Partly allowed

Adani Agri Logistics Ltd. and Anr. v. State of Haryana and Ors.

Punjab & Haryana HC21 May 2010CWP/6102/2008

Case brief

AI extract

What is this about?

The Court held that owners of establishments are liable under the Building and other Construction Workers Act and the Welfare Cess Act when they employ building workers or profit from the work, even if construction is outsourced to contractors, rejecting the defence that the Factories Act 1948 renders them exempt.

What did the court decide?

The writ petitions were allowed in part; owners cannot be excluded from the purview of the Acts in favour of contractors, but interference to grant other relief was declined.

Adani Agri Logistics Ltd. and Anr… — Pension and Retirement Benefits | Punjab & Haryana HC (2010)

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1NTHE HIGH COURT OF PUNJAB AND^HARYANA AT CHANDIGARHe

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CWP No6102 of2008 085MI Dateofdecisionl 21 32010

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AdaniAgriLogisticsLimited and another

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Petitioners

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The Stateof Haryanaand others

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CORAM HONBLE Ml JUSTICE ADARSH KUIWAR GOEL MONBLE Ml2eJ1JSTICEALOK SINGH Present Mr PKlvlutnejaMrAshish Chopra andMr VikasBahaI Advocatesfor the

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Ms Ritu Bahri DAG Haryana Mr ICICKahlon Advocate for Union ofIndia

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Adarsh Kumar GoelJ

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1 This orderwill disposcof CWP^NosA281 6102 7169 10174 11253 of 2008 and 8595 of 2009^as all the involve^common as to coverage of thewrit owners of cstablishrnentby the of the BuildingandotherConstructionWorkers of andConditionsof Service Act 1996 3OCW Act9andthe Building^{andOther ConstructionWorkersWelfareCess Act} 1996 Act Cess Actl

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2 In CWP No6102 of 2008^seven complaintshave been filed

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againstpetitionerN2 withthefoliowing

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i9^Thatthe is^found running^construction work of establishmentwith the aid of 325 workers Hence the establishmentis covered under BLuldingand other ConstructionWorkers Act 1996 The managementfailed to JOYTI RANI show the proofof paymentof fee i gettng 2016.03.28 10:53I attest to the accuracy and integrity of this document

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certificateof in favour of Clef of Factories alongwitll Form No1 on triplicatelfor running thebuildingor constructlon work for theyear 2007 This^1S violationofsectionlrules7171821 ofBOCW Act 1996

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iil^{Therearenofire} providednear four diesel working^at different Iocations ln the establishmentThis is violationof sectionlrules40 91 of BOCW Act 1996

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iiil^Thenotice of^commencement of building^orother constructionwork not submiued in Form N036 This 1S violationofsectionlrules46

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iv That the handrails not providedto stairsmade for the QCe^room So thereis every of fallingfrom heightas workersareusingthem for goinginto QC room for constructionwork This is violationof sectionlrules40 98ofBOCW Act 1996

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v That the workers found workingwithout suitable for 1^ike weldingcutting and grindingetc This is violationof sectionlrules40 101 ofBOCW Act 1996

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vil^{Thatthe fast} movingcouplingof the DG^set has not been properlyguarded^or fenced This 1S violation of sectionlrules40 93ofBOCW Act 1996

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3e ofthe said hasbeensoughtmainlyonthe

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ground^{thattheestablishment} of^the being^covered by^the Factories Act 1948 could not be requiredto get under the

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BOCW Act In supportof this submissionsustenance is soughtfrom the JOYTI RANI 2016.03.28 10:53 I attest to the accuracy and 2014.01.09 13: 01 integrity of this document

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deflnitionof buildingor otherconstructionwork under section2i9 oftht BOCWAct

