1

2026:CGHC:22566

AFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

ARBR No. 47 of 2024

S K Samanta And Co (P) Ltd., A Company Incorporated Under The

Companies Act, 1956 Through Its Director Mr. Aruanshu Brahma, Having Its

Registered Office And Carrying On Business, Inter Alia At Suite No. 4a, 2/5,

Sarat Bose Road, Kolkata - 700020.

---Applicant(s)

Versus

1 - South Eastern Coalfields Limited, Through Secretary, Labour Department

27, Sector 27, Nawagaon Parsatti, Atal Nagar- Nava Raipur, Chhattisgarh -

492101 As Per Honble Court Order Dated 24-06-2025

2 - The State Of Chhattisgarh Through Secretary, Labour Department 27,

Sector 27, Nawagaon Parsatti, Atal Nagar- Nava Raipur, Chhattisgarh -

492101 As Per Hon’ble Court Order Dated 24-06-2025

3 - Chhattisgarh Building And Other Construction Workers Welfare Board

Constituted Under Section 18(1) Of The Building And Other Construction

Workers (Regulation Of Employment And Conditions Of Service ) Act. 1996

Having Its Office At Sector 24 Office Complex Block A- 1st Floor Atal Nagar

Nawa Raipur As Per Hon’ble Court Order Dated 24-06-2025

--- Respondent(s)

2

ARBR No. 48 of 2024

S. K. Samanta And Co. (P) Ltd. A Company Incorporated Under The

Companies Act, 1956 Through Its Director Mr. Arunanshu Brahma, Having Its

Registered Office And Carrying On Business, Inter Alia, At Suite No. 4a, 2/5,

Sarat Bose Road, Kolkata- 700020

---Applicant(s)

Versus

1 - South Eastern Coalfields Limited Through Secretary, Labour Department

27, Sector 27, Nawagaon Parsatti, Atal Nagar- Nava Raipur, Chhattisgarh -

492101 As Per Honble Court Order Dated 24-06-2025

2 - The State Of Chhattisgarh Through Secretary, Labour Department 27,

Sector 27, Nawagaon Parsatti, Atal Nagar- Nava Raipur, Chhattisgarh -

492101 As Per Hon’ble Court Order Dated 24-06-2025

3 - Chhattisgarh Building And Other Construction Workers Welfare Board

Constituted Under Section 18(1) Of The Building And Other Construction

Workers (Regulation Of Employment And Conditions Of Service ) Act. 1996

Having Its Office At Sector 24 Office Complex Block A- 1st Floor Atal Nagar

Nawa Raipur As Per Hon’ble Court Order Dated 24-06-2025

--- Respondent(s)

ARBR No. 4 of 2025

S.K. Samanta And Co. (P) Ltd. A Company Incorporated Under The

Companies Act, 1956 Through Its Director Mr. Arunanshu Brahma, Having Its

Registered Office And Carrying On Business, Inter Alia, At Suite No. 4A, 2/5,

Sarat Bose Road, Kolkata 700020

--- Applicant(s)

versus

3

1 - South Eastern Coalfields Limited Through Secretary, Labour Department

27, Sector 27, Nawagaon Parsatti, Atal Nagar Nava Raipur, Chhattisgarh

492101

2 - The State Of Chhattisgarh Through Secretary, Labour Department 27,

Sector 27, Nawagaon Parsatti, Atal Nagar Nava Raipur, Chhattisgarh 492101

3 - Chhattisgarh Building And Other Construction Workers Welfare Board

Constituted Under Section 18(1) Of The Building And Other Construction

Workers (Regulation Of Employment And Conditions Of Service) Act, 1996

Having Its Office At Sector 24, Office Complex, Block-A 1st Floor, Atal Nagar,

Nawa Raipur

--- Respondent(s)

ARBR No. 6 of 2025

S K Samanta And Co (P) Ltd. A Company Incorporated Under The

Companies, Act, 1956 Through Its Director Mr. Arunanshu Brahma, Having Its

Registered Office And Carrying On Business, Inter Alia, At Suite No. 4 A, 2/5,

Sarat Bose Road, Kolkata 700020.

