Research › Search › Judgment

Punjab High Court · body

2010 DIGILAW 1747 (PNJ)

Adani Agri Logistics Limited v. State Of Haryana

2010-05-21

ADARSH KUMAR GOEL, ALOK SINGH

body2010
Judgment ADARSH KUMAR GOEL, J. 1. This order will dispose of C.W.P. Nos. 4281, 6102, 7169, 11253/2008 and 8595/2009, as all the petitions involve common question as to coverage of the writ petitioners owner of establishment by the provisions of the Building and other Construction Workers (Regulations of Employment and Conditions of Service) Act, 1996 (BOCW Act) and the Building and Other Construction Workers Welfare Cess Act, 1996, Act. 2. In C.W.P. No. 6102/2008, seven complaints have been filed against petitioners No. 2 with the following allegations: "(i) That the management is found running construction work of establishment with the aid of 325 workers. Hence the establishment is covered under Building and other Construction Workers Act, 1996. The management failed to show the proof of payment of Registration fee for getting certificate of registration in favour Chief Inspecter of Factories along with Form No. 1 (in triplicate) for running the building or construction work for the years 2007. This is violation of section/rules 7, 17, 18,21 of BOCW Act, 1996. (ii) There are no fire extinguishers provided near four diesel generator working at different location in the establishment. This is violation of Section/Rules 40, 91 of BOCW Act, 1996. (iii) The notice of commencement of building or Other construction work not submitted in Form No. 36. This is violation of section/rules 46. (iv) That the hand rails not provided to stairs made for the Q.C. room. So there is every possibility of falling from height as workers are using them for going into QC room for construction work. This is violation of section/rules 40, 98 of BOCW Act, 1996. (v) That the workers found working without suitable protective equipments for protection like welding cutting and grinding etc. This is violation of section/rules 40, 101 ofBOCW Act,1996. (vi) That the fast moving coupling of the D.G. Set has not been properly guarded or fenced. This is violation of section/rules 40, 93 ofBOCW Act, 1996." 3. Quashing of the said complaint has been sought mainly on the ground that the establishment of the petitioner being covered by the Factories Act, 1948 could not be required to get registration under the BOCW Act. In support of this submission, sustenance is sought from the definition of "building other construction work" under Section 2(d) of the BOCW Act. 4. Quashing of the said complaint has been sought mainly on the ground that the establishment of the petitioner being covered by the Factories Act, 1948 could not be required to get registration under the BOCW Act. In support of this submission, sustenance is sought from the definition of "building other construction work" under Section 2(d) of the BOCW Act. 4. Case set out in the petition is that the petitioner is carrying out a project of the Food Corporation of India involving creating of integrated supply chain for food grain in the country. Under the project, facilities will be provided for receiving food grain at the Base deposis and transporting the same of the Filed Deposit in bulk wagons. The project was an infrastructure project and was directly 9 monitored by the Prime Ministers office. The petitioners received notice of implementation of the Act and advising them to apply for registration which was followed by Show Case Notice asking the petitioners to show cause why legal action be not taken for violation of provision of the Act. The petitioner put forward their reply to the effect that the construction actively undertaken by them was covered by the Factories Act, 1948 and was, thus, not covered by the BOCW Act. The petitioner also received notice as to liability of pay cess under the Cess Act to which also the stand of the petitioner, was that they were not covered by the said Act on the same ground. This was followed by filing of complaints mentioned above. 5. The respondents have contested the claim in the writ petition by submitting that the definition of expression "building and construction work" which excluded construction covered by the Factories Act was not determinative of applicability of BOCW Act and the Cess At. Even otherwise, the work of the petitioners was not covered by the Factories Act. The writ petitioners was premature as the petitioners will have full opportunity to put forward their defence before the concerned Court trying the complaint. 6. In C.W.P. Nos. 4281, 7169, 10174, 11253/2008 and 8595/2009, direction sought is against implementation of the BOCW Act. Averments in the said petitioners are that they are running establishment for carrying out the work as building and Show Cause Notices have been issued to them alleging violation of the provisions of the BOCW Act and requiring them to appear before the statutory authority. 4281, 7169, 10174, 11253/2008 and 8595/2009, direction sought is against implementation of the BOCW Act. Averments in the said petitioners are that they are running establishment for carrying out the work as building and Show Cause Notices have been issued to them alleging violation of the provisions of the BOCW Act and requiring them to appear before the statutory authority. They gave reply to the effect that they had given the work to the contractors who in turn had the requisite licences. The contractors employed the workers whom the petitioners had no privity and thus, they are not covered by the Act. They could not be required to follow the provision of the BOCW Act. The responsibility to carry out the provision of the said Act was on those whom work had been assigned by the petitioner. 