Ms. Amrutha M vs State Of Karnataka on 10 January, 2025

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January 25, 2025

Karnataka High Court

Ms. Amrutha M vs State Of Karnataka on 10 January, 2025

Bench: M.Nagaprasanna

Reserved on : 01.10.2024
Pronounced on : 10.01.2025 R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 10TH DAY OF JANUARY, 2025

BEFORE

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

WRIT PETITION No.9924 OF 2024 (GM-RES)

BETWEEN:

1. MS. AMRUTHA M.,
AGED ABOUT 22 YEARS
D/O MANJEGOWDA
SRIARUVAMMA, NO. 265
1ST MAIN ROAD, 6TH CROSS
HRUSHIKESH NAGAR
HOSAKERAHALLI
BENGALURU - 560 085.

2. MR. MANJEGOWDA
AGED ABOUT 55 YEARS
S/O AMASHEGOWDA
SRIARUVAMMA, NO. 265
Digitally signed by
VISHAL 1ST MAIN ROAD, 6TH CROSS
NINGAPPA
PATTIHAL HRUSHIKESH NAGAR
Location: High
Court of Karnataka
HOSAKERAHALLI
BENGALURU - 560 085.

3. MS. ANKITHA H.,
AGED ABOUT 19 YEARS
D/O HARISH K.,
3RD CROSS, SRIGANDHA NAGAR
2

HEGGANAHALLI
BENGALURU NORTH
BENGALURU - 560 091.

4. MR. HARISH K.,
AGED ABOUT 46 YEARS
S/O KUTHAN P.,
3RD CROSS, SRIGANDHA NAGAR
HEGGANAHALLI
BENGALURU NORTH
BENGALURU - 560 091.

5. KARNATAKA STATE BUILDING AND
OTHER WORKERS FEDERATION
TRADE UNION REGISTERED UNDER
THE INDIAN TRADE UNIONS ACT, 1926
40/5, 2ND 'B' MAIN ROAD
16TH CROSS, SR NAGAR
BENGALURU - 560 027
THROUGH ITS AUTHORIZED
REPRESENTATIVE
MR. MAHANTHESHA K.,
... PETITIONERS

(BY SRI ADITYA CHATTERJEE, A/W
SMT.AKSHITA GOYAL, ADVOCATES)

AND:

1. STATE OF KARNATAKA
COMMISSIONER OF LABOUR
OFFICE OF THE COMMISSIONER OF LABOUR
KARMIKA BHAVAN,
BANNERGHATTA ROAD,
BENGALURU - 560 029.

THROUGH ITS PRINCIPAL SECRETARY.
3

2. KARNATAKA BUILDING AND
OTHER CONSTRUCTION WORKERS
WELFARE BOARD
WELFARE BOARD CONSTITUTED UNDER
BUILDING AND OTHER CONSTRUCTION
WORKERS ACT, 1996
KALYANA SURAKSHA BHAVAN,
BANNERGHATTA ROAD,
ITI COMPOUND, DAIRY CIRCLE,
BENGALURU,
KARNATAKA - 560 029
THROUGH ITS PRINCIPAL SECRETARY.

3. THE MINISTRY OF LABOUR
SATE OF KARNATAKA
KARMIKA BHAVAN,
DAIRY CIRCLE,
BANNERGHATTA ROAD,
BENGALURU - 560 029.

THROUGH ITS PRINCIPAL SECRETARY.

... RESPONDENTS

(BY SMT.PRATHIMA HONNAPURA, AAG FOR R-1 AND R-3;
SRI M.R.C.RAVI, SR.ADVOCATE A/W
SRI PRASHANTH B.R., ADVOCATE FOR R-2)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO a) QUASH THE IMPUGNED
NOTIFICATION DATED 30 OCTOBER 2023, NUMBERED KA 459 LT
2023, PRODUCED AS ANNEXURE-A AND CONSEQUENTLY
ALLOWING THE APPLICATION OF THE 2021 NOTIFICATION, DATED
13 AUGUST 2021, NUMBERED LD 207 LET 2021 (PRODUCED AS
ANNEXURE-B) TO THE EXTENT THAT EQUIVALENT COURSES ARE
ALLOCATED EQUIVALENT EDUCATIONAL ASSISTANCE AMOUNTS
AND ETC.,
4

THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 01.10.2024, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-

CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

CAV ORDER

Petitioners 1 to 5 are before this Court calling in question the

Notification dated 30-10-2023 and consequently to allow the

application dated 13-08-2021 of 2021 Notification to few of the

petitioners and have also sought several other incidental prayers.

2. Before embarking upon consideration of the issue on its

merits, I deem it appropriate to notice the protagonists in the

petition. The 1st petitioner is the daughter of the 2nd petitioner who

is a registered construction worker and the 3rd petitioner is the

daughter of the 4th petitioner, again a registered construction

worker. The 5th petitioner is the Karnataka State Building and other

Workers Federation (hereinafter referred to as 'the Federation' for

short)
5

3. Facts adumbrated are as follows:

The 1st petitioner is a student of Master of Business

Administration enrolled in Apoorva Institute of Management Studies

and currently is in her 3rd semester. The 3rd petitioner is a student

in Law enrolled in Visveswarapura College of Law and is in her third

semester of law. Both the aforesaid petitioners are the children of

registered construction workers. The children of construction

workers were, in terms of the notification of the year 2021, entitled

to certain amount of educational assistance at the rate of ₹35,000/-

per semester. This notification comes to be amended and the

impugned notification comes to be issued on 30-10-2023 reducing

the amount of assistance for educational purposes to 10,000/-

contrary to what was earlier prevailing at ₹30,000/- and ₹35,000/-

as the case would be, be it for graduation or post-graduation.

Petitioners 1 and 3, daughters of petitioners 2 and 4 applied for

grant of educational assistance as was prevailing earlier. This

comes to be turned down on the strength of the impugned

notification dated 30-10-2023. It is this action, on the strength of
6

the aforesaid notification of the State, that has driven the

petitioners to this Court in the subject petition.

4. The respondents are, the State through the office of the

Commissioner of Labour, the 1st respondent; the Karnataka Building

and Other Construction Workers Welfare Board (hereinafter referred

to as 'the Board' for short), the 2nd respondent and the Ministry of

Labour, State of Karnataka, the 3rd respondent.

5. Heard Sri Aditya Chatterjee, learned counsel appearing for

the petitioners, Smt. Prathima Honnapura, learned Additional

Advocate General appearing for respondents 1 and 3 and Sri M.R.C.

Ravi, learned senior counsel appearing for respondent No.2.

6. The learned counsel appearing for the petitioners would

vehemently contend that the action of the respondents is in

violation of scheme of the Building and Other Construction Workers

(Regulation of Employment and Conditions of Service) Act, 1996

(hereinafter referred to as 'the Act' for short). The impugned

notification cannot have retrospective application after the children
7

got into education and legitimate expectation is shattered in the

case at hand is his submission. The defence of the Board as

projected by the learned senior counsel, as non-availability of fund,

is erroneous and contrary to the record. He would contend that the

Board is over-spending on administrative expenditure, and under-

spending on welfare scheme. He would further contend that deposit

of welfare funds that come into the coffers of the Board is ₹6700/-

crores and the Board has invested it in fixed deposits in violation of

orders of the Apex Court. He would seek to place reliance upon

several judgments of the Apex Court and that of this Court which

would all bear consideration qua their relevance in the course of the

order.

7. Per contra, the learned counsel appearing for the Board

would vehemently refute the submissions to contend that

administrative expenses of the Board is not what is more, but

investments to all kinds of assistance to the children of registered

construction workers or construction workers themselves. The

money no doubt used for funding MGNREGA scheme and

establishment of Indira Canteen as well. But, these are immediately
8

stopped. Now what is being done as usage of funds is only on the

welfare of construction workers who have registered with the

Board. He would submit that the amount that was claimed by these

petitioners - petitioners 1 and 3 - are paid pursuant to the interim

order granted by this Court and therefore, the petition be disposed

of, as grievances of the petitioners have been redressed.

8. The learned counsel appearing for the petitioners would

join the issue to contend that the petition does not become

infructuous merely because petitioners' children were being given

the amount of ₹35,000/-. The challenge to the impugned

notification still remains, as the notification grossly reduces the

amount payable to registered construction workers and their

children, all in an action blatantly contrary to law .

9. I have given my anxious consideration to the submissions

made by the respective learned counsel, and have perused the

material on record. In furtherance whereof, the issue that falls for

consideration is the tenability of the impugned notification. To
9

consider the issue, it becomes germane to notice the genesis of

statutory regulation of welfare of construction workers.

(i) The genesis of statutory recognition of construction
workers:

10. The afore-narrated facts are not in dispute. The

Government of India notified, the Building and Other Construction

Workers (Regulation of Employment and Conditions of Service) Act,

1996 on 19-08-1996. The other Act enacted in the same year is

Building and Other Construction Workers Welfare Cess Act ('the

Cess Act' for short). The Act was promulgated to regulate the

employment and conditions of service of building and other

construction workers and to provide for their safety, health and

welfare measures and for other matters connected therewith or

incidental thereto. Certain provisions of the Act are germane to be

noticed. Section 2(b) of the Act defines beneficiary to be a building

worker registered under Section 12. Section 2(c) defines the

Board. Both the provisions read as follows:

"2. Definitions.--(1) In this Act, unless the
context otherwise requires,--
... ... ...
10

(b) "beneficiary" means a building worker registered
under Section 12;

(c) "Board" means a Building and Other
Construction Workers' Welfare Board constituted
under sub-section (1) of Section 18;"

(Emphasis Supplied)

The Board would be, the Building and Other Construction Workers'

Welfare Board constituted under sub-section (1) of Section 18,

which is the 2nd respondent in the case at hand. A building worker

is defined under Section 2(e) of the Act. It reads as follows:

"(e) "building worker" means a person who is
employed to do any skilled, semi-skilled or
unskilled, manual, supervisory, technical or
clerical work for hire or reward, whether the
terms of employment be expressed or implied, in
connection with any building or other
construction work but does not include any such
person--

(i) who is employed mainly in a managerial or
administrative capacity; or

(ii) who, being employed in a supervisory
capacity, draws wages exceeding one
thousand six hundred rupees per mensem
or exercises, either by the nature of the
duties attached to the office or by reason
of the powers vested in him, functions
mainly of a managerial nature;"

(Emphasis Supplied)
11

Section 12 deals with registration of building workers as

beneficiaries. It reads as follows:

"12. Registration of building workers as
beneficiaries.--(1) Every building worker who has
completed eighteen years of age, but has not completed
sixty years of age, and who has been engaged in any
building or other construction work for not less than ninety
days during the preceding twelve months shall be eligible for
registration as a beneficiary under this Act.

(2) An application for registration shall be made in
such form, as may be prescribed, to the officer authorised by
the Board in this behalf.

(3) Every application under sub-section (2) shall be
accompanied by such documents together with such fee not
exceeding fifty rupees as may be prescribed.

(4) If the officer authorised by the Board under sub-
section (2) is satisfied that the applicant has complied with
the provisions of this Act and the rules made thereunder, he
shall register the name of the building worker as a
beneficiary under this Act:

Provided that an application for registration shall not
be rejected without giving the applicant an opportunity of
being heard.

(5) Any person aggrieved by the decision under sub-
section (4) may, within thirty days from the date of such
decision, prefer an appeal to the Secretary of the Board or
any other officer specified by the Board in this behalf and the
decision of the Secretary or such other officer on such appeal
shall be final:

Provided that the Secretary or any other officer
specified by the Board in this behalf may entertain the
appeal after the expiry of the said period of thirty days if he
12

is satisfied that the building worker was prevented by
sufficient cause from filing the appeal in time.

(6) The Secretary of the Board shall cause to maintain
such registers as may be prescribed."

Section 13 statutorily mandates issuance of identity cards to those

registered building workers. Section 18 deals with constitution of

the State Welfare Board which reads as follows:

"18. Constitution of State Welfare Boards.--(1)
Every State Government shall, with effect from such
date as it may, by notification, appoint, constitute a
Board to be known as the ... (name of the State)
Building and other Construction Workers' Welfare
Board to exercise the powers conferred on, and
perform the functions assigned to it, under this Act.

(2) The Board shall be a body corporate by the name
aforesaid, having perpetual succession and a common seal
and shall by the said name sue and be sued.

(3) The Board shall consist of a chairperson, a person
to be nominated by the Central Government and such
number of other members, not exceeding fifteen, as may be
appointed to it by the State Government:

Provided that the Board shall include an equal number
of members representing the State Government, the
employers and the building workers and that at least one
member of the Board shall be a woman.

(4) The terms and conditions of appointment and the
salaries and other allowances payable to the chairperson and
the other members of the Board, and the manner of filling of
casual vacancies of the members of the Board, shall be such
as may be prescribed."
(Emphasis Supplied)
13

11. The other enactment is the Cess Act, that was enacted to

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

incurred by the employers with a view to augmenting resources of

the Building and other Construction Workers Welfare Boards

constituted under the Act.

12. Certain provisions of the Cess Act are germane to be

noticed. Section 3 of the Cess Act reads as follows:

"3. Levy and collection of cess.--(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, 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.

