(1.) 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.
(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 requesting for registration of the project as a
factory under the provisions of the Factories Act, 1948 and the Uttar
Pradesh Factories Rules, 1950. The appellant was granted registration
and licence under Section 6 of the Factories Act, 1948 read with Uttar
Pradesh Factories Rules, 1950 for the said Project, as a factory.
Respondent No. 1 notified the Uttar Pradesh Building and other
Construction Workers (Regulation of Employment and Conditions of
Service) Rules, 2009 (for short 'BOCW Rules') on 04.02.2009.
Immediately thereafter, the appellant received a notice of even date
issued by respondent No. 2, intimating that the Chief Secretary,
Government of Uttar Pradesh had directed that "establishments"
engaged in construction activities were required to get themselves
registered under the provisions of the BOCW Act and the BOCW Rules.
Simultaneously, a letter of even date was also received from the District
Collector, Sonebhadra, Uttar Pradesh, calling upon the appellant to get
itself/its contractors registered under the provisions of the BOCW Act
and the BOCW Rules. The appellant, vide its letter of even date, replied
to the aforesaid communication dated 19.04.2010 of the District
Collector, Sonebhadra, stating that the appellant was undertaking the
construction activity of the Project under the provisions of the Factories
Act and as such, in view of Section 2(1)(d) of the BOCW Act, the Project
was exempted from the application of the BOCW Act, and consequently
the Welfare Cess Act and BOCW Rules inasmuch as the provisions of
the Factories Act apply to the Project.;