1. These writ petitions raise common question of law, as such, they have been heard together and disposed of by common order.

2. The challenge made in the writ petitions is to the orders/decisions of respondents 1 and 2 to charge 1% of the value of the contracts entered by petitioners with third respondent to undertake design, manufacture, supply, erect, testing and commissioning of blast furnace-3 including civil and structural works as cess under “The Building and Other Construction Workers’ Welfare Cess Act, 1996” (Act 28 of 1996).

3. For convenience sake facts and material papers in W.P.No.9111 of 2010 are considered. Rashtriya Ispat Nigam Limited (third respondent) is a factory registered under the Indian Factories Act, 1948 (for short the Act, 1948). In order to expand its operations and increase the production capacity third respondent obtained necessary permissions to establish another blast furnace. This expansion required design, manufacture, supply, erect, testing and commissioning of blast furnace-3 inclusive of civil and structural works and all facilities. For this purpose third respondent entered into agreements with the petitioners. Petitioners have executed the works in accordance with the terms of the agreement. The Commissioner of Labour (first respondent) held that petitioners are governed by Act Nos. 27 and 28 of 1996, determined amount payable as cess under Act 28 of 1996 and demanded the amount quantified and issued incidental directions. One such demand notice is filed as Annexure P-9 to W.P.No.9111 of 2010. Consequently, similar demand is made by Joint Commissioner for Labour (second respondent) in March, 2010. One such demand notice is filed as Annexure P-14 to W.P.No.9111 of 2010. The first and second respondents directed the third respondent to deduct 1% of the amount payable to the petitioners and remit the same to the Government towards cess payable under the Act 28 of 1996. In terms of the said mandate of the first and second respondents, third respondent deducted 1% contractual amount from the amounts payable to the contractors. Said orders of the first and second respondents are under challenge in this batch of writ petitions.

4. Heard Sri C.R. Sridharan, Sri S.Dwarkanath, Sri Gaddam Srinivas, Sri A.Sanjeev Kumar, Sri S.Ram Babu, Sri P.Venkata Rao, Sri V.B.Subrahmanyam, Sri K.B.Ramananna Dora, Sri G.Rama Gopal, Sri V.Ramu, Sri S.Niranjan Reddy and Sri Arcot Mahesh, learned counsels appearing for respective petitioners, learned Government Pleader for Labour for first and second respondents and Sri V.Ravinder Rao, learned counsel appearing for third respondent.

5. Learned counsel Sri C.R. Sridharan contended that third respondent is a factory established under the Factories Act, 1948 and the factories established in accordance with the provisions of the Factories Act are excluded from application of the provisions of “The Buildings and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996” (Act 27 of 1996) and Act 28 of 1996.

6. Leaned counsel relying on relevant provisions of the Factories Act, 1948, Act 27 of 1996 and Act 28 of 1996 submitted that the contractors who entered into agreements to execute civil and structural works, design, manufacture, supply, erect, test and commission with the third respondent, it being factory, governed by the Factories Act, are not required to pay cess as mandated by Act 28 of 1996 read with Act 27 of 1996 and therefore the demand made by the first and second respondents is ex facie illegal, without power and jurisdiction.

7. Learned counsel further submits that the Act, 1948 takes care of the welfare measures required to be followed by factories established under the Act and the contractors who execute the works for the factory and submits that in terms of the mandate of the Act, 1948 and in terms of the agreements entered into between the petitioners and third respondent, the contractors have complied with the obligati