The BOCW Act and the CESS Act do not apply to construction work covered by the Factories Act or the Mines Act.

Harish Tandon, J.

1. The petitioner has challenged the action of the respondent Nos. 3 & 4 in deducting an amount under the Building and other Construction Workers Welfare Cess Act, 1996 in relation to the contract entered into between the parties for execution of the construction work. The respondent No. 3 invited tender for Structural Works, Reheating Furnaces and Rolling Mills for expansion of IISCO Steel Plant at Burnpur. The petitioner was declared as a successful tenderer and was awarded the contract. Clause IX of general conditions of contract provides that the contractor shall bear and pay all taxes, duties, levies and charges assessed on the contractor, sub-contractor or their employees by Municipal, State or Central Government Authorities except those specifically provided in the contract. A meeting was held at the pre-bid stage wherein it was agreed that the tenderer shall quote the rates by including all types of taxes, duties, levies, transport, freight, insurance etc., as applicable and as may be made applicable till completion for which no extra payment shall be made on any account whatsoever.

2. The RA Bills were raised in terms of the contract but some amount is withheld by the respondent No. 3 which constrained the petitioner to cause a letter for providing the reasons for withholding the said amount. The respondent No. 3 replied that the amount have been deducted on account of CESS Act, 1996, insurance lapse, lapses on safety and cost of the materials issued. The Company sought to invoke Clause 8 of the special condition of contract which provides that the contractor shall also be responsible for implementation of all statutory rules and regulations including the building and other conditions of Contract Act, 1996 (If applicable) and the CESS Act, 1996. Other correspondences exchanged between the parties could not bring the parties to a consensus relating to the applicability of the Building and other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and the CESS Act to the nature of the work provided under the said work contract.

3. An argument is advanced on behalf of the petitioner that BOCW Act and the CESS Act cannot apply if it is covered under the Factories Act and the Mines Act. In this regard, the reference is made to section 2(d) of the BOCW Act which defines building or other construction work but excludes the applicability thereof to which the provisions of the Factories Act or the Mines Act applied. The reliance is heavily placed on the information received under the Right to Information Act which is annexed in reply filed by the petitioner wherein it is indicated that the expansion of IISCO Steel Plant at Burnpur are made under the purview of the Factories Act, 1948 and West Bengal Factories Rules, 1958. To support the only point as canvassed above, the petitioner placed reliance upon the unreported judgment of the Orissa High Court in case of M/s Sterlite Energy Ltd. v. State of Orissa & Ors., (W.P. 15924 of 2009 decided on 04.09.2010) wherein it is held that if the building and other construction work in relation to a factory or mines to which the provisions of the Factories Act or the Mines Act applied, it excludes the applicability of the BOCW Act and the CESS Act.

4. The respondent Nos. 3 & 4 mainly contested the instant writ petition. The stand of this said respondent adumbrated in a pre-bid conference and the consensus arrived therein, the price to be quoted was to include all type of taxes as applicable and may be applicable till completion and, therefore, there is no illegality committed by the aforesaid respondents in deducting the amount on account of CESS Act which is very much applicable in case of the construction work under the Contract. It is pointed out by the said respondent that the unreported judgment rendered by the Orissa High Court as relied upon by the petitioner is a assailed before the Supreme Court and the matter is sub judice.