---Applicant(s)

Versus

1 - South Eastern Coalfields Limited Constituted Under Section 18(1) Of The

Building And Other Construction Workers (Regulation Of Employment And

Conditions Of Service ) Act. 1996 Having Its Office At Sector 24 Office

Complex Block A- 1st Floor Atal Nagar Nawa Raipur (As Per Hon’ble Court

Order Dated 24-06-2025)

2 - The State Of Chhattisgarh Through Secretary, Labour Department 27,

Sector 27, Nawagaon Parsatti, Atal Nagar- Nava Raipur, Chhattisgarh -

492101 (As Per Hon’ble Court Order Dated 24-06-2025)

3 - Chhattisgarh Building And Other Construction Workers Welfare Board

Constituted Under Section 18(1) Of The Building And Other Construction

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Workers (Regulation Of Employment And Conditions Of Service ) Act. 1996

Having Its Office At Sector 24 Office Complex Block A- 1st Floor Atal Nagar

Nawa Raipur (As Per Hon’ble Court Order Dated 24-06-2025)

--- Respondent(s)

(Cause Title Taken from Case Information System)

For Applicant(s) :Mr. Abhijeet Chaterjee, Senior Advocate assisted by

Mr. Aman Pandey and Mr. Vinamra Shrivastava

For Respondent/SECL:Mr. Vaibhav Shukla, Advocate.

For Respondent/State:Mr. S.S.Baghel, Government Advocate.

Date of Hearing :05/05/2026

Date of Order :13/05/2026

Hon’ble Mr. Ramesh Sinha, Chief Justice

C A V Order

1.Since the facts and issues involved in these four arbitration request

petitions are similar, they are being considered and decided by this

common order and ARBR No. 48/2024 is taken as the lead case.

2.The applicant-S.K.Samanta & Co. (Pvt.) Ltd. has filed these arbitration

request petitions under Section 11(6) of the Arbitration and Conciliation

Act, 1996 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

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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 applicant was accepted and a Letter of

Award Ref. No. GM(C)/SECL/BSP/WO/GVR/2020/95 dated 08.11.2020

was issued in favour of the applicant for the said work. Clause 31 and 32

of the ITB provided that an amount of 1% of the work value payable to

the contractors will be deducted from all bills towards worker’s welfare

under Building and Other Construction Worker’s Welfare Cess Rules,

1998 and Building and other Construction Workers Welfare Cess Act,

1996. In terms of the provisions of clause 20.5 of ITB, a formal

agreement dated 06.03.2021 was executed between the parties for

carrying out the said work covered by the Purchase Order. The ITB and

the GCC were part of the agreement dated 06.03.2021. While making

payment of running invoices/ bills of the applicant, the respondent-SECL

started deducting cess in terms of clause 31 of the ITB as set out above.

4.Mr. Abhijeet Chatterjee, learned Senior Advocate appearing for the

applicant would submit that in 1996, the Parliament enacted the Building

and Other Construction Workers (Regulation of Employment and

Conditions of Service) Act, 1996 (for short, the BOCW Act). Section

1(4) of the BOCW Act, insofar as it is material for the present purpose,

provides that it shall be applied to every establishment which employs,

or had employed on any day of the preceding twelve months, ten or more

building workers in any building or other construction work. The

expression “establishment” is defined in Section 2(1)(j) of the “BOCW

Act” which states that “establishment” means any establishment

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belonging to, or under the control of, Government, anybody corporate or

firm, an individual or association or other body of individuals which or

who employs building workers in any building or other construction work;

and includes an establishment belonging to a contractor, but does not

include an individual who employs such workers in any building or

construction work in relation to his own residence the total cost of such

construction not being more than rupees ten lakhs. Further, the

expression “building or other construction work” is defined in Section

2(1) (d) of the BOCW Act to mean the construction, alteration, repairs,

maintenance or demolition, of or, in relation to, buildings, streets, roads,

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, 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

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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

the applicant in respect of setting up and maintenance of workshop as

contemplated under the agreement in question, by reason of operation of

the exclusionary provision in Section 2 (1) (d) of the BOCW Act.

6.In 1996 itself, Parliament enacted the Building and other Construction

Workers’ Welfare Cess Act, 1996 (for short, the BOCW Cess Act) to

provide for levy and collection of a cess on the cost of construction

incurred by employers with a view to augmenting the resources of the

Building and Other Construction Workers’ Boards (for short, the Board)

constituted under the BOCW Act. Section 3(1) of the BOCW Cess Act

provides that “(1) There shall be levied and collected a cess for the

purposes of the Building and Other Construction Workers (Regulation of

Employment and Conditions of Service) Act, 1996 (27 of 1996), at such

rate not exceeding two per cent. But not less than one per cent of the

cost of construction incurred by an employer, as the Central

Government may, by notification in the Official Gazette, from time to time

specify”. In exercise of powers under Section 14(1) of the BOCW Act,

the Central Government has framed the Building & Other Construction

Workers’ Welfare Cess Rules, 1998 (for short, BOCW Rules). Rule 4(3)

of the Cess Rules provides as follows: -

“(3) Notwithstanding the provisions of sub-rule (1) and sub-rule

(2), where the levy of cess pertains to building and other

construction work of a Government or of a Public Sector

Undertaking, such Government or the Public Sector

Undertaking shall deduct or cause to be deducted the cess

payable at the notified rates from the bills paid for such works”.

7.It is only in a situation in which the provisions of BOCW Act applies to an

activity in a particular establishment, that the provisions of Rule 4(3)

confer jurisdiction or power on an organization which is getting such

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activities executed by another concern/ contractor to deduct cess

payable from the bills of the other concern/ contractor executing the

work. As the BOCW Act is not applicable for setting up and maintenance

of a workshop in the precincts of a coal mine, no cess is leviable in terms

of Section 3(1) of the BOCW Cess Act and hence no deduction is

permissible in terms of Rule 4(3) of the Cess Rules. The said Rule

authorises deduction of the cess payable which obviously means cess

leviable under Section 3 of the BOCW Cess 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/PROJ-22/

SECL/CBG/1508 dated 20.10. 2023, SKSL Letter No. 168/172,

173,174/0011/PROJ-202, 214, 218 and 222/SECL/ CBG/1536 dated

30.10.2023., SKSL Letter No. 168, 172,173,174/ 0011/Proj-202, 214,

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218 and 222/SECL/CBG/1610 dated 08.11.2023., SKSL Letter No.

168,172,174/0011/PROJ-202,214,218 and 222/SECL/ CBG/1706

dated 24.11.2023., SKSL Letter No. 174/0011/PROJ-202/

SECL/CBG/1721 dated 25.11.2023., SKSL Letter No. 168, 172, 173,

174/0011/proj-202,214,218,222/SECL/CBG/2032 dated 11.01.2024.,

SKSL Letter No. 168, 172, 173, 174/0011/PROJ-202, 214,218,222/

SECL/CBG/0362 dated 09.05.2024., SKSL Letter No. 168, 172, 173,

174/0011/Proj-202,214,218,222/SECL/CBG/0739 dated 20.06.2024.

and Ref. No. 168, 172, 173, 174/0011/PROJ-202, 214,218,222/

SECL/CBG/1073 dated 27.07.2024 written to the respondent

demanding refund of BOCW Cess illegally deducted from payments

made to the applicant against its bills. In the meantime, the respondent-

SECL had written a letter dated 22.05.2024 alleging that the amount of

BOCW Cess which has been recovered from various contracts have

been deposited with the State authority and therefore the respondent-

SECL would not be in a position to refund the amount from its own fund.

However, the respondent-SECL did not take any step for refunding the

cess illegally deducted even after completion of all payments under the

contract, and thus, by conduct and/ or in effect and/ or by implication, the

respondent rejected and /or repudiated the claim asserted by the

applicant giving rise to disputes and differences between the applicant

and the respondent regarding non-deductibility of BOCW cess in law

and non-refund of cess illegally deducted. The applicant, by its letter

dated 31.07.2024 made a request to the General Manager, of the

respondent-SECL for appointment of a Dispute Redressal Committee in

terms of Clause 42.0 of the GCC forming a part of the agreement. The

applicant further stated that in case the dispute regarding refund of the

deducted BOCW Cess cannot be resolved by the Committee, the

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applicant would wish to proceed for Settlement of Dispute through

Arbitration in terms of Clause No. 42A of the GCC forming part of the

agreement. However, the respondent-SECL did not settle the dispute/

difference as aforesaid nor did it constitute any Committee. The

respondent also failed to appoint an Arbitrator and the differences

persisted. In the circumstances, 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 in

terms of section 3 of BOCW Cess Act pursuant to the demand made by

the State authorities and instructions received by respondent No. 3,

which is evident from the letter dated 21.09.2022. The cess deducted/

collected is required to be deposited before the cess authorities.

Accordingly, as per statutory provisions and contractual provisions, the

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respondent-SECL after collecting cess from the applicant has deposited

the cess amount before the State cess authorities. SECL is only the

collecting agent of the cess and not the beneficiary of the cess amount.

Any refund of the cess amount is to be done by State Authorities and not

the SECL. On this count also, these arbitration request petition deserve

to be dismissed.

