Labour Law & Hr Consultant

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Dear seniors,
Myself is presently associated with a road construction company who takes projects of Highways. As you know that for road construction some licences are required to be obtained from authorities to executive the project. As per my knowledge we are supposed to obtain labour licence, BOCW reg. cert. and consent from pollution dept. etc.
Since we are in the field of Road construction we are required to establish RMC plant and Stone crusher plant at site location on temporary basis till completion of the project.
In my opinion since we have taken registration under BOCW we are not covered under Factories Act and we are not supposed to take factory licence for RMC and Stone Crusher plant. Also it is to be noted that we are producing the materials for the purpose of road construction and not for commercial purpose. Further, the workmen engaged by us are only for construction activities and not for running any factory, so the Factories Act is not applicable and hence no licence under Factories Act is required to be obtained.
If anybody is having the judgment copy of High Court in which it is mentioned that for construction companies if BOCW act is applicable Factories Act will not come in force.
All seniors in the group are requested to give your valuable advice in the subject matter.
Praveen Kr. Singh

Dear P.K.Singh,
It is though true that the word "premises" found in the definition clause of section 2(m) of the Factories Act,1948 must have a fixed site but as held by the Constitutional Bench of the Supreme Court in Ardeshir H. Bhiwandiwala (AIR 1962 SC 29), the term "premises" not only covers building but even open land can also be a part of premises. The aforesaid view was re-affirmed in Lal Mohammed & Others v. Indian Railway Construction Co.Ltd [1999 (1) LLJ.317]. You will not deny the fact preparing ready mix concrete in a substantially large scale and stone crushing are manufacturing processes or activities. When you construct a long stretch of high way, it will take considerable time duration as you may have to undertake the works of construction of bridges, culverts, sub-ways, service roads etc., along with the laying down of the road. Therefore, you are going to have these RMC Plant and stone crushing units in a conveniently accessible place where people can assemble to do the works, materials can be stored and crushed stones and RMC can be despatched quickly along the considerable stretch of construction and not in every kilo meter. Therefore my considered opinion is that you have to obtain factory licence under the Factories Act though you had already got the licence under the BOCW Act. BOCW Licence is not required only in respect of the construction carried out in an existing factory premises.

Dear Sir,
It is true that we are preparing ready mix concrete and stone crushing in large scale but it is for the purpose of construction activity only and not for any commercial purpose. The workmen are engaged by us for construction activities and not for running any factory.
In your view BOCW is not applicable for us then why our client advised us to take the registration under BOCW and deposit the cess amount.
As per Section 2 (1) (d) of BOCW act both the act cannot be applicable for us. Please refer the Judgement of HIGH COURT OF CHHATTISGARH AT BILASPUR (WPC No. 2636 of 2010).
P. K. Singh

Dear P.K.Singh,
I have gone through the judgment referred to and it reaffirms the legal position of application of the BOCW Act,1996 to a premises under construction with an intention of using it as a factory later under the Factories Act,1948 with reference to the exclusion clause of the definition of the term " building and other construction work" as defined u/s 2(1)(d) of the BOCW Act,1948.
But your question is different. As per the definition of the term "manufacturing process" as defined u/s 2(k) of the Factories Act,1948, RMC Plant and Crusher Unit run by your Company carry on with manufacturing process only; hence, the premises where they are situated would be a "factory" as defined u/s 2(m) of the Act if they satisfy the conditions stipulated in ss (i) and (ii) of Sec.2(m) and the workmen employed therein would be "workers" of the factory run by the Construction Company. Their proximity to the high way under construction, their functioning being co-terminous with the construction work for which all the formalities under the BOCW Act have already been complied with and their end products are exclusively used only for the particular construction work cannot be valid reasons for the non-application of the Factories Act,1948 to them. I think that a dispassionate re-reading of the provisions of both the enactments in the back drop of their purpose and scope is required.

Construction of Road is covered under definition of "building and other construction work" of BOCW Act. The RMC Plant or Stone Crushing unit is a separate establishment for the purpose of Factories Act as you are carried out manufacturing process in the said premises. The 1 % cess is correctly charged on the work order of the construction of Road. BOCW Act is not applicable to premises where Factories Act is applicable and the construction of building is part of existing factory.
Dear Sir,
As you said that the Construction of Road is covered under definition of "building and other construction work" of BOCW Act and the RMC Plant or Stone Crushing unit is a separate establishment.
In this regard we would like to inform you that we have setup these plants for the purpose of using the materials in construction activities (construction of road) only and once our road projects ends (max 1-2 yrs) we will have to dismantle the plant from the said location and move to other location as per the requirement because the said plants are setup as temporary, also we are not using it for any commercial purpose. There is no separate premises taken for setting the said plants, it is established at the same place where other construction activities are being carried out for construction of highway.
Also it is to be noted that for setting the said plant we have taken CTE and CTO from the pollution dept. and for getting the same consent no one has asked for any factory license.
P. K. Singh

Dear P.K.Singh,
It is quite natural for every one to take things for granted when no statutory directions are issued by the competent authority. I think that no Factories Inspector has visited the plants so far.
So far as I know for obtaining CTE or CTO from the Pollution Board, the registration certificate under the Factories Act,1948 is not required. If it is one of the requisite preconditions, the authorities would have asked you. Therefore it can not be a valid argument to take the plants out of the coverage of the Factories Act,1948 in case they have the requisite no of workers just because they are owned and run by a Construction Company exclusively for its construction projects.
That apart, like I said earlier, the manufactured end products of the RMC Plants and the Crusher Units are for their use in your construction work which you undertake to do for some one else for profit only. Whether you have registered them under the Factories Act or not they are factories and the workmen employed therein are workers of the factory only and not construction workers.

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