Statutory wage-payment disputes and non-signatories cannot be forced into contractual arbitration without consent.

A dispute over recovery of wages from a contractor's bill, arising from statutory wage-payment obligations, was held outside the scope of the contract's arbitration clause because the matter was governed by the wage-payment regime and labour authorities' determinations rather than a purely contractual controversy. Arbitration also could not be imposed on persons who were not parties to the arbitration agreement, even though they had been impleaded in the suit, because consent remains essential to arbitral jurisdiction. The court therefore set aside the reference to arbitration.

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Issues: Whether the dispute concerning recovery of wages from the contractor's bill, arising from statutory wage-payment obligations, could be referred to arbitration under the contract; and whether persons who were not parties to the arbitration agreement could be compelled to arbitrate merely because they had been impleaded in the suit.

Analysis: The recovery was traceable to the statutory scheme governing payment of wages to contract labour and to the labour authorities' determination under the contract regulations, not to a contractual dispute falling within the arbitration clause. A matter which is otherwise provided for by statute and regulated by the contract regulations is excluded from the arbitration clause. More fundamentally, arbitration rests on consent and cannot be imposed on persons who are strangers to the arbitration agreement. Once the additional defendants, who were not parties to any arbitration agreement, were impleaded, the court could not validly refer the dispute to arbitration so as to bind them.

Conclusion: The reference to arbitration was invalid and was set aside; the appellants succeeded.

Final Conclusion: A dispute governed by statutory wage-payment obligations and involving non-signatories to the arbitration agreement cannot be forced into arbitration, and the court's reference order could not stand.

Ratio Decidendi: Arbitration cannot be compelled in the absence of consent, and a dispute excluded by statute or involving non-parties to the arbitration agreement is not referable under a contractual arbitration clause.

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