19 March 2018
Supreme Court
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NATIONAL CAMPAIGN COMMITTEE FOR CENTRAL LEGISLATION ON CONSTRUCTION LABOUR (NCC CL) Vs UNION OF INDIA

Bench: HON'BLE MR. JUSTICE MADAN B. LOKUR, HON'BLE MR. JUSTICE S. ABDUL NAZEER, HON'BLE MR. JUSTICE DEEPAK GUPTA
Judgment by: HON'BLE MR. JUSTICE MADAN B. LOKUR
Case number: W.P.(C) No.-000318-000318 / 2006
Diary number: 17160 / 2006
Advocates: JYOTI MENDIRATTA Vs CORPORATE LAW GROUP


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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 1 of 57  

 

 

REPORTABLE                

 

            IN THE SUPREME COURT OF INDIA  

CIVIL ORIGINAL JURISDICTION  

WRIT PETITION (CIVIL) NO. 318 OF 2006  

 

National Campaign Committee for Central   

Legislation on Construction Labour (NCC-CL)                 .....Petitioner   

Versus   

Union of India & Ors.                                                    ....Respondents  

WITH  

 

CONMT. PET. (C) No. 52/2013 in W.P. (C) No. 318/2006  

 

 

 

J U D G M E N T  

 

Madan B. Lokur, J.  

1. Symbolic justice – there is nothing more to offer to several millions of  

construction workers in the unorganized sector – not social justice, not  

economic justice. The reason is quite simple. No State Government and no  

Union Territory Administration (UTA) seems willing to fully adhere to and  

abide by (or is perhaps even capable of fully adhering to and abiding by) two

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laws solemnly enacted by Parliament, namely, the Building and Other  

Construction Workers (Regulation of Employment and Conditions of  

Service) Act, 1996 (the BOCW Act) and the Building and Other  

Construction Workers‘ Welfare Cess Act, 1996 (the Cess Act). Directions  

given by this Court from time to time to implement the two laws have been  

flouted with impunity. What is equally tragic is that multiple directions  

issued even by the Government of India under Section 60 of the BOCW Act  

have been disregarded by State Governments and UTAs - and this is  

candidly admitted in a statement made by the learned Additional Solicitor  

General in this Court and also by the Union of India on affidavit. Hopefully,  

the gravity of the situation in the constitutional and federal context, the  

human rights and social justice context will be realized by someone,  

somewhere and at some time.  

2. We have been informed that under the Cess Act, more than Rs. 37,400  

crores have been collected for the benefit of construction workers, but only  

about Rs. 9500 crores have been utilized ostensibly for their benefit. What is  

being done with the remaining about Rs. 28,000 crores? Why is it that  

construction workers across the country are being denied the benefit of this  

enormous amount? These are some questions that arise in this petition – are  

the answers blowing in the wind?

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Brief background  

3. The petitioner is said to be a non-registered Committee of registered  

trade unions concerned with the rights of workers in the unorganized sector  

including construction workers, especially in areas of safety, occupational  

health and welfare measures. The petitioner says that it is ―appalled by the  

attitude and ignorance‖ of most State Governments and UTAs towards  

implementation of the BOCW Act. According to the petitioner, the non-

implementation of the BOCW Act violates the provisions of Articles 15(3),  

39(e) and (f) and also Articles 45 and 47 of the Constitution, which impose a  

primary responsibility on the State to ensure that all the needs of workers are  

met and that their basic rights are fully protected.  The non-implementation  

also violates Article 21 of the Constitution, which provides for the right to  

live with dignity. It is averred that the BOCW Act and the Cess Act are  

based on an international convention, namely, the Safety and Health in  

Construction Convention (No. 167) adopted by the International Labour  

Organization in 1988 and its accompanying recommendation (No.175)  

which provide for a foundation of law on which safe and healthy working  

conditions are built.  

4. Based on its experiences and studies carried out which indicate the

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absence of any effective system for the safe and healthy working conditions  

for construction workers, the petitioner preferred a writ petition in this Court  

under Article 32 of the Constitution in which several prayers have been  

made but essentially the prayer is that the BOCW Act and the Cess Act  

should be meaningfully implemented in letter and spirit.     

The BOCW Act and the Cess Act  

5. The BOCW Act and the Cess Act were both enacted in 1996. The  

Preamble to the BOCW Act states that it is 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.‖ The Preamble to  

the Cess Act states that it is an Act ―to provide for the levy and collection of  

cess on the cost of construction incurred by employers with a view to  

augmenting the resources of the Building and Other Construction Workers  

Welfare Boards constituted under the BOCW Act.‖  

6. The relevant paragraphs of the Statement of Objects and Reasons for  

the enactment of the BOCW Act read:  

―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

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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 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.  The State  

Governments and Union Territory Administrations have been  

consulted in the matter and a majority of them have favoured such a  

legislation.  Also, in a meeting of the Committee of State Labour  

Ministers constituted pursuant to the decision of the 41 st  Labour  

Ministers‘ Conference held under the Chairmanship of the then  

Union Labour Minister on the 18 th

May, 1995, a general consensus  

had emerged on the need for the proposed Central Legislation.  

 

3. In view of the circumstances explained above, it has been  

considered necessary to constitute Welfare Boards in every State so  

as to provide and monitor social security schemes and welfare  

measures for the benefit of building and other construction workers.   

For the said purpose, it has been considered appropriate to bring in a  

comprehensive legislation by suitably amplifying the provisions of  

the Building and Other Construction Workers (Regulation of  

Employment and Conditions of Service) Bill, 1988 which was  

introduced in the Rajya Sabha on the 5 th

December, 1988.  It has  

also 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.‖ [Emphasis supplied].  

  

  

7. The BOCW Act provides, inter alia, for the constitution of Central  

and State Advisory Committee(s) to advise the appropriate Government on  

matters concerning the administration of the BOCW Act (Sections 3 and 4);  

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the constitution of Expert Committee(s) for advising the appropriate  

Government to frame Rules under the BOCW Act (Section 5);  appointment  

of registering officers and registration of establishments employing building  

and construction workers by making an application to the registering officer  

(Sections 6 and 7); registration of building and construction workers as  

beneficiaries under the BOCW Act and issuance of identity cards to them  

(Sections 12 and 13);  constitution of State Welfare Boards with identified  

functions including providing necessary benefits and assistance to  

beneficiaries (Sections 18 and 22); creation of a Welfare Fund for the benefit  

of building and construction workers (Section 24) and providing hours of  

work, welfare measures relating, inter alia, to safety and health and other  

conditions of service of building and construction workers (Chapters VI and  

VII of the BOCW Act).  

8. Clearly, the BOCW Act is a welfare legislation intended and enacted  

for the benefit of the unorganized sector of building and construction  

workers. It has a strong flavour of social justice and is a serious attempt by  

Parliament to ensure that building and construction workers are not  

exploited because of their poverty and their children do not suffer their fate  

in terms of education, healthy living and whatever it takes to live a life of  

dignity.  It is in this background and context that the BOCW Act was

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enacted by Parliament.   

9. Parliament simultaneously enacted the Cess Act which enables the  

State Governments and the UTAs to collect a cess from every employer as  

defined in the BOCW Act to be utilized for the benefit of registered  

construction workers.  

10. The Cess Act provides for the levy and collection of cess in terms of  

Section 3 thereof.  This Section enables the deduction of cess at source in  

relation to building or other construction work of a government or a public  

sector undertaking or advance collection through a local authority.  The cess  

so collected shall be paid to the Welfare Board constituted under the BOCW  

Act after deducting the cost of collection which shall not exceed 1% of the  

amount collected.  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

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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.  

(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.‖  

 

11. Sections  4 and 5 of the Cess Act require every employer to furnish a  

return to the concerned officer or authority and that officer or authority is  

obliged to make an assessment of the amount of cess payable by the  

employer.  The concerned officer or authority is also empowered to specify  

the date within which the cess shall be paid by the employer on assessment.   

In the event of any delay in payment of cess, interest is liable to be paid  

under Section 8 of the Cess Act at 2% for every month or part thereof.   

There is of course a provision for an appeal as well as an enforcement  

provision whereby penalty can be levied under the provisions of the Cess  

Act.   

12. The constitutional validity of the BOCW Act and the Cess Act was  

challenged in the Delhi High Court by the Builders Association of India. As  

regards the BOCW Act it was contended that it is bad for vagueness and as  

far as the Cess Act is concerned, it was contended that the cess is a  

compulsory and involuntary exaction without reference to any special

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benefit for the payer of the cess and therefore the cess was in fact a tax. It  

was contended that Parliament lacked legislative competence to impose a tax  

on lands and buildings which was the effect of the Cess Act.  

13. In Builders Association of India v. Union of India 1  the contentions  

urged were repelled by the Delhi High Court and the constitutional validity  

of the BOCW Act and the Cess Act was upheld.  

14. The Delhi High Court relied upon Hingir-Rampur Coal Co. Ltd. v.  

State of Orissa 2  in which the Constitution Bench explained the difference  

between a tax, a fee and cess in the following words:  

―……It is true that between a tax and a fee there is no generic  

difference. Both are compulsory exactions of money by public  

authorities; but whereas a tax is imposed for public purposes and is  

not, and need not, be supported by any consideration of service  

rendered in return, a fee is levied essentially for services rendered  

and as such there is an element of quid pro quo between the person  

who pays the fee and the public authority which imposes it. If  

specific services are rendered to a specific area or to a specific class  

of persons or trade or business in any local area, and as a condition  

precedent for the said services or in return for them cess is levied  

against the said area or the said class of persons or trade or business  

the cess is distinguishable from a tax and is described as a fee. Tax  

recovered by public authority invariably goes into the consolidated  

fund which ultimately is utilised for all public purposes, whereas a  

cess levied by way of fee is not intended to be, and does not  

become, a part of the consolidated fund. It is earmarked and set  

apart for the purpose of services for which it is levied. There is,  

however, an element of compulsion in the imposition of both tax  

and fee. When the Legislature decides to render a specific service  

to any area or to any class of persons, it is not open to the said area  

or to the said class of persons to plead that they do not want the  

                                                           1  ILR (2007) 1 Del 1143  

2  (1961) 2 SCR 537

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service and therefore they should be exempted from the payment of  

the cess. Though there is an element of quid pro quo between the  

tax payer and the public authority there is no option to the tax-payer  

in the matter of receiving the service determined by public  

authority. In regard to fees there is, and must always be, co-relation  

between the fee collected and the service intended to be rendered.  

Cases may arise where under the guise of levying a fee Legislature  

may attempt to impose a tax; and in the case of such a colourable  

exercise of legislative power courts would have to scrutinise the  

scheme of the levy very carefully and determine whether in fact  

there is a co-relation between the service and the levy, or whether  

the levy is either not co-related with service or is levied to such an  

excessive extent as to be a pretence of a fee and not a fee in reality.  

In other words, whether or not a particular cess levied by a statute  

amounts to a fee or tax would always be a question of fact to be  

determined in the circumstances of each case…..‖   

 

15. With regard to the objectives of the enactments, the Delhi High Court  

took sustenance from the decision of this Court in Bandhua Mukti Morcha  

v. Union of India. 3  The following passage was referred to and relied upon  

with regard to the purpose behind Article 21, Article 39, Article 41 and  

Article 42 of the Constitution. It was stated in Bandhua Mukti Morcha:  

―……It is the fundamental right of everyone in this country,  

assured under the interpretation given to Article 21 by this  

Court in Francis Mullin case [Francis Coralie Mullin v.  

Administrator, Union Territory of Delhi and others] 4  to live  

with human dignity, free from exploitation. This right to live  

with human dignity enshrined in Article 21 derives its life  

breath from the Directive Principles of State Policy and  

particularly clauses (e) and (f) of Article 39 and Articles 41  

and 42 and at the least, therefore, it must include protection of  

the health and strength of workers, men and women, and of  

the tender age of children against abuse, opportunities and  

facilities for children to develop in a healthy manner and in  

                                                           3  (1984) 3 SCC 161  

4 (1981) 1 SCC 608

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conditions of freedom and dignity, educational facilities, just  

and humane conditions of work and maternity relief. These are  

the minimum requirements which must exist in order to enable  

a person to live with human dignity and no State — neither the  

Central Government nor any State Government — has the  

right to take any action which will deprive a person of the  

enjoyment of these basic essentials. Since the Directive  

Principles of State policy contained in clauses (e) and (f) of  

Article 39, Articles 41 and 42 are not enforceable in a Court of  

law, it may not be possible to compel the State through the  

judicial process to make provision by statutory enactment or  

executive fiat for ensuring these basic essentials which go to  

make up a life of human dignity but where legislation is  

already enacted by the State providing these basic  

requirements to the workmen and thus investing their right to  

live with basic human dignity, with concrete reality and  

content, the State can certainly be obligated to ensure  

observance of such legislation for inaction on the part of the  

State in securing implementation of such legislation would  

amount to denial of the right to live with human dignity  

enshrined in Article 21………..The Central Government is  

therefore bound to ensure observance of various social welfare  

and labour laws enacted by Parliament for the purpose of  

securing to the workmen a life of basic human dignity in  

compliance with the Directive Principles of State Policy.‖  

 

16. In short, the Delhi High Court held that the BOCW Act was not vague  

but in keeping with the Directive Principles of State Policy and Parliament  

was justified in levying the cess through the Cess Act.  

17. The decision of the Delhi High Court was challenged in this Court and  

that challenge was repelled in Dewan Chand Builders & Contractors v.  

Union of India 5 . This Court noted the scheme of the BOCW Act in the  

context of Article 21 of the Constitution and observed as follows:  

                                                           5  (2012) 1 SCC 101

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―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.‖    

 

18. This Court referred to the Constitution Bench decision in Hingir-

Rampur Coal Co. Ltd., and another Constitution Bench decision being State  

of W.B. v. Kesoram Industries Ltd. 6  This Court referred to the views  

expressed by Justice R.C. Lahoti (speaking for the majority in Kesoram  

Industries) in the following words:  

―146. ......The term cess is commonly employed to connote a tax  

with a purpose or a tax allocated to a particular thing. However, it  

also means an assessment or levy. Depending on the context and  

purpose of levy, cess may not be a tax; it may be a fee or fee as well.  

It is not necessary that the services rendered from out of the fee  

collected should be directly in proportion with the amount of fee  

collected. It is equally not necessary that the services rendered by the  

fee collected should remain confined to the persons from whom the  

fee has been collected. Availability of indirect benefit and a general  

nexus between the persons bearing the burden of levy of fee and the  

services rendered out of the fee collected is enough to uphold the  

validity of the fee charged…..‖  

                                                           6  (2004) 10 SCC 201

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19. The Court then came to the conclusion that there is a clear distinction  

between a tax and a fee and looking to the purpose of the BOCW Act and  

the Cess Act, it was held that the levy of cess was a fee and not a tax.  

