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2025 Supreme(Telangana) 1193

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
DILIP B. BHOSALE, ACJ., S.V. BHATT, J.
M/s.Vishwa Infrastructure And Services P. Ltd. - Appellant
Vs.
The State of Andhra Pradesh - Respondent
W.A.Nos.1012, 1013, 1019, 1020, 1021, 1023, 1032, 1033, 1034, 1035, 1040, 1099, 1131, 1137, 1174, 1199, 1216, 1262, 1448, 1464, 1470, 1485 OF 2013, 1383, 1447, 1638, 1640 and WA (SR) Nos.165064, 16940, 16948, 16954, 16958, 16967, 16968, 16971, 16980, 16981, 17002, 17003, 29440 of 2014, W.A.Nos.58, 59, 60, 61, 62, 71, 78, 94, 123, 124, 125, 135, 150, 188, 190, 256, 282, 294, 445, 469 and WA (SR) Nos.10221, 12180 14663 of 2015 AND W.P.Nos.28885 of 2009, 1596, 2901, 3959 and 9328 of 2010, 7349 and 7550 of 2013, 27460, 27935 and 29465 of 2014 and 13318 and 13460 of 2015
Decided On : 06-08-2015
Advocate Appeared :
For the Appellant : P Vinayaka Swamy
For the Respondent : GP For IRRI And Comm Area Devtg


Advocates:
Advocate Appeared:
For the Appellant : P Vinayaka Swamy
For the Respondent: GP For IRRI And Comm Area Devtg

The court established that construction works like blast furnaces fall under 'building or other construction work' as defined in labor laws, ensuring their obligations for labor welfare remain intact, upholding the intent of protecting workers.

Headnote:(A) The Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996 - Section 2(d) - Factories Act, 1948 - Construction works executed by contractors within factories, including blast furnaces, are subject to the provisions of Act No.27 and not exempted. Commissioners’ orders requiring cess payment upheld as valid under Act No.28. (Paras 1, 18, 30)

(B) Legal Principle - The definition of 'building or construction work' includes any structure, including blast furnaces, which aligns with the comprehensive nature of legislature intent to protect labor rights in construction within factory premises. (Paras 7.1, 18)

(C) Fact of the Case: The contractors were engaged for constructing blast furnaces within factory premises but claimed they were exempt from labor welfare obligations under Act No.27 based on contracts with principal employers. (Para 30)

(D)

Findings of Court:
The court held that both Act No.27 and Act No.28 applied, determining that contracting out of labor welfare obligations violated public policy as it would result in depriving workers of rights under both Acts. (Paras 28, 30) (E)

Issues: The key issues addressed were whether the construction of blast furnaces constitutes 'building or other construction work' under Act No.27, and whether the contractors can contract out labor protections. (Para 4) (F)

Ratio Decidendi: The court ruled that the structures like blast furnaces fall within building definitions under labor laws, reaffirming the view that public policy safeguards labor rights, preventing exclusion from welfare benefits under Acts 27 and 28. (Para 28) (G)

Result: Appeals allowed, and the prior judgment affirming contractors’ exemption was set aside. (Para 31)

Table of Content
1. writ appeals against commissioner orders. (Para 1 , 2 , 3)
2. nature of contracts for construction work. (Para 4 , 5)
3. arguments regarding applicability of acts. (Para 7 , 8 , 9)
4. interpretation of 'worker' under the acts. (Para 10 , 11 , 12 , 13)
5. definition of 'building' in legal context. (Para 14 , 15 , 16)
6. impact of interpretation on construction workers. (Para 17 , 18 , 19)
7. legislative intent regarding welfare of workers. (Para 20 , 21 , 22)
8. court’s decision on construction worker eligibility. (Para 23 , 24 , 25)
9. contracts and public policy implications. (Para 26 , 27 , 28 , 29)
10. final ruling on applicability of acts. (Para 30)

JUDGMENT :

Dilip B. Bhosale, ACJ.

These writ appeals, under Clause 15 of the Letter Patent, are directed against the order dated 28.11.2013 disposing of a batch of writ petitions whereby the question “whether the works executed by the petitioners in the 3rd respondent-factory (in W.P.No.9111 of 2010) are the works incidental to and/or connected with the works of the 3rd respondent-factory and thus exempted from the provisions of The Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996) (for short “Act No.27”)” has been answered in the affirmative.

2. All writ appeals are preferred either by the Commissioner of Labour or Joint Commissioner of Labour, who were respondent No.1 or 2 in the writ petitions (for short “the Commissioner”). The writ petitions were filed by Infrastructural Development Companies/Contractors (for short “the contractors”) who were given contracts for erection or raising structures/constructions such as blast furnace within the campus of respondents-companies/corporations (for short “the Companies”).

3. The writ petitions were filed by the contractors basically challenging orders of the Commissioner, charging 1% (as cess) of the value of the contracts, executed between them and companies for designing, manufacturing, supplying, erecting, testing and commissioning of blast furnace, under The Building and Other Construction Workers’ Welfare Cess Act , 1996, (28 of 1996) (for short “Act No.28”).

3. Since the questions raised are common, W.P.Nos.28885 of 2009, 1596, 2901, 3959 and 9328 of 2010, 7349 and 7550 of 2013, 27460, 27935 and 29465 of 2014 and 13318 and 13460 of 2015 are also tagged with the Writ Appeals and by consent heard along with the Appeals.

4. Mr.C.R.Sridharan, the learned Senior Counsel appearing for the contractors in this batch of writ appeals/petitions, at the outset, submitted that though question “whether the structures raised or constructions made by the contractors, such as blast furnace, within the premises of factories of the companies are covered by the definition of ‘building or other construction work’?”, was raised, was not addressed by learned single Judge while disposing of the batch of writ petitions, perhaps, in view of the fact the principal question was answered in favour of the contractors. He submitted that this question also needs to be considered and decided in these appeals. The learned Advocate General appearing for the Commissioner did not oppose the submission of Mr.C.R.Sridharan. We, therefore, propose to consider and address both the questions in these appeals. Insofar as the first question is concerned, we reformulate the same as follows: Whether the Factories Act, 1948 (63 of 1948) would apply to the buildings, such as blast furnace within the premises of factories, constructed/erected by contractors? and if yes whether they are liable to pay 1% cess, being ‘employers’ under the provisions of Act No.28? In other words whether structures, such as blast furnace within the factory premises, are exempted from the provisions of Act No.27, that being the works incidental to and/or connected with the works of factory?

5. The factual matrix and questions raised in these appeals are similar. It is not in dispute that the contractors were not only required to d

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