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4 Case^set out in thepetitionis thatthe is canyingout^a of^{the Food} of India involvingcreationof supplychainfor food grainin the countryUndertheprojectfacilitieswill be for receivingfood grainat the Base depotsand the sameto theField Depotsln bulk wagons The projectwas an infrastructure and^was directlymonitoredby the Prime Minsters of6ce The receivednoticeof of theAct and advisingthem to applyfor which^was followedbyShow Cause Notice asking the to show^cause whyIegalactionbe not taken for violationof prOVlSlOnsof the Act The put forwardtheir replyto^the effect that the constructionactivityundertakenby them^was covered by the FactoriesAct 1948and^was thus not coveredbythe BOCW Act The

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alsoreceivednotice^asto liability^to pay cessundertheCessAct to whichalso thestandofthe was thatthey^were not coveredby the saidAct^on the^same groundThis^was followedbyfilingof mentionedabove

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5 The havecontestedtheclaim in thewrit petitionby that the definition of building^{andconstruction} work which excludesconstruction coveredbythe FactorlesAct was not determinativeof of BOCW Act^andtheCess Act Even otherwisethework ofthe was not coveredbythe Factories Act The writ petitionwas prematureas the will^have full to put forward their defence before the concemed Court tryingthe

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colnplaint

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JOYTI RANI 2016.03.28 10:53 I attest to the accuracy and integrity of this document

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Suresh Kumar 2014.01.09 13: 01 Scanned True Copy of Original PHHC,Chandigarh

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6 In CWPNosA281 7169 10174 11253 of2008 and 8595of 2009^direction sought^is against of the BOCW Act Avennents in thesaid are thattheyare runningestablishmentsfor out thework^as buildersandShowCauseNoticeshavebeenissued 1 tothem violationofthe ofthe BOCW Act and 1 them^toappear beforethe statutoiy They^gave reply^totheeffect thattheyhadgiventhe work^to the^contractors whoin tum hadthe Iicences llle contractors theworkerswith whomthe had^no privityandthus they^were not coveredbytheAct Theycould^not be to follow the provlsions of the BOCW Act The to carry out the ofthe saidAct was on thosewhom work hadbeen by^the

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7 In the replyfiled in CWP N03169 of 2008 w41ichhas been

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in other cases byleamedcounse for the standtakenis thatthe beingowners ofestablishments covered undersection 201^oftheAct for whom the buildingworkers^were are employer^{under sectlon} 2I of^the BOCW^Act Their standthat theydid not have any privityof contract with the workersand^on that groundthe

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of theBOCW Act were not applictblecould not be The Act was intended^to providefor safetyand welfare facllities^to the workerswho^were vulnerablesegment labour The Cess Act 1S intended to augmen t he resources of theWelfare^Board workingfor the benefit of workers Mere fact of their havin g iventhe contract did not exclude theinfrom the definitionof The could not be excludedfrom the purviewof the Act merelybecauseof their having

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given^{contractstocontractors whomay have} undertaken^the

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JOYTI RANI of 2016.03.28 10:53 I attest to the accuracy and integrity of this document

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with the of the Act contractors^were for thework of the In thesecircumstancestheyhad nexus with the workersandthuscould not avoid for welfare andsafetyofthe workers

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8 We haveheardleamedcounselfor thepartiesand the

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recor

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9 Question^{forconsiderationiswhetherthe} stand excluded8om the purviewof the BOCW Act and the Cess Act on the groundof their havingoutsourcedtheir construction activityto the contractor^or on the groundthat constructionactivitywas covered bythe ofthe FactoriesAct 10 In^our orderdated1352010 ln CWP No6230 of 2009 New India Construction Companyand another

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VSe State of Haryana

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and othersl^we consideredthe schemeofthe BOCW Act and the CessAct in thecontext ofcontentionraised^on behalfofthecontractors thattheywere not coveredby the said Acts The contentions raised on behalf of the contractors^were repelledhavingregardto theobjectand the plain of^thestatute lt was held thattheycould not claim to avoid liabilityto pay cess for thewelfare of theworkerson whosetoil and sweat the contractor survived andwho^were directlyemployedby^{the contractor} Thereln it^was contended that since work to the owner only^theowner was intended^to be covered and not the contractor ln this batchof stand taken is to the contrarythat the^owner had^no liabilityand only contractors were liable Such stand cannot be acceptedIn Mls New India Construction we have held that under the scheme of the Iaw