7. In the reply filed in C.W.P. No. 7169/2008, which has been adopted in other cases by learned counsel for the respondent, stand taken is that the petitioner being owners of "establishment" covered under Section 2(j) of the Act for whom the building works were employed, are "employer" under Section 2(i) of the BOCW Act. Their stand that they did not have any privity of contract with the workers and on that ground that provision of the BOCW Act were not applicable, could not be accepted. The Act was intended to provide for safety and welfare facilities to the workers who wefe vulnerable segment of unorganizes-labour.The Cess Act is intended to augment the resources of the Welfare Board working for the benefit of workers. Mere fact of their having given the contract did not exclude them from the defintion of "employer". The petitioner could not be excluded from the purview of the Act merely because of their having given contracts of contractors who may have undertaken the responsibility of company with the provisions of the Act. Ultimately, contractors were employed for the work of the petitioners. In these circumstances, they had nexus with the workers and thus could not avoid responsibility for welfare and safety of the workers. 8. We have heard learned counsel for the parties and perused the record. 9. Ultimately, contractors were employed for the work of the petitioners. In these circumstances, they had nexus with the workers and thus could not avoid responsibility for welfare and safety of the workers. 8. We have heard learned counsel for the parties and perused the record. 9. Question for consideration is whether the petitioners stand excluded from the purview of the BOCW Act and the Cess Act on the ground of their having outsourced their construction activity to the contractor or on the ground that construction activity was covered by the provision of the Factories Act. 10. In our order dated May 13, 2010 in C.W.P. No. 6230/2009 New India Construction Company and Another v. State of Haryana and Other, we considered the scheme of the BOCW Act and the Cess Act in the context of contention raised on behalf of the contractors that they were not covered by the said Acts. The contention raised on behalf of the contractors were repelled having regard to the object and the plain language of the statute. It was held that they could not claim to avoid liability to pay cess for the welfare of the workers on whose toil and sweat the contractor survived and who were directly employed by the contractor. Therein, it was contended that since work belonged to the owner, only the owner was intended to be covered and not the contractor. In this batch of petitions, stand taken is to the contrary that the owner had no liability and only contractors were liable. Such stand cannot be accepted. In New India Construction Company and Another v. State ofHaryana and Other (supra), we have held that under the scheme of the law, contractor as well as owner were covered. While noticing the judgment of Delhi High Court, it was observed: "9. It has been pointed dut by learned counsel for the parties that the validity of levy was not in issue in these petitions and was upheld by the Delhi High Court in Builders Association of India v. Union of India and Another, 139 (2007) Delhi Law Times (April-2007) 578 (DB) holding that the levy was referable to Entry 97 of List 1. Correctness of the view taken in the said judgment has not been questioned by either party. Therein, the BOCW Act was held to be referable to Entries 23 and 24 of List III. Correctness of the view taken in the said judgment has not been questioned by either party. Therein, the BOCW Act was held to be referable to Entries 23 and 24 of List III. It was also held that the levy was in the nature of fee, Under the Scheme of the Act, intention was not to confine the applicability of the Act to the owner or the contractor but to cover both. The cess could be collected from the owner or the contractor. If the Cess is not collected from the contractor, the same could be recovered from the owner. The ovner could pass on burden to the contractor and component of cess could be part of cost of contraction. The employer could collect the cess and pass on the Government There was nothing arbitrary in such mechanism. There was no scope for ambiguity. No fault could be found with the direction for deduction of cess at source. The liability to pay cess was intended to fall on the contractor employing the workers. For facility of collection, the owner was also covered by the levy who could pass on the liability to the contractor. Section 4 provides for furnishing of return by the employer. Section 2(j) of BOCW Act defines "establishment" as establishment belonging to or under the control of Government, any body corporate or firm, individual or association or other body of individuals employing building workers and includes establishment belonging to a contractor but does not include individual who employ workers in building or construction work in relation to his residence, total cost of which is not more than Rs. 10 lakhs. Employer is defined as owner of the establishment and also includes a contractor who carries out the construction." 11. 10 lakhs. Employer is defined as owner of the establishment and also includes a contractor who carries out the construction." 