9.Mr. Shukla would further submit that since the deduction of cess is

statutory in nature therefore any dispute regarding the same is not

arbitrable. It is well settled principle of law that dispute falling within the

jurisdiction of statutory authorities are not arbitrable disputes. In the

present case, as per provision of BOCW Cess Act, it is the State Cess

authorities within whose jurisdiction the present dispute falls. A detailed

mechanism is provided under the provision of BOCW Cess Act, 1996

and BOCW Act and Rules to raise the grievance including applicability

of the Act and failing which the applicant could have invoked extra

ordinary jurisdiction of the Hon'ble Court under Article 226 of the

Constitution of the India against the State Cess authority but instead of

exhausting statutory and constitutional remedies, the applicant has

chosen to file the instant application under section 11(6) of the

Arbitration and Conciliation Ac. Moreover the SECL has raised the

grievances before the State cess authorities vide letter dated 29.12.2023

(Annexure R/3) but the respondent No. 3 has rejected the same on

27.05.2024 (Annexure R/4) stating that the provisions of BOCW Cess

Act is applicable on the work executed by the applicant at different sites

of SECL. Against the rejection of the representation, the applicant could

have exhausted other remedies instead of filing the instant application for

appointment of arbitrator. As such, the present petitions deserve to be

dismissed.

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10.Mr. S.S.Baghel, learned Government Advocate appearing for the

respondent/State would submit that the instant applications for seeking

appointment of the Arbitrator, 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 able stage, the

BOCW is going on. The Mines Act, 1952 does not include

manufacturing workers as mine workers in the definition of mine and

manufacturing workers are not entitled to various provisions and benefits

of the Mines Act. The Welfare Board has been constituted by the

Government and does the work of regulation of the employment and

service conditions of factory workers, health safety and other welfare

conditions and implementation of welfare security scheme. In relation to

the Section 2 (1) (d) of the BOCW, the judgment of the Hon'ble Supreme

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Court is very clear in this regard, passed in Civil Appeal No. 6223/2016

in the matter of Lanco Anpara Power Ltd. v. State of Uttar Pradesh

& Others, {(2016) 10 SCC 329} wherein, it is crystal clear that, the

BOCW Act provides for levy of cess on the cost of construction. The

project under the jurisdiction of the SECL, Bilaspur was allotted on

contract basis to the petitioner contractor for project construction work

and not for ongoing excavation operations. Hence, all the provisions of

BOCW Act are applicable in the said construction work and it is

provided to levy cess amount of 1 percent of the total construction cost.

Therefore, there is no infirmity or illegality in the same, therefore, in view

of the facts and circumstances of the case and also in view of the

circulars issued by the State Government, the applicant is not entitled for

any relief as claimed by it in the instant application and the instant

application filed by the applicant, is devoid of merit or substance, thus,

deserves to be dismissed at the threshold.

11.Rejoinder has been filed by the applicant controverting the submissions

made by the respondent-SECL and the respondent-State, to submit that

firstly, the all the issues raised as aforesaid constitute arbitrable disputes

which have to be decided by the Arbitral Tribunal. All objections raised

by the respondents, (including the objection that disputes/ issues on levy

of BOCW Cess can be decided only under the machinery provided

under relevant laws and that the said issue/ dispute has in fact already

been decided in the present case), can and ought to be decided in

arbitration, particularly when Section 16 of the Arbitration and

Conciliation Act, 1996 has been construed in an expansive way to

comprehend consideration of all preliminary objections of the party

raising preliminary objections to the reference. This Court has a limited

role at the referral stage as it is limited to examining whether an

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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 Clause No.32 of the

ITB and in particular the applicability of those provisions in a situation

where the BOCW Act or BOCW Cess Act or BOCW Cess Rules does

not apply. In any event, non-signatory to an arbitration agreement can be

added as party in the reference. Arbitral Tribunal is the most appropriate

forum to decide the said aspect. The question as to whether a non-

signatory to an arbitration agreement can be added as a party to the

arbitration reference involves consideration of various complex tests,

factors and considerations and ought to be left to be decided by the

Arbitral Tribunal. In support of his contentions, reliance is placed on the

decision rendered by the Apex Court in Interplay Agreements

Between Arbitration Under Arbitration And Conciliation Act, 1996

And Stamp Act, 1899, In Re {(2024) 6 SCC 1}, Uttarakhand Purv

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Sainik Kalyan Nigam Limited v. Northern Coalfield Limited {(2020)

2 SCC 455}, Motilal Oswal Financial Services Limited v. Santosh

Cordeiro and Another {2026 (2) SCC 801}, Cox And Kings Limited

v. Sap India Private Limited And Another {(2024) 4 SCC 1},

Lifeforce Cryobank Sciences Inc. v. Cryoviva Biotech Pvt. Ltd. &

Others {2024 SCC OnLine SC 3215}, ASF Buildtech Private Limited

v. Shapoorji Palomji And Company Private Limited {(2025) 9 SCC

76}, Ajay Madhusudan Patel & Others v. Jyotirindra S. Patel &

Others {(2025) 2 SCC 147} and a judgment of this High Court in

Larsen & Toubro Limited v. State of Chhattisgarh {2018 scc online

chh 317} and a judgment of Calcutta High Court in Anjanee Kumar

Lakhotia v. Maruti Maheshwari & Others {2025 SCC OnLine Cal

7956}.