(2) The cess levied under sub-section (1) shall be
collected from every employer in such manner and at such
time, including deduction at source in relation to a building
or other construction work of a Government or of a public
sector undertaking or advance collection through a local
authority where an approval of such building or other
construction work by such local authority is required, as
may be prescribed.

(3) The proceeds of the cess collected under sub-
section (2) shall be paid by the local authority or the State
Government collecting the cess to the Board after
deducting the cost of collection of such cess not exceeding
one per cent. of the amount collected.
14

(4) Notwithstanding anything contained in sub-
section (1) or sub-section (2), the cess leviable under this
Act including payment of such cess in advance may,
subject to final assessment to be made, be collected at a
uniform rate or rates as may be prescribed on the basis of
the quantum of the building or other construction work
involved."

Section 3 empowers Government of India to fix rate of cess to be

collected by the Central or State Governments as the case would

be. Cess is fixed at 1% of the cost of construction incurred by an

employer under the Notification dated 12-10-1996.

13. The State of Karnataka promulgates in the Building and

Other Construction Workers (Regulation of Employment and

Conditions of Service), Karnataka Rules, 2006 ('the Rules' for short)

in exercise of powers conferred under sub-sections (1) and (2) of

Section 62 of the Act. The Rules that are germane to be noticed

are Rules 20, 21A, 33, 37 and 45 and they read as follows:

"20. Form of application for registration of
construction workers as beneficiaries under Section
12.- (1) Every building worker shall apply in Form-V for
registration under sub-section (2) of Section 12 of the Act,
as a beneficiary.

(2) The application for registration, as beneficiary,
shall be accompanied with the following:
15

(a) Registration fee of ₹25/-;

(b) Proof of age:
Explanation: Proof of age means school record, birth
certificate, driving licence, pass port or certificate from
a doctor not below the rank of Assistant Surgeon in
Government Hospitals/ESI Hospitals/ Hospitals of
Local Bodies i.e., Corporation, City Municipal
Corporation, Town Municipal Corporation and Zilla
Panchayats;

(c) Certificate from the present employer or a Trade union
registered under the Trade Unions Act, 1926, or an
official of Labour Department in the concerned
jurisdiction not below the rank of Labour Inspector;

(d) 3 passport size photographs.

(3) The building worker shall also file a nomination in
Form-VI. The nomination shall stand revised in the name of
the spouse on his acquiring a family or on the happening of
any legal change in the status of the family and any change
of nomination shall intimate to the Board in Form-VII.

(4) The Secretary or other officer authorised by him in
this behalf shall issue to every beneficiary an identity card
with a photo of the beneficiary affixed in Form-VIII.

(5) The Secretary of the Board shall maintain a
register of beneficiaries containing the names and addresses
of the construction workers registered in Form-IX. The
Board may maintain such other records and registers as it
considers necessary.
... ... ...

21-A. Contribution of building worker: (1) Every
construction worker whose name has been registered
as a beneficiary under sub-rule (1) of Rule 20 shall
contribute a monthly subscription of ₹10/- per month,
which shall be remitted half yearly to the Board.

(2) If a beneficiary commits defaults in the payment of
contribution, continuously for a period of one year, he shall
16

cease to be the beneficiary of the fund. However, with the
permission of the Secretary or an officer authorised by him in
this behalf, the membership may be resumed on repayment
of arrears of contribution with a fine of ₹2/- per month,
subject to the condition that such resumption shall not be
allowed more than twice.
... ... ...
33. Maintenance of Audit and Accounts.- The
accounts of the Board shall be prepared and
maintained by the Accounts Officer of the Board and
shall be audited by the Auditors appointed by the
Board once a year. The Secretary of the Board shall be
responsible for the disposal of the audit note.
... ... ...
37. Expenditure from the Fund.- All expenses for
the administration of the Fund, fees and allowance of the
Directors of the Board, salaries, leave salaries, joining time
pay, travelling allowance, compensatory allowance, charge
allowances, pension contribution and other benefits of
personal expenses for the legitimate needs of the Board and
the stationery expenses shall be met from the administrative
account of the Fund.
... ... ...
45. Assistance for the education of the son or
daughter of a registered construction worker.- (1) The
Secretary or any other officer authorised in this behalf
by the Board, may, on an application from a registered
construction worker, sanction, -

(a) If the son or daughter of the applicant had
passed S.S.L.C. examination or its equivalent, a
sum of ₹750/- (Rupees seven hundred and fifty
only) to the applicant.

(b) If the son or daughter of the applicant had
passed the PUC examination or its equivalent, a
sum of ₹1,000/- (Rupees one thousand only) to
the applicant.

(d) If the son or daughter of the applicant who is
studying in general Degree course as sum of
₹1,500/-;

(e) If the son or daughter of the applicant who is
studying in professional course a sum of
₹5,000/-.

(2) The amount shall be sanctioned only if the
following conditions are fulfilled, namely:-

(a) A minimum of one year shall have lapsed from the
date of registration of the applicant to the date of his
application;

(b) Only two children of a registered construction worker
shall be given this assistance and

(Emphasis supplied)

Rule 20 mandates that every building worker shall apply in a

particular form for registration as a beneficiary under the Act. Rule

21A directs that every construction worker whose name has been

registered as a beneficiary shall contribute ₹10/- per month which

shall be remitted half yearly to the Board. Rule 33 directs that

accounts of the Board shall be prepared and maintained by the

Accounts Officer of the Board and shall be audited by the statutory

auditors appointed by the Board once a year. Rule 37 directs that
18

all expenses for administration of the fund shall be met from the

administrative account of the fund, which is capped at 5% of the

total fund in terms of Section 24(3) of the Act. Rule 45 which

mandates assistance for education of a son or daughter of a

registered construction worker is imperative. The educational

assistance would commence only on passing of SSLC examination

or its equivalent by the son or daughter. Rule 45 mandates

educational assistance. The afore-quoted are the statutory

framework that, regulates lives of construction of building workers

and their Welfare.

(ii) The petitioners and their grievance:

14. The 1st petitioner is the daughter of the 2nd petitioner who

belongs to a below poverty line category and holds a BPL card and

an identity card as being a daughter of construction worker. She is

enrolled in the year 2023 into a Master of Business Administration

programme. The 3rd petitioner is again a BPL card holder and is

enrolled as a student of Law. They seek educational assistance

under the Act and the Rules. From 2006 through 2022 the State
19

Government, has notified varied educational assistance from time

to time. Petitioners 1 and 3 and the like and variance to the benefit

of students is tabulated, as follows:

"PETITIONER NO. 1 - MBA STUDENT

Corresponding Table:

Year Amount
2006 5000
2009 6000
2011 10000
2013 15000
2015 20000
2017 20000
2018 20000
2019* 20000
2020 25000
2021 35000
2023 10000
20

The afore-drawn graph and the table is indicative of the fact that in

the year 2017, the amount for education was at Rs.20,000/- for an

entry and thereafter Rs.10,000/- every year for a maximum of 2

years; in 2019, the amount was equivalent to annual fee of

government institutes/colleges, which perhaps was capped at

Rs.20,000/-; in 2020, the amount was kept intact at Rs.20,000/-

for boys, but was increased for girls at Rs.25,000/- for every year

of education; in 2021, the amount was capped at Rs.35,000/-

maximum for a 2 years discipline. The educational assistance,

therefore to an MBA student, has been on the increase from 2017

to 2021 or till the impugned notification.

PETITIONER NO.3 - LLB STUDENT

The educational assistance to an LLB student can be

graphically portrayed as follows:
21

"Corresponding Table:

Year Amount (INR)
2006 5000
2009 6000
2011 10000
2013 15000
2015 20000
2017 10000
2018 10000
2019* 20000
2020 20000
2021 30000
2023 10000

The educational assistance graphically drawn or tabulated
would depict the following:

1) In 2005, educational assistance has been computed as
provided for the category 'Professional course'.

2) In 2009, educational assistance has been computed as
provided for the category 'Professional course or PG
course'.
22

3) In 2011, educational assistance has been computed as
provided for the category 'Professional course or PG
course'.

4) In 2013, educational assistance has been computed as
provided for the category 'Professional course or PG
course'.

5) In 2015, educational assistance has been computed as
provided for the category 'Professional course or PG
course'.

6) In 2017, educational assistance has been computed as
provided for the category 'any degree course'.

7) In 2018, educational assistance has been computed as
provided for the category 'any degree course'.

8) In 2019*, educational assistance has been computed as
provided for the category 'Annual fee of govt.
institutes/colleges.

9) In 2020, educational assistance has been computed as
provided for the category 'Graduation'.

10) In 2021, educational assistance has been computed as
provided for the category 'LLB/LLM'.

11) In 2023, educational assistance has been computed as
provided for 'LLB/LLM'"

What is discernible from afore-quoted graphical depiction is that

from 2006 onwards there has been increase in educational

assistance to these categories of students. I have referred to these

two categories, as an illustration, while there are many. Up to 2021
23

the graph has been on the increase, and after 2021, it drastically

falls down, and goes 12 years back and brings the figure what was

prevailing in the year 2011. The notification issued in terms of the

Rules depicting benefits to students of the year 2021, reads as

follows:

"GOVERNMENT OF KARNATAKA

No.LD 207 LET 2021 Karnataka Government Secretariat,
Vikas Soudha,
Bengaluru, dated 13-08-2021.
NOTIFICATION

In exercise of the powers conferred by Section 62 of
the Building and Others Constructions Worker's (Regulation
of Employment and Conditions of Service) Act, 1996 (Central
Act No.27 of 1996) read with sub-rule (1) of rule 45 of the
Building and Others Constructions Worker's (Regulation of
Employment and Conditions of Service) Karnataka Rules,
2006 the Government of Karnataka, hereby notifies the
amount of educational assistance to the registered
construction workers as under:

Sl. Name of the Educational Annual
No course or Standard or Grade Educational
Assistance
(in Rs.)
Pre-matric Courses
1. KG/Pre School/Nursery (Age 3 to 5,000
5)
2. 1st - 4th Std. 5,000
3. 5th - 8th Std. 8,000
4. 9th& 10th Std. 12,000
Post-matric/HSC
st nd
5. 1 PUC & 2 PUC 15,000
24

6. Polytechnic/Diploma/ITI 20,000
7. B.Sc Nursing/GNM/ANM/ 40,000
Paramedical Courses
8. D.ed 25,000
B.ed 35,000
9. Graduation (any discipline) 25,000
10 LLB/LLM 30,000
11 Any Post Graduation ₹35,000/- for
maximum of 2
years subject
Technical/Medical through NEET or KCET
12 BE/ B.Tech or equivalent U.G ₹50,000/- subject
courses. to the maximum
number of the
years course.
13 M.Tech /ME (or equivalent Post ₹60,000/- subject
Graduation courses) to the maximum
number of years of
course.
14 Medical (MBBS/BAMS/BDS/BHMS ₹60,000/- (subject
or equivalent course of Medical to the maximum of
Studies) number of the
years course)
MD ₹75,000/- (subject
to the maximum of
number of the
years course)
15 Ph.D/M.Phil (Any subject) ₹25,000/- for
maximum of 3
years for Ph.D and
1 year for M.Phil
(Those candidates
who have been
selected for Junior
Research
Fellowship (JRF) of
UGC or who are in
the employment of
the State/ Central
Government or
working in aided
Colleges in the
25

posts covered
under the grant-
in-aid schemes of
UGC Colleges are
not eligible for this
assistance).
16 IIT/IIIT/IIM/NIT/IISER/AIIMS/NLU Actual Tuition fee
and listed courses of Government paid.
of India

(Emphasis supplied)

Conditions:

i. The students should have passed previous academic
year and should have enrolled for the current
academic year.

ii. Further, the scholarship may be disbursed through
DBT Mode on State Scholarship Portal (SSP) designed
by the Centre for e-Governance, Government of
Karnataka.

iii. The actual processing fee for successful applications
will be reimbursed in case of Sl.No.16.

iv. Students pursing the above courses in any discipline/
Branches or studies equivalent to the above courses
are also eligible for the scholarship applicable to their
respective course.

v. Registered construction workers whose membership is
valid at the time of submitting the application for
educational assistance and whose children have
enrolled for the above courses are eligible for
scholarship.

vi. Students appearing for the various examinations
through the National Institute of Open Schooling shall
be reimbursed the actual examination fees of the
specific course.
26

vii. This Notification will come into effect from the
academic year 2021-22."

Two disciplines in the aforesaid notification, form the fulcrum of the

subject lis. They are LLB which the 3rd petitioner is pursuing and

MBA which the 1st petitioner is pursuing. They were entitled to

educational assistance at ₹30,000/- and ₹35,000/- respectively.

