Disposed

M/s Hindustan Petroleum Corporation Limited, v. The State of Andhra Pradesh

Andhra Pradesh HC12 Apr 2023WP/8811/2023

Case brief

AI extract

What is this about?

Court treated notice challenging applicability of Building and Other Construction Workers (Regulation of Employment and Condition of Service) Act, 1996 as a show cause notice. Directs petitioner to submit explanation within two weeks before 3rd Respondent passes final order in light of Lanco Anpara judgment, pending final determination of BOCW Act applicability to plant expansion.

What did the court decide?

Impugned notices treated as show cause notices. Petitioner directed to submit explanation within two weeks. Third Respondent directed to pass appropriate orders considering Lanco Anpara principles wit

M/s Hindustan Petroleum Corporation Limited… — Writ and Judicial Review | Andhra Pradesh HC (2023)

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THE HON’BLE SMT JUSTICE V. SUJATHA

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Writ Petition No.8811 of 2023

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ORDER :

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This writ petition came to be filed under Article 226 of the

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Constitution of India seeking the following relief:-

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“...to issue a Writ Order or Direction more particularly one in the nature of Writ of Mandamus declaring the impugned Notice Rc. No. 1824/2022 dated 01.02.2023 of the 3^rd Respondent as bad, arbitrary, contrary to the provisions of Factories Act, 1948 and rules made thereunder and also offends Articles 14 and 19 of the Constitution of India...”

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The petitioner Corporation is duly registered under the provisions of Factories Act, 1948 with registration No.R/2014. The respondent herein has issued license to the petitioner Corporation vide No.43814, who has constructed Single Point Mooring for discharging of Very Large Crude Carrier (VLCC). The products currently manufactured in refinery are LPG, Propylene, Naphtha, MS, ATF, SKO, HSD, LDO, LSHS, IFO, Bitumen, Sulphur, VLSFO etc.

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The case of the petitioner Corporation is that the petitioner’s Corporation refinery was the first East Coast Oil Refinery commissioned as Caltex Oil Refining India Limited

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(CORIL) in 1957 with a crude processing capacity of 0.675 MMTPA. Subsequently, there was expansion of the capacity from 8.3 MMTPA to current level 15 MMPTA which was carried out in a phased manner.

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It is the further case of the petitioner Corporation that the manufacturing process within the refinery had been continuing since inception with mere revamping /upgradation of existing facilities, at no point of time had stopped the manufacturing process, whereby the Visakha refinery premises could have been excluded from the operations of the Factories Act, 1948 as per Sections 6 and 7 of the Factories Act, 1948, which specifies registration of Factories and obtaining permission before occupation of Factory, from the Chief Inspector of the Factories; whereas the petitioner Corporation have constructed the factory and commenced manufacturing process long ago by complying with all the requirements specified at the time of registration under the Factories Act, 1948.

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In spite of the same, the 3^rd respondent has issued notice in the year, 2007 to submit the details of work completed previously, bills paid and also ongoing works to decide the

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applicability of Building and other construction workers (Regulation of Employment and Condition of Service) Act, 1996 (herein after referred to as the BOCW Act, 1996) and finalise the issue. For the above notice, the petitioner Corporation has submitted its reply on 19.06.2008; but inspite of it, the 3^rd respondent has issued notices on 30.03.2013 as well as 23.11.2016, 13.03.2019 and 19.10.2022 for which the petitioner Corporation had submitted its explanations dated 06.05.2013, 28.11.2016, 23.04.2019 and 23.05.2022 respectively informing the respondents that:-

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(i) the petitioner Corporation is duly registered as Factory under the Factories Act, 1948; the entire area including extension of plants is situated within the premises of the Factory and also the said License is covering installed capacity (regular /stand by Horse Power) as well as proposed Horse Power which includes extension of plants within the factory premises and that

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(ii) the said licence covers maximum number of workers put in/ employed, including labour being engaged for extension of the plant within the factory premises and also

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(iii) the factory is registered under the Contract Labour (Regulation and Abolition) Act, 1970 with certificate of registration No. 58/6/86-ALC, as the contractors being engaged for extension of plants within the factory premises are required to obtain licences under the Contract Labour (Regulation and Abolition) Act, 1970,

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(v) the existing factory is carrying on manufacture process since long time which cannot be treated as construction of the new factory thereby does not fall within the purview of BOCW Act, 1996.

