Holding

Construction workers are not covered by the Factories Act, so the BOCW Act and the Welfare Cess Act apply and the appellant must pay the cess.

Summary

Lanco Anpara Power Ltd was constructing a thermal power plant and had obtained registration under the Factories Act. The State authorities issued show‑cause notices under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) and the Buildings and Other Construction Workers Welfare Cess Act, 1996, demanding payment of cess for the construction workers employed. The appellant contended that because the project was registered as a factory, the building work fell within the exclusion clause of Section 2(d) of the BOCW Act and therefore the Acts did not apply. The High Courts rejected this view. The Supreme Court held that construction workers are not ‘workers’ under the Factories Act as the definition of ‘factory’ requires a manufacturing process, which was not yet underway. Consequently, the exclusion clause in Section 2(d) of the BOCW Act does not apply, and the welfare measures and cess under the BOCW Act and the Welfare Cess Act are payable. The appeals and the related writ petitions were dismissed.

Issues considered

The applicability of the Factories Act, 1948 to construction workers engaged in building works for a project that will later become a factory.
Whether Section 2(d) of the Building and Other Construction Workers Act, 1996 excludes such building work because the project is registered under the Factories Act.
Whether the cess under the Welfare Cess Act can be levied on the total project cost or only on the cost of construction.
The proper method of interpreting the exclusion clause – literal versus purposive construction.

Legislation cited

Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996s. 2(d)
Buildings and Other Construction Workers Welfare Cess Act, 1996s. 4, s. 6
Factories Act, 1948s. 2(1), s. 2(k), s. 2(m), s. 6, s. 7
Mines Act, 1952

Subjects

construction workersFactories ActBOCW ActWelfare Cess Actexclusion clausepurposive interpretationcess liabilitysocial welfare legislation

Judgment

[2016] 5 S.C.R. 731

LANCO ANPARA POWER LIMITED A
v.
STATE OF UTTAR PRADESH & ORS.
(Civil Appeal No.6223 of2016)
OCTOBER 18,2016 B

[A.K. SIKRI AND N.V. RAMANA, JJ.]
Building and other Construction Workers (Regulation of
Employment and Conditions of Service) Act, 1996 - Buildings and
other Construction Workers Welfare Cess Act,) 996 - Appellants· C
undertaking construction activity wherein they had planned to set
up their factories - ln the process of construction of civil works,
construction workers engaged - Case of respondent authorities
that the appellants to pay the cess for the welfare of the said workers
engaged in the construction work since the provisions of the BOCW
Act and the Welfare Cess Act meant for construction workers became D
applicable - Case of the appellants that provisions of the Factories
Act apply to the construction of building/project of the appellants -
Held: Construction workers are not covered by the Factories Act -
Thus, they are entitled to the welfare measures provided for such
workers under BOCW Act and Welfare Cess Act - Appellants to pay
E
cess for the welfare of the said workers - Factories Act, 1948.
Dismissing the appeals and the petitions, the Court
HELD: 1.1 The construction workers are not covered by
the Factories Act, 1948 and, therefore, welfare measures
specifically provided for such workers under the Building and F
other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996 and the Buildings and other
Construction Workers Welfare Cess Act, 1996 cannot be denied.
[Para 34)(759-F-G]
1.2 On the conjoint reading of section 2(m), 2(k) & 2(1) of G
the Factories Act, it becomes clear that "factory" is that
establishment where manufacturing process is carried on with or
without the aid of power. Carrying on this manufacturing process
or manufacturing activity is thus a prerequisite. It is equally
pertinent to note that it covers only those workers who are
H
731
732 SUPREME COURT REPORTS [2016] 5 S.C.R.

A engaged in the said manufacturing process. Insofar as these
appellants are concerned, construction of building is not their
business activity or manufacturing process. In fact, the building
is being constructed for carrying out the particular manufacturing
process, which, in most of these appeals, is generation,
transmission and distribution of power. Obviously, the workers
B
who are engaged in construction of the building also do not fall
within the definition of 'worker' under the Factories Act. On these
two aspects there is no cleavage and both parties are at ad idem.
What follows is that these construction workers are not covered
by the provisions of the Factories Act. [Para 21)(753-D-G)
c 1.3 Having regard to the above, if the submission of the
appellants is accepted, the construction workers engaged in the
construction of building undertaken by the appellants which is to
be used ultimately as factory, would stand excluded from the
provisions of BOCW Act and Welfare Cess Act as well. This could
D not be the intention while providing the definition of 'building
and other construction work' in Section 2(d) ofBOCW Act. [Para
22)(753-G-H; 754-A]
1.4 The High Court was right in observing that merely
because the appellants have obtained a licence under Section 6
E of the Factories Act for registration to work a factory, it would
not follow therefrom that they answer the description of the
"factory" within the meaning of the Factories Act. A bare reading
of the definition of factory, thereof makes it abundantly clear that
before this stage, when construction of the project is completed
and the manufacturing process starts, 'factory' within the meaning
F of Section 2(m) of the Factories Act does not come into existence
so as to be covered by the said Act. [Para 23)[754-B-C)
1.5 Section 2(d) of the BOCW Act dealing with the building
or construction work is in three parts. In the first part, different
activities arc mentioned which are to be covered by the said
G expression, namely, construction, alterations, repairs,
maintenance or demolition. Second part of the definition is aimed
at those buildings or works in relation to which the aforesaid
activities are carried out. The third part of the definition contains
exclusion clause by stipulating that it docs not include 'any
H building or other construction work to which the provisions of
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 733
PRADESH

the Factories Act, 1948, or the Mines Act, 1952 applies'. Thus, A
first part of the definition contains the nature of activity; second
part contains the subject matter in relation to which the activity
is carried out and third part excludes those building or other
construction work to which the provisions of Factories Act or
Mines Act apply. [Para 24)(754-D-F]
B
1.6 The construction of the projects of the appellants is
covered by the definition of"building or other construction work"
as it satisfies first two ~lements of the definition. In order to see
whether exclusion clause applies, the words 'but does not include
any building or other construction work to which the provisions
of the Factories Act apply are to be interpreted. The provisions c
of the Factories Act do not apply to the construction of building/
project of the appellants. The provisions of the Factories Act
would "apply" only when the manufacturing process starts for
which the building/project is being constructed and not to the
activity of construction of the project. That is how the exclusion D
clause is to be interpreted and that would be the plain meaning of
the said clause. [Para 25)(754-G-H; 755-A-B]
Orf{ano Chemical Industries v. Union of India 1980 (1)
SCR 61 : (1979) 4 SCC 573 - referred to.
1. 7 The said meaning attributed to the exclusion clause of E
the definition is also in consonance with the objective and purpose
which is sought to be achieved by the enactment of BOCW Act
and Welfare Cess Act. If the construction of this provision as
suggested by the appellants is accepted, the construction workers
who are engaged in the construction of buildings/projects would F
neither get the benefit of the Factories Act nor of BOCW Act/
Welfare Cess Act. That could not have been the intention of the
Legislature. BOCW Act and Welfare Cess Act are pieces of social
security legislation to provide for certain benefits to the
construction workers. [Para 26] [755-F-H]
G
1.8 Purposive interpretation in a social amelioration
legislation is an imperative, irrespective of anything else.
'Superior purpose' contained in BOCW Act and Welfare Cess
Act has to be kept in mind when two enactments - the Factories
Act on the one hand and BOCW Act/Welfare Cess Act on the
H
734 . SUPREME COURT REPORTS [20 J6] 5 S.C.R.