On the fond hope of getting educational assistance, they get

enrolled to these courses in the afore-mentioned institutions and

during February and March, 2023, they apply for educational

assistance to the Board. The Board, as is known for its wont, of

callousness does not process them, till the impugned notification

comes about on 30-10-2023, which is for close to 7 months. It is

here the right of these poor children is taken for granted. Then

emerges the impugned notification. The impugned Notification

reads as follows:

¸ÀASÉå:PÁE 459 J¯ï En 2023 PÀ£ÁðlPÀ ¸ÀPÁðgÀzÀ ¸ÀaªÁ®AiÀÄ:
«PÁ¸À¸ËzsÀ,¨ÉAUÀ¼ÀÆgÀÄ,
¢£ÁAPÀ:30.10.2023
C¢ü¸ÀÆZÀ£É
PÀlÖqÀ ªÀÄvÀÄÛ EvÀgÉ ¤ªÀiÁðt PÁ«ÄðPÀgÀ (GzÉÆåÃUÀzÀ PÀæ«ÄÃPÀgÀt ªÀÄvÀÄÛ ¸ÉÃªÁ µÀgÀvÀÄÛUÀ¼ÀÄ)
PÁAiÉÄÝ 1996 (PÉÃAzÀæ PÁAiÉÄÝ 1996gÀ ¸ÀASÉå 27)gÀ PÀ®A 62gÀr ¥ÀæzÀvÀÛªÁzÀ C¢üPÁgÀªÀ£ÀÄß ZÀ¯Á¬Ä¹,
PÀ£ÁðlPÀ ¸ÀPÁðgÀªÀÅ PÀlÖqÀ ªÀÄvÀÄÛ EvÀgÉ ¤ªÀiÁðt PÁ«ÄðPÀgÀ (GzÉÆåÃUÀzÀ PÀæ«ÄÃPÀgÀt ªÀÄvÀÄÛ ¸ÉÃªÁ
µÀgÀvÀÄÛUÀ¼ÀÄ) PÀ£ÁðlPÀ ¤AiÀÄªÀÄUÀ¼ÀÄ 2006gÀ ¤AiÀÄªÀÄ 45 (1) gÀr £ÉÆÃAzÁ¬ÄvÀ PÀlÖqÀ PÁ«ÄðPÀgÀ
27

ªÀÄPÀÌ½UÉ ±ÉÊPÀëtÂPÀ ¸ÀºÁAiÀÄzsÀ£À ªÉÆvÀÛUÀ¼À£ÀÄß ±ÉÊPÀëtÂPÀ ªÀµÀð 2022-23jAzÀ C£ÀéAiÀÄªÁUÀÄªÀAvÉ F
PÉ¼ÀPÀAqÀAvÉ ¥ÀjµÀÌj¹ DzÉÃ²¹zÉ.

PÀæ «zÁå¨sÁå¸ÀzÀ «ªÀgÀ (vÀgÀUÀw CFªÁ PÉÆ¸À CxÀªÁ UÉæÃqï) ªÁ¶ðPÀ ±ÉÊPÀëtÂPÀ
¸ÀA. ¸ÀºÁAiÀÄzsÀ£ÀzÀ
ªÉÆvÀÛ
(gÀÆ. UÀ¼À°è)
1 1£ÉÃ vÀgÀUÀw¬ÄAzÀ-5£ÉÃ vÀgÀUÀwAiÀÄªÀgÉUÉ 1,100
2 6£ÉÃvÀgÀUÀw¬ÄAzÀ-7£ÉÃvÀgÀUÀwAiÀÄªÀgÉU 1.250
3 8£ÉÃ vÀgÀUÀw 1,350
4 9£ÉÃ vÀgÀUÀw¬ÄAzÀ-10£ÉÃ vÀgÀUÀwAiÀÄªÀgÉUÉ 3,000
5 ¥ÀæxÀªÀÄ ¦AiÀÄÄ¹ ªÀÄvÀÄÛ ¢éwÃAiÀÄ ¦.AiÀÄÄ.¹ 4,600
6 ¥ÀzÀ« 6,000
7 ©E/©mÉPï CxÀªÁ ¸ÀA§AzsÀ¥ÀlÖ AiÀÄÆa PÉÆÃ¸ïð 10,000
8 ¸ÁßvÀPÉÆÃvÀÛgÀ ¥ÀzÀ« 10,000
9 ¥Á°mÉQßPï / r¥ÀèªÀiÁ/LnL 4,600
10 ©J¸ï¹ £À¹gïAUï/fJ£ïJªÀiï/ JJ£ïJªÀiï/¥ÁgÀªÉÄrPÀ¯ï PÉÆÃ¸ïð/ 10,000
JPÀÆì®j £À¹gïAUï CAqï «ÄqïªÉÊ¥ï
11 ©.Jqï 6,000
12 ªÉÊzÀåQÃAiÀÄ (JªÀiï©©J¸ï /©JªÀiï J¸ï / ©rJ¸ï/©ºÉZï JªÀiï 11,000
J¸ï PÉÆÃ¸ïð CxÀªÁ EzÀPÉÌ ¸ÀA§AzsÀ¥ÀlÖ ¸ÀªÀiÁ£ÁAvÀgÀ ¸ÁßvÀPÉÆÌÃvÀÛgÀ
PÉÆÃ¸ïð
13 J¯ï J¯ï ©/ J¯ï J¯ï JªÀiï 10,000
14 JªÀiï.mÉPï/JªÀiïE( EzÀPÉÌ ¸ÀA§AzsÀ¥ÀlÖ ¸ÀªÀiÁ£ÁAvÀgÀ ¸ÁßvÀPÉÆÌÃvÀÛgÀ 11,000
PÉÆÃ¸ïð)
15 JªÀiï r ªÉÄrPÀ¯ï 12,000
16 r.Jqï 4,600
17 ¦ºÉZïr/JªÀiï.¦ü¯ï/(AiÀiÁªÀÅzÉÃ «µÀAiÀÄ) 11,000
18 LLn/LLLn/LLJªÀiï/J£ÉÊn/LLJ¹Dgï/JLLJªÀiï J¸ï/J£ï 11,000
J¯ï AiÀÄÆ ªÀÄvÀÄÛ ¨sÁgÀvÀ ¸ÀPÁðgÀzÀ ªÀiÁ£ÀåvÉ ¥ÀqÉzÀ PÉÆÃ¸ÀUÀ¼ÀÄ

µÀgÀvÀÄÛUÀ¼ÀÄ:

1. F ªÉÄÃ°£À ¸ÀºÁAiÀÄzsÀ£ÀzÀ ªÉÆvÀÛªÀÅ ±ÉÊPÀëtÂPÀ ªÀµÀð 2022-23 ¸Á°¤AzÀ C£ÀéAiÀÄªÁUÀÄvÀÛzÉ.

2. ±ÉÊPÀëtÂPÀ ¸ÀºÁAiÀÄzsÀ£À PÉÆÃj Cfð ¸À°è¸ÀÄªÀ «zÁåyðUÀ¼ÀÄ »A¢£À ±ÉÊPÀëtÂPÀ ªÀµÀðzÀ°è
GwÛÃtðgÁVgÀ¨ÉÃPÀÄ ªÀÄvÀÄÛ ¥Àæ¸ÀPÀÛ ±ÉÊPÀëtÂPÀ ªÀµÀðzÀ°è ±ÉÊPÀëtÂPÀ zÁR¯ÁwAiÀÄ£ÀÄß ¥ÀqÉ¢gÀ¨ÉÃPÀÄ.
28

3. ±ÉÊPÀëtÂPÀ ¸ÀºÁAiÀÄzsÀ£ÀPÁÌV Cfð ¸À°è¸ÀÄªÀ ¸ÀªÀÄAiÀÄzÀ°è £ÉÆÃAzÁ¬ÄvÀ PÀlÖqÀ PÁ«ÄðPÀgÀ
£ÉÆÃAzÀtÂ/¸ÀzÀ¸ÀåvÀéªÀÅ ZÁ°ÛAiÀÄ°ègÀ¨ÉÃPÀÄ.

4. ±ÉÊPÀëtÂPÀ ¸ÀºÁAiÀÄzsÀ£À PÉÆÃj Cfð ¸À°è¸À¨ÉÃPÁzÀÝ°è »A¢£À ªÀµÀðzÀ ªÉÄÃ 31gÀ ¥ÀÇªÀðzÀ°è
£ÉÆÃAzÀtÂAiÀiÁzÀ PÀlÖqÀ ªÀÄvÀÄÛ EvÀgÉ ¤ªÀiÁðt PÁ«ÄðPÀgÀÄ £ÉÆÃAzÁ¬ÄvÀ £ÀAvÀgÀzÀ ±ÉÊPÀëtÂPÀ ªÀµÀðPÉÌ
¸ÀºÁAiÀÄzsÀ£À ¥ÀqÉAiÀÄ®Ä CºÀðjgÀÄvÁÛgÉ.

PÀ£ÁðlPÀ gÁdå¥Á®gÀ DzÉÃ±Á£ÀÄ¸ÁgÀ
ªÀÄvÀÄÛ CªÀgÀ ºÉ¸Àj£À°è

¸À»/-
30.10.2023
(¸ÀÄªÀÄ. J¸ï)
¸ÀPÁðgÀzÀ C¢üÃ£À PÁAiÀÄðzÀ²ð,
PÁ«ÄðPÀ E¯ÁSÉ."

(Emphasis added)

The change in the impugned notification is drastic, as the amount of

assistance to a child of construction worker who is pursuing

graduation or post-graduation is brought down to ₹10,000/- from

₹30,000/- and 35,000/- which was prevailing earlier. Educational

assistance to the poor children should only increase and not

decrease to such abysmal levels. No reasons are forthcoming in

the Notification as to why the notification puts the clock back to a

2011 scale. The lives of children of construction workers

should be made good in a progressive manner and not in a
29

regressive manner, as is done in the case at hand. This brings

the petitioners to the doors of this Court.

15. This Court, considering the plea and plight of the

petitioners passed an order on 23-04-2024. The said order is

germane to be noticed. It reads as follows:

"ORDER

The petitioners are 4 in number. The 1st petitioner is
the daughter of the 2nd petitioner. The 3rd petitioner is the
daughter of the 4th petitioner. They are before this Court
calling in question a notification dated 30.10.2023, by which,
the entitlement of the benefits qua the quantum is reduced
by the State from Rs.30,000/-, Rs.35,000/- respectively to
Rs.10,000/- and Rs.11,000/- respectively and have sought
an interim prayer to direct the disbursement of Rs.35,000/-
and Rs.30,000/- to be paid to the daughters, petitioners 1
and 3, children of the construction workers for the purpose of
payment of fees to pursue MBA and LLB.

The learned counsel for the petitioners submits that
petitioners 1 and 3 are wanting to pursue post graduate
courses, one the LLB and the other MBA. They are entitled to
certain benefits under a notification dated 13.08.2021. They
have submitted their applications at the relevant point in
time. The 2nd respondent Karnataka Building and Other
Construction Workers Welfare Board ('the Board' for short)
has not acceded to the said request.

The learned counsel representing the 2nd
respondent/Board Sri.Prashanth.B.N. would submit that the
petitioners are not entitled to claim Rs.35,000/- or
Rs.30,000/-, as the case would be, in terms of the
notification dated 30.10.2023. Therefore, the Board is
30

prepared to pay Rs.10,000/- and Rs.11,000/- respectively
and not the claim of the petitioners.

In reply, learned counsel for the petitioners would
submit that the daughters had submitted their respective
applications, when the earlier notification was in force. That
is kept pending and the subsequent notification is applied to
the petitioners. He would further contend that close to
Rs.8,200/- crores collected as Welfare Cess is lying with the
Board and are not wanting to part with the afore requested
amount.

I have given my anxious consideration to the
submissions made by the respective learned counsel for the
parties.

The Board is created for the welfare of the building
construction workers. The welfare is met with the welfare
cess collected and other funds received by the Board i. The
daughters of poor constructions workers, have by their own,
come to the stage of pursuing their post graduate studies,
the 1st petitioner - LLB and the 3rd petitioner - MBA. These
children of the construction workers are entitled to certain
benefits. Such benefits flew from a notification dated
13.08.2021. The notification is issued for educational
assistance to recognized construction workers. The fathers of
the petitioners 1 and 3 are recognized construction workers,
this fact is not in dispute. Therefore, their children would
become entitled to certain amount, in terms of the said
notification. The amounts they are entitled to are for
pursuing LLB/LLM it is Rs.30,000/-, any other post-
graduation it is Rs.35,000/- for a maximum of 2 years per
subject.

During the subsistence of the said notification dated
13.08.2021, the daughters of petitioners 2 and 4 submit an
application seeking the said amount. It is again not in
dispute that the amount is sought by producing the requisite
catalogue of fees that had been demanded, in terms of the
communication on 05.01.2024 to the CEO and Secretary of
the Board. Identical application is preferred by the other
daughter-petitioner No.3. These applications of both these
petitioners are kept in cold storage for about 10 months.
31

After 10 months comes a new notification - the
impugned notification. It is dated 30.10.2023. What happens
in the new notification is reduction of the fees payable to the
children of construction workers. Insofar as the present
petition is concerned, what the daughters would get is,
Rs.11,000/- and Rs.10,000/- as against Rs.35,000/- and
Rs.30,000/-. Therefore, there is reduction to 1/3rd in the new
notification. The new notification is sought to be applied to
these petitioners. In the considered view of this Court it
cannot be applied. The reason is plain and simple. In terms
of the subsisting earlier notification dated 13.08.2021, both
the daughters had submitted their applications, those
applications are treated in a cavalier manner and placed in
the bin, but was yet to become a thrash. In the interregnum
emerges the new notification.

