The main legal point established in the judgment is the mandatory nature of the provisions of the Building and Other Construction Workers’ Welfare Cess Act, 1996, and the liberal construction of the provisions in favor of the workers.

Justice Rajiv Sharma, Judge.

Respondent-Department invited tenders for the construction of Administrative Block of Panchayati Raj Institute, Baijnath, District Kangra. Petitioner participated in the tendering process. The approval to accept the lowest tender of the petitioner amounting to ` 3,67,39,405/-, which was 54.19% above the amount put to tender, i.e 2,38,27,349/- was accorded on 24.11.2009 by the Chief Engineer. Thereafter, petitioner was informed to complete all the codal formalities by the Executive Engineer on 14.12.2009. Petitioner completed all the codal formalities and agreement was also entered between the parties. Petitioner started the construction of building. However, a sum of ` 31,580.23 was deducted from the running bill of the petitioner, vide Annexure A-3.

2. Mr. Ajay Sharma has strenuously argued that the action of the respondents to deduct a sum of ` 31,580.23 from the running bill of the petitioner is illegal. According to him, the petitioner is not bound to pay cess leviable under the Building and Other Construction Workers’ Welfare Cess Act, 1996 and the Rules framed thereunder as per the concluded contract entered into between the parties. He then argued that the parties are bound by the terms and conditions contained in the agreement and the same cannot be altered or modified unilaterally.

3. Mr. Rajinder Dogra, learned Additional Advocate General, 1% cess is to be deducted from all the works with effect from 4.12.2008 when the provisions of the Building and Other Construction Workers’ Welfare Cess Act, 1996 and the Rules framed thereunder came into force with effect from 4.12.2008 in the State.

4. I have heard the learned counsel for the parties and have perused the pleading carefully.

5. In the instant case, the petitioner has quoted his rates on 5.10.2009, which were accepted by the Chief Engineer and thereafter the codal formalities were directed to be completed by the Executive Engineer on 14.12.2009. It is, thus, evident that the agreement has been entered into between the parties only after 14.12.2009. The Chief Engineer had issued instructions to his subordinates to deduct 1% cess after coming into force the Building and Other Construction Workers’ Welfare Cess Act, 1996 (hereinafter referred to as the ‘Act’ for brevity sake) and the Rules framed thereunder with effect from 14.12.2009 from the bills of the contractor being mandatory provisions. This decision has been taken by the Chief Engineer on the basis of letter addressed by the Labour Commissioner to all the Head of Departments of the respondent-State on 30.1.2009.

6. It will be apt this stage to take note of salient features of the Act. According to the preamble, Act has been made to provide for the levy and collection of a cess on the cost of construction incurred by the employers with a view to augmenting the resources of the Building and Other Construction Workers’ Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. Section 3 of the Act provides that there shall be levied and collected a cess for the purpose of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, at such rate not exceeding two per cent, but not less than one per cent of the cost of construction incurred by the employer, as the Central Government may, by notification in the official gazette, from time to time specify. The cess is to be collected from every employer in such manner and at such time, including deduction at source in relation to a building or other construction work of a Government or of a public sector undertaking or advance collection through a local authority where an approval of such building or other construction work by such local authority is required, as may be prescribed. The proceeds of the cess collected are to be paid by the local authority or the State Government collecting the cess