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
W.P. (C) No.318 of 2006 etc. Page 2 of 57
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?
W.P. (C) No.318 of 2006 etc. Page 3 of 57
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
W.P. (C) No.318 of 2006 etc. Page 4 of 57
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
W.P. (C) No.318 of 2006 etc. Page 5 of 57
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);
W.P. (C) No.318 of 2006 etc. Page 6 of 57
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
W.P. (C) No.318 of 2006 etc. Page 7 of 57
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
W.P. (C) No.318 of 2006 etc. Page 8 of 57
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
W.P. (C) No.318 of 2006 etc. Page 9 of 57
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
W.P. (C) No.318 of 2006 etc. Page 10 of 57
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
W.P. (C) No.318 of 2006 etc. Page 11 of 57
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
W.P. (C) No.318 of 2006 etc. Page 12 of 57
―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
W.P. (C) No.318 of 2006 etc. Page 13 of 57
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
W.P. (C) No.318 of 2006 etc. Page 14 of 57
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
W.P. (C) No.318 of 2006 etc. Page 15 of 57
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:
W.P. (C) No.318 of 2006 etc. Page 16 of 57
“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
W.P. (C) No.318 of 2006 etc. Page 17 of 57
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
W.P. (C) No.318 of 2006 etc. Page 18 of 57
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
W.P. (C) No.318 of 2006 etc. Page 19 of 57
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
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—
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
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
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
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
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
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
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;
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
W.P. (C) No.318 of 2006 etc. Page 29 of 57
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
W.P. (C) No.318 of 2006 etc. Page 30 of 57
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
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
W.P. (C) No.318 of 2006 etc. Page 32 of 57
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
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
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
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
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
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.
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
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:
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
W.P. (C) No.318 of 2006 etc. Page 41 of 57
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
W.P. (C) No.318 of 2006 etc. Page 42 of 57
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
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.
W.P. (C) No.318 of 2006 etc. Page 44 of 57
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
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
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
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
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
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
W.P. (C) No.318 of 2006 etc. Page 50 of 57
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
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
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
W.P. (C) No.318 of 2006 etc. Page 53 of 57
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
W.P. (C) No.318 of 2006 etc. Page 54 of 57
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
W.P. (C) No.318 of 2006 etc. Page 55 of 57
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)
W.P. (C) No.318 of 2006 etc. Page 56 of 57
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
W.P. (C) No.318 of 2006 etc. Page 57 of 57
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