L.Sudhershan Reddy, vs The South Central Railway
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    IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH
                       AT HYDERABAD
           TUESDAY, THE TWELFTH DAY OF FEBRUARY,
                 TWO THOUSAND AND THIRTEEN

                           :PRESENT:
         THE HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY

                          WP .NO: 12104 of 2011
Between:
1 L. Sudhershan Reddy, S/o Late Laxma Reddy
2 M/s Eswar Sai Constructions,
    Rep. by its Partner L. Laxmikanth Reddy, S/o L.Sudhershan Reddy
    R/o Vikarabad, Ranga Reddy district.
3 T. Ravibabu, S/o Venkateswara Rao
4 A. Veeraiah, S/o Venkatramaiah
                                                           ..... Petitioners
                                   AND

1   The South Central Railway, rep. by its General Manager, Rail Nilayam,
    Secunderabad.
2   The Chief Engineer (Works), South Central Railway, Secunderabad.
3   The Senior Divisional Engineer (West), South Central Railway,
    Secunderabad.
4   The Senior Divisional Engineer (South), South Central Railway,
    Secunderabad.
5   The Senior Divisional Finance Manager (Broadguage), South Central
    Railway, Secunderabad.
6   The Divisional Railway Manager, South Central Railway, Secunderabad.
                                                           .....Respondents

     Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed herein, the High Court may be
pleased to issue a writ or order or direction specially one in the nature of writ
of mandamus, declaring the impugned Memo No.W.148/1/9(vol.IV) dated
03.03.2009 on the file of Chief Engineer (Works), South Central Railway,
Secunderabad-2nd respondent and the action of the respondents in
unilaterally deducting the 1% Labour Cess from the outstanding bills of the
petitioners under the provisions of Building & Other Construction Workers
Welfare Cess Act, 1996 and rules made thereunder as illegal, arbitrary and
violative of principles of natural justice and consequently, direct the
respondents not to recover labour cess amount from the respective bills of
the petitioners.

     The petition coming on for hearing, upon perusing the Petition and the
affidavit filed herein and the order of the High Court dated 13-06-2011 made in
WPMP No.14800 of 2011 and upon hearing the arguments of Sri L.
Prabhakar Reddy, Advocate for the Petitioners, and Sri P. Bhaskar, Standing
Counsel for the Respondents, the Court made the following

ORDER

This Writ Petition is filed for a Mandamus to set aside Memo No.W.148/1/9(vol.IV), dated 03-03-2009, of respondent No.2 and to declare the action of the respondents, in unilaterally deducting 1% Labour Cess from the petitioners' outstanding bills under the Welfare Cess Act, 1996 (for short 'the Act') and the Rules made thereunder, as illegal, arbitrary and violative of the principles of natural justice.

Contd...2/P

:: 2 ::

At the hearing, Mr.L.Prabhakar Reddy, learned Counsel for the petitioners, placed reliance on final order, dated 22-10-2009, in WP.No.11269 of 2009 and batch (Ch.V.V.Subbarao vs. The Government of Andhra Pradesh, rep. by its Principal Secretary to Finance & Planning Dept.,) in support of his submission that the burden to bear 1% Cess under the Act does not lie on the petitioners, who are only contractors, but the same is on the agency, which has undertaken the work. However, Mr.P.Bhaskar, learned Standing Counsel for South Central Railways, relied on the judgment in Cormandel Prestcrete Private Limited vs. State of Andhra Pradesh, rep. by Principal Secretary to Government, Irrigation and CAD Department and Ors. (2011 (6) ALT

703).

I have carefully perused both the above-noted judgments cited by the respective Counsel.

The judgment in Cormandel Prestcrete Private Limited (2 supra) is earlier in point of time. After framing as many as seven points, a learned single Judge, on a detailed reasoning, has held that the liability is on the contractors to pay the Labour Cess and that even in the absence of a clause in the Agreement, by operation of the provisions of the Act, they are still liable to pay the Cess. However, a diametrical contrary view was taken by another learned Judge in Ch.V.V.Subba Rao (1 supra). A perusal of this Order shows that the judgment in Cormandel Prestcrete Private Limited (2 supra) was not noticed by the learned Judge. In view of these two conflicting Judgments, I feel it appropriate that an authoritative pronouncement by a Division Bench is needed. Accordingly, the Writ Petition is referred to a Division Bench. The Registry shall post this case before the appropriate Division Bench after obtaining necessary order from the Hon'ble the Chief Justice.

ASSISTANT REGISTRAR //TRUE COPY// For ASSISTANT REGISTRAR To 1 The Section Officer, Writ Filing Section, High Court of A.P., Hyderabad.

2. One CC to Sri L. Prabhakar Reddy, Advocate (OPUC)

3. One CC to Sri P. Bhaskar, Standing Counsel (OPUC)

4. One spare copy.

nnr HIGH COURT

CVNR,J

DATED: 12-2-2013

ORDER

W.P.NO. 12104 OF 2011

DIRECTION HIGH COURT Nnr Date of Drafting : 15-02-2013

CVNR,J

DATED: 12-2-2013

ORDER

W.P.NO. 12104 OF 2011

DIRECTION