A other hand, are involved, both of which are welfare legislations.
[Paras 27, 32)(756-A-B)
Allahabad Bank v. Canara Bank 2000 (2) SCR 1102 :
(2000) 4 sec 406 - relied on.
Atma Ram Mittal v. Ishwar Singh Punia 1988 (2) Suppl.
B SCR 528 : (1988) 4 SCC 284; MP. Mineral Industry
Association v. Regional Labour Commr. (Central) AIR
1960 SC 1068 : 1960 SCR 476; Surendra Kumar Verma
v. The Central Government Industrial Tribunal 1981 (1)
SCR 789 : (1980) 4 SCC 443; Workmen of American
c Express v. ManaKement <?(American Express (1985) 4
SCC 71; Carew and Co. Ltd. v. Union of India 1976
(1) SCR 379 : (1975) 2 SCC 791; Bombay Anand
Bhavan Restaurant v. Deputy Director. Employees' State
Insurance Corporation & Anr. (2009) 9 SCC 61;
Pegasus Assets Reconstruction P. Ltd. v. Mis. Haryana
D Concast Limited & Anr 2016 (1) SCALE 1; Richa
Mishra v. State of Chhattisgarh and Others 2016 (1)
SCR 316 : (2016) 4 SCC 179; Shailesh Dhairyawan v.
Mohan Balkrishna Lu/la 2015 SCR 70 : (2016) 3 SCC
619 - referred to.
E 1.9 The submission that while granting permission under
the Factories Act, various conditions are imposed which the
appellants are required to fulfill and these conditions are almost
the same which are contained in BOCW Act, cannot be accepted.
Registration under the Factories Act becomes necessary in view
F of provisions contained in Section 6 of the said Act as this Section
requires taking of approval and registration of factories even at
preparatory stage i.e. at the stage when the premises where
factory is to operate has to ensure that construction will be done
in such a manner that it takes care of safety measures etc. which
arc provided in the Factories Act. This means to ensure that
G construction is carried out in such a manner that provisions in
the Factories Act to ensure health, safety and provisions relating
to hazardous process as well as welfare measures are taken care
of. It is for this reason that even after the building is completed
before it is occupied, notice under Section 7 is to be given by the
H occupier to the Chief Inspector of Factories so that a necessary
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 735
PRADESH

inspection is carried out to verify that all such measures are in A
place. Therefore, when the permissions for construction of
factories is given, the purpose is altogether different. [Para
33)(759-C-F)
1.10 It is made clear that insofar as objection to the
calculation of cess as contained in the show cause notices is B
concerned, it would be open to the appellants to agitate the same
before the adjudicating authorities. [Para 35][760-A-B)
Punjab Land Development and Reclamation
Corporation Ltd., Chandigarh v. Presiding Officer,
Labour Court, Chandigarh and Others 1990 (3) SCR c
111 : (1990) 3 SCC 682; B.N. Mutto v. T.K. Nandi 1979
(2) SCR 409 : (1979) 1 SCC 361; Shri Hariprasad
Shivshanker Shukla and another v. Shri A.D. Divelkar
and others 1957 SCR 121; Regional Director, Employees
State Insurance Corporation, Trichur v. Ramanuja
Match Industries 1985 (2) SCR 119 : (1985) 1 SCC D
218; Dadi Jagannadham v. Jammulu Ramulu and
Others 2001 (2) Suppl. SCR 60 : (2001) 7 SCC 71;
Shyam Sunder and others v. Ram Kumar and another
2001 (1) Suppl. SCR 115 : (2001) 8 SCC 24; Grasim
Industries Ltd. v. Collector of Customs, Bombay 2002 E
(2) SCR 945 : (2002) 4 SCC 297; Deepal Girishbhai
Soni and Others v. United India Insurance Co. Ltd.,
Baroda 2004 SCR 213 : (2004) 5 SCC 385; Bhikusa
Yamasa Kshatriya (P) Ltd. v. Union of India and another
1964 SCR (1) 860; Dewan Chand Builders and
Contractors v. Union of India and Others 2011 (13) F
SCR 214 : (2012) 1 SCC 101- referred to.
Case Law Reference
1990 (3) SCR 111 referred to Para 10
1979 (2) SCR 409 referred to· Para 10 G
1957 SCR 121 referred to Para 10
1985 (2) SCR 119 referred to Para 10
2001 (2) Suppl. SCR 60 referred to Para 10
2001 (1) Suppl. SCR 115 referred to Para 10
H
736 SUPREME COURT REPORTS [2016] 5 S.C.R.

A 2902 (2) SCR 945 referred to Para 10
2004 SCR 213 referred to Para 10
1964 _S(:R (1) 860 referred to Para 13
2011 (13) SCR 214 referred to Para 16
B 1980 (1) SCR 61 referred to Para25
1988 (2) Suppl. SCR 528 referred to Para27
1960 SCR 476 referred to Para28
1981 (1) SCR 789 referred to Para 28
c (1985) 4 sec 11 referred to Para 29
1976 (1) SCR 379 referred to Para30
(2009) 9 sec 61 referred to Para 31
2000 (2) SCR 1102 relied on Para32
D
2016 (1) SCALE 1 referred to Para32
2016 (1) SCR 316 referred to Para32
2015 SCR 70 referred to Para32
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6223
E of2016
WITH
Civil Appeal Nos. 10187-10188of2016
W.P. (C) No. 64 of2012
F
W.P. (C) No. 848 of2013
W.P. (C) No. 385 of2014
Civil Appeal No. 6569of2014
T.P. (C) No. 342 of2014
G
T.C. (C) No. 29 of2015
W.P. (C) No. 174 of2016
W.P. (C) No. 311 of2016
Civil Appeal No. 6571 of2014
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 737
PRADESH

T.C. (C) No. 38 of2016 A
CivilAppealNo.10186of2016
W.P. (C) No. 698 of2016
CivilAppealNo.10189of2016.
From the Judgment and Order dated 28.04.2015 of the High Court B
of Judicature at Allahabad in Writ Tax No. 772of2011.
Ms. Pinki Anand, ASG, C. A. Sundaram, Gaurab Banerji, Ravindra
Srivastava, Rana Mukherj i, Ms. Vibha Datta Makhija, Sr. Advs., Akhil
Sibal, Deepak Khurana, Ms. Aditi Sharma, Umesh Kumar Khaitan, Amar
Dave, Mahesh Agarwal, Ankur Saigal, Ms. Sadapurna Mukherjee, c
Satyendra Kumar, E. C. Agrawala, Vikrant Panchnanada, Mahesh
Agarwal, Ms. Neha Nagpal, Shashank Mani sh, Ms. Vaidehi Misra, Sahil
Tagotra, 8. S. Banthia, Prashant Shukla,Alok Hoonka, Nitin Gupta, Kush
Agrawal, Nikilesh Ramachandran, Neeraj Shekhar, Arunabh Chowdhury,
Rahul Pratap, Parshanto Chandra Sen, Shivanshu Singh, Udayan Verma, D
Ms. Sana Batta, A. Venayagam Balan, T. G Narayanan Nair, K. Raghava
Charyulu, Kai lash Pandey, Vaibhav Shukla, Ranjeet Singh, Ms. J. Kataria,
K. V. Sreekumar, Ravi Prakash Mehrotra, Rajeev Dubey, Pulkit Tare,
Sh_reekant N. Terdal, Shibashish Misra, Alok K. Agarwal, Sanjeev Kr.
Singh, Kumar Dushyant Singh, Puneet Taneja, Mishra Saurabh, Ankit
Kr. Lal, Ms. Atka Agarwal, R.R. Rajesh, A. K. Sharma, Franklin Caesar E
Thomas, Chand Qureshi, M. P. Siddiqui, Upendra Prasad, Naveen
Chawla, T. Mahipal, T. A. Khan, Rajesh Ranjan, Mukhesh Kumar
Maroria, Advs. for the appearing parties.
The Judgment of the Court was delivered by
F
A.K. SIKRI, J. I. Leave granted in SLP (C) Nos. 29105-29106
of201 l, SLP (C) No. 26363 of2016 and SLP (C) No. 26330 of2016.
Since pure question oflaw is involved, we allow the transfer petition and
transfer cases and also take up, along with these appeals, the writ petitions
which were filed before the respective High Courts.
2. These appeals are filed by the appellants challenging the orders G
passed by different High Courts i.e. High Court of Allahabad, High Court
ofOrissa, High Court of Madhya Pradesh and High Court ofKarnataka.
These High Courts, however, are unanimous in their approach and have
reached the same conclusion. In all these cases, appellants were issued
H
738 SUPREME COURT REPORTS [2016] 5 S.C.R.

