Allowed

M/S. Chicago Constructions International Private Limited v. Kerala Water Authority

Kerala HC19 Dec 2023WP(C)/42985/2023

Case brief

AI extract

What is this about?

This writ petition challenges the imposition of a 1% cess under the Kerala Construction Workers Welfare Fund Act against a material supplier. The Court held that where there is a factual dispute regarding liability, unilateral deduction without assessment or hearing is improper, allowing the petition and directing a hearing.

What did the court decide?

Writ petitions allowed; impugned proceedings set aside; competent authority directed to hear the petitioner, assess their claim, and return collected amounts if not liable.

M/S. Chicago Constructions International Private… — Service and Employment | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

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TUESDAY, THE 19TH DAY OF DECEMBER 2023 / 28TH AGRAHAYANA, 1945

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WP(C) NO. 42985 OF 2023

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PETITIONER:

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M/S. CHICAGO CONSTRUCTIONS INTERNATIONAL PRIVATE LIMITED
REPRESENTED BY ITS MANAGING DIRECTOR, S.MOHANA KUMAR,
AGED 60 YEARS, SON OF SADASIVAN, HAVING ITS REGISTERED
OFFICE AT TC 22/2703, CHITIRA LANE, KOCHAR ROAD,
SASTHAMANGALAM, THIRUVANANTHAPURAM, PIN - 695010

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BY ADVS.
N.KRISHNA PRASAD
A.MOHAMMED FAIZAL
P.SHANES METHAR
DEEPAK VARUGHESE MATHEW
GEETHU SUSAN VARGHESE
PUSHPARAJ.K.P
JAISHRI SHEBA JACOB
BHARATH MOHAN

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RESPONDENTS:

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1 KERALA WATER AUTHORITY REPRESENTED BY ITS MANAGING DIRECTOR, JALA BHAVAN, OBSERVATORY HILLS, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695033

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2 THE SUPERINTENDING ENGINEER KERALA WATER AUTHORITY, PUBLIC HEALTH CIRCLE, THIRUVANANTHAPURAM, PIN - 695033

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3 THE EXECUTIVE ENGINEER PROJECT DIVISION, KERALA WATER AUTHORITY, THIRUVANANTHAPURAM, PIN - 695033

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4THE KERALA CONSTRUCTION WORKERS WELFARE FUND BOARD
REP. BY ITS CHAIRMAN, NIRMAL BHAVAN, METTUKKADA, THAYCAUD
POST, THIRUVANANTHAPURAM, PIN - 695014

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

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19.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 42985 OF 2023

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JUDGMENT

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The petitioner in this matter – is stated to

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be Works Contractor, engaged by the Kerala Water
Authority (KWA).

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2.The specific case of the petitioner is

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that they have been contracted with the ‘KWA’

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only to supply materials for pipeline works being

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carried on by them; and that they have no
connection with such construction work, or its
allied performance. They argue that, obviously,

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therefore, no “Cess” under the Kerala
Construction Workers Welfare Fund Act, could have
been imposed against them, since the contracts
entered into by them have no relation to the

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construction work at all, or to the construction
workers.

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3.The petitioner say that, however, in

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spite of this, 1% of their bill amount is sought

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WP(C) NO. 42985 OF 2023

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to be now deducted towards “Cess” under the

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“KCWWF”; and consequently, that they have been
constrained to approach this Court, through this
writ petition. They assert that their contentions

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are supported by the judgments of this Court in

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Poulose and others v. State of Kerala and others
[1993(3)ILR Kerala 675] and Kerala Construction
WWF Board v. State of Kerala [1995(2) KLT 724].

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4.Sri.P.M.Johny – learned Standing Counsel
for the ‘KWA’, however, in response to the afore
submissions of Sri.P.Shanes Methar – learned
counsel for the petitioner, argued that, since
the petitioner is a contractor under the ‘KWA’,
their obligation to pay “Cess” under the “KCWWF”
is unmistakable and unavoidable. He argued that,

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as long as the petitioner is involved in
construction works, they certainly have to pay
“Cess” and they cannot refuse it in any manner

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WP(C) NO. 42985 OF 2023

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whatsoever.

