TaxTMI 
TaxTMI 
2026 (6) TMI 1292
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....6 seeking appointment of a Sole Arbitrator for adjudicating the dispute that has arisen between the parties. 3. The facts, in brief, as projected by the applicant {in ARBR No. 48/2024} is that the applicant Company is an ISO 9001-2008 Company started civil construction contracts as a proprietary / partnership firm has been in the business of executing EPC Contracts ever since its incorporation in 1982 in a wide arena of projects pertaining to Central and State Governments, Public Sector Companies, Railways, Power Plants, Steel Plant, Mines, Roads, Bridges etc. Pursuant to a Notice Inviting Tender (for short, the NIT) being NIT No. GM(C)/SECL/BSP/Et-Tk/ GVR/2020/185 dated 15.06.2020 issued on behalf of the respondent No. 1-South Eastern Coalfields Ltd. (for short, the SECL) inviting tenders for carrying out work of design, and commissioning of workshop and store of Gevra OCP, including maintenance during defect liability period (DLP), on turnkey basis, the applicant submitted its bid/offer for the said work. The said NIT comprised of, inter alia, 'Instructions to Bidders' (for short, the ITB) and 'General Terms and Conditions of Contract' (for short, the GCC). The offer of the ap....
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....works), generation, transmission and distribution of power, water works(including channels for distribution of water), oil and gas installations, electric lines, wireless, radio, television, telephone, telegraph and overseas communications, dams, canals, reservoirs, watercourses, tunnels, bridges, viaducts, aqueducts, pipelines, towers, cooling towers, transmission towers and such other work as may be specified in this behalf by the appropriate Government, by notification but does not include any building or other construction work to which the provisions of the Factories Act, 1948 (63 of 1948), or the Mines Act, 1952 (35 of 1952), apply. 5. Mr. Chatterjee would submit that a combined and plain reading of the aforesaid provisions of BOCW Act shows that the said Act is not applicable to any building or other construction work to which the provisions of the Mines Act, 1952 applies. The construction and maintenance of a workshop in the precincts of a coal mine which is the work covered under the aforesaid contract between the applicant and the respondent-SECL is an activity to which the Mines Act, 1952 would apply. Hence, the BOCW Act will not apply to the activities carried out by....
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....s Act. Further, as no cess is payable in respect of the operations of the applicant under Section 3, it is illegal to deduct the same from the bills of the applicant. The aforesaid clause 31 of the ITB forming part of the contract contemplates deduction of cess under the BOCW Cess Act and BOCW Cess Rules, the respondent-SECL has no power, authority or jurisdiction to deduct cess in terms of the said clause 31 and all such deductions are illegal and unauthorised and liable to be refunded by the respondent. After the applicant was advised that the BOCW Act and consequently the BOCW Cess Act and the BOCW Cess Rules were not applicable for any work or activity in the course of construction of Coal Handling Plant (CHP) and no cess could be deducted under the BOCW Cess Act or BOCW Cess Rules from payments in respect of the invoices/ bills of the applicant in respect of the work covered under the Agreement in question ( as stated above), the applicant raised the contention that no cess was deductible from payments against its bills under BOCW Cess Act or BOCW Cess Rules. The issue was raised by the applicant with the respondent-SECL through several letters being SKSL Letter No./174/0011/P....
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....umstances, the applicant wrote a letter 23.08.2024. reiterating its request for appointment of an Arbitrator. In the instant case, the agreed procedure for appointment of arbitrator is contained in Clause 42A of the GCC forming a part of the agreement as stated above, the respondent-SECL has failed to act as required under the said agreed procedure. The agreement on the appointment procedure does not provide any other means for securing the appointment. As such, this Hon'ble Court may be pleased to appoint a Sole Arbitrator for adjudicating the disputes and differences that have arisen between the parties. Whether or not the BOCW Act, BOCW Cess Act and the Rules are applicable in case of the applicant, can also be adjudicated by the Arbitrator so appointed by this Hon'ble Court. 8. On the other hand, Mr. Vaibhav Shukla, learned counsel appearing for the respondent/SECL would submit that the respondents have deducted BOCW Cess @ 1% from the running bills of the applicant in terms of clause 31 and 32 of ITB pursuant to the direction and notification of State Government dated 19.02.2021 and 27.11.2021. The BOCW cess deduction are statutory deductions which is mandatorily deducted i....
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.... as framed and filed by the applicant, is without any substance, deserves to be dismissed. The applicant/contractor has obtained Licence under Section 12 of the Contract Labour (Regulation and Abolition) Act, 1970, from the appropriate Central Government for employment of contract labour for the said contract work. Any establishment under Section 2(1)(a) of the BOCW Act employs building workers directly or through a contractor in respect of which, the Appropriate Government under the Industrial Disputes Act, 1947 is the Central Government. A person employed in a mine is defined under Section 2(h)(ii) of the Mines Act, 1952 as a person engaged in a any activity or service connected with the development of a mine including the construction of its plant, but not including the construction of buildings, roads, works and other such works not directly connected with any existing or future mining operations. Section 2 (t) of the Mines Act, 1952 defines mine and a construction worker engages in the construction of building and other construction work in which, it is clear that, before this stage when construction of the project is completed the fact that, the mines is not running at an abl....
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....s to the reference. This Court has a limited role at the referral stage as it is limited to examining whether an arbitration agreement exists. Issue of non-arbitrability is not to be decided by the referral court at the referral stage but by the Arbitral Tribunal. Dispute in this case is not between the applicant and the State of Chhattisgarh. Dispute is on the scope and effect of clause 31 and 32 of ITB and as to whether SECL has a right to deduct BOCW Cess under the said clauses of ITB. Relationship between applicant and SECL is contractual and the disputes are purely contractual. The disputes pertain to applicability of clauses 31 and 32 of the ITB. The disputes do not pertain to any sovereign function of the State. The BOCW Cess Act or BOCW Cess Rules do not expressly or by necessary implication bar arbitration. In any case such issue is to be decided by the Arbitral Tribunal. Further, it was not at all necessary to implead respondent No.2 or Respondent No.3 or for that matter anybody other than the respondent No.1-SECL because the disputes are contractual disputes between the applicant and the respondent No.1 which calls for interpretation of the provisions of Clause No.31 and....
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.... to a Sole Arbitrator. On the contrary, the stand of the respondent-SECL is that the amount which is deducted by it does not benefit the SECL in any manner as it has to be transmitted in the account of the State Government. The SECL is merely acting as a collecting agency and as soon as it is collected, the same is transmitted to the State Government. The contention of the State is that the project under the jurisdiction of the SECL was allotted on contract basis to the applicant for project construction work and not for ongoing excavation operations. Hence, all the provisions of the BOCW are applicable in the said construction work. A bare perusal of clause 31 and 32 of the ITB makes it amply clear that 1% of the work value payable to the contractors will be deducted from all bills towards the workers welfare under the BOCW Act and Rules. The said clause reads as under: "31. An Amount of 1% (One percent) of the work value payable to the contractors will be deducted from all Bills towards the worker's welfare under Building and other Construction Worker's Welfare Cess Rules' 1998 and Building and other Construction Worker's Welfare Cess Act' 1996 (As applicable in the Stat....