Lanco Anpara Power Ltd vs State Of Uttar Pradesh And Ors

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.

The respondents were not satisfied with the aforesaid stand taken by the appellant. Thus, show cause notice dated 17.02.2011 was issued by respondent No. 2 as to why action be not taken against the appellant for failing to get itself registered under BOCW Act. It was followed by another notice of even date stating that the appellant had not furnished requisite information relating to construction activities undertaken by it as required under Section 4 of the Welfare Cess Act read with Rule 6 of the Welfare Cess Rules. Some more notices were issued to the similar effect with regard to the construction activities in respect of the township in Anpara, undertaken by the appellant. Insofar as township is concerned, appellant got itself registered through its principal contractors under Welfare Cess Act and started paying the cess. However, in respect of construction activity and factory premises, the appellant reiterated its stand that by virtue of Section 2(1)(d) of the BOCW Act, it was excluded from the coverage thereof. The contention of the appellant was rejected by the respondents which led to issuance of further notices demanding cess.

It is stated at the cost of repetition that construction workers are not covered by the Factories Act and, therefore, welfare measures specifically provided for such workers under the BOCW Act and Welfare Cess Act cannot be denied.

We, thus, hold that all these appeals are bereft of any merit. Accordingly, these appeals, along with the writ petitions filed before this Court as also those which are the subject matter of the transfer petition and transfer cases, are dismissed with cost. We, however, make it clear that insofar as objection to the calculation of cess as contained in the show cause notices is concerned, it would be open to the appellants to agitate the same before the adjudicating authorities.

No costs.

OCTOBER 18, 2016