In Brief
Several highway contractors disputed welfare cess deductions by the National Highways Authority of India under the Building and Other Construction Workers Act and Cess Act. The Supreme Court upheld arbitral awards in favour of the contractors, holding that these welfare laws could not practically take effect until state welfare boards were constituted and implementation machinery was in place—often years after contracts were bid. The Court rejected NHAI's attempts to retroactively levy cess on old projects, finding such liability could not be factored into bid prices when no operational framework existed. Arbitrators' plausible contract interpretations warranted deference absent patent illegality.
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