A show cause notices by the concerned authorities under the provisions of
the Building And Other Construction Workers (Regulation of Employment
and Conditions of Service) Act, 1996 (hereinafter referred to as 'BOCW
Act') and Buildings And Other Construction Workers Welfare Cess Act,
1996 (hereinafter referred to as 'Welfare Cess Act'). They had
challenged those notices by filing writ petitions in the High Courts on the
B
ground that the provisions of BOCW Act or Welfare Cess Act were not
applicable to them because of the reason that they were registered under
the Factories Act, 1948. It may be mentioned that at the relevant time
no manufacturing operation had commenced by the appellants. In fact,
all these appellants were in the process of construction of civil works/
c factory buildings etc. wherein they had planned to set up their factories.
As the process of construction of civil works was undertaken by the
appellants wherein construction workers were engaged, the respondent
authorities took the view that the provisions of the aforesaid Acts which
were meant for construction workers became applicable and the
D. appellants were supposed to pay the cess for the welfare of the said
workers engaged in the construction work. The appellants had submitted
that Section 2(d) of the BOCW Act which defines 'building or other
construction work' specifically states that it does not include any building
or construction work to which the provision of the Factories Act, 1948
or the Mines Act, 1952 apply. Since the appellants stood registered
E under the Factories Act, they were not covered by the definition ofbuilding
or other construction work as contained in Section 2( d) of the Act and,
therefore, said Act was not applicable to them by virtue of Section 1(4)
thereof. All the High Courts have negated the aforesaid plea of the
appellants on the ground that the appellants would not be covered by the
definition of factory defined under Section 2(m) of the Factories Act in
F the absence of any operations/ manufacturing process and, therefore,
mere obtaining a licence under Section 6 of the Factories Act would not
suffice and rescue them from the'!r liability to pay cess under the Welfare
Cess Act. This is, in nutshell, the subject matter of all these appeals.
However, in order to understand the full implication of the issue involved
and to answer the said issue, it would be apt to take note of certain facts
from one of these appeals. This factual canvass is suitably available in
the events that have occurred leading to the filing of Civil Appeal No.
6223/2016.
3. In this appeal, the appellant proposed to set up a 2X600
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 739
PRADESH [A. K. SIKRI, J.]

Megawatt capacity coal-based thermal power project namely "Anpara A
C" at Anpara in District Sonebhadra, Uttar Pradesh ("the Project"),
pursuant to being selected in a tariff-based competitive bidding initiated
by the Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL)
on behalf of the Uttar Pradesh Power Corporation Ltd. (UPPCL). The
project consists of two Steam Turbine Generators (STG) each having
B
capacity of 600 MW and two pulverised coal fired steam generators
and the balance of plant. The appellant, in respect of the aforesaid
project, made an application to the Director of Factories, Uttar Pradesh,
submitting the layout/drawings of the proposed plants and requesting for
registration of the project as a factory under the provisions of the Factories
Act, 1948 and the Uttar Pradesh Factories Rules, 1950. The appellant c
was granted registration and licence under Section 6 of the Factories
Act, 1948 read with Uttar Pradesh Factories Rules, 1950 for the said
Project, as a factory. Respondent -ND. I notified the 1,Jttar Pradesh
Building and other Construction Workers (R!!gulation of Employment
and Conditions of Service) Rules, 2009 (for short 'BOCW Rules') on
D
04.02.2009. Immediately thereafter, the appellant received a notice of
even date issued by respondent No. 2, intimating that the Chief Secretary,
Government ofUttar Pradesh had directed that "establishments" engaged
in construction activities were required to get themselves registered under
the provisions of the BOCW Act and the BOCW Rules. Simultaneously,
a letter of even date was also received from the District Collector, E
Sonebhadra, Uttar Pradesh, calling upon the appellant to get itself/its
contractors registered under the provisions of the BOCW Act and the
BOCW Rules. The appellant, vide its letter of even date, replied to the
aforesaid communication dated 19.04.20 I 0 of the District Collector,
Sonebhadra, stating that the appellant was undertaking the construction
activity of the Project under the provisions of the Factories Act and as
F
such, in view of Section 2( I )(d) of the BOCW Act, the Project was
exempted from the application of the BOCW Act, and consequently the
Welfare Cess Act and BOCW Rules inasmuch as the provisions of the
Factories Act apply to the Project.
4. The respondents were not satisfied with the aforesaid stand 0
taken by the appellant. Thus, show cause notice dated 17.02.2011 was
issued by respondent No. 2 as to why action be not taken against the
appellant for failing to get itself registered under BOCW Act. It was
followed by another notice of even dale stating that the appellant had
H
740 SUPREME COURT REPORTS [2016) 5 S.C.R.

A · not furnished requisite information relating to construction activities
undertaken by it as required under Section 4 of the Welfare Cess Act
read with Rule 6 of the Welfare Cess Rules. Some more notices were
issued to the similar effect with regard to the construction activities in
respect of the township in Anpara, undertaken by the appellant. Insofar
as township is concerned, appellant got itself registered through its
B
principal contractors under Welfare Cess Act and started paying the
cess. However, in respect of constn1ction activity and factory premises,
the appellant reiterated its stand that by virtue of Section 2( I)(d) of the
BOCW Act, it was excluded from the coverage thereof. The contention
of the appellant was rejected by the respondents which led to issuance
c offurther notices demanding cess.
5. At this juncture, the appellant filed the writ petition in the High
Court of Judicature at Allahabad challenging tile validity of notices dated
14.03.2011and02.04.2011 demanding payment of cess, on the following
grounds:
D (i) That the appellant is not amenable to assessment of liability
under the Welfare Cess Act inasmuch as the Factories Act is
applicable to the Project, and the Project is as such, exempt from
the applicability of the said Act by virtue of the exclusionary cause
contained in Section 2(1 )( d) of the BOCW Act.
E (ii) That respondent No. 2, vide impugned notice dated 02.04.2011,
was proceeding to calculate the alleged cess payable by the
appellant on the basis of the cost of the Project, and not on the
cost of construction of the said Project, whereas under the scheme
of the Cess Act, cess is payable only o'i1 the cost of construction
F ' . incurred annually, and not on the entire project cost, which includes
several other components apart from civil construction works.
6. The respondents filed their counter affidavit contesting the
petition. After hearing, the writ petition has been dismissed by the High
Court vide judgment dated 28.04.2015, gist whereof has already been
G . . taken note of above.
7. Emphatic submissions were made by Mr. Sundaram, learned
senior counsel appearin'g in some of these ·appeals, questioning the
·approach and conclusion reached by the High Court. Other senior counsel
Mr: Gaurab Banerji and Mr. Akhil Sibal supplemented those submissions
lending their candour thereto. These submissions were further
H
('

LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 741
PRADESH [A. K. SIKRI, J.]

supplemented by Mis. Prashant Shukla, Arunabh Chowdhury and K. A
Raghava Charyulu, Advocates. It may not be necessary to take note of
individual submissions made by these counsel. Instead, for the sake of
brevity, we are reproducing the submissions of these counsel in
consolidated form hereinafter.
8. These counsel have led two prong attacks on the demands B
raised by the respondents for payment of cess under BOCW Act read
with Welfare Cess Act, which is as under:
i) In the first instance, it is argued that BOCW Act does not apply
to those undertakings which are registered under the Factories
Act. To support this submission, emphasis was laid on the definition c
of "building or other construction work" as contained in Section
2(1 )( d) of BOCW Act, which reads as under:
"Section 2(1)(d) : "building or other construction work"
means the construction, 'alternation, repairs, maintenance
or demolition ofor, in relation to, buildings, streets, roads, D
railways, tramways, airfields, irrigation, drainage,
embankment and navigation works, flood control works
(including storm water drainage works), generation,
transmission and distribution of power, water works
(including channels for distribution of water), oil and gas
installations, electric lines, wireless, radio, television, E
telephone, telegraph and overseas communication dams,
canals, reservoirs, watercourses, tunnels, bridges, viaducts,
aquaducts, pipelines, towers, cooling towers, transmission
towers and such other work as may be specified in this
behalf by the appropriate Government, by notification but F
does not include any building or other construction work to
which the provisions of the Factories Act, 1948 (63of1948).
or the Mines Act, 1952 (35 of 1952), apply.
(emphasis added)"
(ii)· Second submission, which in fact flows from first submission G
noted above, was that the approach of the High Court in dealing with the
matter was contrary to law. In this behalf, it was pointed out that the
High Court has rejected the case of the appellants herein on the ground
that even if the appellants had obtained a licence under the Factories
Act for registration to work a factory, the appellants were still not excluded
H
742 SUPREME COURT REPORTS [2016] 5 S.C.R.

A from the provisions of Welfare Cess Act as no manufacturing process
or factory operation had started by the appellants and, therefore,
appellants did not answer the description of'factol)'' within the meaning
of Factories Act. As per the High Court, since the appellants had only
undertaken the process of construction of premises which are to be
ultimately used as factories, and since such power project has not started
B
and there was no operation for which the licence was obtained under
the Factories Act till the production commences, it could not be said that
"factory" has come into existence and, therefore, the appellants were
not entitled to take advantage of mere registration under the Factories
Act.
' c Dubbing the aforesaid approach as erroneous, it was the argument
.· of the appellants that the High Court ignored the pertinent aspect that
even when the building was under construction, the establishments which
were covered by the Factories Act stood excluded by virtue of definition
contained in Section 2( d) of BOCW Act which pertained to construction
D of building and, therefore, specifically covered the stage of construction
itself. It was argued that matter should have been seen from that angle.
Advancing this argument further, it was also submitted that the Legislature
is alive to the fact that the facto!)' is not running at the stage when
building or other construction work is going on. However, it still chose to
exclude those buildings or other construction work to which the provisions
E of Factories Act apply.

9. Expanding the aforesaid submissions, the appellants even gave
the rationale in couching the definition of Section 2(d) of the BOCW Act
in that specific manner by submitting that once the provisions of Factories
Act apply, all the benefits which are admissible to the workers under the
F BOCW Act and Welfare Cess Act are granted under the Factories Act
as well. This submission was buttressed by pointing out the provisions/
conditions stipulated while granting the permission under the Factories
Act. It was submitted that the safety measures and facilities which the
appellants were obligated under those conditions were the same as
G stipulated in BOCW Act.
I0. Taking support ofinterpretative tools to support the aforesaid
twin submissions, it was submitted by the counsel for the appellants that
Section 2(d} had to be given literal meaning, in the absence of any
ambiguity in the said provision and number ofjudgments were cited in
H this behalf, Some_ of those judgments are as under:
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 743
PRADESH [A. K. SIKRI, J.)

i) In Punjab Lmrd Development mu/ ReclanratiOn Corporation A
Ltd., Clwmligar/1 v. Presiding Officer, Labour Court,
. Chandigarh and Ot/1ers 1, this Court while interpreting the word
'means' observed thatifthe definition has used the word 'means',·
it shall include certain things or acts and the definition has used .
the word 'means', it shall include certain things or acts and the 'B
definition is a hard-a_nd-fast definition and no other meaning can·
be assigned to the expression than is put down in definition. This
Court further observed that if the· words of the statute are in .
themselves precise and unambiguous, then no· inore can be
necessary .than to expound those words in their natural and ordinary
sense. The words themselves alone do; in such case, best declare C
the intention of the law. This Court after making reference to its
judgment in B.N. Mutto v. T.K. NamiP observed that "the Court
has to determine the intention as expressed by the words used. If
the words of a statute are themselves precise and unambiguous,
then no more can be necessary than to expound those words in
their ordinary a1id natural sense''. It was further observed that ·D
"the cardinal rule of construction of statute is to read statutes
literally, that is, by giving t-0 the words their .ordinary, naturafand
grammatical meaning." ·
ii) In S/1ri Hariprasad Shivs/ranker Shukla andanot/1er v. Sltri
.A.D. Divelkar and otliers3, it was held that ''there is no doubt E
that when the Act itself provides a dictionary for the words used, ·
we must look irito that dictionary first for an interpretation of the
words used' in the statute. We ~re not concerned with, any
.. presumed intention of the legislature; our task is to get at the
intention as expressed in the statute". . . F
iii) In Regional Director, Enrployeef State Insurance
Corporation, Tric/1ur v. Rmna11uja Matcil /11dustries\ the Court
pointed out that "there is no doubt that beneficial legislations should
have liberal construction with a view to implementing the legislative
intent but where such beneficial legislation has a scheme of its ·G
.·own there is no warrant for the Court to travel beyond the scheme
and extend the scope of the statute on the pretext of extending
1
(1990) 3 sec 682 .
'll979) 1 sec 361
3
1957 SCR 121
• (1985) 1 sec 218
744 SUPREME COURT REPORTS [2016] 5 S.C.R.

A the statutory benefit to those who are not covered by the scheme".
iv) In Dadi Jaganntullmm v. Jammu/u Ramulu and Otlters5,
this Court, while interpreting the provisions that fell for
consideration, made the following observations in paragraph 13:
"13 ..... The settled principles of interpretation are that the
B court must proceed on the assumption that the legislature
did not make a mistake and that it did what it intended to
do. The court must, as far as possible, adopt a construction
which will carry out the obvious intention of the legislature.
Undoubtedly ifthere is a defect or an omission in the words
c used by the legislature, the court would not go to its aid to
correct or make up the deficiency. The court could not add
words to a statute or read words into it which are not there,
especially when the literal reading produces an intelligible
result. The court cannot aid the legislature's defective
phrasing of an Act, or add and mend, and, by construction,
D make up deficiencies which are there."
v) In S/1yam Sunder and otlters v. Ram Kumar and anot/1e~,
this Court explained as to how to interpret the provisions of an
enactment in the following words:
E " ... when the words used in a statute are capable of only
one meaning. In such a situation, the courts have been
hesitant to apply the rule of benevolent construction. But if
it is found that the words used in the statute give rise to
more than one meaning, in such circumstances, the courts
are not precluded from applying such rule of construction.
F The third situation is when there is no ambiguity in a provision
of a statute so construed. If the provision of a statute is
plain, unambiguous and does not give rise to any doubt, in
such circumstances the rule of benevolent construction has
no application."
G vi) Similarly in Grasim Industries Ltd. v. Collector ofCustoms,
Bombay', the Constitution Bench of this Court explained the
principle ofliteral interpretation as under:
'(2001) 1sec11
'<2001) s sec 24
1
(2002) 4 sec 297
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 745
PRADESH [A. K. SIKRI, J.]