20. The interpretation of the BOCW Act and the Cess Act was again  

considered in A. Prabhakara Reddy and Company v. State of Madhya  

Pradesh. 7  The emphasis in this case was on registering the construction  

workers and providing them necessary benefits. Since the levy of cess is a  

fee, it was urged that urgent steps should be taken for implementation of the  

two Acts. It was further observed that merely because there was some delay  

in the effective implementation of both the statutes it could not be a ground  

for invalidating the levy of cess, nor could the levy of cess be said to have  

retrospective application. It was held as follows:  

―The fact that the task of registering the workers and providing them  

the benefit may take some time, would not affect the liability to pay  

the levy as per the Cess Act. Any other interpretation would defeat  

the rights of the workers whose protection is the principal aim or  

primary concern and objective of the BOCW Act as well as the Cess  

Act. Cess is a fee for service and hence, its calculation, as per settled  

law is not to be strictly in accordance with quid pro quo rule and  

does not require any mathematical exactitude. The scheme of the  

BOCW Act, the Cess Act and the Rules warrant that the lawfully  

imposable cess should be imposed, collected and put in the statutory  

welfare fund without delay so that the benefits may flow to the  

eligible workers at the earliest. The scheme of the BOCW Act or the  

Cess Act does not warrant that unless all the workers are already  

registered or the welfare fund is duly credited or the welfare  

measures are made available, no cess can be levied. In other words  

                                                           7  (2016) 1 SCC 600

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the service to the workers is not required to be a condition precedent  

for the levy of the cess. The rendering of welfare services can  

reasonably be undertaken only after the cess is levied, collected and  

credited to the welfare fund.  

 

We also find no merit in other submission advanced on behalf of the  

appellants that there is a legal impediment in charging levy on the  

cost of construction incurred by the employer from a particular  

period on account of constitution of the Board from a particular date  

or for any other reason. This argument is fallacious. Such beneficial  

measures for the welfare of the workers are applicable even to the  

construction activity which may have commenced before coming  

into force of the BOCW Act and the Cess Act, if they are  

subsequently covered by the provisions of these Acts. There can be  

no legal obstacle in ignoring the construction cost incurred before  

the cess became leviable by distinguishing it from the cost of  

construction incurred later, from a date when the Board is available  

to render service to the building and other construction workers. The  

levy of cess in these facts and circumstances cannot be faulted for  

any reason. The demand of cess in the given facts cannot amount to  

retrospective application of the Cess Act. Hence the appeals must  

fail.‖  

 

21. Notwithstanding the law being absolutely clear and constitutionally  

valid, it was not being implemented in accordance with the intent of  

Parliament. Therefore, there was a need for the petitioner to move this Court  

and for this Court to take up the issues raised as matters relating to social  

justice and human rights.  

Positive directions issued by the Court  

22. Bearing in mind the welfare and beneficial intent behind the BOCW  

Act and the Cess Act and for their effective and meaningful implementation,  

this Court has issued a series of directions since May 2008. This Court was

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compelled do so since even twelve years after the enactment of the BOCW  

Act, the basic statutory mandates had not been carried out by the State  

Governments and UTAs.  It is not necessary to advert to all the directions,  

even though each one of them is significant. A few of them, referred to infra,  

are enough to indicate the progression of the case. Later, we will also refer  

to various affidavits filed by the Union of India to indicate its helplessness in  

effectively implementing the BOCW Act and the Cess Act despite several  

statutory directions issued by it.    

23. When the case was taken up for consideration by this Court on 12 th   

May, 2008 it was informed by the petitioner that even after a decade of the  

enactment of the BOCW Act, the minimum and basic requirements of its  

provisions had not been implemented or considered by almost every State  

Government and UTA. It was submitted that Section 4 of the BOCW Act  

requires a Committee to be constituted called the State Building and Other  

Construction Workers Advisory Committee. The purpose of this State  

Advisory Committee is to advise the State Government on matters relating  

to the administration of the BOCW Act. It was submitted that perhaps no  

State Government had yet constituted the State Advisory Committee under  

Section 4 of the BOCW Act which reads:  

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“4. State Advisory Committee.—(1) The State Government shall  

constitute a committee to be called the State Building and Other  

Construction Workers‘ Advisory Committee (hereinafter referred to  

as the State Advisory Committee) to advise the State Government on  

such matters arising out of the administration of this Act as may be  

referred to it.   

 

(2) The State Advisory Committee shall consist of—   

 

(a) a Chairperson to be appointed by the State Government;   

 

(b) two members of the State Legislature to be elected from  

the State Legislature—members;   

 

(c) a member to be nominated by the Central Government;   

 

(d) the Chief Inspector—member, ex officio;   

 

(e) such number of other members, not exceeding eleven, but  

not less than seven, as the State Government may nominate to  

represent the employers, building workers, associations of  

architects, engineers, accident insurance institutions and any  

other interests which, in the opinion of the State Government,  

ought to be represented on the State Advisory Committee.   

 

(3) The number of persons to be appointed as members from each of  

the categories specified in clause (e) of sub-section (2), the term of  

office and other conditions of service of, the procedure to be  

followed in the discharge of their functions by, and the manner of  

filling vacancies among, the members of State Advisory Committee  

shall be such as may be prescribed:   

 

Provided that the number of members nominated to represent the  

building workers shall not be less than the number of members  

nominated to represent the employers.‖    

24. Similarly, it was submitted that State Governments had not framed  

statutory rules in terms of Section 62 of the BOCW Act. The significance of  

the Rules is that they are required to provide, inter alia, registration of an

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establishment, registration of a beneficiary (construction worker), the  

benefits that a beneficiary is entitled to under Section 14 of the BOCW Act  

and so on. Consequently, in the absence of any statutory rules having been  

framed by any State Government, it would be well-nigh impossible for a  

construction worker to obtain the benefits due to him or her under the  

provisions of the BOCW Act.   

25. For the purposes of framing statutory Rules, Section 5 of the BOCW  

Act postulates the State Government constituting one or more Expert  

Committee consisting of persons specially qualified in building or other  

construction work for advising the State Government in drafting the rules.  

26. Based on the submissions made, the Court called for factual  

information from the State Governments to be provided within eight weeks.  

27. When the case was taken up for consideration on 5 th  December, 2008  

it transpired that only some States had provided the required information,  

but more significantly, it came to notice that cess was being collected by the  

State Governments under the Cess Act but the benefits of that collection  

were not being passed on to the construction workers.  

28. Accordingly, on 13 th  January, 2009 the Court turned its attention to  

yet another very important and significant aspect of the BOCW Act, that is,  

the appointment of registering officers, registration of establishments and the

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registration of building workers who are the real beneficiaries of the  

provisions of the BOCW Act. Section 6 of the BOCW Act requires the  

appropriate government to appoint gazetted officers as registering officers  

for the purposes of the BOCW Act. What is more important is Section 7 of  

the BOCW Act, which requires the registration of establishments. The  

necessity of such registration is that it facilitates the implementation of other  

laws that could be beneficial to construction workers, such as the provisions  

of the Maternity Benefits Act, 1961 and the provisions of the Minimum  

Wages Act, 1948. In the absence of the registration of establishments  

involved in construction activities, it would be extremely difficult for the  

authorities under the BOCW Act to implement the provisions of labour laws.   