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In spite of receiving the above said explanations, the 3^rd respondent has one again issued such notice on 01.02.2023 vide Rc.No 1824/2022 requesting to furnish list of construction works that were undertaken, duration of works, contractors engaged, and details of Social Security benefits implemented to the construction workers. Challenging the alleged impugned notice in RC. No. 1824/2022 dated 01.02.2023 of the 3^rd respondent, the present writ petition is filed, on the ground that the said notice is contrary to the provisions of the Factories Act, 1948 and the provisions of BOCW Act, 1996 has no application to the establishment of the petitioner’s Corporation .

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Heard the learned counsel or the petitioner Corporation as well as learned Government Pleader for Labour.

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Learned Government Pleader for Labour took a strong objection stating that it is only a notice under Section 4(2) of BOCW Act, 1996, nothing stopped the petitioner Corporation from furnishing the details as sought by the respondents and

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further stated that it is only a notice but not final proceedings and as such this Writ Petition itself has to be dismissed on the ground that it is premature.

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Learned counsel for the petitioner Corporation has vehemently argued that the impugned notice dated 01.02.2023 was issued after considering the earlier explanations given by the petitioner Corporation and duly coming to a conclusion that the expansion / extension of construction works were undertaken by the construction workers / contractor for a particular period temporary in nature which is not benefited long time for providing social security benefits i.e., payment of gratuity, pension, shelter on demand submitted by the unions, covered under building and other construction works under Act, 1996 as well as Cess Act, 1996 and rules made thereunder.

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However, finally came to a conclusion that the management failed to pay cess within 30 days of completion of the construction work, which observations made in the said notice would show that the respondents having made up their mind, has issued the impugned notice.

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Having gone through the contents, it is true that as alleged by the petitioner Corporation, the 3^rd respondent having come to a conclusion that Sec 4(2) of the BOCW Act, 1996 is applicable to the petitioner Corporation has issued the impugned notice directing the petitioner Corporation to furnish the data in a particular form. When the 3^rd respondent has made up his mind that BOCW Act, 1996 is applicable for the petitioner Corporation, the question of issuing the said impugned notice calling for information is of no use and would definitely be in adverse to the petitioner Corporation.

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The further observations made in the said impugned notice that the Judgment relied upon by the petitioner Corporation is not applicable to them, as the petitioner Corporation has undertaken extension of works through Civil contractor and construction workers and the management failed to submit the reports in Form-I within 30 days from the date of completion of the construction works as per Section 4 of the BOCW Act and Section 61 of the Cess Rules and also failed to sent notice for commencement of Building and other construction works as per Section 4(2) of the Building and Other Construction Workers’ Cess Act, 1996, also establishes

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the fact that the 3^rd respondent has made up his mind that the provision of the BOCW Act, 1996 is applicable the petitioner Corporation.

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For proper appreciation of the case, it is necessary to extract Section 2(1)(3) of BOCW Act, 1996 which read as follows :-

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“Building or Construction work means the Construction, alteration, repairs, maintenance, demolition, of or in relation to, buildings, streets, roads, railways, tramways, air fields, 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 communications, towers, transmission towers and such other work as may be specified in this behalf by the appreciate Government, by notification but does not include any building or their construction work to which the provisions of the Factories Act, 1948 or the Mines Act, 1952 apply” .

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In support of the case, the learned counsel for the petitioner Corporation relied upon the judgement of Chattisgarh

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High Court in the case of Larsen And Turbro Limited Vs.

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State of Chatttisgarh and others as well as Judgment of Hon’ble Supreme Court in the case of LANCO ANPARA LIMITED Vs. STATE OF UTTAR PRADESH AND OTHERS¹ wherein it is observed as follows:-

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“39.The deliberate and emphatic exclusion clause when read with the judgment of the Hon’ble Supreme Court in the case of Lanco Anpara (supra), it clearly suggests that the moment the manufacturing process gets commenced in an industry the provisions of the Factories Act becomes applicable and therefore, the provisions of BOCW Act would seize to operate in those factories. That subsequent to the manufacturing process getting started, it is the provision of the Factories Act, which would be applicable to these factories.