11. Reference may now be made to the definitions of expression "building and other construction activity", "employer" and "establishment" in Section 2(g)(i) and (j) of the BOCW Act: "2(d) "building or other construction work" means the construction alteration repairs, maintenance or demolition, of or, in relation to, buildings, streets, roads, railways, tramways, airfields, irrigation, drainage, embankment and navigation works, flood control works (including storm water drainage works), generation, transmission and distribution of power, water works (including channels for distribution of water), oil and gas installations, electric lines, wireless, radio; television, telephone, telegraph and overseas communication dams, canals, reservoirs, water- courses, tunnels, bridges, viaducts, aqueducts, pipelines, towers, cooling towers, transmission towers and such other work as may be specified in this behalf by the appropriate Government, by notification but does not include any building or other construction work to which the provisions of the Factories Act, 1948 (63 of 1948), or the Mines Act, 1952 (35 of 1952), apply: (i) "employer", in relation to an establishment, means the owner thereof, and includes: (i) in relation to a building or other construction work carried on by or under the authority of any department of the Government, directly without any contractor, the authority specified in this behalf or where no authority is specified, the head of the department: (ii) in relation to a building or other construction work carried on by or on behalf of a local authority or other establishment, directly without any contractor, the Chief Executive Officer of that authority or establishment; (iii) in relation to a building or other construction work carried on by or through a contractor, or by the employment of building workers supplied by a contractor, the contractor. XX XX XX XX (j) "establishment" means any establishment belonging to, or under the control of Government, any body corporate or firm, an individual or association or other body of individuals which or who employs building workers in any building or other construction work; and includes an establishment belonging to a contractor, but does not include an individual who employs such workers in any building or construction work in relation to his own residence the total cost of such construction not being more than rupees ten lakhs." 12. The definition of "employer" shows that the owner of an establishment employing building workers is covered by the said definition. The definition is further extended to include contractor who may be employed in relation to "building or other construction work". Even when there is no privity of contract with the workers of the contractor, it is the owner for whose benefit the work is carried on. 13. Mere fact that the liability was undertaken by the contractor did not exclude the liability of the employer. Role of owner was akin to the role of principal employer under the scheme of the Contract Labour (Regulation and Abolition ) Act, 1970. In fact, in reply filed on behalf of Labour Department of Punjab, a plea to this effect has been raised in C.W.P. No. 10174/2008. The fact that every "employer" is covered is further clear by Section 44 of, the Act which requires employer to supervise building activity to ensure compliance of provisions of the Act. The said provision is as under: "44. Responsibility of employersAn employer shall be responsible for providing constant and adequate supervision of any building or other construction work in his establishment as to ensure compliance with the provisions of this Act relating to safety and for taking all practical steps to preent accidents." 14. As regards the contention that that an individual who employs workers for getting his own house constructed for the value of more than Rs.10 lacs, though covered under Section 2(j), could not be intended to be covered by the Act and get himself registered and subjected to compliance of provisions which may be impossible for an individual, learned counsel for the respondents pointed out that none of the petitioners was an individual house owner and thus this contention was academic. The petitioners were professional builders or contractors engaged in commercial activity having large establishments and they had no difficulty in getting themselves registered and carrying out the obligation of the nature of principal employer of undertaking responsibility of supervising compliance of provisions of the Act by the contractor wherever work was assigned to contractor. 15. Learned counsel for the respondents also brought to our notice that apart from judgment of the Delhi High Court in Builders Association, a Division Bench of Andhra Pradesh High Court in judgment dated July 15, 2008 in Writ Petition Nos. 15. Learned counsel for the respondents also brought to our notice that apart from judgment of the Delhi High Court in Builders Association, a Division Bench of Andhra Pradesh High Court in judgment dated July 15, 2008 in Writ Petition Nos. 4587/2008 (Cormandel Prestcrete Private Limited v. State of Andhra Pradesh and Others) and a Single Bench of Madhya Pradesh High Court in judgment dated January 6,2009 in Writ Petition Noi 2717/2008 {Gannon Dunkerley and Co. Limited v. State of Madhya Pradesh and Others, have upheld the liability of the owner as well us contractor. 