It is not the folly of the daughters-petitioners 1 and 3.
They had a right under the notification dated 13.08.2021.
The right is eroded by sheer callousness on the part of the
2nd respondent/Board by not passing any order on the said
notification and bringing them under the ambit of the new
notification. The callousness of the officers manning the
Board cannot place the rights of these poor construction
workers in limbo.
The Board refuses to recognize the lamenting of the
daughters who have risen up to the stage of post graduation.
They are not ready to part with any amount beyond what is
in the notification dated 30.10.2023. The said notification, is
on the face of it, in applicable to the case of the petitioners,
as it cannot take away the rights of the petitioners
retrospectively, by making it retroactive.

Learned counsel for the petitioners submits that close
to Rs.8,200/- crores has come into the coffers of the Board,
while that would be a matter to be considered at the final
stage, I deem it appropriate to grant an interim order,
directing the 2nd respondent/Board to disburse the aforesaid
amount of Rs.35,000/- and Rs.30,000/- as applied for, by
petitioners 1 and 3, so that they would pay the fees or the
fees already paid would be reimbursed to the poor families of
construction workers.
.... ... ....
32

ORDER

(i) The petitioners 1 and 3 are declared
entitled to Rs.35,000/- and Rs.30,000/-
respectively.

(ii) The said amount shall be released to the
petitioners 1 and 3 within 4 weeks from
the date of receipt of the copy of this
order.

(iii) The petitioners 1 and 3 are entitled to cost
of litigation at Rs.25,000/- each to be paid
by the Board to the said petitioners within
4 weeks from the date of receipt of the
copy of this order.


           (iv)    In the event the Board would not pay the
                   amount       directed   hereinabove,   the

petitioners 1 and 3 would become entitled
to costs at Rs.500/- each for every day’s
delay till the payment reaches the doors of
petitioners 1 and 3.

Heard in part.

List the matter on 07.06.2024 for
further hearing.

Objections, if any, by any, by then.”

(Emphasis supplied)

Petitioners 1 and 3 were declared entitled to ₹35,000/- and

₹30,000/- respectively. It was directed to be released forthwith.

The Board did not release educational assistance. The Board

projected lack of funds. The petitioners then submitted that cess
33

collected till date was ₹6,700/- crores and the Board is not willing

to part with ₹65,000/- to both the students, and the deposit was

said to be with Canara Bank, an interest earning deposit. Therefore,

this Court passed the following order on 07-06-2024. It reads as

follows:

“Learned counsel for the petitioners submits that the
amount that was directed to be paid to the poor children who
have studied upto the level of MBA and LLB as fees is not
paid.

Learned counsel for the respondents submits that they
are not in a position to pay and they have filed a review
petition.

Therefore, the learned counsel for the petitioners
submits cess of about Rs.6,700/- crores is received and is
kept in deposit in the Canara Bank.

The respondent – Board shall place on record as
to how Rs.6,700/- crores is spent upon the welfare of
the building construction workers for whose purpose
the fund in created and the amount is put into the
fund.

An affidavit of the Competent Officer shall be filed by
the next date of hearing.

List this matter on 14.06.2024, for further hearing at
2:30 p.m.”

(Emphasis added)

Affidavits are filed before this Court, in furtherance of what was

directed. The affidavit contained the amount of cess in the coffers
34

of the Board and its deposit into respective Banks. Paragraph-11 of

the affidavit filed by the Board is as follows:

“11. The details of the Fixed Deposits of the Board is
furnished in the below Table:

Sl. Bank Name Bank Address Amount Deposit Maturity
No. (Rs. in Date Date
Crores)
1 SBI BANK Dr. Ambedkar 600.00 30-06-32023 30-06-2024
Veedi
2 CANARA BANK Welfare Board 1,600.00 10-07-2023 10-07-2024
3 SBI BANK Wilson Garden 750.00 15-07-2023 15-07-2024
4 UNION BANK OF Jalabhavan 1000.00 16-08-2023 16-08-2024
INDIA Branch
5 UNION BANK OF Jalabhavan 600.00 29-08-2023 29-08-2024
INDIA Branch
6 UNION BANK OF Jalabhavan 400.00 30-08-2023 30-08-2024
INDIA Branch
7 CANARA BANK Welfare Board 350.00 06-09-2023 06-09-2024
8 SBI BANK Whitefield 300.00 15-09-2023 15-09-2024
9 SBI BANK ITPL 300.00 15-09-2023 15-09-2024
10 BANK OF K.G.Road 300.00 01-12-2023 01-12-2024
BARODA
11 BANK OF Indira Nagar 500.00 08-12-2023 08-12-2024
BARODA
TOTAL AMOUNT 6,700.00″

Therefore, a huge amount of ₹6,700/- crores is in deposit as

tabulated. The expenditure projected is as follows:

“…. …. ….

15. I state that, the details of the expenditure of the Board from
inception to 30.04.2024 for various schemes is furnished in
the table below:-

                                           Total                         Ration to the
Sl.                               No. of         Amount in                   total
        Scheme Details
No.                            Beneficiaries      crores                 expenditure
                                                                        in Percentage
                                     35



1    Education Assistance        1635115    1,236.00        17.74
2    Funeral Expense              38929      160.13           2.30
3    Major Ailments Assistance    17487       70.57          1.01
4    Accidental Death              9369       94.90          1.36
5    Unregistered Death             79        2.17           0.03
     Assistance
6    Maternity Assistance          14683       41.63        0.60
7    Medical Expenses              2916         4.11        0.06
8    Skill Academy                    -        1.97         0.03
9    Pension                       9975        65.78        0.94
10   Disability Ex-gratia            77        2.01         0.03
11   Disability Pension             398        4.71         0.07
12   Family Pension                 100         0.12        0.00
13   Marriage Assistance          205243      934.12        13.40
14   Anil Bhagya                   4055        73.53        1.06
15   Shrama Samarthya             419727      264.70         3.80
16   BMTC Bus pass                361048      234.10        3.36
17   Karmika Bandhu                   0         1.12        0.02
18   Software expenses                0        16.03        0.23
19   MGNREGA                         0         6.65         0.10
20   Seva Sindhu                      0        65.64        0.94
21   KSRTC                        200000       85.20        1.22
22   Housing                       27256      522.75        7.50
23   Creaches                      7382        17.77        0.25
24   Thayi magu sahaya hasta       4252          2.55        0.04
25   Immunity Kit                 950000     253.94         3.64
26   IAS/KAS                        737          7.86       0.11
27   Preventive Health Care      1885960     589.30         8.46
28   Mobile medical Unit          350489       30.75        0.44
29   Transit Accommodation            -       117.44        1.69
30   Nutrition Kit                200000        44.28       0.64
31   Covid-19 Relief Fund        3610372    1,725.73        24.76
32   SSLC Merit Benefit            2187         2.19        0.03
33   Tab (6th std to 10th std)     16400      34.90         0.50
34   2nd PUC Distribution of       7000       49.93         0.72
     Lap Top
35   IEC                             -        72.57          1.04
36   School Kit                   161833     131.52          1.89
             Total               10143069   6,968.67       100.00"



                                                 (Emphasis added)

The expenditure projected by the Board has several heads which do

not touch upon the welfare of the construction workers to whom the

amount in deposit or its interest has to be necessarily spent. few
36

illustration are at Sl.Nos.19, 25 and 26, as they do not fall within

the list of benefits or the schemes for the welfare of the

construction workers or their families.

16. What is projected by the Board appears to be contrary to

what is observed by the Comptroller and Auditor General of India

which audits funds of the Board. The audit ends in a report for the

financial year 2013 and 2019 or later. Certain shocking revelations

are found in the report. The statute mandates administrative

expenditure or any other expenditure to be less than 5% or 5% to

the maximum. Therefore, the cap is 5%. How much has been

spent on necessary and unnecessary expenditure is found in the

report. As an illustration the 2019 report insofar as expenditure is

concerned reads as follows:

“3.1.5 Deficiencies in collection and utilisation of cess

3.1.5.1 Cess lying in Public Account

The cess levied by State departments was accounted for
under the Head of Account (HoA) ‘8449-00-120-0-18-660’ in
Khajane-2 from November 2017. In order to receive
payment from Khajane-2 system, it was necessary for the
Board to furnish its mark derails and be registered as a
recipient.

Scrutiny showed that receipts amounting to `37.94 crore and
`187.43 crore were credited to this HoA during 2017-18 and
2018-19 respectively, but no expenditure had been booked
(August 2019) as the Board was not registered as a
recipient. This resulted in loss of revenue to the Board
aggregating `225.37 crore and the amount continued to
main as undischarged liability in the Public Account.

The Government state (November 2019) that action had
been initiated to ensure transfer of `225.37 crore to the
Board’s account Regarding registration of the Board as a
recipient in Khajane-2 system, the Secretary to Government,
Department of Labour, assured (January 2020) that suitable
action would be taken.

3.1.5.2 Non-realisation of cess

Non-realisation of cess due to non-receipt of fresh
cheques was pointed in Paragraph 3.3.5.4 of Report
No.3 of the year 2014. Scrutiny showed that as of
March 2019, the Board returned 8,510 defective
cheques/demand drafts for `17.08 crore (tappal
returns44 – 6,171 instruments valuing `9.75 crore and
bank returns45 – 2,339 instruments worth `7.33 crore).
No reminders were issued till October 2018 and
reminders issued in October-November 2018 and
January-March 2019 accounted for only six per cent
cases (`1.10 crore out of `17.08 crore). As a result, the
Board was yet to receive fresh cheques/drafts in respect of
all these cases, resulting in non-realisation of cess to the
extent of `17.08 crore (August 2019).

Illustration

Bengaluru Development Authority (BDA) had issued two
cheques amounting to ₹2,08,70.536 (₹1,25,66,766 and
₹83,03,770 vide cheque numbers 695480 and 695481
dated 27.02.2018) towards cess payable to the Board.
These cheques were received by the Board on 26.05.2018
with a time validity of only one day. As the cheques could
not be presented to the banks within the permissible
time, they became time barred. The cheques were
returned (May 2018) to BDA for issue of fresh cheques.
No fresh cheques for the above mentioned amounts have
been received till date (September 2019). The Board did
not reflect this amount as receivable resulting in
understatement of receivables.

3.1.5.3 Non-remittance of construction workers’
welfare cess

Section 3 of the Cess Act, 1996, stipulated that the cess
collecting authorities should transfer to the Board the
proceeds of cess collected within 30 days of its collection.

There continued to be no mechanism at the Board to ensure
that the cess collected by the government departments,
public sector undertakings, etc., was promptly remitted to
the Board’s account despite being pointed out during
previous audit (Paragraph 3.3.5.3). Information obtained
from three ULBs (CC, Kalaburagi, CMC, Bidar and CMC,
Chikkamagaluru) showed that cess proceeds aggregating
₹10.01 crore was not remitted to the Board (March 2019).
Out of this, ₹54.42 lakh pertaining to building plans
sanctioned by CMC, Bidar was outstanding since the year
2015-16. In the absence of a proper mechanism, the
possibility of loss of revenue to Board and diversion of
welfare funds by cess collecting authorities could not be
ruled out.

Illustration

CMC, Chikkamagaluru, was responsible to collect one per cent of the
estimated cost while according plan approvals and transfer the cess
proceeds to the Board. Till November 2016, the CMC collected the cess
amount from the applicants in the form of demand drafts (DDs) and
forwarded the DDs to the Board. During December 2016, the CMC opened
a bank account in IDBI Bank, Chikkamagaluru, and it instructed the
applicants to remit the cess amount in this bank account instead of
submitting the DDs. The CMC then transferred the collected cess amount
to the Board by drawing DDs on this account.

On 31.03.2018, the Municipal Commissioner, CMC, Chikkamagaluru,
accorded approval for remitting ₹19,03,096 to the Board for which a
cheque (No. 146585) dated 31.03.2018, IDBI Bank, was drawn in favour
of “Yourself DD’ to remit the amount through DD. Entries were passed in
39

The Government stated (November 2019) that the matter
would be pursued to ensure remittance of unremitted cess
amount.

Audit also observed that though there was a provision
for levy of penalty for non-payment of cess by the
employer, there was no penalty for those cess
collecting authorities which did not deposit the cess
proceeds within 30 days.

During the exit conference, the Secretary to Government,
Department of Labour, stated (January 2020) that action
would be initiated to amend the rules by incorporating
penalty clause for non-remittance of cess within the
prescribed time limit.

3.1.5.4 Discrepancies in sanction of benefits

Scrutiny of records in 10 test-checked field offices showed
that the sanctioning authorities disbursed inadmissible
assistance of ₹20.24 lakh in 29 out of 390 test-checked
cases. The reasons attributable were disbursement of
assistance for 3rd child, disbursement without ensuring
renewal of registration, assistance disbursed to ineligible
beneficiaries, etc. In 4 out of 72 test-checked cases, the
sanctioning authorities paid ₹2.18 lakh in excess of the
eligibility. In another 9 out of 63 test-checked cases,
assistance less than the admissible amount was disbursed,
resulting in short payment of ₹7.94 lakh. The details are
given in Appendix 3.6. Improper sanction of benefits was
pointed out vide Paragraph 3.3.6.3 of the previous report.

The Government stated (November 2019) that
discrepancies in sanction of benefits would be verified
and necessary action would be taken.

