High Court of KeralaSingle JudgeWrit petition allowed; impugned proceedings set...

Joseph John v. Kerala Water Authority and Others

Case / Petition Number:WP(C) NO. 770 OF 2024

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Devan Ramachandran
Judgment Date
2024-01-08
Court Decision / Holding
Writ petition allowed; impugned proceedings set aside; direct the competent Authority of the KWA to hear the petitioner and assess his claim that he is not liable to pay cess under KCWWF Act because he only supplies materials and is not involved in construction; recovery of any amount from his bill is deferred until orders; if it is ultimately found that cess cannot be imposed, amounts collected will be refunded; proceedings to be completed expeditiously and in light of the cited precedents.
Final Disposition
Writ petition allowed; impugned proceedings set aside; KWA directed to hear the petitioner and assess his claim; recovery of cess deferred; if cess cannot be imposed, amounts collected will be refunded; matter to be resolved expeditiously with consideration of cited precedents; orders communicated to the petitioner accordingly.

Parties to the Case

Appellants / Petitioners

  • Joseph John

Respondents

  • Kerala Water Authority
  • The Superintending Engineer
  • The Executive Engineer
  • Kerala Construction Workers Welfare Fund Board

Legal Representation & Advocates

Counsels for Petitioners

  • • P. Shanes Methar
  • • N. Krishna Prasad

Counsels for Respondents

  • • P. M. Johny, SC

Case Synopsis & Summary

Joseph John, a works contractor engaged by the Kerala Water Authority (KWA), challenges a 1% deduction from his bill towards the Kerala Construction Workers Welfare Fund (KCWWF) cess. He asserts that his contract with KWA is limited to supplying materials for pipeline works and does not involve construction activity, hence cess under KCWWF should not be imposed. He cites earlier Kerala High Court judgments—Poulose and others v. State of Kerala and others (1993 ILR Kerala 675) and Kerala Construction Workers Welfare Fund Board v. State of Kerala (1995 KLT 724)—as supportive authorities for his position that cess should not be levied where the contractor has no direct role in construction. The KWA contends that as a contractor, he is bound to pay cess whenever construction works are involved, and that even the supply of materials may be considered part of construction. The judge notes that KCWWF is a defined scheme with specific criteria and that a factual dispute exists about the contract's nature; directing that the competent KWA authority must assess the petitioner's assertion and determine whether cess can be levied. The court emphasizes the need for an opportunity of hearing and directs that, pending the decision, no recovery shall be made and that, if it is ultimately found that cess cannot be imposed, any amounts collected will be refunded. The judgment also directs consideration of the cited precedents to guide the eventual order.

Provisions of Law Cited

Kerala Construction Workers Welfare Fund Act (KCWWF)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that he was engaged by the KWA only to supply materials for pipelines and not to participate in construction work, and therefore cannot be subjected to cess under KCWWF. He argues that the cess obligation can be imposed only if the contract involves construction and all statutory criteria are satisfied, citing Poulose and others v. State of Kerala and Kerala Construction WWF Board v. State of Kerala as supportive authorities. He asserts a factual dispute about the contract's nature and seeks an opportunity to be heard and for the competent authority to assess his claim before any deduction from bills. He asks for quashing of the impugned proceedings and a direction to KWA to determine whether cess is due, with a possible refund if not.

Contentions of Respondents

The KWA argues that as a contractor, the petitioner is obliged to pay cess under KCWWF as long as construction works are involved, even if he merely supplies materials. It contends that cess cannot be refused and that proper assessment by the competent authority with due hearing is required before any deduction. The respondents emphasize that KCWWF's ambit covers contractors engaged in construction and those providing essential materials, and that the Act should be applied only after a thorough verification and due process.

Cited Precedents (3)