29. What is equally important is the registration of building workers who  

are the real beneficiaries of the provisions of the BOCW Act. This is  

provided for in Section 11 and Section 12 of the BOCW Act. It does not  

require much imagination to appreciate that unless a construction worker is  

registered under the provisions of the BOCW Act and is employed by a  

registered establishment, that construction worker will not be entitled to any  

benefits that may accrue under the provisions of the BOCW Act or any other  

law that can benefit a construction worker. This is really the crux of the  

implementation issue arising in the present case and unfortunately, little

19

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attention was paid to it by any State Government or any UTA.   All that we  

have been told is that there are more than 4.5 crore building and construction  

workers in the country and earlier about 2.15 crore had been registered and  

as of now about 2.8 crore have been registered.  How these figures have  

been arrived at is anybody‘s guess.  In any event, the registration of building  

and construction workers is well below the required number and is also a  

guesstimate.   

30. Yet another significant aspect of the implementation of the BOCW  

Act that was neglected and brought to the notice of this Court related to the  

constitution of the State Building and Other Construction Workers‘ Welfare  

Board under the provisions of Section 18 of the BOCW Act. The Welfare  

Board is not an administrative body, but is a body corporate, having  

perpetual succession and a common seal and which may sue and be sued.  

The Welfare Board has a range of functions to perform and these are  

detailed in Section 22 of the BOCW Act. These functions include providing  

assistance to a beneficiary in case of an accident, providing pension to  

beneficiaries, sanctioning loans, providing financial assistance for the  

education of children of beneficiaries and so on. In other words, a large  

amount of benefits that a construction worker is entitled to come within the   

purview of the functions of the Welfare Board. Section 22 of the BOCW Act

20

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 20 of 57  

 

reads as follows:  

―22. Functions of the Boards.—(1) The Board may—   

 

(a) provide immediate assistance to a beneficiary in case of  

accident;   

 

(b) make payment of pension to the beneficiaries who have  

completed the age of sixty years;   

 

(c) sanction loans and advances to a beneficiary for  

construction of a house not exceeding such amount and on such  

terms and conditions as may be prescribed;   

 

(d) pay such amount in connection with premia for Group  

Insurance Scheme of the beneficiaries as it may deem fit;   

 

(e) give such financial assistance for the education of children  

of the beneficiaries as may be prescribed;   

 

(f) meet such medical expenses for treatment of major  

ailments of a beneficiary or, such dependant, as may be prescribed;   

 

(g) make payment of maternity benefit to the female  

beneficiaries; and   

 

(h) make provision and improvement of such other welfare  

measures and facilities as may be prescribed.   

 

(2) The Board may grant loan or subsidy to a local authority or an  

employer in aid of any scheme approved by the State Government  

for the purpose connected with the welfare of building workers in  

any establishment.   

  

(3) The Board may pay annually grants-in-aid to a local authority or  

to an employer who provides to the satisfaction of the Board welfare  

measures and facilities of the standard specified by the Board for the  

benefit of the building workers and the members of' their family, so,  

however, that the amount payable as grants-in-aid to any local  

authority or employer shall not exceed—   

21

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 21 of 57  

 

(a) the amount spent in providing welfare measures and  

facilities as determined by the State Government or any person  

specified by it in this behalf, or   

  

(b) such amount as may be prescribed,   

 

whichever is less:   

  

Provided that no grants-in-aid shall be payable in respect of any such  

welfare measures and facilities where the amount spent thereon  

determined as aforesaid is less than the amount prescribed in this  

behalf.‖    

31. One of the more important functions of the Welfare Board is to  

constitute a fund called the Building and Other Construction Workers‘  

Welfare Fund. This is provided for in Section 24 of the BOCW Act. As the  

name suggests, the Welfare Fund is intended to utilize the funds received by  

it, not for the benefit of the Welfare Board, but for the benefit of the  

construction workers. As far as the expenses of the Welfare Board are  

concerned, Section 24(3) of the BOCW Act provides that it shall not exceed  

5% of its total expenses during a financial year meaning thereby that at least  

95% of the fund is to be utilized for the benefit of construction workers.  

Therefore, there are certain financial limitations placed on the Welfare  

Board with regard to the utilization of the Welfare Fund, which is  

constituted for the benefit of the construction workers. What has been  

brought to our notice is that huge amounts are available with the Welfare  

Boards, but have not been utilized for the benefit of the building and

22

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 22 of 57  

 

construction workers. This is not only a tragedy, but a travesty of justice, but  

we will advert to this a little later.   

32. Realizing the significance and the importance of the provisions  

regarding the appointment of registering officers, registration of  

establishments and construction workers and setting up of the Welfare  

Boards (none of which had apparently been complied with) the Court gave  

the following direction on 13 th  January, 2009:  

―We direct the Chief Secretary of the respective States and Secretary  (Labour) of each States and the Union Territories to take timely  

steps as per the provisions of the [BOCW] Act, if not already done.  

We would like to have the appraisal report in the first week of May  

as to what steps have been taken in this regard. If any of the State  

Government has not done anything pursuant to the Act, urgent steps  

are to be taken so that the benefits of this legislation shall not go  

waste. Otherwise the unorganized workers of the construction sector  

will be denied the benefit of the Act.‖  

   

33. Thereafter, on 18 th  January, 2010 the Court passed a set of directions  

so that the provisions of the BOCW Act could be effectively implemented. 8   

The directions passed by this Court are as follows:  

"1. Welfare Boards have to be constituted by each State with  

adequate full time staff within three months.   

 

2. Welfare Boards will have to meet at least once in two months or  

as specified in the rules, to discharge their statutory functions.   

 

3. Awareness should be built up, about the registration of building  

workers and about the benefits available under the Act. There should  

be effective use of media, AIR and Doordarshan, for awareness  

                                                           8 National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2011) 4 SCC 653  

23

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 23 of 57  

 

programmes regarding the Act, the benefits available there under  

and procedures for availing the benefits.   

 

4. Each State Government shall appoint Registering Officers and set  

up centres in each district to receive and register the applications and  

issue receipts for the applications.   

 

5. Registered trade unions, Legal Service Authorities and NGOs are  

to be encouraged to assist the workers to submit applications for  

registration and for seeking benefits.   

 

6. All contracts with Governments shall require registration of  

workers under the Act and extension of benefits to such workers  

under the Act.   

 

7. Steps to be taken to collect the cess under the Cess Act  

continuously.   

 

8. The benefits under the Act have to be extended to the registered  

workers within a stipulated time frame, preferably within six  

months.   

 

9. The Member Secretary of the Welfare Boards and the Labour  

Secretary shall be responsible for due implementation of the  

provisions of the Act. The Labour Ministry of each State shall carry  

out special drives to implement the provisions of the Act.   

 

10. The CAG should audit the entire implementation of the Act and  

use of the funds.   

 

11. All Boards shall submit a comprehensive reports as required  

under the Act and Rules to the respective Government."  

   

34. Notwithstanding these specific and some general directions, the State  

Governments and UTAs apparently failed to take adequate steps to push  

ahead the implementation of the BOCW Act. What is equally tragic is that  

on 25 th  April, 2011 when the case was taken up for consideration, the

24

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 24 of 57  

 

learned Additional Solicitor General appearing on behalf of the Union of  

India stated before this Court that though directions had been issued by the  

Central Government from time to time under the provisions of the BOCW  

Act, implementation of the directions had not taken place at the ground level  

for the reason that such directions were not enforceable with penal  

consequences! Therefore, the Central Government had decided to take steps  

to amend the BOCW Act and if necessary to enact statutory Rules in that  

regard. For this purpose, the learned Additional Solicitor General sought  

three months time for the Union of India to take necessary steps.  

