Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(SC) 843

SUPREME COURT OF INDIA
A.K. SIKRI, N.V. RAMANA, JJ.
LANCO ANPARA POWER LIMITED - APPELLANTS
VERSUS
STATE OF UTTAR PRADESH & ORS. - RESPONDENTS
Civil Appeal No. 6223 of 2016 With 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)
Decided On : 18-10-2016

Advocates Appeared:
For the Appellants :- Umesh Kumar Khaitan, E. C. Agrawala, B.S. Banthia, Prashant Shukla, Ms. Anushree Mishra, Kush Agrawal, Nikilesh Ramachandran, Neeraj Shekhar, Rahul Pratap, A. Venayagam Balan, T.G. Narayanan Nair, K.N. Madhusoodhanan, K. Raghvacharyulu, Kailash Pandey, Ranjeet Singh, Ms. Joolie Kataria, K.V. Sreekumar, Advocates.
For the Respondents:- Shreekant N. Terdal, Ravindra Srivastava, SR. Adv., Rajeev Dubey, Ravi Prakash Mehrotra, Shibashish Misra, Kumar Dushyant Singh, Puneet Taneja, Mishra Saurabh, Advocates.

IMPORTANT POINT
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.

Headnote:(a) Building And Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 – Section 2(1)(d) – "Building or other construction work" – First part of the definition contains the nature of activity; second part contains the subject matter in relation to which the activity is carried out and third part excludes those building or other construction work to which the provisions of Factories Act or Mines Act apply – Construction of the projects of appellants satisfying first two elements of the definition – Manufacturing process not having commenced provisions of Factories Act would not apply to instant buildings under construction – Buildings in question not excluded for purview of BOCW Act – If section 2(1)(d) of BOCW Act r/w section 2(m) of Factories Act is not construed in the manner as aforesaid, the construction workers will neither get the benefit of the Factories Act nor of Building And Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996/ Buildings And Other Construction Workers Welfare Cess Act, 1996 – Purposive interpretation. (Para 24, 25, 26, 27)
       1964 SCR (1) 860; 2012(1) S.C.T. 634 : (2012) 1 SCC 101; (1979) 4 SCC 573; (1988) 4 SCC 284 – Relied upon
       1957 SCR 121; (1985) 1 SCC 218; (2001) 7 SCC 71; (2001) 8 SCC 24; (2002) 4 SCC 297; (2004) 5 SCC 385 – Referred
       (b) Interpretation of statute – Labour statute – Welfare statute – Building And Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996/ Buildings And Other Construction Workers Welfare Cess Act, 1996 – Welfare statutes must, of necessity, receive a broad interpretation – 'Superior purpose' contained in BOCW Act and Welfare Cess Act has to be kept in mind when the welfare legislations, Factories Act on the one hand and BOCW Act/Welfare Cess Act on the other hand, are involved. (Para 28, 32)
       (2000) 4 SCC 406; 2016 (1) SCALE 1; 2016(1) S.C.T. 776 : (2016) 4 SCC 179; (2016) 3 SCC 619 – Relied upon
       (c) Factories Act, 1948 – Section 6 and 7 – Permission u/s 6 – Required to ensure that the building fulfills all the safety requirements of the Act – After completion of building the occupier of the factory is required to give notice to Chief Inspector of Factories so that a necessary inspection is carried out to verify that all safety measures are in place – Purpose of permissions for construction of factories is altogether different. (Para 33)
       Facts of the case:
       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 and Buildings And Other Construction Workers Welfare Cess Act, 1996. 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.
       At the relevant time no manufacturing operation had been commenced by the appellants. 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.
       All the High Courts have negated the 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.
       Finding of the Court:
       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.
       Result: Appeals dismissed.

JUDGMENT

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 reques

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2016 Supreme(SC) 843

IMPORTANT POINTConstruction 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.

Cases Referred (21)

IMPORTANT POINT
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.