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40.In view of the above discussion and the view of the Hon’ble Supreme Court in all the cases referred to herein above, this Court is of the opinion that since the (two) respondent No.3 establishments, the provisions of Factories Act were already in force, the provisions of the BOCW Act shall not be applicable on them.”

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In view of the fact that the petitioner Corporation was registered under the provisions of Factories Act, 1948 and manufacturing process commenced decades ago, the present construction activity, if any, within the petitioner Corporation

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1 (2016) 10 scc 329

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premises falls within the ambit of the Factories Act, 1948, but not within the purview of the BOCW Act, 1996.

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A perusal of the impugned notice would go to show that

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the respondents have already come to a conclusion and directed the petitioner Corporation “to submit the details of works completed previously, bills paid on or after 26.06.2007 and also ongoing works to decide the applicability of Act, as the Joint Commissioner of Labour is the cess Accessing Authority to finalise the issue on or before 08.02.2023. Therefore, the impugned notice cannot be termed as a notice as mandated under Sub Section 2 of Section 4 of the Act.

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On 13.04.2023, learned counsel for the petitioner Corporation has brought to the notice of this Court that though the matter was heard in detail on 12.04.2023 and the order being passed by this court, the respondents have again issued similar notice No. A/1824/2022 dated 12.04.2023 at around 9 p.m U/Sec 4(2) of Cess Act r.w.r 4(3) Cess Rules reiterating the same facts as stated earlier. Learned counsel for the petitioner Corporation has furnished a copy the same across the bench. The operative portion of the Notice is extracted below:-

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“In consideration of the legal delay, show the case in writing within 7 days that why penal action should not be initiated against you and also finally requested to submit ongoing works, completed works for which payments made to contractors on or after 26.06.2007, newly sanctioned works in the prescribed proforma.”

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However, learned Government Pleader appearing for the respondents submitted that a similar issue was already dealt with by this court in W.P.No. 16090 of 2021. The facts in the present writ petition and W.P.No. 16090 of 2021 are one and the same.

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In view of the above, this court feels it appropriate to dispose of this Writ Petition with the following directions :

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1. The impugned notice issued in Rc.No. 1824/2022 dated 01.02.2023 and subsequent notice No. A/1824/2022 dated 12.04.2023 shall be treated as show cause notices under Section 4(2) of the Building and Other Construction Workers Cess Act, 1996.

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1. The petitioner Corporation shall submit its explanation to the said notices treating them as show cause notices within a period of two (2) weeks from the date of receipt of a copy of this order.

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1. On receiving the said explanations from the petitioner Corporation, the 3^rd respondent shall pass appropriate orders keeping in mind the law laid down by the Hon’ble Supreme Court in the case of LANCO ANPARA LIMITED Vs. STATE OF UTTAR PRADESH AND OTHERS² without being prejudiced by the observations made in the impugned notices. The above exercise shall be completed within a period of two (2) weeks thereafter. Till such time, the respondents shall not take any coercive steps.

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Accordingly, this Writ Petition is disposed of. There shall

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be no order as to costs.

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As a sequel, miscellaneous application, pending, if any,

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shall also stand closed.

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SMT JUSTICE V. SUJATHA

12.04.2023 Psr

2 (2016) 10 scc 329

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THE HON’BLE SMT JUSTICE V. SUJATHA

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(Disposed of)

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Writ Petition No.8811 of 2023

Date: 12.04.2023

Psr.

THE HON’BLE SMT JUSTICE V. SUJATHA

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Writ Petition No.8811 of 2023

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Advance order

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In view of the above observations, this Court feels it appropriate to dispose of this writ petition with the following directions:

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1. The respondent shall not give any weightage to the observations made in the impugned notice dated 01.02.2023 and shall treat the same as a show cause notice.

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1. The petitioner Corporation shall submit its explanation to the said notice treating it as a show cause notice within a period of two (2) weeks from the date of receipt of a copy of this order.

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1. On receiving the said explanation from the petitioner corporation the 3rd respondent shall pass appropriate orders keeping in mind the above observations made by this Court in accordance with law. Till such time, the respondents shall not take any coercive steps.

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Accordingly, this Writ Petition is disposed of. There shall be

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no order as to costs.

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SMT JUSTICE V. SUJATHA

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12.04.2023 Psr

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As a sequel, miscellaneous application, pending, if any,

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