35. Not only did the Union of India not take any effective steps to amend  

the BOCW Act but even the State Governments and UTAs continued the  

unashamed and unabashed flouting of the directions issued by this Court as  

well as by the Central Government. In a sense, it seems to have been decided  

by the powers that be that the BOCW Act ought not to be implemented  

faithfully. Faced with this situation, this Court had no option but to initiate  

proceedings for contempt of Court. An opportunity was given to all  

concerned to file a reply. Some State Governments filed a reply, while  

others did not.  

36. At this stage, it may be mentioned that it was noticed by this Court  

that the amounts collected by the State Governments and the UTAs under

25

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 25 of 57  

 

the provisions of the Cess Act had not been subjected to any audit by the  

Comptroller and Auditor General (CAG). It was also noticed that large funds  

were lying with the Welfare Boards, but had not been disbursed. The  

possibility of these amounts being diverted for other heads of expenditure  

could not be ruled out by this Court.  

37. Therefore, taking all factors into consideration the following general  

directions were issued by the Court on 7 th

February, 2012 9  :  

―(a) All the State Welfare Boards shall be subjected to audit by the  

CAG within two months from today.  All the States, Union  

Territories and the State Boards to initiate the process and ensure its  

completion under the provisions of Section 27 of the Act.    

(b) Every Welfare Board shall, without fail, hold its meetings at least  

once in two months and submit its Minutes, as well as the action  

taken and progress reports in regard to the framing and  

implementation of the schemes and disbursement of funds to the  

eligible applicants, to the Secretary (Labour) of that Government  

quarterly.    

(c) The funds available with the Welfare Boards which have not  

been disbursed or are not likely to be disbursed within a short period  

should be properly invested with the nationalized banks only.  Funds  

available with the Welfare Boards shall not be utilized by the State  

for any other head of expenditure of the State Government, etc.    

(d) Union of India has filed an affidavit.  It is stated in the affidavit  

that they have taken various steps, including steps for amendment of  

the Act and the Rules framed thereunder.  Union of India is directed  

to expedite this process.  We also direct the Union of India to  

discharge its various statutory functions under the Act with  

particular reference to Sections 24 to 27.  It shall also issue  

appropriate directions under Section 60 of the Act to all the State  

Governments to fully implement the provisions of the Act as well as  

the Cess Act.‖   

                                                           9  National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2012) 3 SCC 336  

26

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 26 of 57  

 

 

38. Quite clearly, this Court was more concerned with the implementation  

of the BOCW Act and the Cess Act and not with coercing the governmental  

functionaries to perform their duties and responsibilities. Accordingly, with  

appropriate directions having been issued, this Court did not feel the  

necessity of proceeding further with the contempt proceedings, which were  

then disposed of.  

39. More than a year later, this Court again took up the matter on 12 th   

December, 2014 with the expectation that some positive steps had been  

taken in the meanwhile. However, the hopes were belied and so a direction  

was given to the Secretary in the Ministry of  Labour and Employment of  

the Government of India to convene a meeting of all the Secretaries in the  

corresponding Ministries of the State Governments and UTAs on or before  

16 th  January, 2015 and to discuss with them the modalities for effective  

implementation of the BOCW Act and the Cess Act and arrive at a  

consensus since these statutes involved the living conditions of construction  

workers and collection of huge amounts for their benefit. 10

 

40. Pursuant to the directions given on 12 th  December, 2014 a meeting  

was held as proposed and the Union of India filed an affidavit in this regard.  

                                                           10

National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2015) 17 SCC     166

27

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 27 of 57  

 

In the order dated 13 th  February, 2015 it was noticed that the affidavit  

disclosed certain shocking figures relating to the collection and utilization of  

the cess. By way of illustration, the figures relating to the States of  

Maharashtra and Rajasthan were noted. The tabular statement prepared and  

incorporated in the order dated 13 th

February, 2015 is given below:  

Year Cess collected in crores Expenditure incurred in  

crores for 17 schemes  

2011-12 Rs.425.97 No figure supplied  

2012-13 Rs.777.69 Rs.3.99  

2013-14 Rs.788.60 Rs.53.34  

(State of Maharashtra)  

 

Year Cess collected in crores Expenditure incurred in  

crores for various  

schemes  

2011-12 Rs.154.01 No figure supplied  

2012-13 Rs.173.83 Rs.11.95  

2013-14 Rs.251.95 Rs.25.93  

(State of Rajasthan)  

41. It was noted that the unfortunate situation reflected in the above two  

tabular statements, that is, non-utilization of the large amounts collected,  

was repeated in State after State. It was further noted that: (i) There was no  

clear indication whether the CAG had audited the receipts and expenditure;

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 28 of 57  

 

(ii) There were a multiplicity of schemes in operation, apparently for the  

benefit of construction workers. However, it was not clear whether the  

schemes were being monitored by one authority or by a different authority  

for each scheme. The learned Additional Solicitor General was requested to  

inform the status in this regard; (iii) Given the existing situation, the Union  

of India was expected to take necessary steps and to issue appropriate  

directions under Section 60 of the BOCW Act. 11

  

42. When the matter was next taken up on 31 st  July, 2015 the learned  

Amicus Curiae highlighted the shocking state of affairs that we had noticed  

on 13 th

February, 2015. He pointed out the tragic state of affairs, not only  

with reference to Rajasthan, but also with reference to Haryana, Uttar  

Pradesh and the National Capital Territory of Delhi. It was also brought to  

notice that the total amounts collected under the provisions of the Cess Act  

was between about Rs.25,000 and Rs.30,000 crores. Based on the  

submissions made by the learned Amicus we required Haryana, Rajasthan,  

Uttar Pradesh and Delhi to file affidavits with regard to the collection and  

utilization of the amounts under the Cess Act and proposals for utilization of  

the amounts. 12

 

                                                           11

National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2015) 17 SCC       169  

12 National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2015) 17 SCC  171

29

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43. Unfortunately, the affidavits filed did not take the matter of utilization  

of funds any further, in the sense that the State Governments and UTAs had  

no clue on how to spend the cess that had been collected; on the contrary, it  

appeared that the cess collected was being used for purposes other than for  

the benefit of construction workers, such as for advertisements etc. Faced  

with this situation, we had no option but to request the Secretary in the  

Ministry of Labour and Employment of the Government of India to be  

present in Court along with a possible action plan concerning the utilization  

of the collected cess.  

44. When the Secretary in the Ministry of Labour and Employment  

appeared in Court on 11 th  September, 2015 he informed us of certain  

positive steps contemplated by the Government of India. We noted three  

such steps: (i) Introducing a Universal Access Number to be provided to  

every construction worker so that if he or she migrates from one State to  

another, the benefit of registration does not get lost, nor does that  

construction worker need to get registered in the other State; (ii) Registration  

of construction workers - we were informed that though there were more  

than 4 crores construction workers, only about 1.5 crores had been registered  

with the concerned authorities. It was expected that the remaining  

construction workers would be registered before the end of the financial year

30

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that is by 31 st  March, 2016; (iii) Ensuring that benefits of Government  

schemes are passed on to construction workers, such as scholarships, skill  

development programs etc. 13

 

45. It is worth mentioning that the introduction of a Universal Access  

Number is not something new or novel, inasmuch as Section 13 of the  

BOCW Act requires every beneficiary of the statute to be provided with an  

identity card with a photograph duly affixed thereon. Similarly, Section 15  

of the BOCW Act obliges every employer to maintain a register showing the  

details of employment of beneficiaries in a building or other construction  

work. Obviously, the register would contain the identity of the beneficiary  

based only on the identity card issued under Section 13 of the BOCW Act.  