3.1.5.6 Avoidable liability towards income tax

Mention was made in Paragraph 4.9 of the Report of
the C&AG on General and Social Sector for the year
ended March 2015 (Report No.1 of the year 2016)
regarding avoidable payment of ₹42.83 crore towards
income tax (TDS) as the Board had not made use of
the enabling provisions available in the IT Act, 1961,
for availing tax exemption. The Government replied
(October 2015) that action had been initiated to obtain
tax exemption certificates from the authorities of
Income Tax Department (ITD).

Scrutiny showed that the Board had applied to the
Commissioner of Income Tax for grant of exemption
under Section 10 (46) of the IT Act, 1961, in August
2018 ie., after a gap of three years from being pointed
out by Audit and the application was yet to be
approved (November 2019). Further, the Income Tax
Returns (ITRs) of the Board for the Financial Years
(FYs) 2014-15 to 2016-17 were selected (September
2017 and August 2018) for scrutiny assessment by
ITD. As the Board had no exemption, the Assessing
Officer concluded (December 2017 and December
2018) the assessments for FYs 2014-15 and 2015-16
by treating cess receipts and interest on FDs and
savings bank account as income of the Board and
levied tax of ₹413.09 crore for FY 2014-15 and
₹402.93 crore for FY 2015-16. The ITD also issued
(March 2019) notices under Section 148 (income
escaping assessment) of IT Act, 1961, for FYs 2011-

12, 2012-13 and 2013-14 as the Board had filed these
ITRs exhibiting income as Nil. The assessments for
other FYs were due for completion by 31.12.2019.

Audit also observed that there were delays ranging
from 3 to 18 months in filing ITRs for FYs 2011-12 to
2016-17 and Form 1046 were either not filed or filed
41

belatedly. These omissions along with failure of the
Board in obtaining exemption under IT Act, 1961,
resulted in avoidable tax liability aggregating
₹2,358.94 crore including penal interest of ₹755.07
crore (detailed in Appendix 3.7). Out of this, the ITD
had already collected (February 2018) ₹413.09 crore
by attaching the Board’s bank account.

During the exit conference (January 2020), the
Secretary to Government, Department of Labour,
accepted that the Board had failed to present its case
professionally and clarified that all possible action had
now been taken to get the exemption and the final
order was awaited. The Secretary, however, expressed
concerns about obtaining the exemption with
retrospective effect.

The fact remains that at the end of March 2019, the
Board had to bear an additional liability of ₹2,358.94
crore including penal interest of ₹755.07 crore
towards income tax, which could have been averted
had the Board followed the provisions available in the
IT Act, 1961, for availing tax exemption. The much
bigger area of concern is that if the Board has to pay
the entire liability amount (without getting any
exemption) towards income tax, it has to be borne
from the receipts of the Board, which are meant for
implementation of the welfare schemes of the
construction workers. This would entail an
expenditure of 43 per cent of the Welfare fund
including penalty and only 57 per cent of the Fund
would be available for the benefit of the beneficiaries.

3.1.5.7 Inadmissible expenditure

Sections 22 and 24 of the Act, 1996, mandated that at
least 95 per cent of the funds should be utilised for the
benefit of construction workers. Pursuant to directions
of the Hon’ble Supreme Court of India (August 2015),
the GoI reiterated (June 2016) that welfare funds
should not be used for any purpose other than for
welfare of construction workers and their family
exclusively. In case of any violation, immediate
42

corrective steps were to be taken and the funds so
spent were to be recouped in welfare funds with
immediate effect. The GoI further clarified (July 2017)
that states could take proactive steps to facilitate
transit accommodation, labour shed-cum-night
shelter, mobile toilets and mobile crèches to
construction workers in the areas of their
concentration prior to their finding work.

Audit observed that in contravention to the provisions
cited, the Board incurred an expenditure of ₹67.98
crore on inadmissible items which was yet to be
recouped to welfare funds (November 2019). The
details are as follows:

➤ Expenditure on acquiring land – The Board acquired
128.64 acre of land at a cost of ₹65.80 crore
(including incidental expenses viz., registration fee
and stamp duty) from different government
organisations such as KIADB and eight others on
lease/sale basis during the period 2013-16 to
establish National Construction Academy, transit
accommodation, residential schools, skill centres
and Karmika Kalyana Bhavanas. This expenditure
was met out of the welfare fund in 2013.

Scrutiny showed that after the receipt of GoI’s
directives (July 2017), the Board resolved (March
and May 2018) to utilise 33 acre (worth ₹14.76
crore) out of 128.64 acre of land for admissible
purposes47 and sought reimbursement of amount
from KIADB/other agencies on return of the
remaining acquired land (95.64 acre of land costing
₹51.04 crore). There was no further progress and
amount of ₹51.04 crore was yet to be recouped
(November 2019).

➤ Advertisement and publicity expenses – The Hon’ble
Supreme Court highlighted (August 2015) that
expenditure incurred on advertisements with the cess
amount collected was inappropriate and directed that the
amount spent be returned to the accounts of construction
43

workers. The Board incurred an expenditure of ₹3.93
crore towards advertisement and publicity during the
period from 2013-14 to 2015-16 which was not
admissible and needed to be recouped.

➤ Construction of Kalyana Suraksha Bhavan – Consequent to
State Government’s in-principle approval (December
2009) to construct Kalyana Suraksha Bhavan at ITI
Compound, Bannerghatta Road, Bengaluru, the Board
passed (January 2010) a resolution to meet the cost of
this building jointly with the Department of Factories and
Boilers, Labour Department. The Board met the total
cost of construction of ₹14.76 crore out of welfare
funds and received (March 2014) only ₹3 crore
from the Department of Factories and Boilers
against its share of ₹7.38 crore. The Board further
released (August 2018) ₹1.25 crore (estimated cost
was ₹1.79 crore) to Karnataka Rural Infrastructure
Development Limited (KRIDL) for interior work of
fourth floor. The interior work was yet to be
completed. As the construction of such building was
not allowed out of welfare funds, expenditure of
₹13.01 crore48 incurred by the Board was
inadmissible.

The Government stated (November 2019) that it would
review the matter.

3.1.5.8 Unfruitful expenditure on development of
software

The Board had incurred an expenditure of ₹1.21 crore on
developing a software (Karmika-I), which was rolled out in
February 2016. The software provided for online registration,
online data retrieval, elimination of data duplication, cess
module for tracking cess collection, etc. However, it was not
fully functional49 as the SLIs/LIs had not been provided with
computers. Subsequently, the Board invited (July 2017)
tenders for developing a comprehensive software (Karmika-
II) with an estimated cost of ₹54.36 lakh and awarded
(January 2018) the work to M/s Vansh Infotech and paid
₹44.72 lakh for the period from February 2018 to January
2019. The scope of the work included providing only the
44

manpower and carrying out the work as per requirement of
the Board but the Board did not have any IT staff/expert to
finalise requirements and validate specifications. The Board
did not fix any timeline/milestones though it entrusted
several functional requirements to the agency. The work also
included, among other things, monitoring and programming
of renewals, processing claims, etc., which necessitated that
the old manual data of registration (prior to February 2016)
should be digitised. The Board had entrusted the work of
digitising the manual data to KEONICS in November 2017.
However, there was no progress. Hence, awarding the work
of developing new software to M/s Vansh Infotech without
digitisation of old manual data was not justifiable.

As a result, the software launched in February 2019 was not
fully operational. The Board terminated (April 2019) the
contract as the agency failed to attend to the bugs/issues
and started (June 2019) using Seva Sindhu (e-governance
portal of GoK) for registering eligible beneficiaries. Thus, the
Board failed to achieve its intended objective of having a
comprehensive software for providing better services to
construction workers and monitor cess collection despite
incurring an expenditure of ₹1.66 crore.

The Government stated (November 2019) that the agency
was unable to handle and complete the task within the
stipulated time. It further stated that the Board claimed back
(September 2019) the amount of ₹44.72 lakh along with
penalty (as per Clause 5 of the agreement) from the agency
as the new software was not working properly and its
optimal use was not possible. The reply was not fully
acceptable as the Clause 5 of the agreement contained
penalty clause only for delay in deployment of manpower
and hence recovery of ₹44.72 lakh was not assured.

3.1.5.9 Absence of monitoring on investments

The Board had been investing surplus amounts in fixed
deposits (FDs) after calling for the quotations from the
banks. The Investment Register/FD Register was maintained
in softcopy (excel) without any mechanism for verification by
45

the officers of the Board. The balances reflected in the
investment Registers were not verified/reconciled with the
physical Fixed Deposit Receipts and bank confirmation
statements to ensure its correctness. Out of total fixed
deposits amounting to ₹4,803.63 crore as at the end of
March 2017, bank confirmations were available for only
₹1,810.46 crore. Audit, therefore, could not ascertain the
correctness of the balance fixed deposits amounting to
₹2,993.17 crore in the absence of the confirmation of
balances from the relevant banks. The investment as at the
end of March 2019 was ₹6,337.28 crore (as per unaudited
accounts). Scrutiny of investments in FDs valuing more than
₹10 crore showed that:

➤ Details of pre-closure, maturity, reinvestment were not
being updated in the register.

➤ There were five cases where the bank without prior
permission of the Board divided the amount to be
deposited into smaller denomination for investing in FDs
(Appendix 3.8 (a)) and there were also 13 cases where
credit details on maturity were not traceable from the
records (Appendix 3.8 (b)).

➤ Board had invested ₹100 crore for the period from
22.03.2017 to 22.02.2018 for a duration of 11 months.

The said FD attracted rate of interest of 5.1 per cent per
annum. However, the bank documents showed that no
interest was credited on closure of the FD. In addition, an
amount of ₹1,27,500 was deducted from the principal
amount towards TDS, which was incorrect as no interest
was paid.

➤ In 12 test-checked cases involving ₹625 crore (43 FDs),
the Board invested ₹430 crore (32 FDs) at rates lower
than the available rates which resulted in loss of interest
of ₹2.46 crore (Appendix 3.9). As these are only
illustrative cases, the Board should look into this aspect in
all other cases also to preclude any further likelihood of
loss of revenue.

During the exit conference (January 2020), the Secretary to
Government, Department of Labour, agreed to the possibility
of fund mismanagement and assured to get it enquired.

The observations discussed in paragraphs 3.1.4 and 3.1.5
indicate lack of commitment on the part of the
Government/Board to take forward the issue of workers’
welfare besides reflecting on the absence of strong and
effective institutional mechanism.

It is recommended that a robust internal control
mechanism within the Board should be put in place to
ensure that cess is realised effectively from all
sources, the cess is used for the purpose for which it is
meant, there is no inadmissible expenditure and
avoidable expenditure towards income tax liability is
addressed.

3.1.6 Institutional mechanism

3.1.6.1 Ineffective institutional mechanism

The institutional mechanism was either absent or not
effective as below:

➤ The Secretary of the Board had submitted (August 2011,
February 2012, December 2013, December 2015,
February 2016, May 2018) proposals to the Government
for constituting a State Advisory Committee but the State
Government constituted the Committee in November
2019 i.e. after a delay of more than 12 years from
establishing the Board. This inordinate delay deprived the
Board of suitable guidance on such matters arising out of
the administration of the Act, 1996.

➤ The Board had not constituted the Internal Audit Wing and
no Internal Audit was carried out in spite of being pointed
out in previous financial audits.

➤ The State Government had not conducted the social audit
on the implementation of the Act, 1996 despite the
directions of Hon’ble Supreme Court of India.

The Government stated (November 2019) that corrective
measures were being undertaken in this regard.

3.1.6.2 Inadequate human resources

Audit observed that though the Board was constituted in
January 2007, it was not provided with necessary staff as
detailed below:

➤ There was inordinate delay in framing C&R Rules as the
State Government was yet to finalise/notify the Rules
(November 2019). This was also pointed out in the earlier
report of the C&AG (Paragraph 3.3.3). Further, there was
no consistency and objective criteria for having assessed
the overall need of staff strength as the requirement of
personnel for Head office/Field offices varied from 1,668
(December 2016) to 262 (June 2017) to 623 (May 2019).

➤ Though the State Government sanctioned (December
2017) 35 posts to be filled up on deputation, 23 of these
remained vacant (March 2019). Majority of the work at
Board was being managed with contractual staff who
even handled cheques/demand drafts and accountability
could not be fixed on them.

➤ During the period from 2014-15 to 2018-19, the post of
Secretary as regular charge was held for 10 months. For
the remaining 50 months, seven incumbents held this
post as additional charge.

➤ In accordance with the Government’s instructions, the
officers/officials of Labour Department were entrusted
duties of registering establishments and cess assessment
(LOs), registering beneficiaries and cess collection
(SLIs/LIs) and sanctioning social security benefits (except
pension and disability pension) to ALCs and LOs. These
48

officers/officials of the Labour Department were to
perform duties for the Board in addition to their regular
charge of administering and enforcing provisions of other
23 central/state acts. Audit noticed that against the
sanctioned 324 posts in these three cadres (ALC, LO and
SLI/LI), 116 posts (36 per cent) were vacant as of May
2019.

Shortage of staff and vacancies in the posts of ALC, LO and
SLI/LI hampered the registration of establishments and
workers and also led to delays in sanctioning the claims.
The Government stated (November 2019) that approval to
C&R Rules was under consideration and the Board would
take action to recruit officers/employees once the C&R Rules
were approved.

It is recommended that the State Government finalise
the C&R Rules of the Board immediately so that
appropriate/qualified persons are appointed to ensure
accountability and prevent handling of finances by the
outsourced employees.

