M/S. CHICAGO CONSTRUCTIONS INTERNATIONAL PRIVATE LIMITED v. KERALA WATER AUTHORITY and others

# `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ``` THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN ``` ``` TUESDAY, THE 19[TH] DAY OF DECEMBER 2023 / 28TH AGRAHAYANA, 1945 ``` ## `WP(C) NO. 42985 OF 2023` ## `PETITIONER:` ``` M/S. CHICAGO CONSTRUCTIONS INTERNATIONAL PRIVATE LIMITED REPRESENTED BY ITS MANAGING DIRECTOR, S.MOHANA KUMAR, AGED 60 YEARS, SON OF SADASIVAN, HAVING ITS REGISTERED OFFICE AT TC 22/2703, CHITIRA LANE, KOCHAR ROAD, SASTHAMANGALAM, THIRUVANANTHAPURAM, PIN - 695010 BY ADVS. N.KRISHNA PRASAD A.MOHAMMED FAIZAL P.SHANES METHAR DEEPAK VARUGHESE MATHEW GEETHU SUSAN VARGHESE PUSHPARAJ.K.P JAISHRI SHEBA JACOB BHARATH MOHAN ``` ## `RESPONDENTS:` ``` 1KERALA WATER AUTHORITY REPRESENTED BY ITS MANAGING DIRECTOR, JALA BHAVAN, OBSERVATORY HILLS, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695033 2THE SUPERINTENDING ENGINEER KERALA WATER AUTHORITY, PUBLIC HEALTH CIRCLE, THIRUVANANTHAPURAM, PIN - 695033 3THE EXECUTIVE ENGINEER PROJECT DIVISION, KERALA WATER AUTHORITY, THIRUVANANTHAPURAM, PIN - 695033 4THE KERALA CONSTRUCTION WORKERS WELFARE FUND BOARD REP. BY ITS CHAIRMAN, NIRMAL BHAVAN, METTUKKADA, THAYCAUD POST, THIRUVANANTHAPURAM, PIN - 695014 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 2 ``` ## `JUDGMENT` ``` The petitioner in this matter – is stated to be Works Contractor, engaged by the Kerala Water Authority (KWA). ``` ``` 2.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, 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. ``` ``` 3.The petitioner say that, however, in spite of this, 1% of their bill amount is sought ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 3 ``` ``` to be now deducted towards “Cess” under the “KCWWF”; 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]. ``` ``` 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’, their obligation to pay “Cess” under the “KCWWF” 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 ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 4 ``` ``` whatsoever. ``` ``` 5.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. ``` ``` 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 ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 5 ``` ``` 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 automatic deduction from their 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 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 these ``` ``` writ petitions and set aside impugned proceedings and direct the competent Authority of the ‘KWA’ to hear the petitioner and assess their claim, ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 6 ``` ``` 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 each of 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 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 ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 7 ``` ``` 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 ``` ``` SAS ``` ``` WP(C) NO. 42985 OF 2023 ``` ``` 8 ``` ## `APPENDIX OF WP(C) 42985/2023` ``` PETITIONER’S EXHIBITS: ``` ``` Exhibit P1TRUE COPY OF THE SELECTION NOTICE DATED 07.12.2022 ALONG WITH THE ACCEPTED PRICE SCHEDULE Exhibit P2TRUE COPY OF THE AGREEMENT DATED 19.12.2022 Exhibit P3TRUE COPY OF THE CB-3 VOUCHER DATED NIL AND IN RELATION TO CC PART BILL-1 Exhibit P4TRUE COPY OF THE CB-3 VOUCHER DATED NIL AND RELATED TO CC PART BILL-2 Exhibit P5TRUE COPY OF THE CB-3 VOUCHER DATED 10/05/2023 Exhibit P6TRUE COPY OF THE CB- 3 VOUCHER DATED 16/08/2023 Exhibit P7TRUE COPY OF THE JUDGMENT IN WRIT PETITION (CIVIL) NO.39649 OF 2023 AND CONNECTED CASES ```