Case NameCitationTreatmentExplanation
Poulose and others v. State of Kerala and others1993(3) ILR Kerala 675PositiveCited as supportive authority for the petitioner's claim that cess may not apply where the contract does not entail construction.
Kerala Construction Workers Welfare Fund Board v. State of Kerala1995(2) KLT 724PositiveCited as supportive precedent concerning the ambit of KCWWF and application to contractors.
W.P.(C) No. 39649 of 2023W.P.(C) No. 39649 of 2023Mentioned OnlyJudgment cited as Exhibit P6; referenced in the appendix, not expressly relied upon as a controlling rule.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ``` THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN MONDAY, THE 8[TH] DAY OF JANUARY 2024 / 18TH POUSHA, 1945 ``` ## `WP(C) NO. 770 OF 2024` ## `PETITIONER:` ``` JOSEPH JOHN, AGED 55 YEARS, MONIPPILLIL HOUSE, AVOLI (PO), MUVATTUPUZHA, ERNAKULAM, PIN – 686670. ``` ``` BY ADVS. P.SHANES METHAR N.KRISHNA PRASAD ``` ## `RESPONDENTS:` ``` 1KERALA WATER AUTHORITY, REPRESENTED BY ITS MANAGING DIRECTOR, JALA BHAVAN, OBSERVATORY HILLS, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN – 695033. 2THE SUPERINTENDING ENGINEER, OFFICE OF THE SUPERINTENDING ENGINEER, P.H CIRCLE, KERALA WATER AUTHORITY KALMANDAPAM, PALAKKAD, PIN – 678001. 3THE EXECUTIVE ENGINEER, OFFICE OF THE EXECUTIVE ENGINEER, WATER SUPPLY PROJECT DIVISION, KERALA WATER AUTHORITY, PALAKKAD, PIN – 678001. 4KERALA CONSTRUCTION WORKERS WELFARE FUND BOARD REP. BY ITS CHAIRMAN, NIRMAN BHAVAN, METTUKADA, THYCAUD, THIRUVANANTHAPURAM, PIN – 695014. BY ADV.SRI.P.M.JOHNY, SC ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 770 OF 2024 ``` ``` -2- ``` ## `JUDGMENT` ``` The petitioner in this writ petition is stated to be Works Contractor engaged by the Kerala Water Authority (KWA). ``` ``` 2.The specific case of the petitioner is that he has been contracted with the ‘KWA’ only to supply materials for pipeline works being carried on by them; and that he has no connection with such construction work, or its allied performance. He argues that, obviously, therefore, no “Cess” under the Kerala ``` ``` Construction Workers Welfare Fund Act, could have been imposed against him, since the contract entered into by him has no relation to ``` ``` the construction work at all, or to the ``` ``` construction workers. ``` ``` 3.The petitioner says that, however, in spite of this, 1% of his bill amount is sought ``` ``` WP(C) NO. 770 OF 2024 ``` **==> picture [22 x 9] intentionally omitted <==** ``` to be now deducted towards “Cess” under the “KCWWF”; and consequently, that he has been constrained to approach this Court, through this writ petition. He asserts that his 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]. ``` ``` 4.Sri.P.M.Johny – learned Standing Counsel for the ‘KWA’, however, in response to the afore submissions of Sri.P.Shanes Methar – learned counsel for the petitioner, argued that, since the petitioner is a contractor under the ‘KWA’, his obligation to pay “Cess” under the “KCWWF” is unmistakable and unavoidable. He argued that, as long as the petitioner is involved in construction works, he certainly has to pay “Cess” and he cannot refuse it in any manner whatsoever. ``` ## `WP(C) NO. 770 OF 2024` **==> picture [22 x 8] intentionally omitted <==** ``` 5.It is luculent from the afore rival ``` ``` positions that there is factual disputation as to the nature of the contract entered into by the petitioner with the ‘KWA’. While he ``` ``` maintains that he is 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. ``` ``` 6.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. ``` ``` 7.In the case at hand, as I have already ``` ``` said above, it is the specific contention of the petitioner that he only supplies materials and has no part in the construction work. If this be ``` ``` WP(C) NO. 770 OF 2024 ``` ``` -5- ``` ``` so, certainly, it is a matter which the Superintendent or such other competent Authority of ‘KWA’ must consider, before imposing “Cess” upon him, through an automatic deduction from his bills. ``` ``` 8.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 he is liable to pay “Cess”, without even making an assessment of the same and without affording him 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 his claim, that he is not liable to pay “Cess” under the “KCWWF” Act because, they only supply materials and not concerned with the construction work. ``` ``` WP(C) NO. 770 OF 2024 ``` ``` -6- ``` ``` The afore shall be done, after affording the petitioner an opportunity of being heard and after assessing his 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 amount from his Bill amounts towards “Cess” under the “KCWWF Act”, will ``` ``` stand deferred; and will be taken forward only after the said orders are communicated to him 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 ``` ``` WP(C) NO. 770 OF 2024 ``` **==> picture [22 x 8] intentionally omitted <==** ``` the “KCWWF Act” cannot be imposed against the petitioner, then the amounts already collected from him under such head will be returned without any avoidable delay. ``` ``` Sd/- ``` ``` DEVAN RAMACHANDRAN ``` ``` JUDGE ``` ``` akv ``` ``` WP(C) NO. 770 OF 2024 ``` ``` -8- ``` ## `APPENDIX OF WP(C) 770/2024` ## `PETITIONER EXHIBITS` ``` EXHIBIT P1A TRUE COPY OF THE WORK ORDER TOGETHER WITH THE ACCEPTED SCHEDULE (LETTER NO. KWA/PHC/KKD/JJM/CHALAVARA-HEAD WORKS/21-22 DATED 13-10-2022 OF THE SECOND RESPONDENT) ``` ``` EXHIBIT P2A TRUE COPY OF THE RELEVANT PAGES OF AGREEMENT NO. 23/22 - 2 3 /SE/PHC/PKD DATED 19/10/2022 ``` - `EXHIBIT P3 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC FIRST & PART BILL DATED 26-04-2023` - `EXHIBIT P4 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC SECOND & PART BILL DATED 26-12-2023` - `EXHIBIT P5 A TRUE COPY OF THE REPRESENTATION DATED 09.10.2023 SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT` - `EXHIBIT P6 A TRUE COPY OF THE JUDGMENT DATED 0412- 2023 OF THIS HON'BLE COURT IN W.P. (C) NO. 39649 OF 2023`