Once Manufacturing Starts, Factories Act Would Apply Instead Of The Building And Other Construction Workers Act: Chhattisgarh HC [Read Judgment]

The Chhattisgarh High Court recently held that the moment manufacturing process begins in an industry, the provisions of the Factories Act, 1948 would be applicable, and therefore, the provisions of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) would cease to operate in a factory.

"...the moment the manufacturing process gets commenced in an industry the provisions of the Factories Act becomes applicable and therefore, the provisions of BOCW Act would seize to operate in those factories. That subsequent to the manufacturing process getting started, it is the provisions of the Factories Act, which would be applicable to these factories," Justice P. Sam Koshy observed.

The Court was hearing two Writ Petitions filed by Larsen and Turbo Ltd. (L&T), challenging notices issued to it demanding that it be registered under provisions of BOCW Act and that it pays 1% Cess charges under the Building and Other Construction Workers Welfare Cess Act, 1996.

The question now posed before the Court was whether the provisions of the BOCW Act would be applicable to a factory, where the manufacturing process has started and the provisions of Factories Act are already in force.

Answering the question in the negative, the Court relied on the judgment in the case of Lanco Anpara Power Limited v. State of Uttar Pradesh and Ors, wherein the Supreme Court had held that the provisions of the Factories Act would apply "only when the manufacturing process starts for which the building/project is being constructed".

Referring to the conclusion arrived at by the Apex Court, the High Court observed, "The plain reading of the aforesaid conclusion of the Hon’ble Supreme Court clearly envisages the ratio laid down by the Hon’ble Supreme Court in the aforesaid judgment i.e. prior to the commencement of a manufacturing process for the workers engaged for the construction of the factory, the provisions of the Factories Act would not be applicable upon them and they would stand covered and protected under the provisions of the BOCW Act.

This also means and implies that where a manufacturing process has already commenced the provisions of the Factories Act is what would be applicable and after the commencement of the manufacturing process, the provisions of the BOCW Act gets excluded as is envisaged under Section 2(1)(d) of the BOCW Act."

It, therefore, allowed the Petitions and set aside the impugned notices ruling, "In view of the aforesaid discussions and the view of the Hon’ble Supreme Court in all the cases referred to hereinabove, this Court is of the opinion that since in the two respondent No.3-establishments, the provisions of Factories Act were already in force, the provisions of the BOCW Act shall not be applicable on them."