The provisions of Section 13 and Section 15 of the BOCW Act read as  

follows:  

―13. Identity cards.––(1) The Board shall give to every  

beneficiary an identity card with his photograph duly affixed thereon  

and with enough space for entering the details of the building or  

other construction work done by him.   

 

(2) Every employer shall enter in the identity card the details  

of the building or other construction work done by the beneficiary  

and authenticate the same and return it to the beneficiary.  

 

(3) A beneficiary who has been issued an identity card under  

this Act shall produce the same whenever demanded by any officer  

                                                           13

National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2015) 17 SCC  173

31

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 31 of 57  

 

of Government or the Board, any inspector or any other authority for  

inspection.   

   

15. Register of beneficiaries.––Every employer shall  

maintain a register in such form as may be prescribed showing the  

details of employment of beneficiaries employed in the building or  

other construction work undertaken by him and the same may be  

inspected without any prior notice by the Secretary of the Board or  

any other officer duly authorised by the Board in this behalf.‖  

 

46. The matter was once again taken up for consideration on 16 th  October,  

2015 when learned counsel for the parties were heard and the affidavit filed  

by the Secretary in the Ministry of Labour and Employment was  

considered. 14

During the course of discussions, it came out that there were  

five key areas on which the Central Government needed to concentrate for  

the time being. These five key areas were identified as follows:  

―(i) To ensure maximum coverage of the building and other construction  

workers;  

 

(ii)  To ensure distribution of benefits and implementation of the  

Schemes that are in existence for the benefit of the building and other  

construction workers;  

 

(iii) To lay greater emphasis on education and provide educational  

facilities to the children of the building and other construction  

workers;  

 

(iv)  To provide health benefits and insurance of the building and other  

construction workers and their families;  

 

(v)  To activate the State Advisory Boards which, as per the affidavit,  

have not even met in the last several years.‖  

                                                           14

National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2015) 17 SCC  174

32

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47. Thereafter, it appears that in spite of directions given by this Court  

and the Government of India, hardly any progress was made to benefit the  

construction workers. Consequently, this Court was compelled to take the  

assistance of a senior officer from the office of the CAG to determine the  

amount collected as cess for the benefit of construction workers and  

ascertain where the amount was actually being spent.   

48. The affidavits filed by the office of the CAG indicated that the amount  

collected as cess for the benefit of construction workers was in the region of  

about Rs.27,000 crores and about Rs.29,000 crores. The affidavits also  

indicated that some State Governments had not even bothered to transfer the  

amount to the State Welfare Board. Overall, the affidavits gave a clear  

picture of a shocking state of affairs inasmuch as some Welfare Boards had  

expenditure out of the collected cess for payment of entry tax/value added  

tax, purchase of washing machines for construction workers and purchase of  

laptops for construction workers. This Court found that rather astonishing  

since it appeared that there was no rationale in providing washing machines  

and laptops to construction workers who were by and large poor and  

uneducated as well as migrant labour. Be that as it may, it also came to  

notice that huge amounts were being spent for administrative purposes

33

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 33 of 57  

 

thereby exceeding the 5% limit provided for in Section 24(3) of the BOCW  

Act. As far as the beneficiaries were concerned, hardly 10% of the collected  

amount of cess was utilized for their benefit, even including the expenditure  

on washing machines and laptops.  

49. On 10 th  November, 2017 when the case was again taken up for  

consideration, the Secretary in the Ministry of Labour and Employment  

informed us that there had been an increase in the number of registered  

construction workers in the country from about 2.15 crores to about 2.8  

crores.  We were also informed that the collection of cess in the country had  

increased and had exceeded Rs.37,000 crores as on 30 th  June, 2017. The  

overall expenditure had also increased from about Rs.5371 crores to about  

Rs.9491 crores again as on 30 th  June, 2017. We were also informed that  

schemes had been prepared for the benefit of construction workers and a  

national online portal was under construction which could be used by NGOs,  

perhaps to monitor the implementation of the statutes that we are concerned  

with. In other words, the impression sought to be given to us was that the  

Government of India was now getting its act together, collecting data and  

applying its resources for the benefit of construction workers,  

Affidavits filed by the Union of India  

50. The Union of India through the Ministry of Labour and Employment

34

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 34 of 57  

 

has filed about a dozen affidavits from time to time. It is not necessary to  

detail the contents of each affidavit, except with respect to a few salient  

issues directly concerning the interests of construction workers which are  

mentioned below.  

(a) Directions issued by the Union of India under Section 60 of the BOCW  

Act: The Union of India has issued various directions to the State  

Governments and the UTAs with regard to implementation of the BOCW  

Act and the Cess Act. These directions were issued under Section 60 of the  

BOCW Act on:  

(i) 27th September, 2010   

(ii) 12th July, 2013 (statutory order)  

(iii) 27th February, 2014   

(iv) 4th March, 2014  

(v) 16th October, 2014   

(vi) 9th September, 2015   

(vii) 23rd September, 2015   

(viii) 8th October, 2015 and  

(ix) 7th June, 2016  

51. It is stated by the Union of India in an affidavit of 11 th

September,  

2015 that directions issued in the past have not yielded the desired outcome

35

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 35 of 57  

 

which is reflected in the accumulation of huge amounts of cess with the  

Welfare Boards resulting in inadequate provisions for safety, health and  

other conditions of service of construction workers. This complaint is  

reiterated in a later paragraph of the affidavit. However, we may note that  

subsequently, in an affidavit dated 26 th

February, 2016 the Union of India  

indicated in a tabular form, the status of compliance with some directions  

issued; nevertheless, non-compliance remained the rule while compliance  

the exception. The crux of the matter is to ensure the passing on of the  

benefits to the unorganized sector of construction workers, but this has not  

been achieved by any State Government or UTA.  

(b) Schemes framed by State Governments and UTAs: While full details  

of schemes for the benefit of construction workers are not available on  

record, we are surprised to find from the affidavit filed by the Union of India  

on 13 th  February, 2015 the number of schemes framed by the State  

Governments. For example, it is stated that in Haryana, there are 22  

schemes; in Himachal Pradesh, there are 17 schemes; in Jharkhand, there are  

various schemes; in Maharashtra, there are 17 schemes; in Meghalaya, there  

are 14 schemes; in the NCT of Delhi, there are 18 schemes and in Rajasthan  

and Tamil Nadu, there are various schemes. It is quite clear, therefore, that  

the State Governments and UTAs are only interested in announcing one

36

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 36 of 57  

 

scheme after another without giving any thought to the formulation of these  

schemes, monitoring their efficacy and supervising their implementation.  

The implementation of these schemes appears to be only on paper.  

