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Case BriefsHigh Courts


Delhi High Court: In a petition filed challenging the vires of Rule 14 of Building & Other Construction Workers Welfare Cess Rules, 1998 (Rules, 1998), a Division Bench of Rajiv Shakdher and Tara Vitasta Ganju, JJ., held that that Rule 14(2)(b) of 1998 Rules is clearly beyond the powers of rule-making authority and must be struck down.

The petitioner is a Public Sector Undertaking (PSU) who has been imposed and called upon to pay the entire amount, Rs. 9,13,77,520/- which is inclusive of cess, penalties and interest, by the Assessing Authority via an order dated 07-03-2012, thus, show cause notice dated 13-02-2012 was issued. Aggrieved, the petitioner preferred an appeal and while preferring the same, did not deposit any of the amounts and thus, the appeal was dismissed by the Appellate Authority for non-compliance of the provisions of Rule 14(2) of 1998 Rules.

The core issue under consideration was whether the petitioner could have been called upon to pay 100% of cess, penalty and interest, for progressing its appeal, which was filed before the Appellate Authority?

The Court remarked that the rationale provided in the said order was that in case the petitioner was to succeed, the amounts, if any, deposited towards cess, penalties and interest, would be returned to it.

The Court noted that that the rule making authority has been given necessary powers for framing rules, under Section 14 of 1996 Act but the rule making authority cannot frame a rule, which is beyond the power conferred under the 1996 Act.

The Court further noted that on analyzing the width and scope of Section 11 of 1996 Act and making a careful perusal of the said sub-section, it becomes clear, that an appeal can be preferred under sub-section (1) of Section 11, in the form and manner prescribed only if it is accompanied by stipulated “fees” and the prescription, made in that behalf, is incorporated in Rule 14 of 1998 Rules.

The Court however, opined that the provision made in sub-clause (b) of sub-rule (2) of Rule 14 of 1998 Rules is clearly beyond the provisions of Section 11(2) of 1996 Act and the said section i.e., Section 11(2) of 1996 Act, only speaks about “fees”.

Placing reliance on Additional District Magistrate (Rev.) Delhi Admn. v. Siri Ram, (2000) 5 SCC 451, wherein it was observed that “it is a well-recognized principle of interpretation of a statute that conferment of rule-making power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act, or which is inconsistent therewith or repugnant thereto. From the above discussion, we have no hesitation to hold that by amending the Rules and Form P-5, the rule-making authority has exceeded the power conferred on it by the Land Reforms Act.”

Thus, the Court held Clause (b) of sub-rule (2) of Rule 14 of the 1998 Rules must be struck down for being ultra vires the provisions of Section 11 of the 1996 Act.

[MTNL v. Deputy Labour Commissioner, 2022 SCC OnLine Del 3704, decided on 31-10-2022]

Advocates who appeared in this case :

Ms Geeta Luthra, Sr. Adv. with Mr Sushil Kumar Singh, Ms Sitwat Nabi and Mr Harsh B. Nagar, Advocates for Petitioner;

Mr Prashant Manchanda, ASC with Mr Angad Singh, Mr Vaibhav, Ms Jasleen, Advs. for GNCTD/R-1. Mr Anurag Ahluwalia, CGSC with Mr Danish Faraz Khan, Adv. for R-2/UOI.

*Arunima Bose, Editorial Assistant has reported this.

Case BriefsCOVID 19High Courts

Delhi High Court: Prathiba M. Singh, J., while addressing a matter with regard to protection of migrant workers, held that, there is dire need to create a mechanism for the registration of migrant workers, so that they can be protected and benefits of relevant Acts can be passed onto them.

Present petition was filed to seek the implementation of Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979.

GNCTD pursuant to the last order of the Court placed on record an affidavit stating that as far as the the 1979 Act is concerned, there are no registered contractors under the said Act.

In so far as the registration of Migrant Workers under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, GNCTD had disclosed that there are various schemes which are available for construction workers.

Further it has been submitted that the registered workers under the above act have been disbursed financial assistance.

GNCTD also informed the Court that the Shramik helpline was made operational during the lockdown period to assist the migrants.

It is stated that no contractor or employer working in NCT Delhi has made any application for issue of registration or grant of a licence, under the 1979 Act. However, it is also mentioned that the Shram Suvidha portal of the Ministry enables online issuance of licences and registrations under the 1979 Act.