3.1.6.3 Shortfall in registration of establishments

The Board had registered 6,227 establishments in the State
as of December 2018. Audit observed that the Board neither
devised any mechanism to identify the prospective
employers nor complied with the GoI’s directives (May 2018)
such as, forwarding copies of work orders to relevant
authorities, developing a mechanism for regular monitoring
of construction activities and use of GIS
technology/mapping, etc., for ensuring registration of
establishments (detailed in Appendix 3.10). Though the
Board received cess proceeds in form of cheques/DDs or
through RTGS/NEFT from employers/cess collecting
authorities, it did not co-relate this data with that available
with the respective LOs to ensure registration of these
establishments and workers employed therein and failed to
maintain a comprehensive database of construction works
undertaken in the State. As a result, there was a shortfall in
registration of establishments to the extent of 99 per cent in
the test-checked districts as detailed in Appendix 3.11.

Further, LOs though empowered, had not conducted
inspection of premises of the establishment in any of the six
test-checked districts during the period from 2014-15 to
2018-19 and hence failed to identify unregistered employers.

During the exit conference (January 2020), the Secretary to
Government, Department of Labour, attributed shortage of
staff as a major constraint and stated that all possible action
would be taken to increase the registration of
establishments.”

(Emphasis added)

The CAG has red flags throughout the report against the State

Government. By the end of March, 2019 the liability towards

income tax had increased to ₹2358/- crores with penal interest at

₹755/- crores; all for one solitary reason of not availing exemption

as available under the Act by placing documents before the Income

Tax authorities. Land is acquired from welfare cess fund

notwithstanding the funds available with other organizations of the

State.

17. After all the aforesaid report, one of the construction

workers applies under the Right to Information Act about the

resolutions of the Board qua expenditure. One particular resolution

is as follows:

“PÁAiÀÄð¸ÀÆa-22 (V)

ªÀÄAqÀ½AiÀÄ CzsÀåPÀëgÀ G¥ÀAiÉÆÃUÀPÁÌV E£ÉÆÃªÁ Qæ¸ÁÖ ªÁºÀ£ÀªÀ£ÄÀ ß
RjÃ¢¹gÀÄªÀ §UÉÎ WÀl£ÉÆÃvÀÛgÀ C£ÀÄªÉÆÃzÀ£É ¥ÀqÉAiÀÄÄªÀ PÀÄjvÀÄ.

¢£ÁAPÀ: 12.02.2020 gÀAzÀÄ ªÀiÁ£Àå PÁ«ÄðPÀgÀ ¸ÀaªÀgÀ PÀbÉÃj¬ÄAzÀ
ªÀÄAqÀ½AiÀÄ CzsÀåPÀëgÀ G¥ÀAiÉÆÃUÀPÁÌV MAzÀÄ ºÉÆ¸À E£ÉÆÃªÁ Qæ¸ÁÖ ªÁºÀ£ÀªÀ£ÀÄß
MzÀV¸ÀÄªÀAvÉ ¸ÀÆa¹gÀÄvÁÛgÉ. CzÀgÀAvÉ ¢£ÁAPÀ: 18.02.2020 gÀAzÀÄ ªÉÄ: £ÀA¢
lAiÉÆÃmÁ ªÉÆÃmÁgï ªÀ¯ïØð ¥ÉæöÊ.°., ¨ÉAUÀ¼ÀÆgÀÄ EªÀjAzÀ ºÉÆ¸ÀzÁV ªÁºÀ£ÀªÀ£ÀÄß
RjÃ¢¹ ªÀiÁ£Àå CzsÀåPÀëjUÉ MzÀV¸À¯ÁVgÀÄvÀÛzÉ. ¸ÀzÀj ªÁºÀ£À RjÃ¢AiÀÄ MlÄÖ ªÉÆvÀÛ
gÀÆ.29,29,477/- UÀ¼ÁVgÀÄvÀÛzÉ JAzÀÄ ¸À¨sÉUÉ ªÀÄAqÀ½AiÀÄ PÁAiÀÄðzÀ²ðgÀªÀgÀÄ w½¹zÀgÀÄ.

ªÀÄAqÀ½AiÀÄ ¤tðAiÀÄ: ªÀÄAqÀ½ CzsÀåPÀëgÀ G¥ÀAiÉÆÃUÀPÁÌV ºÉÆ¸À E£ÉÆßÃªÁ Qæ¸ÁÖ
ªÁºÀ£ÀªÀ£ÀÄß RjÃ¢¹gÀÄªÀÅzÀPÉÌ ¸À¨sÉAiÀÄÄ ¸ÀªÁð£ÀÄªÀÄvÀ¢AzÀ WÀl£ÉÆÃvÀÛgÀ C£ÀÄªÉÆÃzÀ£É
¤ÃrvÀÄ.”

This is only a tip of the iceberg. The graph of inadmissible and

wasteful expenditure as produced by the learned counsel for the

petitioners is necessary to be quoted and it depicts as follows:

“Inadmissible & Wasteful expenses can fund
all beneficiaries for education for a year
51

The afore-quoted gives a clear picture as to how the funds that

have to be used for the welfare of construction workers are treated

or have been wasted elsewhere. Glaring wasteful expenditure is

spending ₹7/- crores on MGNREGA software; spending ₹18/- crores

on Indira canteen expenses and several other wasteful expenditures

and on unauthorised holding training scheme the expenditure that
52

is shown is ₹745/- crores. These are facts and figures, that very

stubborn, as they cannot be changed.

18. Yet another glaring circumstance, as observed

hereinabove, is the tax liability. The total number of beneficiaries

under the Act is 9,61,930 registered construction workers. The tax

liability that could be avoided was ₹3548/- crores. Who is

responsible? It is the callousness of officers of the Board who have

not applied for tax exemption to the Income Tax Department has

resulted in tax liability. It was not 10, 20 or 100 crores but it was

₹3548/- crores. The investment is noticed hereinabove. ₹6700/-

crores is in fixed deposit. The interest that it generates can take

care of entire education expenses of the children of registered

construction workers. What is happening to the interest is

necessary to be accounted and facts placed before the CAG by the

Board. Therefore, the non-availability of funds to be the reason for

bringing in the amendment to the notification is absolute

gibberish.

19. It now becomes apposite to notice certain orders passed

by the Apex Court from time to time. The Apex Court in the case of

NATIONAL CAMPAIGN COMMITTEE FOR CENTRAL

LEGISLATION ON CONSTRUCTION LABOUR v. UNION OF

INDIA1 while considering entire spectrum of the Act and the Rules

and earlier directions issued from time to time has passed a

comprehensive order. The discussion, direction and general

directions of the Apex Court read as follows:

“…. …. ….

Discussion and directions

70. There can be no doubt that the BOCW Act
and its sister legislation, the Cess Act are social justice
legislations. They were enacted keeping in mind the
directive principles of State policy, particularly Article
39 of the Constitution which requires the State to
direct its policy to secure the health and strength of
workers and Article 42 of the Constitution concerning
just and humane conditions of work. In addition,
Article 21 of the Constitution cannot be forgotten. A
life of dignity is a fundamental right given to all
persons and that includes construction workers. It is
in this background that the two welfare and beneficent
legislations must be understood and appreciated.

71. The Statement of Objects and Reasons for the
BOCW Act refers to 8.5 million construction workers (85
lakhs) in 1995-1996. They were the vulnerable section of
society who needed the support of the State for their safety,
health and welfare. They have been consistently let down by

1
(2018) 5 SCC 607
54

the State and even directions given by this Court and by the
Ministry of Labour and Employment has not brought about
any substantive change. Governance is not about mouthing
platitudes, or framing good looking schemes, but about
action and it is quite clear to us that insofar as the rights of
construction workers are concerned, that vulnerable section
of society has been badly let down by the governance
structure. To make matters worse for them, the number of
construction workers has increased 5-fold over the last 20
years, as estimated by the Ministry of Labour and
Employment. The task before the State — to effectively
implement the laws enacted by Parliament for the benefit
and welfare of a vulnerable section of society is enormous,
and as the progression in the case shows, the State might
well be unable to live up to the expectations of Parliament
unless there is a strong will to bring about a positive change.
State apathy in a situation such as this virtually amounts to
exploitation of the construction workers, and if the State
turns exploitative, there is little hope for vulnerable sections
of society.

72. In this background and on the available facts and
figures, submissions were made by the learned counsel for
the parties.

73. The learned counsel for the petitioner’s principal
submissions were to the effect that the BOCW Act should be
faithfully implemented and the amounts collected for the
benefit of construction workers should be utilised for their
benefit and not for any other purpose, including purchase of
items like washing machines and laptops which obviously
cannot be used by construction workers. On the other hand,
the submissions of the learned Additional Solicitor General
appearing on behalf of the Union of India were to the effect
that all efforts are being made to ensure that there is full and
effective compliance with the provisions of the BOCW Act and
that the Monitoring Committee is supervising these efforts so
that all necessary entitlements and benefits are passed on to
the construction workers.

74. It will be seen from the figures on record
that the quantum of cess collected in one quarter from
31-3-2017 till 30-6-2017 is in the region of about Rs
55

5000 crores. (The difference between the figure given
by the Secretary in the Ministry of Labour and
Employment and the Standing Committee). This is a
huge amount and would work out to about Rs 20,000
crores annual collection. The figures presented to us
by the CAG or even the Standing Committee do not
reflect such a huge collection. Obviously, there is
something terribly rotten with the collection and
accounting mechanism and it is quite clear that the
exercise of registration, both of the establishments
and of the construction workers is not being carried
out satisfactorily. This is an area that has to be very
seriously looked into by all the State Governments and
the UTAs as well as by the Ministry of Labour and
Employment. Unless there is effective and full
compliance with the provisions regarding collection of
cess, several establishments will remain outside the
net and thousands of beneficiaries will be denied what
is constitutionally and statutorily due to them.

75. Our first direction, therefore, is to the Ministry of
Labour and Employment, the State Governments and the
UTAs to put in place and strengthen the registration
machinery, both for the registration of establishments as well
as registration of construction workers. This should be done
within a specified time-frame to be decided by them, but at
the earliest.

76. Our second direction to the Ministry, the State
Governments and UTAs in this regard is to establish and
strengthen the machinery for the collection of cess. It is a
matter of common knowledge that there is a tremendous
amount of construction activity going on all over the country
and there is no reason why establishments involved in the
construction activity, both formal as well as non-formal,
should not pay the cess, especially when they are utilising
the services of the construction workers. Similarly, there is
no reason why the construction workers of these
establishments should be denied their entitlements and
benefits under the BOCW Act and other laws. As noted
above, huge amounts are involved and we will not be
surprised if the quarterly collection of Rs 5000 crores is
perhaps the minimum — the cess collected could be much,
56

much more, if the registration machinery and the collection
machinery are strengthened and work to their potential.

77. As we have seen above, State Governments and
UTAs have framed a large number of schemes allegedly for
the benefit of construction workers. The multiplicity of
schemes brings to mind the adage that too many cooks spoil
the broth. Keeping a track of these schemes is by itself an
enormous task, perhaps resulting in administrative issues
and red tape. It would be worthwhile if a model scheme is
framed by the Ministry of Labour and Employment, which
appears to be best equipped to do so, taking the best
practices (so to speak) of the existing schemes. This model
scheme can then be made available to all concerned, that is,
the State Governments, the UTAs and the Welfare Boards
with the flexibility of making appropriate modifications
wherever necessary.

78. Our third direction, therefore, is to the Ministry of
Labour and Employment to frame one composite Model
Scheme for the benefit of construction workers in
consultation with all stakeholders including NGOs who are
actually working at the grassroots level with construction
workers. While there is an urgency in framing such a Model
Scheme, we would caution the Ministry of Labour and
Employment to make haste slowly and to prepare a Model
Scheme that is comprehensive and can easily be
implemented, is pragmatic and does not involve too much
paperwork.

79. In preparing the Model Scheme, we expect the
Ministry of Labour and Employment to include within it, inter
alia, issues and concerns of education, health, social
security, old age and disability pension and other benefits
that are necessary for living a life of dignity as postulated by
the Constitution of India. We also expect the Model Scheme
to be framed and publicised within a specified time-frame to
be decided by the Ministry of Labour and Employment,
preferably within six months, but in any event on or before
30-9-2018.

80. The CAG in its affidavit of 2-5-2017 has stated
that it carries out three kinds of audits: financial audit,
57

compliance audit and performance audit. It is explained in
the affidavit that:

“… In financial audit, audit ensures whether the
financial statements are properly prepared or complete
in all respect and are presented with adequate
disclosure. In compliance audit, audit checks whether
the provisions of the Constitution, applicable laws, rules
and regulations and various orders and instructions are
being complied with or not. In performance audit, audit
checks as to what extent the activity, programme or
organisation operates economically, efficiently and
effectively.”

81. Unfortunately, as the variance in the figures
shows, there is an absence of an effective audit in at least
one of the three categories of audits, if not in all three. It is
not for us to give any direction to the CAG on how to perform
its functions, being a constitutional authority, but we are of
the opinion that it is necessary for the CAG to take stock of
issues and problems pertaining to the implementation of the
BOCW Act and to ensure that effective and meaningful audits
are carried out, keeping in mind the huge amounts involved.