''10. No words or expressions used in any statute can be A
said to be redundant or superfluous. In matters of
interpretation one should not concentrate too much on one
word and.pay too little attention to other words. No provision
in the statute and no word in any section can be construed
in isolation. Every provision and every word must be looked
B
at generally and in the context in which it is usecl. It is said
that every statute is an edict of the legislature. The
elementary principle of interpreting any word while
considering a statute _is to gather the mens or sententia legis
of the legislature. Where the words are clear and there is
no obscurity, and there is no ambiguity and the intention of c
the legislature is clearly conveyed, there is no scope for the
court to take upon itself the task of amending or alternating
(sic altering) the statutory provisions. Wherever the language
is clear the intention of the legislature is to be gathered
from the language used. While doing so, what has been
D
said.in the statute as also what has not been said has to be
noted. The construction which requires for its support
addition or substitution of words or which resultsiin rejection
of words has to be avoided. As stated by the Privy Council
in Crmiford v. Spooner [(1846) 6 Moore PC 1 : 4 MIA
179] "we cannot aid the legislature's defective phrasing of E
an Act, we cannot add or mend and, by construction make
up deficiencies which are left there". In case of an ordinary
word there should be no attempt to substitute or paraphrase
of general application. Attention should be confined to what
is necessary for deciding the particular case. This principle
is too well settled and reference to a few decisions of this F
Court would suffice. (See: Gwalior Rayons Silk M&.
(Wvg.) Co. Ltd. v. Custodian of Vested Forests [1990
Supp SCC 785 : AIR 1990 SC 1747], Union of India v.
Deoki Nandan Aggarwal [1992 Supp (I) SCC 323: 1992
sec (L&S) 248 : {1992) 19 ATC 219 : AIR 1992 SC 96] G
,Institute of Chartered Accountants of India v, Price;.,·
Waterhouse [(1997) 6 SCC 312] and Harbhajan Singh v.
Pre,_ss Council of India [(2002) 3 SCC 722 : JT (2002) 3
SC 21])'' .

H
746 SUPREME COURT REPORTS [2016] 5 S.C.R.

A vii) In Deepal Girisltblwi Soni and Otlters v. United India
Insurance Co. Ltd., Baroda8, while interpreting the provisions
that fell for consideration, the principle was applied even in the
context of beneficial legislation, when the language was plain,
depicting clear intention of the legislature, in the following terms:
B "53. Although the Act is a beneficial one and, thus, deserves
liberal construction with a view to implementing the
legislative intent but it is trite that where such beneficial
legislation has a scheme of its own and there is no vagueness
or doubt therein, the court would not travel beyond the same
and extend the scope of the statute on the pretext of
c extending the statutory benefit to those who are not covered
thereby. (See Regional Director, ES/ Corpn. v. Ramanuja
Match Industries [( 1985) I SCC 218 : 1985 SCC (L&S)
213 : AIR 1985 SC 278])."
Relying upon all the aforesaid judgments, the forceful exhortation
D was to follow this literal construction while interpteting Section 2(d) of
BOCW Act in the manner appellants suggested to us.
11. Mr. Rana and Mr. Srivastava countered the aforesaid
submissions giving equally salubrious response. Their fervent plea was
that the view taken by the High Court while interpreting the provisions
E of Section 2(d) of BOCW Act was perfectly justified and any other
interpretation as suggested by the appellants would defeat the very
purpose of these Acts. It was argued that mere registration under the
Factories Act would be of no consequence inasmuch as definition of
'factory' contained in Section 2(m) of the Act unambiguously suggest
F that the· provisions of the said Act would apply only when manufacturing
process is actually carried on. It was further submitted thatthe definition
of 'worker' under the Factories Act does not include construction
workers and, therefore, construction workers would not be entitled to·
various benefits whiCh are contained in different provisions of the
Factories Act. It is for this reason at the stage of construction of the
G building, which is to be ultimately used as a factory, the provisions of
BOCW Act would be applied. It was also emphasised that while
interpreting the provisions of these two Acts, "superior purpose" behind
therein had to be kept in mind and this enactment which is for the welfare

' <2004) s sec 385
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 747
PRADESH [A. K. SIKRI, J.]

of the weaker section, i.e. workers of unorganised sector, had to be A
liberally construed by giving that construction which accords them the
benefit eschewing the other approach which would preclude them from
getting the benefit under the Acts. In this hue, the learned counsel strongly
urged upon this Court to invoke the principle of purposive interpretation,
which is in vogue, to do complete justice in the matter. It was also
B
argued that exclusion provision contained in Section 2(d) ofBOCW Act
had to be construed narrowly as per the settled proposition of law.
12. We have bestowed our due and serious consideration to the
submissions made of both sides, which these submissions deserve. The
central issue is the meaning that is to be assigned to the language of
Section 2(d) of the Act, particularly that part which is exclusionary in
c
nature, i.e. which excludes such building and construction work to which
the provisions of Factories Act apply. Before coming to the grip of this
central issue, we deem it appropriate to refer to the objectives with
which the Factories Act and BOCW Act were enacted, as that would
be the guiding path to answer the core issue delineated above. D
13. Insofar as Factories Act is concerned, its Preamble mentions
that it is an Act to consolidate and amend the law regulating labour in
factories. It is enacted primarily with the object of protecting workers
employed in factories against industrial and occupational hazards. For
that purpose it seeks to impose upon the owners or occupiers certain E
oblig'ltions to protect workers unwary as well as negligent and to secure
for them employment in conditions conducive to their health and safety.
This Act also requires that the workers should work in healthy and sanitary
conditions and for that purpose it provides that precautions should be
taken forthe safety of workers and prevention of accidents. Incidental
provisions in Factories Act are made for securing information necessary F
to ensure that the objects are carried out and the State Governments are
empowered to appoint Inspectors, to call for reports and to inspect the
prescribed registers with a view to maintain effective supervision. The
duty of the employer under this Act is to secure the health and safety of
workers and extends to providing adequate plant, machinery and G
appliances, supervision over workers, healthy and safe premises, proper
system of working and extends to giving reasonable restrictions. Detailed
provisions are, therefore, made in diverse chapters of the Act imposing
oblig'ltions upon the owners of the factories to maintain inspe~ting staff

H
748 SUPREME COURT REPORTS (2016] 5 S.C.R.