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contractor as well as owner were covered While noticingthe of

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DelhiHighCourt it^was observed

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It has beenpointedout by learnedcounselfor the partiesthat thevalidityof levywas not in issuein these petitionsand^was upheldby the Delhi HighCourt^lll Builders Association of India^Ve Union of India and another 1392007 Delhi Law Times 578 OOB9 thattheOevywas referableto Entry97 of List I Correctnessof the view taken in the said has^110t been by^eitherparty Therein the BOCW Act was held^to be referable^to Entries 23 and24 ofList II It^was alsoheldthatthelevy was ln the nature of fee Under the Schemeof the Act intention^was not^to confiliethe applicabilitvof the Act to the^owner or thecontractor but to cover both The cess could be collected from the owner^or the contractor If the Cess is not collectedfrom the contractor the same could be recoveredfrom the Owner The^owner could pass^on burdento the contractor and component of cess could be part of cost of constructionThe could collect the^cess and pass^Oll to the GovernmentThere was nothing in such mechanismThere^wasno scope^for No fault could be foundwith the directionfor deductionof^cessatsource lhe liability^to pay^cess was intended^to fall on the contractor the wolkers For facilitv of collection the ownerwas alsocoveredby the levy who could^passon the liability^tothe contractor Section 4 providesfor of^retum by^the Section 201of BOCW Act deflnes establishinent^as establishment to or underthe coontrolof Govemmentany body^corporate or firm individualor associationor other body^{ofindividuals} employingbuilding^workersand

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JOYTI RANI to a contractor but does 2016.03.28 10:53 I attest to the accuracy and integrity of this document

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includesestablishment

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not^{includeindividualwho} einploysworkersln building or constructionwork 111relationto his residencetotal cost ofwhichis not more thanRsl lacs Employer1S definedas owner ofthe establishmentandalsoincludesa contractorwhocanies^out theconstruction17

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Referencemay^now be made^to the definitionsof

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building^{andotherconstruction} activity and establishment in Section2 aI iI andO9ofthe BOCW Actl

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2dl buildingor otherconstructionwork meansthe construction alteration repairs^maIntenance or demolition of^or in relation^to buildingsstreets roads raiIways trainways airflelds embankmentand works Ooodcontrolworks including^stonn water works9 transmlsslon and distributionof power water works channelsfor distributionofwater9oil andgas installations electric lines wireless radio television and^overseas communication dams canals reservoirs watercourses tunnels bridges viaducts pipelinestowers coolingtowers transmissiontowers and such other work as may be specifledh1this behalfby the Govemment by^{notificationbut doesnotinclude any} buildingor other con stru ctl Oll work to which the of the Factories^act 1948 63 of 19489or the Mines Act 1952

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35 0f19529apply

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i9 employef^{inrelation toanestablishmentmeansthe} owner thereof andoincludesl

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i1^{inrelation toa} building01 other constructionwork carried^on by^or underthe of any of the Govemment directlywithout any contractor the JOYTI RANI speciOedin this behalf^or where^no is 2016.03.28 10:53 I attest to the accuracy and specied^{the headofthe} integrity of this document

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specied^{the headofthe}

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ii9in^relaontoa buding^{orodlerconsUucon} work carried^on by^or on behalf of a local or otherestablishmentdirectlywithout anycontractor the Chief Executive Offlcer of that or establishment

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ii o in relation^to a buildingor other constructlon work carried^on by^or a contractor or bythe of building^workers suppliedby a contractorthecontractor