82. On the issue of audits, it would be worthwhile and
relevant for the State Governments and the Welfare Boards
in every State and UTA to conduct a social audit. The CAG
has prepared detailed guidelines for conducting a social audit
in respect of some other schemes (for example, the Report
of the Working Group on Developing Social Audit Standards
with reference to the Mahatma Gandhi National Rural
Employment Guarantee Act, 2005) and these guidelines can
be adapted mutatis mutandis for carrying out a social audit
in respect of the implementation of the BOCW Act.

83. Our fourth direction is to the Ministry of Labour
and Employment, the State Governments and the UTAs to
conduct a social audit on the implementation of the BOCW
Act so that in future there is better and more effective and
meaningful implementation of the BOCW Act. If a mistake
has occurred, and we have no doubt that hundreds of
mistakes have occurred in the implementation of the BOCW
58

Act, it is more appropriate to admit the mistake for a better
future rather than to justify it or continue to repeat the
mistake. This is more so in the case of the BOCW Act where
crores of men, women and children are involved on a day-to-
day basis and Parliament has thought it appropriate to
legislate for their benefit. The sanctity of laws enacted by
Parliament must be acknowledged — laws are enacted for
being adhered to and not for being flouted. The rule of law
must be respected and along with it the human rights and
dignity of building and construction workers must also be
respected and acknowledged, to avoid a complete breakdown
of the BOCW Act compounded by serious violations of Part
III of the Constitution guaranteeing fundamental rights.

84. We are pained to record that the Union of India
through the Ministry of Labour and Employment has
acknowledged that directions issued under Section 60 of the
BOCW Act are disregarded by the State Governments and
the UTAs, in the sense that they are not acted upon or are
acted upon whenever it is convenient to the State
Government or the UTA. This is rather disturbing and it is not
necessary for us to say anything more on the subject. We
leave it to the Union of India to discuss and decide on the
modalities and methodologies for ensuring that directions
issued under laws enacted by Parliament are given due
respect by the State Governments and the UTAs and
directions issued thereunder for the implementation of the
laws in letter and spirit are acted upon with due dispatch and
promptitude.

General directions

85. Apart from the specific directions that we
have been constrained to pass, it is necessary to pass
some general directions so that the BOCW Act is fully
implemented with responsibility:

85.1. Every State Government and UTA shall
constitute a State Advisory Committee, if not already
constituted, and that State Advisory Committee shall
meet regularly for conducting its business. It may be
mentioned that Rule 20 of the Building and Other
Construction Workers’ (Regulation of Employment and
59

Conditions of Service) Central Rules, 1998 provides
that the Central Advisory Committee shall meet at
least once in six months. This could be used as a good
guideline for meetings of the State Advisory
Committee.

85.2. Every State Government and UTA shall
constitute an Expert Committee and frame statutory
rules under Section 62 of the BOCW Act, if such
statutory rules have not already been framed. Setting
up an Expert Committee and framing statutory rules
should be in a time-bound manner, with the exercise
being completed preferably within six months and in
any event by 30-9-2018.

85.3. The State Governments and UTAs must
appoint Registering Officers for registration of
establishments and construction workers. This is a
critical aspect of the implementation of the BOCW Act
as well as the Cess Act.

85.4. Every State Government and UTA should
establish a Welfare Board in terms of Section 18 of the
BOCW Act. It must be appreciated that this is not a
body that can be created by an executive order. The
law requires that the Welfare Board shall be a body
corporate having perpetual succession and a common
seal. There are therefore legal formalities to be carried
out for the constitution of a Welfare Board.

85.5. Every State Government and UTA should
establish a Welfare Fund for the benefit of the
construction workers, with appropriate rules for
utilisation of the funds.

85.6. It is imperative that all construction
workers should be given identity cards and should be
registered in terms of Section 12 of the BOCW Act. The
Ministry of Labour and Employment has proposed the
issuance of a Universal Access Number for each
construction worker. We make no comment or
observation about the efficacy or otherwise of a
Universal Access Number. It was submitted by the
60

learned counsel for the petitioner that smart cards
should be issued to all construction workers. We keep
this issue open and leave it to the Ministry of Labour
and Employment to decide on an appropriate system
of identification and registration, provided it is
effective and meaningful.

85.7. The Ministry of Labour and Employment
shall actively consider making available to the
construction workers the benefits of the Maternity
Benefit Act, 1961 and the Minimum Wages Act, 1948,
the Employees’ State Insurance Act, 1948, the
Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952, as well as (to the extent
possible) the Mahatma Gandhi National Rural
Employment Guarantee Act, 2005.

85.8. The Ministry of Labour and Employment
should also consider whether projects of the
Government of India in the Railways, Defence and
other establishments are brought within the purview
of the BOCW Act.

85.9. The Monitoring Committee which has had
quite a few meetings so far should pro-actively ensure
full compliance with the provisions of the BOCW Act,
the Cess Act and the directions issued by this Court. It
needs to meet far more frequently, and in any case
once in three months, considering that thousands of
crores of rupees are not being gainfully utilised, and in
some instances, misutilised.

86. The Union of India must take a decision on
the management of the cess already collected. It
appears to us that the benefits and entitlements that
have accrued to the construction workers (millions of
whom have not been identified) cannot be passed on
to them due to the passage of time, with the
whereabouts of some of them not known. Accordingly,
a decision will have to be taken by the Union of India
on the gainful utilisation of the cess already collected
so that the Welfare Boards are not unjustly enriched —

the beneficiaries having unfortunately lost out.

87. It must be appreciated that construction
workers do not assist only in building infrastructure,
but they also assist in building the nation, in their own
small way. Once that realisation dawns upon those
required to implement the BOCW Act and the Cess Act,
perhaps due respect will be shown to Article 21 of the
Constitution and to parliamentary statutes.”

(Emphasis supplied)

The Apex Court observes that the State must appreciate that

construction workers do not assist only in building infrastructure but

they also assist in building the nation in their own small way.

Therefore, respect should be shown to Article 21 of the Constitution

and to statutes and directions which directed implementation.

20. It becomes germane to notice, what the State

Government has done pursuant to the direction issued by the Apex

Court. This is released through a communication by Government of

India of the expenditure they are incurring. It is germane to be

noticed and reads as follows:

“…. …. ….

It had come to the notice of the Ministry of Labour and
Employment that some State Welfare Boards were issuing
tenders or incurring expenditure on distribution of household
items such as lanterns, blankets, umbrellas, took-kits,
62

utensils, cycles and similar other articles instead of on
tangible welfare measures such as life insurance, health
insurance, disability cover, maternity benefits and old-age
pensions for the workers. Since the procurement process
adds layers to the entire process, with apprehension of
leakages both at the procurement stage and at the
distribution end, hence this decision was prompted.

Transfer of money in the form of cash has been completely
stopped by the instant order and any monetary assistance
has to be necessarily given through DBT. The order also puts
a ban on the distribution of articles in kind. It mentions that
no benefit can be provided in-kind except in extra-ordinary
circumstances such as natural calamities, epidemics, fire,
accidents caused due to occupational hazard or similar other
crisis and only with the prior approval of the State
Government. This is done with the intent that the welfare of
the construction workers is not compromised during
exceptional situations.

Section 22(1) of the Act comprehensively stipulates
the functions of the State Welfare Boards. Sub-
sections (a) to (g) mandate the State Welfare Boards
to spend the Cess fund on payment of premium for
pension, group insurance scheme, scholarships to
workers’ children, medical expenses, maternity
benefits and loans for house construction. As an
exception, sub-section (h) allows the boards to spend
on such other welfare measures and facilities as may
be prescribed. It was observed that some State
Welfare Boards had taken recourse to this sub-section
of the Act and resorted to arbitrary use of cess funds
for construction of buildings and distribution of
articles and utensils instead of using it for the welfare
of construction workers.

The order emphasizes that the social security coverage
stipulated under Section 22(1) (a) to (g) will hold precedence
over any other benefit being provided to the registered
construction workers under Section 22(1) (h) of the Act.
After meeting these priority expenses as mentioned in
Section 2(1)(a) to (g) of the Act, any balance of the cess
fund can be utilized by the Boards for giving additional
63

benefits as per the mandate given under Section 22(1)(h) of
the Act. To keep a vigilant eye on the nature of
expenditure, the Ministry has asked the State Boards
to furnish an Annual Return on the details of items on
which the expenditure has been incurred under
Section 22(1) (a) to (g) and Section 22(1)(h)
separately.”

(Emphasis supplied)

The afore-quoted communication depicts the amount being spent

by the State Welfare Boards on unfruitful expenses like umbrellas,

utensils and transfer of money by cash.

21. If the action of the State is considered on the anvil of the

right to life, as obtaining under Article 21 of the Constitution of

India, it would unmistakably mean that, right to all benefits that the

children of construction workers are entitled to get through the

legislation. The legislation, be it the Act or the Rules, is aimed at

educating the children of construction workers who are below

poverty line inter alia. It is for the purpose of social amelioration

such statutes promulgated are termed as ‘bread and butter

statutes’ or ‘welfare legislations’ in the words of the Apex Court.

Such statutes which aim at upliftment of the status of persons
64

below poverty line should be interpreted in such a way that leans

towards edification of the lives of the poor. The canons of social

legislation and its interpretation is completely different from the

canons of interpretation of taxation laws or of the kind. To achieve

the purpose of the enactment the Courts must lean towards

upliftment of the poor is by now too well settled principle of law.

Quoting judgments of the Apex Court on the issue would only bulk

the subject judgment.

22. The 2nd and 4th petitioners and their children had

legitimate expectation at the time when the children joined the

course that they would be given financial assistance till completion

of the course, as at the time of joining the course the amount that

was fixed would have been enough for completion of education. It

has been varied to the detriment of those children. Therefore, the

State should not have varied the amount to the extent that it has

taken back the benefit to a vintage of 10 years by putting the clock

back to a benefit that prevailed in the year 2011. The state should

never stifle or smother the rights of the poor. There is no reason
65

whatsoever found in any of the justification projected by the State

to do so.

23. The projection by the respondent Board is that it has

financial constraints. As observed hereinabove, the financial

constraints projected is preposterous, to say the least, as crores of

rupees are spent elsewhere. There is no accounting of the interest

earned on deposits close to ₹7000 crores. When there is complete

budgetary sanction for a benefit that was prevailing at the time

when the applications were submitted by the petitioners, it could

not have been kept in cold storage for close to 7 months; wait till

the change in policy and put them under the bracket of changed

policy and hit them hard. Financial difficulties cannot be projected

to deprive citizens of their constitutional rights. The law does not

permit the State to do so. The benefits once extended to them, as

observed, create a legitimate expectation to the petitioners that

they would get the benefit throughout their period of study. Such

legitimate expectation of these petitioners is completely eroded.

24. Reference being made to the judgment of the Apex Court

in the case of NATIONAL BUILDINGS CONSTRUCTION

CORPORATION v. S.RAGHUNATHAN2 becomes apposite. The

Apex Court has held as follows:

                                   "....   ....     ....
                20. Lord   Diplock   in Council    of  Civil   Service

Unions v. Minister for the Civil Service [1985 AC 374 :

(1984) 3 All ER 935 : (1984) 3 WLR 1174, HL] laid down that
the doctrine of “legitimate expectation” can be invoked if the
decision which is challenged in the court has some person
aggrieved either (a) by altering rights or obligations of that
person which are enforceable by or against him in private
law; or (b) by depriving him of some benefit or advantage
which either (i) he had in the past been permitted by the
decision-maker to enjoy and which he can legitimately
expect to be permitted to continue to do until there has been
communicated to him some rational grounds for withdrawing
it on which he has been given an opportunity to comment;

or (ii) he has received assurance from the decision-maker
that it will not be withdrawn without giving him first an
opportunity of advancing reasons for contending that it
should not be withdrawn.

(emphasis supplied)

21. The Indian scenario in the field of “legitimate
expectation” is not different. In fact, this Court, in several of
its decisions, has explained the doctrine in no uncertain
terms.

22. In Navjyoti Coop. Group Housing Society v. Union
of India [(1992) 4 SCC 477] the decision of the House of
Lords in Council of Civil Service Unions v. Minister for the
Civil Service [1985 AC 374: (1984) 3 All ER 935: (1984) 3
WLR 1174, HL] was followed and that decision was
summarised in the following words: (SCC p. 494, para 15)

2
(1998) 7 SCC 66
67

“It has been held in the said decision that an
aggrieved person was entitled to judicial review if he
could show that a decision of the public authority
affected him of some benefit or advantage which in the
past he had been permitted to enjoy and which he
legitimately expected to be permitted to continue to
enjoy either until he was given reasons for withdrawal
and the opportunity to comment on such reasons.”

23. This Court further observed as under: (SCC pp.
494-95, paras 15 and 16)
“The existence of ‘legitimate expectation’ may
have a number of different consequences and one of
such consequences is that the authority ought not to act
to defeat the ‘legitimate expectation’ without some
overriding reason of public policy to justify its doing so.
In a case of ‘legitimate expectation’ if the authority
proposes to defeat a person’s ‘legitimate expectation’ it
should afford him an opportunity to make
representations in the matter.