A and for maintenance of health, cleanliness, prevention of overcrowding
and provision for amenities such as lighting, drinking water, etc. Provisions
are also made for safety of workers and their welfare, such as restrictions
on working hours and on the employment of young persons and females,
and grant of annual leave with wages. In Bltikus" Yam"s" Ks/1(1/riy"
(P) Ltd. v. Union of India and m10tl1er9 , this Court highlighted the
B
necessity and rationale behind legislating this Act and the objectives which
it sought to achieve, in the following manner:
"9. The Factories Act, as the preamble recites, is an Act to
consolidate and amend the law regulating labour in factories.
The Act is enacted primarily with the object of protecting
c workers employed in factories against industrial and
occupational hazards. For that purpose it seeks to impose
upon the owners or the occupiers certain obligations to
protect workers unwary as well as negligent and to secure
forthem employment in conditions conducive to their health
D and safety. The Act requires that the workers should work
in healthy and sanitary conditions and for that purpose it
provides that precautions should be taken for the safety of
workers and prevention ofaccidents. Incidental provisions
are made for securing information necessary to ensure that
the objects are carried out and the State Governments are
E empowered to appoint Inspectors, to call for reports and to
inspect the prescribed registers with a view to maintain
effective supervision. The duty of the employer is to secure
the health and safety of workers and extends to providing
adequate plant, machinery and appliances, supervision over
F workers, healthy and safe premises, proper system of
working and extends to giving reasonable instructions.
Detailed provisions are therefore made in diverse chapters
of the Act imposing obligations apurrthe owners of the
factories to maintain inspecting staff and for maintenance
of health, cleanliness, prevention of overcrowding and
G provision for amenities such as lighting, drinking water, etc.
etc. Provisions are also made for safety of workers and
their welfare, such as restrictions on working hours and on
the employment of young persons and females, and grant

9
H !964 SCR (I) 860
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 749
PRADESH [A. K. SIKRI, J.]

of annual leave with wages. Employment in a manufacturing A
process was at one time regarded as a matter of contract
between the employer and the employee and the State was
not concerned to impose any duties upon the employer. It is
however now recognised that the State has a vital concern
in preventing exploitation of labour and in insisting upon
B
proper safeguards for the health and safety of the workers.
The Factories Act undoubtedly imposes numerous
restrictions upon the employers to secure to the workers
adequate safeguards for their health and physical we! I-being.
But imposition of such restrictions is not and cannot be
regarded, in the context of the modem outlook on industrial c
relations, as unreasonable.... "
14. Coming to BOCW Act, its Statement of Objects and Reasons,
depicting the legislative intent, reads as under:
"(I) It is estimated that about 8.5 million workers in the
country are engaged in building and other Construction D
works. Building and other construction workers are one of
the most numerous and vulnerable segments of the
unorganised labour in India. The building and other
construction works are characterized by their inherent risk
to the life and limb of the workers. The work is also E
characterised by its casual nature, temporary relationship
between employer and employee, uncertain working hours,
. lack of basic amenities and inadequacy of welfare facilities.
In the absence of adequate statutory provisions, the requisite
information regarding the number and.nature of accidents
is also not forthcoming. In the absence of such information, F
it is difficult to fix responsibility or to take any corrective
action.
(2) Although the provisions of certain Central Acts are
applicable to the building and other construction workers
yet a need has been felt for a comprehensive Central G
Legislation for regulating their safety, health, welfare and
other conditions of service. ft had been considered
necessary to levy a cess on the cost of construction incurred
by the employers on the building and other construction
H
750 SUPREME COURT REPORTS [2016] 5 S.C.R.

A works for ensuring sufficient funds for the Welfare Boards
to undertake the social security schemes and welfare
measure.s."
15. In the Statement of Objects and Reasons of this Act itself, it
was considered necessary to levy a cess on the cost of construction
B incurred by the employers while constructing building etc. This led to
passing of Welfare Cess Act. The Statement of Objects and. Reasons
behind this Act was to provide for the levy and collection of a cess on
the cost of construction incurred by the employers for augmenting the
resources of the Building, and Other Construction Workers' Welfare
Boards constituted by the State Governments under the Building and
c Other Construction Workers' (Regulation of Employment and Conditions
of Service) Ordinance, 1995.
16. Scheme of BOCW Act came up for consideration by this
Court in the Dewan Cltantl B11iltlers and Contractors v. Union .of
India and Otllers 10 • Recognising that the noble purpose behind the
D said Act is to ensure welfare of the building and construction wo.rkers in
order to provide basic human dignity enshrined in Article 21 of the
Constitution, the Court observed as under:
"I 0. It is thus clear froni the scheme of the BOCW Act .
that its sole aim is the welfare of building and construction
E workers, directly relatable to their constitutionally recognised
right to live with basic human dignity, enshrined in Article
2! of the Constitution oflndia. It envisages a network of
authorities at the Central and.State levels to ensure that the
· benefit of the legislation is made available 'to every building
F and construction worker, by constituting Welfare Boards
and clothing them with sufficient powers to ensure
enforcement of the primary purpose of the BOCW Act.
The means of generating revenues for making effective
th-;: welfare provisions of the BOCW Act is through the
Cess Act, which is questioned in these appeals as
G unconstitutional.
xx xx xx
17. It is manifest from the overarching schemes of the
BOCW Act, the Cess Act and the Rules made thereunder
H 1
'' (2012) 1 sec 101
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 751
PRADESH [A. K. SIKRI, J.]

that their sole object is to regulate the employment and A
· conditions of service of building and other construction
workers, traditionally exploited sections in the society and
to provide for their safety, health and other welfare
measures. The BOCW Act and the Cess Act break new
ground in that, the liability.to pay cess falls not only on the
B
owner of a building or establishment, but under Section
2(l)(i)(iii) of the BOCW Act
"in relation to a building or other construction work carried
on by or through a contractor, or by the employment of
building workers supplied ?.Ya contractor, the contractor";
c
The extension of the liability on to the contractor is with a
view to ensure that, if for any reason it is not possible to
collect cess from the owner of the building at a stage
subsequent to the completion of the construction, it can be
recovered from the contractor. The Cess Act and the Cess
Rules ensure that the cess is collected at source from the D
bills of the contractors to whom payments are made by the
owner. In short, the burden of cess is passed on from the
owner to the contractor."
· (emphasis supplied)
E
I 7. Keeping in view the aforesaid objective of the respective Acts,
we now deal with the scope and ambit of Section 2(d) of BOCW Act.
As noticed above, one of the submissions of the appellants is that literal
interpretation needs to be given to the said provision as it categorically
excludes those building or construction work to which Factories Act
apply. In this very hue, it is argued that as the benefit under the Factories F
Act are already given to the construction workers who are involved in
the construction work, there is no need for covering the construction
workers who are engaged in building or construction work ofthe appellants
under BOCW Act or Welfare Cess Act.
18. Before dealing with the argument predicated on literal G
constructiOn, we would like to deal with the second aspect as the answer
· to that would facilitate the answer to this aspect as well. Section 2(m)
of the Factories Act defines 'factory' in the following manner:
"(m) "factory" means any premises including the precincts
H
752 SUPREME COURT REPORTS [2016] 5 S.C.R.