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j1^{establishment} means any establishment to or underthe controlof Govemmentany bodycorporateor firm an individual^or association^or other bodyof individuals which^or who employsbuildingworkersin any building or other constructionwork and includes^an establishment to a contractor but does not include^an individualwho employssuch workersin any building^or constructionwork in relation^to his own residence the totalcost of suchconstructionnot beingmore thanrupees^ten lakhs

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12 The definition of shows that the^owner of an

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establishment building^{workers1Scovered} by^thesaid deflnitionThe definitionis furtherextendedto includecontractor who may be in relation^to buildingor otherconstructionwork Even when thereis^no privityof contract with the workersof the contractor it is the owner for whosebeneflt thework is carried^on

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13 Mere^{fact that} theIiabilitywas undertakenbythe contractor did not excludethe liabilityofthe Role of^{ownerwasakinto} therole

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of principalemployerunder the schemeof the ContractLabour Regulation JOYTI RANI 2016.03.28 10:53 Suresh Kumar I attest to the accuracy and 2014.01.09 13: 01and Abolitior Act 1⁹⁷⁰ In fact in replyfiled on behalf of Labour integrity of this document Scanned True Copy of Original PHHC,Chandigarh

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1 of Punjab^a plea^{tothiseffecthasbeenraised} in CWP 11 No10174of2008 The factthat^every is coveredis furtherclear by^{section 44} of^theActwhich to building activityto ensure of of theAct The said provision1S

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asunderl

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44 of An shallbe for providingconstant and of any buildingor other construction work in his establishment^astoensure coinpliancewith^the provisions of this Act relatingto safetyand for takingall practical stepsto preventaccidents

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14 As regardsthecontentionthatthat^an individualwho employs

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Wollkersfor gettinghis^OW11 houseconstructedfor thevalueof morethan Rsl O lacs thoughcovered under sectiOIl 2 could not be intendedto be covered by^{the Actand gethimself} and to which^{may be} for^an individual learnedcounselfor the pointedout that^none of^the was an individual house^owner and thusthis contention^was academicThe were buildersor^contractors in commercialactivityhaving large^{establishmentsand} they^hadno difficulty^{l tl} getting^themselves

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and carryingout the ofthe^nature of of of of^the Act bythe contractor whereverwork^was to contractor 15 Leamed counselfor the also broughtto our notice thatapartfroin of theDelhi HighCourtin BuildeI Association^a

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Division Bench of Andhra PradeshHlghCourt in judgmentdated 1572008

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Suresh Kumar2014.01.09 13: 01ln Writ Petition NosA587 of 2008 OWlsCormandel Prestcrete Private Scanned True Copy of Original PHHC,Chandigarh

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Limited^ve StateofAP and othersland^a SingleBenchofMadhyaPradesh High^{Court in} dated62009 in Writ PetitionN02717 of 2008 Mls Gannon Dunkerlevand CoeLimited vState of MP and othersl haveupheldtheIiabilityofthe^owner as well as contractor

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16 In Mls CormandelPrestcrete the issueconsideredwas in the context of writ petitionfiled by contractors seekingexclusion 8om the BOCW Act^andtheCess Act In Mls Gannon c0 Co dealing with theplea ofowners^as well^{ascontractors} bytheBOCW and theCessAct even whenFactoriesAct appliedit was observed

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19 The intentionofthe is thereforenot onlyto includethe^owner of^{theestablishmentinthe} present^case the company but also the contractorswho carries out the or other constructionwork and^1San work of building for the purposeof theConstructionWorkersAct 1996andthe CessAct 1996 Thus there^1S no escape for thecontractors whohaveundertakenthebuildingand other COllStrUCtlOllwork in the establishment to the companyThus in theconsideredopnionof thisCourtthe Contractorswho undertakethe work of buildingand other construction woteksin an establishment to or under the controlof Governmentany bodycorporate^or flrm an individual^or association^or otller body of individualswhich^or who employsbuildingworkersⁱⁿ any building^or other constructionwork and includes^an establishment to a contractor are govemedby the provisionsof Cess Act 1996 and the Rules of 1998 lnade thereunder