* * *

It may be indicated here that the doctrine of
‘legitimate expectation’ imposes in essence a duty on
public authority to act fairly by taking into consideration
all relevant factors relating to such ‘legitimate
expectation’. Within the conspectus of fair dealing in
case of ‘legitimate expectation’, the reasonable
opportunities to make representation by the parties
likely to be affected by any change of consistent past
policy, come in.”

24. In Food Corpn. of India v. Kamdhenu Cattle Feed
Industries [(1993) 1 SCC 71] it was held that in all State
actions, the State has to conform to Article 14 of the
Constitution of which non-arbitrariness is a significant facet.
It was further observed that there is no unfettered discretion
in public law and a public authority possesses powers only to
use them for public good. It was further observed as under:

(SCC p. 76, para 8)

“8. The mere reasonable or legitimate
expectation of a citizen, in such a situation, may
not by itself be a distinct enforceable right, but
68

failure to consider and give due weight to it may
render the decision arbitrary, and this is how the
requirement of due consideration of a legitimate
expectation forms part of the principle of non-

arbitrariness, a necessary concomitant of the rule
of law. Every legitimate expectation is a relevant
factor requiring due consideration in a fair
decision-making process. Whether the expectation
of the claimant is reasonable or legitimate in the
context is a question of fact in each case.
Whenever the question arises, it is to be
determined not according to the claimant’s
perception but in larger public interest wherein
other more important considerations may
outweigh what would otherwise have been the
legitimate expectation of the claimant. A bona fide
decision of the public authority reached in this
manner would satisfy the requirement of non-
arbitrariness and withstand judicial scrutiny. The
doctrine of legitimate expectation gets assimilated
in the rule of law and operates in our legal system
in this manner and to this extent.”

(emphasis supplied)

25. In Union of India v. Hindustan Development
Corpn. [(1993) 3 SCC 499] the meaning of the words
“legitimate expectation” was again considered. Quoting from
the case of Attorney General for New South
Wales v. Quin [(1990) 64 Aust LJR 327] the following lines:

“To strike down the exercise of administrative
power solely on the ground of avoiding the
disappointment of the legitimate expectations of an
individual would be to set the courts adrift on a
featureless sea of pragmatism. Moreover, the notion of a
legitimate expectation (falling short of a legal right) is
too nebulous to form a basis for invalidating the exercise
of a power when its exercise otherwise accords with
law.”

the Court observed as under: (SCC p. 549, para 35)

“If a denial of legitimate expectation in a given
case amounts to denial of right guaranteed or is
69

arbitrary, discriminatory, unfair or biased, gross
abuse of power or violation of principles of natural
justice, the same can be questioned on the well-
known grounds attracting Article 14 but a claim based
on mere legitimate expectation without anything
more cannot ipso facto give a right to invoke these
principles. It can be one of the grounds to consider
but the court must lift the veil and see whether the
decision is violative of these principles warranting
interference. It depends very much on the facts and
the recognised general principles of administrative
law applicable to such facts and the concept of
legitimate expectation which is the latest recruit to a
long list of concepts fashioned by the courts for the
review of administrative action, must be restricted to
the general legal limitations applicable and binding
the manner of the future exercise of administrative
power in a particular case. It follows that the concept
of legitimate expectation is ‘not the key which
unlocks the treasury of natural justice and it ought
not to unlock the gates which shuts the court out of
review on the merits’, particularly when the element
of speculation and uncertainty is inherent in that very
concept.”

26. This doctrine was reiterated in M.P. Oil
Extraction v. State of M.P. [(1997) 7 SCC 592] in which it
was also laid down that though the doctrine of “legitimate
expectation” is essentially procedural in character and
assures fair play in administrative action, it may, in a given
situation, be enforced as a substantive right.”

(Emphasis supplied)

The Apex Court considers various forms and hues of legitimate

expectation. When it comes to depriving a person benefit of an

advantage which he had been permitted in the past, such decision
70

should be fair and should pass muster of Article 14 of the

Constitution of India. It cannot be arbitrary.

25. In yet another judgment, the Apex Court recognizes the

welfare of construction workers and relates it to right to life under

Article 21 of the Constitution of India. The Apex Court in the case of

DEWAN CHAND BUILDERS AND CONTRACTORS v. UNION OF

INDIA3 has held as follows:

“…. …. ….

3. The background in which the BOCW Act was
enacted, is set out in the Statement of Objects and Reasons
appended to the Bill preceding its enactment. To better
appreciate the legislative intent, it would be instructive to
refer to the following extract from the Statement of Objects
and Reasons:

“(1) It is estimated that about 8.5 million
workers in the country are engaged in building and
other construction works. Building and other
construction workers are one of the most numerous
and vulnerable segments of the unorganised labour in
India. The building and other construction works are
characterised by their inherent risk to the life and limb
of the workers. The work is also characterised by its
casual nature, temporary relationship between
employer and employee, uncertain working hours, lack
of basic amenities and inadequacy of welfare facilities.

In the absence of adequate statutory provisions, the
requisite information regarding the number and nature

3
(2012) 1 SCC 101
71

of accidents is also not forthcoming. In the absence of
such information, it is difficult to fix responsibility or to
take any corrective action.

(2) Although the provisions of certain Central
Acts are applicable to the building and other
construction workers yet a need has been felt for a
comprehensive Central Legislation for regulating their
safety, health, welfare and other conditions of
service.”

4. A fairly long Preamble to the BOCW Act is again
indicative of its purpose. It reads thus:

“An Act to regulate the employment and
conditions of service of building and other construction
workers and to provide for their safety, health and
welfare measures and for other matters connected
therewith or incidental thereto.”

5. Further, Section 1(4) of the BOCW Act makes it
clear that it:

“1. (4) … applies 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.”

6. Some of the definitions under Section 2 of the
BOCW Act, relevant for these appeals are:

“2. (1)(b) ‘beneficiary’ means a building
worker registered under Section 12;

(c) ‘Board’ means a Building and Other
Construction Workers’ Welfare Board constituted under
sub-section (1) of Section 18;

***

(e) ‘building worker’ means a person who is
employed to do any skilled, semi-skilled or unskilled,
72

manual, supervisory, technical or clerical work for hire
or reward, whether the terms of employment be
expressed or implied, in connection with any building
or other construction work but does not include any
such person–

(i) who is employed mainly in a managerial or
administrative capacity; or

(ii) who, being employed in a supervisory capacity,
draws wages exceeding one thousand six
hundred rupees per mensem or exercises,
either by the nature of the duties attached to
the office or by reason of the powers vested in
him, functions mainly of a managerial nature;

                    ***
       (g) 'contractor'    means     a   person    who

undertakes to produce a given result for any
establishment, other than a mere supply of goods or
articles of manufacture, by the employment of building
workers or who supplies building workers for any work
of the establishment, and includes a sub-contractor;

***

(i) ’employer’, in relation to an establishment,
means the owner thereof, and includes–

(i) in relation to a building or other construction
work carried on by or under the authority of any
department of the Government, directly without
any contractor, the authority specified in this
behalf, or where no authority is specified, the
head of the department;

(ii) in relation to a building or other construction
work carried on by or on behalf of a local
authority or other establishment, directly
without any contractor, the Chief Executive
Officer of that authority or establishment;

(iii) in relation to a building or other construction
work carried on by or through a contractor, or
by the employment of building workers supplied
by a contractor, the contractor;

***

(k) ‘Fund’ means the Building and Other
Construction Workers’ Welfare Fund of a Board
constituted under sub-section (1) of Section 24;”

7. The scheme of the BOCW Act is that it
empowers the Central Government and the State
Governments to constitute Welfare Boards to provide
and monitor social security schemes and welfare
measures for the benefit of the building and other
construction workers. Section 7 requires every
employer in relation to an establishment to which the
BOCW Act applies to get such establishment
registered. Section 10 makes this requirement
mandatory and therefore, without such registration,
the employer of an establishment, to which the BOCW
Act applies, cannot employ building workers.

8. Chapter IV of the BOCW Act contains
provisions stipulating the registration of building
workers as beneficiaries and requires certain
contributions to be made by such beneficiary at such
rate per month as may be specified by the State
Government. Where the worker is unable to pay his
contribution due to any financial hardship, the Board
can waive the payment of such contribution for a
period not exceeding three months at a time.

9. Chapter V of the BOCW Act sets out the
constitution and functions of the Building and Other
Construction Workers’ Welfare Boards. Section 24 sets
out the provision for the constitution of the welfare
fund and its application. Part III of Chapter VI of the
BOCW Act contains provisions concerning the safety,
health and welfare of the construction workers
generally and with reference to specific kinds of
activities.

10. It is thus clear from the scheme of the BOCW
Act that its sole aim is the welfare of building and
construction workers, directly relatable to their
constitutionally recognised right to live with basic
human dignity, enshrined in Article 21 of the
Constitution of India. It envisages a network of
authorities at the Central and State levels to ensure
that the benefit of the legislation is made available to
every building and construction worker, by
constituting Welfare Boards and clothing them with
sufficient powers to ensure enforcement of the
primary purpose of the BOCW Act. The means of
generating revenues for making effective the welfare
provisions of the BOCW Act is through the Cess Act,
which is questioned in these appeals as
unconstitutional.

11. The Statement of Objects and Reasons to the
BOCW Act explained that it had been considered

“necessary to levy a cess on the cost of
construction incurred by the employers on the building
and other construction works for ensuring sufficient
funds for the Welfare Boards to undertake the social
security schemes and welfare measures”.

Simultaneously with the enactment of the BOCW Act,
Parliament enacted the Cess Act. The Statement of Objects
and Reasons to the Cess Act noted that the intention was to

“provide for the levy and collection of a cess on
the cost of construction incurred by the employers for
augmenting the resources of the Building and Other
Construction Workers’ Welfare Boards constituted by
the State Governments under the Building and Other
Construction Workers’ (Regulation of Employment and
Conditions of Service) Ordinance, 1995″.”

(Emphasis supplied)
75

The Apex Court holds that, on a perusal of the scheme it was clear

that legislation is enacted with the sole aim of welfare of

construction workers directly relatable to their constitutionally

recognized right to life, i.e., to live with basic human dignity as

enshrined in Article 21 of the Constitution of India. Why the Apex

Court directed strict implementation of the benefits under the Act is

also found in the afore-quoted paragraphs.

26. In the light of what is held by the Apex Court in the

judgments noticed hereinbefore, the action of the State, in treating

the funds that belonged to the construction workers and their

children as the property of the Board, for bartering away for

wasteful expenditure must be stopped, and stopped forthwith,

as it cannot be forgotten that reference in the preamble to the

Constitution of India to the words “we the people” does not mean

the miniscule elite, or a larger upper middle class only, but it would

be largely inclusive of the people who are below poverty line like

the construction workers. They also have a constitutional right to

live with basic human dignity and also entitled to all the rights that

flow from the statutes. The rights of construction workers cannot be
76

railroaded in the broad day light by the State, or the Authorities like

the Board. The core issue in the lis revolves round education of two

girl children of construction workers. Therefore, before I say

omega, I wish to observe that the State must be remember that it

should take all steps towards educating women, as it is said,

educating a man, is educating an individual; educating a

woman, is educating a generation.

27. For the aforesaid reasons, the following:

ORDER

(i) Writ Petition is allowed.

(ii) The Notification impugned dated 30-10-2023
stands quashed.

(iii) It is declared that the notification dated 13-08-

2021 would prevail.

(iv) The quashment of the Notification supra will not
come in the way of power of the State to bring in
a notification, if need arises, varying the amount.
But, while so doing, it shall bear in mind the
77

observations made in the course of the order. It
can never be to the detriment of the welfare of
construction workers and their families.

(v) A mandamus issues to the State and the Board to
disperse educational assistance to the applications
received for financial years 2020-21, 2021-22 and
2022-23 till completion of education thereto.

(vi) The Board shall consider the applications of
similarly situated applicants, bearing in mind the
observations made in the course of the order and
not drive every person to knock at the doors of
this Court seeking identical relief, as the State can
bear the brunt of litigation, but not the poor
citizen.

(vii) The Comptroller and Auditor General of India
shall take up, if not already taken up, and
complete the audit of the funds of the Board
within three months, if not earlier, and place the
report before the Registry of this Court.

(viii) Once the report is received by the Registry, it
shall relist this matter without any delay.

(ix) A copy of this order shall be communicated to the
Chief Secretary, the State of Karnataka for
compliance and report.

(x) A copy of this order shall also be circulated by the
Registry to the Additional Solicitor General of
India for compliance, with the observations made
in the course of the order and the task of getting
the audit report from the office of the CAG.

Sd/-

(M. NAGAPRASANNA)
JUDGE
Bkp
CT:MJ

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Shiv Narain Pd. Mishra vs The State Of Bihar And Ors on 30 August, 2025

Bharatvarshiya Digamber Jain Tirth … vs Jain Shwetamber Society on 18 August, 2025

Tulsi Devi vs The State Of Madhya Pradesh on 14 August, 2025

30.08.2025 vs Khasi Hills Autonomous District … on 30 August, 2025

Nishi Singla vs State Of Punjab And Others on 28 August, 2025

Ms. Amrutha M vs State Of Karnataka on 10 January, 2025

Karnataka High Court

Ms. Amrutha M vs State Of Karnataka on 10 January, 2025

Author: M.Nagaprasanna

Bench: M.Nagaprasanna

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