A thereof-
(i) whereon ten or more workers are working, or were
working on any day of the preceding twelve months, and in
any part of which a manufacturing process is being carried
on with the aid of power, or is ordinarily so carried on, or
B (ii) Whereon twenty or more workers are working, or were
working on any day of the preceding twelve months, and in
any part of which a manufacturing process is being carried
on without the aid of power, or is ordfoarily so carried on,-
but does not include a mine subject to the operation of[the
c Mines Act, 1952 (35of1952)] or [a mobile unit belonging
to the armed forces of the Union, a railway running shed or
a hotel, restaurant or eating j)lace].
[Explanation [I] - For computing the number of workers
for the purposes of this clause all the workers in [different
D groups and relays] in a day shall be taken into account;]
[Explanation H - For the purposes of this clause, the mere
fact that an Electronic Data Processing Unit or a Computer
Unit is installed in any premises or part thereof, shall not be
construed to make it a factory if no manufacturing process
E is being carried on in such premises or part thereof;] ... "
19. Section 2(k) of the Factories Act defines 'manufacturing
process' in the following manner:
(k) "manufacturing process" means any process for-
F (i) making, altering, repairing, ornamenting, finishing,.
packing, oiling, washing, cleaning, breaking up, demolishing,
or otherwise treating or adapting any article or substance
with a view to its use, sale, transport, delivery or disposal,
or
G (ii) [pumping oil, water, sewage or any other substance;
or]
(iii) generating, transforming or transmitting power; or
(iv) [composing types for printing, printing by letter press,
lithography, photogravure or other simi Jar process or book
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 753
PRADESH [A. K. SIKRI, J.]

binding;] [or] A
(v) constructing, reconstructing, repairing, refitting, finishing
or breaking up ships or vessels;[ or]
(vi) [preserving or storing any article in cold storage;]
20. It is also necessary to take note of the definition of 'worker', B
which is contained in Section 2(1) of the Factories Act. It reads as
under:
(I) "worker" means a person &[employed, directly or by or
through any agency (including a contractor) with or without
the knowledge of the principal employer, whether for c
remuneration or not], in any manufacturing process, or in
cleaning any part of the machinery or premises used for a
manufacturing process, or in any other kind of work
incidental to, or connected with, the manufacturing process,
or the subject of the manufacturing process 7[but does not
include any member of the armed forces of the Union]; D
21. On the conjoint reading of the aforesaid provisions, it becomes
clear that "factory" is that establishment where manufacturing process
is carried on with or without the aid of power. Carrying on this
manufacturing process or manufacturing activity is thus a prerequisite.
It is equally pertinent to note that it covers only those workers who are E
engaged in the said manufacturing process. Insofar as these appellants
are concerned, construction of building is not their business activity or
manufacturing process. In fact, the building is being constructed for
carrying out the particular manufacturing process, which, in most of
these appeals, is generation, transmission and distribution of power.
F
Obviously, the workers who are engaged in construction of the building
also ao not fall within the definition of 'worker'
' . under the Factories Act.
·----- ......
_ '

, On these two aspects there is no' cleavage and both parties are at ad
-idem. What follows is that these construction workers are not covered
- by the provisions of the Factories Act.
G
22. Having regard to the above, ifthe contention of the appellants
is accepted, the construction workers engaged in the construction of
building undertaken by the appellants which is to be used ultimately as
factory, would stand excluded from the provisions ofBOCW Act and
Welfare Cess Act as well. Could this be the intention while providing
H
754 SUPREME COURT REPORTS [2016] 5 S.C.R.

A the definition of' bui !ding and other construction work' in Section 2(d) of
BOCW Act? Clear answer to this has to be in the negative.
23. We may mention at this stage that High Court is right in
observing that merely because the appellants have obtained a licence
under Section 6 of the Factories Act for registration to work a factory, it
B would not follow therefrom that they answer the description of the
"factory" within the meaning of the Factories Act. We have reproduced
the definition of 'factory' and a bare reading thereof makes it abundantly
clear that before this stage, when construction of the project is completed
and the manufacturing process starts, 'factory' within the meaning of
Section ?.(m) of the Factories Act does not come into existence so as to
c be covered by the said Act.
24. We now advert to the core issue touching upon the construction
of Section 2(d) ofthe BOCW Act. The argument of the appellants is
that language thereof is unambiguous and literal construction is to be
accorded to find the legislative intent. To our mind, this submission is of
D no avail. Section 2(d) of the BOCW Act dealing with the building or
construction work is in three parts. [n the first part, different activities
are mentioned which are to be covered by the said expression, namely,
construction, alterations, repairs, maintenance or demolition. Second
part of the definition is aimed at those buildings or works in relation to
E which the aforesaid activities are carried out. The third part of the
definition contains exclusion clause by stipulating that it does not include
'any building or other construction work to which the provisions of the
Factories Act, 1948 (63of1948), or the Mines Act, I 952 (35 of I 952),
appl.ies'. Thus, first part of the definition contains the nature ofactivity;
second part contains the subject matter in relation to which the activity
F is carried out and. third part excludes those building or other construction
work to which the provisions of Factories Act or Mines Act apply.
25. It is not in dispute that construction of the projects of the
appellants is covered by the definition of"building or other construction
work" as it satisfies first two elements of the definition pointed out above.
G In order to see whether exclusion clause applies, we need to interpret
the words 'but does not include any building or other construction work
to which the provisions of the Factories Act ............ apply'. The
question is as to whether the provisions of the Factories Act apply to the
construction of building/project of the appellants. We are of the firm
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 755
PRADESH [A. K. SIKRI, J.]

opinion that they do not apply. The provisions of the Factories Act would A
"apply" only when the manufacturing process starts for 'which the
building/project is being constmcted and not to the activity of construction
of the project. That is how the exclusion clause is to be interpreted and
that would be the plain meaning of the said clause. This meaning to the
exclusion clause ascribed by us is in tune with the approach adopted by
B
this Court in Organo Cltemica/ Industries v. Union of lndiaL. Two
separate, but concurring, opinions were given by Justice V.R. Krishna
Iyer and Justice A.P. Sen, and we reproduce here below some excerpts
from both opinions:
"Justice A.P. Sen (para 23)
c
Each word, phrase or sentence is to be considered in the
light of general purpose of the Act itself. A bare mechanical
interpretation of the words 'devoid ofconcept or purpose'
will reduce much of legislation to futility. It is a salutary
rule, well established, that the intention of the legislature
must be found by reading the statute as a whole. D

Justice V.R. Krishna Iyer (para 241)
A policy-oriented interpretation, when a welfare legislation
falls for determination, especially in the context of a
developing country, is sanctioned by principle and precedent E
and is implicit in Article 37 of the Constitution since the
judicial branch is; in a sense, part of the State. So it is
reasonable to assign to 'damages' a larger, fulfilling
meaning."
26. The aforesaid meaning attributed to the exclusion clause of
F
the definition is also in consonance with the objective and purpose which
is sought to be achieved by the enactment of BOCW Act and Welfare
Cess Act. As pointed out above, if the construction of this provision as
suggested by the appellants is accepted, the construction workers who
are engaged in the construction of buildings/projects will neither get the
benefit of the Factories Act nor of BOCW Act/Welfare Cess Act. That G
could not have been the intention of the Legislature. BOCW Act and
Welfare Cess Act are pieces of social security legislation to provide for
certain benefits to the construction workers.

11
(1979) 4 sec 573
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756 SUPREME COURT REPORTS [2016) S S.C.R.

A 27. Purposive interpretation in a social amelioration legislation is
an imperative, irrespective of anything else. This is so eloquently brought
out in the following passage in the case of Atma Ram Mittal v. ls/1war
Singlt Punia 1 ~:
"9. Judicial time and energy is more often than not consumed
B in finding what is the intention of Parliament or in other
words, the will of the people. Blackstone tells us that the
fairest and most rational method to interpret the will of the
legislator is by exploring his intentions at the time when the
· law was made, by signs most natural and probable. And
these signs are either the words, the context, the subject-
c matter, the effects and consequence, or the spirit and
reason of the law. (emphasis by the court) See
Commentaries on the Lmvs of England (facsimile of I st
Edn. of I 765, University of Chicago Press, 1979, Vol. 1, p.
59). Mukherjea, J. as the learned Chief Justice then was, in
D Poppatlal Shah v. State of Madras [AIR 1953 SC 274:
1953 SCR 677: 1953 Cri LJ 11 OS: (1953) 4 STC 188) said
that each word, phrase or sentence was to be construed in
the light of purpose of the Act itself. But words must be
construed with imagination of purpose behind them said
Judge Learned Hand, a long time ago. It appears, therefore,
E that though we are concerned with seeking of intention, we
are rather looking to the meaning of the words that the
legislature has used and the true meaning of what words
[Ed.: Lord Reid in the aforecited case had observed: (All
ER p. 814) "We often say that we are looking for the
F intention of Parliament, but this is not quite accurate. We
are seeking the meaning of the words which Parliament
used. We are seeking not what Parliament meant but the
true meaning of what they said."] as was said by Lord
Reid in Black-Clm1·so11 Jnternational Ltd. v. Papierwerke
Waldhoj-AschaffenburgA.G [1975 AC 591, 613: (1975)
G I All ER 810: (1975) 2WLRS13) . We are clearly of the
opinion that having regard to the language we must find the
reason and the spirit of the law."