Thus, in view of the above Court stated that,

“… there is a dire need for creating a mechanism for registration of migrant workers.”

The said action has to be taken to ensure that migrant labour is adequately protected in terms of the Acts and benefits meant for them are passed to them

Court directed Union of India to file an affidavit in terms of the the kind of portal which is sought to be created, for the registration of migrant labour across the country. Such a portal ought to have on board all the state governments so that the ingress and egress of migrant labour is duly recorded and reported.

Matter to be listed on 22-07-2020. [Shashank S. Mangal v. GNCTD, 2020 SCC OnLine Del 677 , decided on 29-06-2020]

Case BriefsSupreme Court

Supreme Court:

“Construction workers do not assist only in building infrastructure, but they also assist in building the nation, in their own small way.”

After it was brought to the notice of the bench of Madan B. Lokur and Deepak Gupta, JJ that under the Building and Other Construction Workers‘ Welfare Cess Act, 1996, more than Rs. 37,400 crores have been collected for the benefit of construction workers, but only about Rs. 9500 crores have been utilized ostensibly for their benefit, the Bench issued various directions after stating:

“No State Government and no Union Territory Administration (UTA) seems willing to fully adhere to and abide by (or is perhaps even capable of fully adhering to and abiding by) two  laws solemnly enacted by Parliament, namely, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (the BOCW Act) and the Building and Other Construction Workers‘ Welfare Cess Act, 1996 (the Cess Act).”

The Court, hence, asked the Ministry of Labour and Employment, the State Governments and the UTAs to:

  • put in place and strengthen the registration machinery, both for the registration of establishments as well as registration of construction workers at the earliest.
  • establish and strengthen the machinery for the collection of cess.
  • frame one composite Model Scheme for the benefit of construction workers in consultation with all stakeholders including NGOs who are actually working at the grassroots level with construction workers. The scheme should include within it, inter alia, issues and concerns of education, health, social security, old age and disability pension and other benefits that are necessary for living a life of dignity as postulated by the Constitution of India.
  • conduct a social audit on the implementation of the BOCW Act so that in future there is better and more effective and meaningful implementation of the BOCW Act.

The Court also issued certain general directions for the implementation of the BOCW Act:

  • Every State Government and UTA shall constitute a State Advisory Committee, if not already constituted.
  • Every State Government and UTA shall constitute an Expert Committee and frame statutory Rules under Section 62 of the BOCW Act, if such statutory Rules have not already been framed.
  • The State Governments and UTAs must appoint Registering Officers for registration of establishments and construction workers.
  • Every State Government and UTA should establish a Welfare Board in terms of Section 18 of the BOCW Act. It must be appreciated that this is not a body that can be created by an executive order. The law requires that the Welfare Board shall be a body corporate having perpetual succession and a common seal.
  • Every State Government and UTA should establish a Welfare Fund for the benefit of the construction workers, with appropriate rules for utilisation of the funds.
  • all construction workers should be given identity cards and should be registered in terms of Section 12 of the BOCW Act.
  • The Ministry of Labour and Employment shall actively consider
  • making available to the construction workers the benefits of The Maternity Benefit Act, 1961 and The Minimum Wages Act, 1948, The Employees‘ State Insurance Act, 1948, the Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952, as well as (to the extent possible) the Mahatma Gandhi National Rural Employment Guarantee Act, 2005.
  • The Ministry of Labour and Employment should also consider whether projects of the Government of India in the railways, defence and other establishments are brought within the purview of the BOCW Act.
  • The Monitoring Committee which has had quite a few meetings so far should pro-actively ensure full compliance of the provisions of the BOCW Act, the Cess Act and the directions issued by this Court.

The Court asked the Union of India to take a decision on the management of the cess already collected. Noticing that the benefits and entitlements that have accrued to the construction workers cannot be passed on to them due to the passage of time, with the whereabouts of some of them not known. Accordingly, a decision will have to be taken by the Union of India on the gainful utilization of the cess already collected so that the Welfare Boards are not unjustly enriched – the beneficiaries having unfortunately lost out. [National Campaign Committee for Central Legislation on Construction Labour v. Union of India, 2018 SCC OnLine SC 236, decided on 19.03.2018]