(c) Other benefits: The affidavits of the Union of India advert to some  

statutory benefits. For example, it is stated that a large number of  

construction workers would be entitled to the benefit of the Mahatma  

Gandhi National Rural Employment Guarantee Scheme, since most of the  

works undertaken through the scheme, barring a few relating to forestry,  

horticulture, etc. fall within the meaning of ‗building or other construction  

work‘ as defined in Section 2(1)(d) of the BOCW Act. Similarly, every  

establishment, falling within the purview of Section 1(4) of the BOCW Act,  

employing more than 20 workers would be covered by the provisions of the  

Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952.  

Finally, any establishment covered by the provisions of Section 1(5) of the  

Employees‘ State Insurance Act, 1948, and employing 10 or more workers is  

obliged to provide health benefits and other benefits under the said Act to  

the workers. It is submitted on affidavit by the Union of India that: if any  

establishment employs 20 or more building construction workers, it not only  

falls within the purview of the BOCW Act, but also falls within the purview  

of the Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952

37

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 37 of 57  

 

(in covered areas); any establishment, employing 10 or more building  

construction workers may fall within the purview of the Employees‘ State  

Insurance Act, 1948 (in covered areas), and within the purview of the  

Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952 and  

also within the purview of  the BOCW Act.   

52. In other words, a large number of benefits are available to building  

and construction workers but an effort is needed to ensure that all the  

concerned authorities sit together for the benefit of these building and  

construction workers, on whose account thousands of crores of rupees are  

being collected under the Cess Act.  

53. It is disclosed by the Union of India in its affidavit dated 9 th  October,  

2015 that not a single State Advisory Committee, anywhere in the country  

held a single meeting during the previous 12 months. This is a clear  

indication that there is a total lack of concern and apathy on the part of the  

powers that be in doing anything substantial for the benefit of construction  

workers. This is indeed an extremely sorry state of affairs that puts a  

Shakespearean tragedy to shame. The members of the State Advisory  

Committee must appreciate that they have a huge responsibility, which they  

must discharge or give up their position, and make way for somebody else to  

take over the responsibility.

38

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 38 of 57  

 

(d)  Sobering features: Two sobering features come out of the affidavits filed  

by the Union of India. They are: (i) There is a move to provide a Universal  

Access Number with portability to construction workers. However, this  

would require some legislative changes and a huge campaign and effort by  

the Union of India, the State Governments and Union Territory  

Administrations. It is not clear whether any one of them has the will or  

desire to ensure that through the provision of a Universal Access Number,  

the construction workers will be given the benefits that they are legitimately  

entitled to; (ii) The second sobering feature is disclosed in the affidavit of  

26 th  February, 2016 where the Union of India has provided a tabular  

statement showing that several States have complied with some directions  

issued by the Union of India under Section 60 of the BOCW Act. Although  

this is heartening, full compliance of the provisions of the various statutes  

enacted for the benefit of construction workers is still far away.  

(e) A positive development that has taken place is the announcement by  

NALSA of the Legal Services to the Workers in the Unorganised Sector  

Scheme, 2015. The efficacy of this Scheme and its implementation has not  

yet been evaluated, but given the track record of NALSA, we are fairly  

confident that it is taking necessary steps in the right direction.  

(f) Monitoring Committee: On 10th November, 2017 it was stated before us by

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 39 of 57  

 

the Secretary in the Ministry of Labour & Employment that a Monitoring  

Committee had been set up sometime in 2015 (actually vide order dated 9 th   

September, 2015) for effective implementation of the BOCW Act.  The  

Monitoring Committee consists of the Labour Secretary of each State/Union  

Territory and the first meeting of the Monitoring Committee was held in  

November 2015.  Thereafter, seven meetings have been held by the  

Monitoring Committee.  

54. Much earlier, through an affidavit dated 15 th  January, 2016 it was  

stated by the Secretary in the Ministry of Labour & Employment that the  

Monitoring Committee was actually set up by an order dated 9 th

September,  

2015 with the Secretary in the Ministry of Labour & Employment, as the  

Chairman, the Additional Secretary as the Vice Chairman and the Joint  

Secretary and Director General (Labour Welfare) as the Member Secretary.   

A representative of the Chief Labour Commissioner (Central) was a Member  

and the Director/DS, DG (LW) was the Member Convenor.   In view of the  

ambiguity, the composition of the Monitoring Committee is not quite clear  

nor is it clear whether the composition of the Monitoring Committee has  

been expanded or reworked.  

55. Be that as it may, the Terms and Reference of the Monitoring  

Committee are as follows:

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 40 of 57  

 

―(a)  The Committee will hold a meeting once in three months  

and interact with the State/UTs governments through  

video conferencing or in person.    

            (b)  The Committee will furnish its Report of every meeting  

to Secretary (L & E) for information and suggesting  

further measures to be taken to improve utilization of  

Cess funds.    

   (c) Suggest issue of directions from time to time under  

Section 60 of BOCW Act, 1996, if felt necessary.‖       

56. The last meeting of the Monitoring Committee (8 th

meeting) was held  

on 12 th  December, 2017.  This meeting was held subsequent to the order  

dated 10 th  November, 2017 passed by this Court and on the basis of the  

statement made by the Secretary in the Ministry of Labour & Employment  

that she would call a meeting of the Monitoring Committee consisting of the  

Labour Secretaries of all the States and Union Territories within one month.  

57. It is important to note that the Monitoring Committee is ordered to  

meet once in every three months and we hope that this order issued by the  

Government of India would be honoured and respected. In any event it is  

significant that at least now the Union of India has woken up to its statutory  

responsibilities and duties.  

Collection and utilization of the cess  

58. Statistical information regarding the collection and utilization of cess  

suggests nothing but a complete mess. The figures on our record are

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available from three sources:  

1. The 28 th  Report of the Standing Committee on Labour (2016-17) of  

the 16 th

Lok Sabha prepared in August 2017.  

2. Affidavit of the CAG dated 6 th  October, 2017. However, this  

information is incomplete and the actual figures would be higher than  

reflected in the affidavit. It must be stated here that it is surprising that even  

the CAG does not have accurate figures from the State Governments and the  

UTAs.  

3. Information provided in Court by the Secretary, Ministry of Labour  

and Employment on 10 th  November, 2017.  

59. The collection and utilization mess can be appreciated from the  

tabular statement below:  

Cess collected  

as per the  

report of the  

Standing  

Committee as  

on 31.03.2017  

(Provisional)  

(in crores of  

rupees)  

Amount spent  

as per the  

report of the  

Standing  

Committee as  

on 31.03.2017  

(Provisional)  

(in crores of  

rupees  

Cess  

collected as  

per the  

affidavit of  

the CAG  

dated  

06.10.2017  

(in crores of  

rupees  

Amount  

transferred  

to the  

Welfare  

Board as per  

the affidavit  

of the CAG  

dated  

6.10.2017  

(in crores of  

rupees  

Cess collected  

as per the  

statement of  

the Secretary,  

Ministry of  

Labour and  

Employment  

as on  

30.6.2017  

(in crores of  

rupees  

Amount spent  

as per the  

statement of  

the Secretary,  

Ministry of  

Labour and  

Employment  

as on  

30.6.2017  

(in crores of  

rupees  

32632.96 7516.52 37060.90 37255.45  

(not  

necessarily  

utilized) 15

 

37482 9491  

                                                           15

There is an obvious discrepancy

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60. The detailed figures as on 31 st  March, 2017 relating to each State and  

UTA are given in Annexure I to this judgment. It may be mentioned here  

that the National Legal Services Authority (NALSA) has stated in an  

affidavit filed on 14 th  

December, 2016 that its estimate is that the amount of  

cess that ought to have been collected is in the region of about Rs. 70,000  

crores!  

