M/S.MIDLAND ENGINEERING AND CONTRACTING COMPANY v. KERALA WATER AUTHORITY

KERALA WATER AUTHORITY REP. BY ITS MANAGING DIRECTOR, JALA BHAVAN, VELLAYAMBALAM, THIRUVANTHAPURAM, PIN - 695055 THE SUPERINTENDING ENGINEER OFFICE OF THE THE SUPERINTENDING ENGINEER, KERALA WATER AUTHORITY, PH CIRCLE, MALAPPURAM, PIN - 676505 THE EXECUTIVE ENGINEER OFFICE OF THE EXECUTIVE ENGINEER KERALA WATER AUTHORITY, PROJECT DIVISION, MALAPPURAM, PIN - 676505 KERALA CONSTRUCTION WORKERS WELFARE FUND BOARD REP. BY ITS CHAIRMAN, NIRMAN BHAVAN, METTUKKADA, THYCAUD.P.O., THIRUVANANTHAPURAM, PIN - 695014 SRI.V.V.JOSHY – SC SRI.C.R.SYAMKUMAR - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

22.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 7032 OF 2024 2 JUDGMENT The petitioner is stated to be a company engaged by the Kerala Water Authority (KWA).

The specific case of the petitioner is that they have been contracted with the ‘KWA’ only to supply materials for pipeline works being carried on by them; and that they have no connection with such construction work, or its allied performance. They argue that, obviously, therefore, no “Cess” under the Kerala Construction Workers Welfare Fund Act (“KCWWF Act”), could have been imposed against them, since the contracts entered into by them have no relation to the construction work at all, or to the construction workers.

The petitioner says that, however, in spite of this, 1% of their bill amount is sought to be now deducted towards “Cess” under the “KCWWF Act”; and consequently, that they have been constrained to approach this Court, through this writ petition. They assert that their contentions are supported by the judgments of this Court in 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].

Sri.V.V.Joshy – learned Standing Counsel for the ‘KWA’, however, in response to the afore submissions of Sri.P.Shanes Methar – WP(C) NO. 7032 OF 2024 3 learned counsel for the petitioner, argued that, since the petitioner is a contractor under the ‘KWA’, their obligation to pay “Cess” under the “KCWWF Act” is unmistakable and unavoidable. He argued that, as long as the petitioner is involved in construction works, they certainly have to pay “Cess” and they cannot refuse it in any manner whatsoever.

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

However, it must be borne in mind that “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 the obligation of a contractor to pay “Cess” thereunder be attracted.

In the case at hand, as I have already said above, it is the specific contention of the petitioner that they only supply materials and have no part in the construction work. If this be so, certainly, it is a matter which the Superintendent or such other competent Authority of ‘KWA’ must consider, before imposing “Cess” upon them, through an WP(C) NO. 7032 OF 2024 4 automatic deduction from their bills.

When there is a clear factual dispute as afore, it would not be proper for one of the contracting parties unilaterally to impose a detriment on the other, citing that they are liable to pay “Cess”, without even making an assessment of the same and without affording them an opportunity of being heard. In the afore circumstances, I allow this writ petition and set aside impugned proceedings and direct the competent Authority of the ‘KWA’ to hear the petitioner and assess their claim, 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 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. Needless to say, until such time as the afore is done and the resultant orders communicated to the petitioner, action to recover any WP(C) NO. 7032 OF 2024 5 amount from their Bill amounts towards “Cess” under the “KCWWF Act”, will stand deferred; and will be taken forward only after the said orders are communicated to them and in terms of the decisions will be arrived at. 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. Sd/- DEVAN RAMACHANDRAN JUDGE MC/22.2 WP(C) NO. 7032 OF 2024 6 APPENDIX OF WP(C) 7032/2024 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 Exhibit P3 Exhibit P4 Exhibit P5 A TRUE COPY OF THE E TENDER NO.SE/PHC/MPM/66/2023-24 DATED NIL PUBLISHED BY THE SECOND RESPONDENT A TRUE COPY OF THE L E T T ER O F A C C E P T A N C E D ATED: 11.10.2023 (TOGETHER WITH THE ACCEPTED SCHEDULE) ISSUED BY THE SECOND RESPONDENT A TRUE COPY OF THE RELEVANT PAGES OF AGREEMENT NO.SE/PHC/MPM/89/2023-24 DATED 2 4 / 1 1 /2023 A TRUE COPY OF THE REPRESENTATION DATED 14.2.2024 SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT A TRUE COPY OF THE JUDGMENT DATED 4.12.2023 IN W.P (C) NO.39649 OF 2023