16. In Cormandel Prestcrete Pvt. Ltd. V. State of AP and Others (supra), the issue considered was in the context of writ petition filed by contractors seeking exclusion from the BOCW Act and the Cess Act. In Gannon Dunkerley & Co., dealing with the plea of coverage of owners as well as contractors by the BOCW and the Cess Act, even when Factories Act applied, it was observed: "19. The intention of the legislature is therefore not only to include the owner of the establishment in the present case the company but also the contractors who carries out the work of building or other construction work and is an employer for the purpose of the Construction Workers Act, 1996 and the Cess Act, 1996. Thus, there is no escape for the contractors who have undertaken the building and other construction work in the establishment belonging to the company. Thus, in the considered opinion of this Court the Contractors who undertake the work of building and other construction works in an establishment belonging to or under the control of Government any body corporate or firm, an individual or association or other body of individuals which or who employs building workers in any building or other construction work; and includes, an establishment belonging to a contractor, are governed by the provision of Cess Act, 1996 and the Rules of 1998 made thereunder. 20. The next submission of the learned counsel for the petitioner-contractor is based on the exclusion clause contained in the definition under section 2(1)(d) of "Building or other construction work", which stipulates that any building or other construction work to which the provisions of the Factories Act, 1948 will not be included in the definition as contained in this clause. 20. The next submission of the learned counsel for the petitioner-contractor is based on the exclusion clause contained in the definition under section 2(1)(d) of "Building or other construction work", which stipulates that any building or other construction work to which the provisions of the Factories Act, 1948 will not be included in the definition as contained in this clause. It is the contention of the learned counsel for the petitioner that the company is governed by the Factories Act, 1948 and as such the construction which are carried out are governed by the said Act, the necessary corollary whereof would be the exclusion of the contractors engaged herein from the applicability of the construction Workers Act, 1996 and the Cess Act, 1996 and the Rules made thereunder: 21. The Factories Act, 1948 was enacted to consolidate and amend the law regulation labour in factories. The statement of objects of reasons reveals that at the time of enactment, the Factories Act, 1934 was in existence but number of defects and weaknesses were experienced and the provisions pertaining to safety, health and welfare of workers engaged in factories were found to be inadequate and unsatisfactory which harbingered the need for minimum requirements regarding health (cleanliness, ventilation and temperature, dangerous dusts and fumes, lighting and control of glare etc.) safety (eye protection control of explosive and inflammable dusts, etc.) and general welfare of workers (washing facilities, first aid, canteens, shelter rooms, creches, etc.) amplified where necessary, by rules and regulations to be prescribed by Governments, Thus, the Factories Act, 1948, as the statement of objects and reasons and various provisions contained therein reveals, operates in a different field with different scope and object than the Construction Workers Act, 1996, Cess Act, 1996. The nature of construction activities undertaken to commission a refinery cannot by any stretch of imagination be construed as an activity under the Act of 1948. Merely because the provision of the Act of 1948 has been made applicable besides other labour laws to the contractors, will not, in the considered opinion of this Court, exclude the applicability of the Construction Workers Act, 1996 and Cess Act, 1996 to the petitioner-contractors. The second submission, therefore, put forth by the petitioner regarding exclusion of the petitioner-contractors from the applicability of the Construction Workers Act, 1996 and Cess Act, 1996 therefore also fails." 17. We respectfully agree with the above observation. The second submission, therefore, put forth by the petitioner regarding exclusion of the petitioner-contractors from the applicability of the Construction Workers Act, 1996 and Cess Act, 1996 therefore also fails." 17. We respectfully agree with the above observation. We are thus, of the view that the owner of establishment for whom or for whose benefit construction activity is carried on and who employs building Workers is included and is required to comply with the provisions of the BOCW Act and the Cess Act. The petitioners cannot, thus, be excluded from the coverage of BOCW and the Cess Act. 18. As regards criminal complaint for alleged violation, we make it clear that it will be open to the accused in the said complaints to put forward their defence before the concerned court which will be considered on its own merits in accordance with law. 19. We, thus, do not find any ground to interfere to grant the relief sought in the writ petition. 20. The writ petitioners are dismissed. 21. Before parting with this order, we consider it appropriate to invite attention of the concerned authorities to the question of coverage of an individual constructing his own house of value of more than Rs. 10 lakhs. Though in absence of challenge by any such individual, we do not consider it necessary to adjudicate on this question, the concerned authority may be well advised to have a fresh look at the monetary limit in the light of expert opinion so that the limit is not vulnerable to challenge on the ground of arbitrariness. An individual who constructs a small house which also may cost more than Rs.10 lakhs may not find it possible to seek registration and render himself answerable for compliance of provision of the Act. 22. A copy of this order be sent to the Cabinet Secretary, Government of India, for being forwarded to concerned department for due consideration of this aspect in accordance with law.