61. Perhaps only the Standing Committee has the accurate figures but, as  

mentioned above, it is quite shocking that even the CAG does not have all  

the figures and whatever figures are available, may not be reliable. It must  

be appreciated that the CAG is a constitutional authority under Article 148  

of the Constitution charged with the duty and adequately empowered by  

Article 149 of the Constitution in relation to the accounts of the Union and  

the States.  If this constitutional body does not have the required and  

accurate information, there is undoubtedly a financial mess in this area and  

this chaos has been existing since 1996. The only victims of this extremely  

unfortunate state of affairs and official apathy are construction workers who  

suffer from multiple vulnerabilities.   

62. What makes the situation even worse is that many of the construction  

workers are believed to be women and at least some of them have small  

children to look after. That even they are victims of official apathy truly

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 43 of 57  

 

reflects a very sad state of affairs, and the loss already caused to them and  

other construction workers cannot be remedied. The reason for this is that it  

is not known which construction worker is entitled to get how much in terms  

of money or what benefit and under which scheme. Some of these  

construction workers from the 1990s and even later, may perhaps have  

unfortunately passed away or might be untraceable or old enough to deserve  

a pension. The question therefore is: What should be done with the  

thousands of crores that have been collected for the benefit of construction  

workers but cannot be utilized for their benefit? Can the State Governments  

and the UTAs or the Welfare Boards unjustly benefit and fill their coffers at  

the expense of unknown and helpless construction workers, some of whom  

are women and some having small children? These are questions for which  

we have not been provided any answers at all - it is entirely for the  

Government of India and Parliament to decide how to legally appropriate  

these thousands of crores of rupees and then utilize the amounts for the  

benefit of construction workers, at least for the future, assuming nothing can  

be done for the past.  It is a mammoth task for which the powers that be  

must brace themselves, if they are serious in assisting people with multiple  

vulnerabilities.  

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Discussion and directions  

63. 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.  

64. 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 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

45

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 45 of 57  

 

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.     

65. In this background and on the available facts and figures, submissions  

were made by learned counsel for the parties.   

66. 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 utilized 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

46

             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 46 of 57  

 

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.  

67. It will be seen from the figures on record that the quantum of cess  

collected in one quarter from 31 st  March, 2017 till 30

th  June, 2017 is in the  

region of about Rs. 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 of 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.  

68. Our first direction, therefore, is to the Ministry of Labour and

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 47 of 57  

 

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.  

69. 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 utilizing 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, much more, if the  

registration machinery and the collection machinery are strengthened and  

work to their potential.  

70. As we have seen above, State Governments and UTAs have framed a

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 48 of 57  

 

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.  

71. 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.  

72. In preparing the Model Scheme, we expect the Ministry of Labour and  

Employment to include within it, inter alia, issues and concerns of

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 49 of 57  

 

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  

publicized 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 th

September, 2018.  

73. The CAG in its affidavit of 2 nd

May, 2017 has stated that it carries out  

three kinds of audits: Financial Audit, 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 organization operates  

economically, efficiently and effectively.‖    

74. 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 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

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amounts involved.  

75. 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.  

76.  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 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

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 51 of 57  

 

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.  

77. 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  

78. 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

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             W.P. (C) No.318 of 2006 etc.                                                                                                     Page 52 of 57  

 

is fully implemented with responsibility.  

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  

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.  

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 th

September,  

2018.  

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

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BOCW Act as well as the Cess Act.  

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.  

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.  

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 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

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decide on an appropriate system of identification and registration,  

provided it is effective and meaningful.  

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.  

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.  

9. The Monitoring Committee which has had quite a few meetings so  

far should pro-actively ensure full compliance of 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 utilized, and in some instances, misutilized.  

79. The Union of India must take a decision on the management of the

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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 utilization of the cess  

already collected so that the Welfare Boards are not unjustly enriched – the  

beneficiaries having unfortunately lost out.  

80. 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 realization 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.  

81. List the Writ Petition for directions on 1 st  May, 2018 only to ascertain  

whether timelines have been fixed by the concerned authorities for  

compliance of the directions.  

82. The Contempt Petition stands disposed of.  

 

………………………J  

         (Madan B. Lokur)   

   

New Delhi;                                                       ...……………………..J                

March 19, 2018                                                          (Deepak Gupta)

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ANNEXURE I  

Sr.  

No.  

Name of the  

States/UTs  

Standing Committee Report CAG Report  

Amount of  

Cess  

collected  

(Rs. in  

Crore) as on  

31.03.2017  

[Provisional]  

Amount  

spent (Rs. in  

Crore) as on  

31.03.2017   

 

 

[Provisional]  

Amount of  

Cess  

collected (Rs.  

In Crore)  

from 1996 till  

31.03.2017  

Amount of Cess     

transferred (Rs. In  

Crore) to the  

Building and Other  

Construction  

Workers Welfare  

Board  

1 Andhra Pradesh 1153.61 205.46 667.50 667.53  

2 Arunachal Pradesh 65.36 51.60 98.31 20.00  

3 Assam 512.24 12.57 530.46 611.82  

4 Bihar 921.92 75.23 NA 972.93  

5 Chhattisgarh 699.61 514.14 755.80 NA  

6 Goa 85.68 0.83 94.78 95.78  

7 Gujarat 1564.64 35.00 1524.36 863.04  

8 Haryana 1847.05 172.07 1847.05 1847.05  

9 Himachal Pradesh 335.39 44.49 353.25 360.62  

10 Jammu & Kashmir 566.00 221.00 625.99 653.03  

11 Jharkhand 291.28 143.46 330.95 NA  

12 Karnataka 3861.00 240.00 4106.43 4106.03  

13 Kerala 1474.73 1455.88 1483.81 439.47  

14 Madhya Pradesh 1575.62 552.04 207.10 NA  

15 Maharashtra 5074.16 255.50 5074.16 5074.16  

16 Manipur 21.00 10.99 63.61 NA  

17 Meghalaya 94.83 1.09 99.84 99.84  

18 Mizoram 40.37 21.95 49.64 49.64  

19 Nagaland 20.06 3.34 1.65 1.65  

20 Odisha 1100.00 361.00 1118.35 1118.35  

21 Punjab 921.55 391.61 973.78 973.78  

22 Rajasthan 1600.00 620.00 1069.19 1266.52

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23 Sikkim 64.67 20.68 76.00 76.00  

24 Tamil Nadu 1706.00 600.00 1870.60 1870.60  

25 Telangana 443.12 98.69 667.53 667.53  

26 Tripura 129.28 12.36 140.18 140.18  

27 Uttar Pradesh 2943.80 598.90 220.78 184.25  

28 Uttarakhand 170.41 31.21 189.39 186.58  

29 West Bengal 1149.12 531.42 NA 1713.18  

30 Delhi 1930.00 174.71 1793.67 1846.68  

31 A & N Islands 46.42 3.91 NA NA  

32 Chandigarh 96.09 3.72 NA NA  

33  Dadra & Nagar  

Haveli 3.08 0.00 NA NA  

34 Daman & Diu 37.17 0.54 NA NA  

35 Lakshwadeep 5.66 0.00 6.15 6.15  

36 Punducherry 82.04 51.13 96.44 96.44  

Total 32632.96 7516.52 26136.75 26008.83