12 (t988J 4 sec 284
H
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 757
PRADESH [A. K. SIKRI, J.]

28. How labour legislations are to be interpreted has been stated A
and restated by this Court time and again. In M.P. Mineral Industry
Association v. Regional Labour Commr. (Centra/)1 3 , this Court while
dealing with the provisions of the Minimum Wages Act, 1948, observed
.that t'1is Act is intended to achieve the object of doing social justice to
workmen employed the scheduled employments by prescribing minimum
B
rates of wages for them, and so in construing the said provisions the
court should adopt what is sometimes described as a beneficent rule of
construction. In Surendra Kumar Verma v. Tlte Central
Government Industrial Tribunal 1\ this Court reminded that semantic
luxuries are misplaced in the interpretation of'bread and butter'.statutes.
Welfare statutes must, of necessity, receive a broad interpretation. Where c
legislation is designed to give relief against certain kinds of mischief, the
Court is not to make inroads by making etymological excursions.
29. We would also like to reproduce a passage from Workmen of
American Express v. Management of American Express 1;, which
provides complete answer to the argument of the appellants based on D
literal construction:
"4. The principles of statutory construction are well settl.~d.
Words occurring in statutes ofliberal import such as social
welfare legislation and human rights' legislation are not to
be put in Procrustean. beds or shrunk to Liliputian E
dimensions. In construing these legislations the imposture
ofliteral construction must be avoided and the prodigality
of its misapplication must be recognised and reduced. Ju4ges
oughtto be more concerned with the "colour", the "content"
and the "context" of such statutes (we have borrowed the
words from Lord Wilberforce's opinion in Prenn v. F
Simmonds [(1971) 3 All ER 237] ). In the same opinion
Lord Wilberforce pointed out that law is not to be left behind
in some island of literal interpretation but is to enquire
beyond the language, unisolated from the matrix of facts in
which they are set; the law is not to be interpreted purely G
on internal linguistic considerations ..."
30. In equal measure is the message contained in Carew and Co.
" AIR 1960 SC 1068
"(1980) 4 sec 443
' (1985) 4 sec 11
1
H
758 SUPREME COURT REPORTS [2016] 5 S.C.R.

A Ltd. v. Union of lndia' 6 :
"21. The law is not "a brooding omnipotence in the sky"
but a pragmatic instrument of social order. It is an operational
art controlling economic life, and interpretative effort must
be imbued with the statutory purpose. No doubt, grammar
B is a good guide to meaning but a bad master to dictate ... "
31. The sentiments were echoed in Bombay Anand Bliavan
Restaurant v. Deputy Director, Employees' State Insurance
Corporation & Anr. 17 in the following words:
"20. The Employees' State Insurance Act is a beneficial
c legislation. The main purpose of the enactment as the
Preamble suggests, is to provide for certain benefits to
employees of a factory in case of sickness, maternity and
employment injury and to make provision for certain other
matters in relation thereto. The Employees' State Insurance
D Act is a social security legislation and the canons of
interpreting a social legislation are different from the canons
of interpretation of taxation law. The courts must not
countenance any subterfuge which would defeat the
provisions of social legislation and the courts must even, if
necessary, strain the language of the Act in order to achieve
E the purpose which the legislature had in placing this legislation
on the statute book. The Act, therefore, must receive a
liberal construction so as to promote its objects.
32. In taking the aforesaid view, we also agree with the learned
counsel for the respondents that 'superior purpose' contained in BOCW
F Act and Welfare Cess Act has to be kept in mind when two enactments
- the Factories Act on the one hand and BOCW Act/Welfare Cess Act
on the other hand, are involved, both of which are welfare legislations.
(See Allallabad Bank v. Ctmara Bank' 8 , which has been followed in
Pegasus Assets Reconstruction P. Ltd. v. Mis. Haryana Concast
G Limited &Anr. 19 in the context ofSecuritization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 and
Companies Act, 1956. Here the concept of 'felt necessity' would get
1
• (1975) 2 sec 191
11
(2009) 9 sec 61
'" (2000J 4 sec 406
19
H 2016 (I) SCALE I
LANCO ANPARA POWER LIMITED v. STATE OF UTTAR 759
PRADESH [A. K. SIKRI, J.]

triggered and as per the Statement of Objects and Reasons contained in A
BOCW Act, since the purpose of this Act is to take care of a particular
nece~sity i.e. welfare ofunorganised labour class involved in construction
activity, that needs to be achieved and not to be discarded. Here the
doctrine of Purposive Interpretation also gets attracted which is explained
in recent judgments of this Court in Riclut Misltra v. State of
B
Chhattisf(arh and Ot/1ers~0 and Slutiles/1 D/utiryawan v. Mo/tan
Balkrislma Lu/la~'.
33. We are left to deal with the argument of the appellants that
whil{: granting permission under the Factories Act, various conditions
are imposed which the appellants are required to fulfill and these
conditions are almost the same which are contained in BOCW Act. We
c
are not convinced with this submission either. It is already held that
provisions of Factories Act are not applicable to these construction
workers. Registration under the Factories Act becomes necessary in
view of provisions contained in Section 6 of the said Act as this Section
requires taking of approval l!.nd registration of factories even at D
preparatory stage i.e. at the stage when the premises where factory is
to operate has to ensure that construction will be done in such a manner
that it takes care of safety measures etc. which are provided in the
Factories Act. This means to ensure that construction is carried out in
such a manner that provisions in the Factories Act to ensure health,
safety and provisions relating to hazardous process as well as welfare E
measures· are taken care of. It is for this reason that even after the
building is completed before it is occupied, notice under Section 7 is to
be given by the occupier to the Chief Inspector of Factories so that a
necessary inspection is carried out to verify that all such measures are
in place. Therefore, when the permissions for construction of factories F
is given, the purpose is altogether different.
34. It is stated at the cost of repetition that construction workers
are not covered by the Factories Act and, therefore, welfare measures
specifically provided for such workers under the BOCW Act and Welfare
Cess Act cannot be denied. G
35. We, thus, hold that all these appeals are bereft of any merit.
Accordingly, these appeals, along with the writ petitions filed before this

20 (2C 16) 4 SCC 179 at Page No. 197
21 (2016) 3 sec 619- Para 31 H
760 SUPREME COURT REPORTS [2016] 5 S.C.R.

A Court as also those which are the subject matter of the transfer petition
and-transfer cases, are dismissed with cost. We, however, make it clear
that insofar as objection to the calculation of cess as contained in the
show cause notices is concerned, it would be open to the appellants to
agitate the same before the adjudicating authorities.
B 36. No costs.
Nidhi Jain Matters dismissed.