12.I have heard learned counsel appearing for the parties, perused the

pleadings and documents appended thereto.

13.In nutshell, the contention of the applicant is that since the construction

work of Coal Handling Plant is connected with mining work, the Mines

Act, 1952 would apply and the provisions of the BOCW Act, BOCW

Cess Act or the BOCW Rules would not apply and the respondent-SECL

had no authority to deduct 1% of the work value payable to the applicant

from all bills towards worker’s welfare under the BOCW Act, the BOCW

Cess Act or the BOCW Rules as these Acts and Rules have no

applicability in the case of the applicant. This is the precise dispute

which, according to the applicant, needs to be adjudicated for which the

applicant has prayed for referring the dispute 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

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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 States).”

“32. Instruction to Bidder shall be a part of contract

agreement.”

14.There is no dispute that the GCC also contains clause 42.0 for

settlement of disputes and clause 42A for settlement of disputes through

arbitration. There is further no dispute with respect to the ratio laid down

by the Apex Court in the cases cited by the applicant, however,

applicability of the ratio depends on the facts of each case.

15.The contention of the applicant is that in light of Section 2(1)(d) of the

BOCW Act, which defines the word ‘building or other construction work’,

would 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. The applicant was from the very beginning

aware that deduction to the tune of 1% shall be made from his running

bills as the said conditions were the part of the agreement signed

between the applicant and the respondent-SECL hence, the same

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cannot be termed as a dispute which admittedly the applicant has

agreed to before entering into the contract.

16.The dispute sought to be referred by the applicant does not arise merely

out of a contractual interpretation simpliciter, but essentially pertains to

the applicability and operation of the provisions of the BOCW Act,

BOCW Cess Act and BOCW Rules. The deduction of cess at the rate of

1% from the running bills of the applicant has been made pursuant to

statutory provisions, Government notifications and the contractual

stipulations consciously accepted by the applicant at the time of entering

into the agreement. Clause 31 of the ITB specifically provided for such

deduction and Clause 32 made the ITB an integral part of the contract

agreement. The applicant, being fully aware of these conditions,

participated in the tender process and executed the agreement without

demur.

17.The principal issue raised by the applicant is with regard to the

applicability or otherwise of the BOCW Act and the consequential

liability towards deduction of cess. Such determination necessarily

involves examination of statutory provisions, the scope of exclusion

contained in Section 2(1)(d) of the BOCW Act, and the authority of the

State machinery under the enactment. The respondent-SECL has

merely acted as a collecting agency for deduction and deposit of cess

with the competent State authorities in terms of statutory mandate. The

amount so deducted has already been deposited with the concerned

authorities and SECL is not the beneficiary thereof. In the considered

opinion of this Court, the dispute in question falls within the domain of

the statutory framework governing levy and collection of cess and

cannot be said to be a pure contractual dispute amenable to arbitration.

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18.The disputes which are governed by a special statute and require

adjudication by statutory authorities constituted thereunder are not

ordinarily arbitrable. The BOCW Act and the BOCW Cess Act provide a

complete mechanism in respect of levy, collection and adjudication

relating to cess. The grievance raised by the applicant regarding

wrongful deduction or non-applicability of cess is, therefore, required to

be agitated before the appropriate statutory forum in accordance with

law. Merely because an arbitration clause exists in the agreement would

not ipso facto render every dispute arbitrable, particularly when the

controversy substantially relates to determination of statutory liability.

19.This Court is also of the view that the present dispute does not warrant

exercise of jurisdiction under Section 11(6) of the Act of 1996. The

scope of reference sought by the applicant travels beyond the ambit of

contractual interpretation and seeks adjudication on statutory

applicability under special enactments.

20.Consequently, this Court does not find it to be a fit case for appointment

of a Sole Arbitrator. As a result of the above discussion, these aribtration

request petitions stand dismissed.

Sd/-

(Ramesh Sinha)

CHIEF JUSTICE

Amit

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Head Note

Mere existence of an arbitration clause in an agreement does not ipso facto

render every dispute arbitrable. Where the controversy substantially pertains

to determination, adjudication, or enforcement of statutory liability, such

disputes may fall outside the scope of arbitration and require adjudication by

the competent statutory/forum authority.