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20 The next submisslonof the leamed counsel for the petitioner^{contractorisbasedon} the exclusion clause contaionedin tlle deflnition under section 2d1 of JOYTI RANI 2016.03.28 10:53 Building^{orotherconstructionwork} which stipulatesthat I attest to the accuracy and integrity of this document

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any buildingor other constructionwork to which the ofthe FactoriesAct 1948will not beincludedin thedefinition^as containedin thisclause It is thecontention ofthe leamedcounselfor the thatthecompany^1S by^{theFactoriesact} 1948 and^as such the constructloll which are carriedout are by^thesaid Act the necessary corollarywhereof would be the of the^contractors herein 8om the ofthe constructionWorkersAct 1996andthe Cess Act 1996andtheRules madethereunder

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21 The FactoriesAct 1948^was enactedto consolidateand amendthelaw labourin factoriesThe^statement of objectsof reasons revealsthat at thetimeof^enactment the Factories Act l 934^was ln existence but numberof defects and weakilesses were and the provisions to safetyhealth and welfare of workers in factories^were foundto be and which the need for inlnimum health cleanliness ventilationand dusts and 8imes lighting^and control of glareetc9safetyeye protection control of and inflammabledusts etc and general^welfare of^workers washing^{facilitiesfirstaid} canteens shelter^rooms crches etc9 where necessar by^{rules and} to be prescribedby Governments Thus the Factories Act 1⁹⁴⁸ as the stateinent of objectsand^reasons and variousprovisions containedthereinrevealsoperatesin a differentfield with different scope and objectthan the ConstructionWorkers Act 1996 Cess Act 1996 The nature of construction activities undertakento COinlntssion a retlnerycannot by any stretchof be construed^asan activityunder the Act of 1948 Merelybecausetheprovisionofthe Act of JOYTI RANI 2016.03.28 10:53 1948has beenmadeapplicablebesidesother labourlaws^to I attest to the accuracy and integrity of this document

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be^contractors will not in the consideredopinionof this Court exclude the of the Construction WorkersAct 1996and Cess Act 1996^to the contractors The secondsubmissionthereforeput forthby the exclusion of the Contractorsfrom the of the Construction WorkersAct 1996andCessAct 1996thereforealsofails

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17 We agreewith the above observationsWe are thus of the^Vlew that the^owner of^{establishmentforwhom orforwhose} benefitconstructionactivityis cairied on and who employsbuildingworkers is includedand is to complywith the ofthe BOCW Act and the Cess Act llhe cannot thus be excluded Oom the ofBOCW^andtheCess Act

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18 As regardscriminal for allegedviolation^we makeit clear thatit will be open to theaccusedin thesaid to put forward their

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defencebeforetlheconcernedcourt whichwill beconsidered^on its^own merits in accordancewithlaw

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We thus do not find any groundto interfere^to gran t herelief sought^inthewrit petitions

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21 Before partingwith this order^we considerit to invite attentionofthe concemedauthoritiesto the ofan individual his^own houseof value of more than Rs lacs Thoughin absence byany^{such individual wedonotconsider} it necessaryto on this the concemed authoritymaybe

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well advisedto have^a freshlook at the monetaryIimit in the lightofexpert

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JOYTI RANI 2016.03.28 10:53 I attest to the accuracy and integrity of this document

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An individualwho^constructsa small^house which also^may

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cost more thanRs10 lacs may not find it to seek and render for ofthe Act 22 A copy of this order be sent to the Cabinet Governmentof lndia for beingforwardedto concemed for due considerationofthis aspectin accordancewith law

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Adani Agri Logistics Ltd. and Anr. v. State of Haryana and Ors.

Case brief

What is this about?

What did the court decide?

Adani Agri Logistics Ltd. and Anr. v. State of Haryana and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

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