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positions that there is factual disputation as to
the nature of the contracts entered into by the
petitioner with the ‘KWA’. While they maintain
that they are to only supply materials, without
having any participation in the actual

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construction work; the ‘KWA’ appears to take the
stand that, even the supply of materials is part
of the construction work.

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6.However, it must be borne in mind that

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“KCWWF” Scheme has a particular ambit to it and
its purlieus are also well defined. It is only if
all the criteria thereunder are satisfied, will

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the obligation of a contractor to pay “Cess”
thereunder be attracted.

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said above, it is the specific contention of the

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WP(C) NO. 42985 OF 2023

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petitioner that they only supply materials and

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have no part in the construction work. If this be

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so, certainly, it is a matter which the

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Superintendent or such other competent Authority

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of ‘KWA’ must consider, before imposing “Cess”
upon them, through an automatic deduction from
their bills.

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8.When there is a clear factual dispute as

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afore, it would not be proper for one of the

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contracting parties unilaterally to impose a
detriment on the other, citing that they are

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liable to pay “Cess”, without even making an

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assessment of the same and without affording them
an opportunity of being heard.

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In the afore circumstances, I allow these

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writ petitions and set aside impugned proceedings
and direct the competent Authority of the ‘KWA’

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to hear the petitioner and assess their claim,

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WP(C) NO. 42985 OF 2023

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that they are not liable to pay “Cess” under the
“KCWWF” Act because, they only supply materials
and not concerned with the construction work.
The afore shall be done, after affording each
of the petitioner an opportunity of being heard
and after assessing their contentions and the
germane documentary materials; thus culminating
in an appropriate order and necessary action
thereon, as expeditiously as is possible. This
shall be done also adverting specifically to the
declarations in the afore cited precedents.

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Needless to say, until such time as the afore
is done and the resultant orders communicated to
the petitioner, action to recover any amount from
their Bill amounts towards “Cess” under the

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“KCWWF Act”, will stand deferred; and will be
taken forward only after the said orders are
communicated to them and in terms of the

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WP(C) NO. 42985 OF 2023

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decisions will be arrived at.

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As a corollary, if, through the afore
exercise, it is to be found that “Cess” under the
“KCWWF Act” cannot be imposed against the
petitioner, then the amounts already collected
from them under such head will be returned
without any avoidable delay.

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 Sd/-

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DEVAN RAMACHANDRAN

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JUDGE

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SAS

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WP(C) NO. 42985 OF 2023

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APPENDIX OF WP(C) 42985/2023

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PETITIONER’S EXHIBITS:

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Exhibit P1TRUE COPY OF THE SELECTION NOTICE DATED
07.12.2022 ALONG WITH THE ACCEPTED PRICE
SCHEDULE
Exhibit P2TRUE COPY OF THE AGREEMENT DATED 19.12.2022
Exhibit P3TRUE COPY OF THE CB-3 VOUCHER DATED NIL AND IN
RELATION TO CC PART BILL-1
Exhibit P4TRUE COPY OF THE CB-3 VOUCHER DATED NIL AND
RELATED TO CC PART BILL-2
Exhibit P5TRUE COPY OF THE CB-3 VOUCHER DATED 10/05/2023
Exhibit P6TRUE COPY OF THE CB- 3 VOUCHER DATED
16/08/2023
Exhibit P7TRUE COPY OF THE JUDGMENT IN WRIT PETITION
(CIVIL) NO.39649 OF 2023 AND CONNECTED CASES

M/S. Chicago Constructions International Private Limited v. Kerala Water Authority

Case brief

What is this about?

What did the court decide?

M/S. Chicago Constructions International Private Limited v. Kerala Water Authority

Case brief

What is this about?

What did the court decide?

What the court decided

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M/S. Chicago Constructions International Private Limited Vs Kerala Water Authority