Factories Act, 1948 – Building And Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 – Buildings And Other Construction Workers Welfare Cess Act, 1996 – Construction workers are not covered by the Factories Act and, therefore, welfare measures specifically provided for such workers under the BOCW Act and Welfare Cess Act cannot be denied.
CIVIL APPELLATE JURISDICTION
(A.K. SIKRI) AND (N.V. RAMANA) JJ.
OCTOBER 18, 2016
CIVIL APPEAL NO. 6223 OF 2016
LANCO ANPARA POWER LIMITED …..APPELLANT(S)
STATE OF UTTAR PRADESH & ORS. …..RESPONDENT(S)
W I T H
CIVIL APPEAL NO. OF 2016 (ARISING OUT OF SLP (C) NOS. 29105-29106 OF 2011) W.P. (C) NO. 64 OF 2012 W.P. (C) NO. 848 OF 2013 W.P. (C) NO. 385 OF 2014 CIVIL APPEAL NO. 6569 OF 2014 T.P. (C) NO. 342 OF 2014 T.C. (C) NO. 29 OF 2015 W.P. (C) NO. 174 OF 2016 W.P. (C) NO. 311 OF 2016 CIVIL APPEAL NO. 6571 OF 2014 T.C. (C) NO. 38 OF 2016 CIVIL APPEAL NO. OF 2016 (ARISING OUT OF SLP (C) NO. 26363 OF 2016) W.P. (C) NO. 698 OF 2016 AND CIVIL APPEAL NO. OF 2016 (ARISING OUT OF SLP (C) NO. 26330 OF 2016)
J U D G M E N T
A.K. SIKRI, J.
Leave granted in SLP (C) Nos. 29105-29106 of 2011, SLP (C) No. 26363 of 2016 and SLP (C) No. 26330 of 2016. Since pure question of law is involved, we allow the transfer petition and transfer cases and also take up, along with these appeals, the writ petitions which were filed before the respective High Courts.
2. These appeals are filed by the appellants challenging the orders passed by different High Courts i.e. High Court of Allahabad, High Court of Orissa, High Court of Madhya Pradesh and High Court of Karnataka. These High Courts, however, are unanimous in their approach and have reached the same conclusion. In all these cases, appellants were issued show cause notices by the concerned authorities under the provisions of the
Building And Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
(hereinafter referred to as ‘BOCW Act’) and
Buildings And Other Construction Workers Welfare Cess Act, 1996
(hereinafter referred to as ‘Welfare Cess Act’). They had challenged those notices by filing writ petitions in the High Courts on the ground that the provisions of BOCW Act or Welfare Cess Act were not applicable to them because of the reason that they were registered under the
Factories Act, 1948
It may be mentioned that at the relevant time no manufacturing operation had commenced by the appellants. In fact, all these appellants were in the process of construction of civil works/factory buildings etc. wherein they had planned to set up their factories. As the process of construction of civil works was undertaken by the appellants wherein construction workers were engaged, the respondent authorities took the view that the provisions of the aforesaid Acts which were meant for construction workers became applicable and the appellants were supposed to pay the cess for the welfare of the said workers engaged in the construction work. The appellants had submitted that Section 2(d) of the BOCW Act which defines ‘building or other construction work’ specifically states that it does not include any building or construction work to which the provision of the Factories Act, 1948 or the Mines Act, 1952 apply. Since the appellants stood registered under the Factories Act, they were not covered by the definition of building or other construction work as contained in Section 2(d) of the Act and, therefore, said Act was not applicable to them by virtue of Section 1(4) thereof. All the High Courts have negated the aforesaid plea of the appellants on the ground that the appellants would not be covered by the definition of factory defined under Section 2(m) of the Factories Act in the absence of any operations/ manufacturing process and, therefore, mere obtaining a licence under Section 6 of the Factories Act would not suffice and rescue them from their liability to pay cess under the Welfare Cess Act. This is, in nutshell, the subject matter of all these appeals. However, in order to understand the full implication of the issue involved and to answer the said issue, it would be apt to take note of certain facts from one of these appeals. This factual canvass is suitably available in the events that have occurred leading to the filing of Civil Appeal No. 6223/2016.
3. In this appeal, the appellant proposed to set up a 2X600 Megawatt capacity coal-based thermal power project namely “Anpara C” at Anpara in District Sonebhadra, Uttar Pradesh (“the Project”), pursuant to being selected in a tariff-based competitive bidding initiated by the Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL) on behalf of the Uttar Pradesh Power Corporation Ltd. (UPPCL). The project consists of two Steam Turbine Generators (STG) each having capacity of 600 MW and two pulverised coal fired steam generators and the balance of plant. The appellant, in respect of the aforesaid project, made an application to the Director of Factories, Uttar Pradesh, submitting the layout/drawings of the proposed plants and requesting for registration of the project as a factory under the provisions of the Factories Act, 1948 and the Uttar Pradesh Factories Rules, 1950. The appellant was granted registration and licence under Section 6 of the Factories Act, 1948 read with Uttar Pradesh Factories Rules, 1950 for the said Project, as a factory. Respondent No. 1 notified the
Uttar Pradesh Building and other Construction Workers (Regulation of Employment and Conditions of Service) Rules, 2009
(for short ‘BOCW Rules’) on 04.02.2009. Immediately thereafter, the appellant received a notice of even date issued by respondent No. 2, intimating that the Chief Secretary, Government of Uttar Pradesh had directed that “establishments” engaged in construction activities were required to get themselves registered under the provisions of the BOCW Act and the BOCW Rules. Simultaneously, a letter of even date was also received from the District Collector, Sonebhadra, Uttar Pradesh, calling upon the appellant to get itself/its contractors registered under the provisions of the BOCW Act and the BOCW Rules. The appellant, vide its letter of even date, replied to the aforesaid communication dated 19.04.2010 of the District Collector, Sonebhadra, stating that the appellant was undertaking the construction activity of the Project under the provisions of the Factories Act and as such, in view of Section 2(1)(d) of the BOCW Act, the Project was exempted from the application of the BOCW Act, and consequently the Welfare Cess Act and BOCW Rules inasmuch as the provisions of the Factories Act apply to the Project.
4. The respondents were not satisfied with the aforesaid stand taken by the appellant. Thus, show cause notice dated 17.02.2011 was issued by respondent No. 2 as to why action be not taken against the appellant for failing to get itself registered under BOCW Act. It was followed by another notice of even date stating that the appellant had not furnished requisite information relating to construction activities undertaken by it as required under Section 4 of the Welfare Cess Act read with Rule 6 of the Welfare Cess Rules. Some more notices were issued to the similar effect with regard to the construction activities in respect of the township in Anpara, undertaken by the appellant. Insofar as township is concerned, appellant got itself registered through its principal contractors under Welfare Cess Act and started paying the cess. However, in respect of construction activity and factory premises, the appellant reiterated its stand that by virtue of Section 2(1)(d) of the BOCW Act, it was excluded from the coverage thereof. The contention of the appellant was rejected by the respondents which led to issuance of further notices demanding cess.
5. At this juncture, the appellant filed the writ petition in the High Court of Judicature at Allahabad challenging the validity of notices dated 14.03.2011 and 02.04.2011 demanding payment of cess, on the following grounds: