Holding

The Court held that the BOCW Act and the Cess Act are constitutionally valid social‑justice statutes and, due to persistent non‑implementation by the States and UTs, issued comprehensive directions to the Centre, States and UTs to enforce registration, cess collection, welfare board constitution, social audit and a model scheme for construction workers.

Summary

The Supreme Court heard a writ petition filed by the National Campaign Committee for Central Legislation on Construction Labour (NCC‑CL) seeking effective implementation of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) and the Building and Other Construction Workers’ Welfare Cess Act, 1996 (Cess Act). The Court found that both statutes are social‑justice legislation rooted in Articles 21, 39 and 42 of the Constitution, but State Governments and Union Territory Administrations had repeatedly ignored the Acts and the Court’s earlier directions, resulting in massive unutilised cess collections and inadequate registration of workers and establishments. The Court therefore issued specific directions to the Ministry of Labour and Employment, the States and UTs to strengthen registration machinery, improve cess collection, frame a composite model scheme, conduct social audits, constitute advisory and expert committees, appoint registering officers, establish welfare boards and funds, and ensure that construction workers receive identity cards and benefits under other labour statutes. The petition was disposed with these directions, and the contempt proceedings were dismissed.

Issues considered

The constitutional validity and social‑justice character of the BOCW Act and the Cess Act.
Whether the State Governments and Union Territory Administrations have complied with the statutory obligations under the BOCW Act and the Cess Act.
The failure to collect, audit and utilize the cess levied under the Cess Act for the benefit of construction workers.
The lack of registration of establishments and construction workers as mandated by the Acts.
The need for welfare boards, welfare funds, and the provision of benefits under other labour statutes to construction workers.
The appropriate remedial directions to ensure effective implementation of the Acts.

Legislation cited

Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996s. 12, s. 13, s. 15, s. 18, s. 22, s. 24, s. 3, s. 4, s. 5, s. 6, s. 60, s. 62, s. 7
Building and Other Construction Workers Welfare Cess Act, 1996s. 3, s. 8
Constitution of Indias. Article 21, s. Article 39, s. Article 42
Employees' Provident Funds and Miscellaneous Provisions Act, 1952
Employees' State Insurance Act, 1948
Mahatma Gandhi National Rural Employment Guarantee Act, 2005
Maternity Benefit Act, 1961
Minimum Wages Act, 1948

Subjects

Construction workersBOCW ActCess ActSocial justiceDirective PrinciplesArticle 21RegistrationWelfare BoardCess collectionAuditModel schemeImplementation

Judgment

204 [2018]REPORTS
SUPREME COURT 9 S.C.R. 204 [2018] 9 S.C.R.

A NATIONAL CAMPAIGN COMMITTEE FOR CENTRAL
LEGISLATION ON CONSTRUCTION LABOUR (NCC-CL)
v.
UNION OF INDIA AND ORS.
B (Writ Petition (Civil) No. 318 of 2006)
MARCH 19, 2018
[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Building and Other Construction Workers (Regulation of
Employment and Conditions of Service) Act, 1996 – Building and
C
Other Construction Workers’ Welfare Cess Act, 1996 –
Implementation of the Acts – BOCW Act and Cess Act are social
legislations – They were enacted keeping in mind the Directive
Principles of State Policy, particularly Art.39 which requires the
State to direct its policy to secure the health and strength of workers,
D and Art.42 which concerns just and humane conditions of work –
However, neither State Government nor Union Territory
Administration (UTA) were willing to fully adhere to abide by two
above mentioned laws enacted by Parliament and even the directions
issued by the Government of India had been disregarded by the
State Governments and UTAs – Specific directions issued: (i) Ministry
E
of Labour and Employment, the State Governments and UTAs to put
in place and strengthen the registration machinery, both for
registration of establishments as well as registration of construction
workers – (ii) Ministry, the State Governments and UTAs to establish
and strengthen the machinery for collection of cess – (iii) Ministry
F of Labour and Employment to frame a composite Model Scheme for
benefit of construction workers in consultation with all stakeholders
including NGOs actually working at the grassroots level with
construction workers – (iv) State Governments and the Welfare
Boards in every State and UTA to conduct a social audit on
implementation of the BOCW Act so that in future there is better and
G
more effective and meaningful implementation of the BOCW Act –
Apart from the said specific directions some general directions also
passed so that the BOCW Act is fully implemented with responsibility
– Constitution of India – Arts. 21,39 and 42.

H
204
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 205
UNION OF INDIA

Issuing the directions, the Court A
HELD: 1. There can be no doubt that the Building and other
Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996 (BOCW) and its sister
legislation, the Building and Other Construction Workers’
Welfare Cess Act, 1996 (Cess) are social justice legislations. B
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 C
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.
[Para 63] [239-F-H]
2. The Statement of Objects and Reasons for the BOCW D
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 E
has not brought about any substantive change. 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. F
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.
[Para 64] [240-A-B; C-D]
Specific Directions G
3. First direction, therefore, is to the Ministry of Labour
and Employment, the State Governments and the UTAs to put in
place and strengthen the registration machinery, both for the
registration of establishments as well as registration of
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206 SUPREME COURT REPORTS [2018] 9 S.C.R.

A construction workers. This should be done within a specified time-
frame to be decided by them, but at the earliest. [Para 68]
[241-C-D]
4. Second direction to the Ministry, the State Governments
and UTAs in this regard is to establish and strengthen the
B 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.
C 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. [Para 69] [241-D-F]
5. Third direction, therefore, is to the Ministry of Labour
and Employment to frame one composite Model Scheme for the
D 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, the Ministry of Labour
and Employment is cautioned to make haste slowly and to prepare
E a Model Scheme that is comprehensive and can easily be
implemented, is pragmatic and does not involve too much
paperwork. [Para 71] [242-B-C]
6. Fourth direction is to the Ministry of Labour and
Employment, the State Governments and the UTAs to conduct a
F 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. [Para 76] [243-C-D]
General Directions
7. Every State Government and UTA shall constitute a State
G Advisory Committee, if not already constituted, and that State
Advisory Committee shall meet regularly for conducting its
business. 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
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NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 207
UNION OF INDIA

used as a good guideline for meetings of the State Advisory A
Committee. [Para 78] [244-B-D]
8. 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 B
rules should be in a time bound manner. [Para 78] [244-D-E]
9. The State Governments and UTAs must appoint
Registering Officers for registration of establishments and
construction workers. This is a critical aspect of the
implementation of the BOCW Act as well as the Cess Act. [Para C
78] [244-E-F]
10. 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 D
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. [Para 78] [244-F-G]
11. Every State Government and UTA should establish a
Welfare Fund for the benefit of the construction workers, with E
appropriate rules for utilisation of the funds. [Para 78] [244-G-H]
12. 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 F
each construction worker. This issue is left open to the Ministry
of Labour and Employment to decide on an appropriate system
of identification and registration, provided it is effective and
meaningful. [Para 78] [245-A-C]
13. The Ministry of Labour and Employment shall actively
G
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

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208 SUPREME COURT REPORTS [2018] 9 S.C.R.

A Act, 1952, as well as (to the extent possible) the Mahatma Gandhi
National Rural Employment Guarantee Act, 2005. [Para 78]
[245-C-D]
14. The Ministry of Labour and Employment should also
consider whether projects of the Government of India in the
B railways, defence and other establishments are brought within
the purview of the BOCW Act. [Para 78] [245-D-E]
15. 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
C 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. [Para 78] [245-E-F]
16. The Union of India must take a decision on the
D management of the cess already collected. 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. [Para79]
[245-G-H]

E Builders Association of India v. Union of India ILR
(2007) 1 Del 1143; Hingir-Rampur Coal Co. Ltd. v. State
of Orissa (1961) 2 SCR 537; Bandhua Mukti Morcha
v. Union of India (1984) 3 SCC 161 : [1984] 2 SCR
67; Dewan Chand Builders & Contractors v. Union of
India (2012) 1 SCC 101 : [2011] 13 SCR 214; State of
F W.B. v. Kesoram Industries Ltd. (2004) 10 SCC 201 :
[2004] 1 SCR 564; A. Prabhakara Reddy and Company
v. State of Madhya Pradesh (2016) 1 SCC 600 : [2015]
9 SCR 675; National Campaign Committee for Central
Legislation on Construction Labour v. Union of India
G (2011) 4 SCC 653; National Campaign Committee for
Central Legislation on Construction Labour v. Union
of India (2012) 3 SCC 336; National Campaign
Committee for Central Legislation on Construction
Labour v. Union of India, (2015) 17 SCC 166; National
Campaign Committee for Central Legislation on
H Construction Labour v. Union of India, (2015) 17 SCC
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 209
UNION OF INDIA

169; National Campaign Committee for Central A
Legislation on Construction Labour v. Union of India
(2015) 17 SCC 171; National Campaign Committee for
Central Legislation on Construction Labour v. Union
of India, (2015) 17 SCC 173; National Campaign
Committee for Central Legislation on Construction
B
Labour v. Union of India, (2015) 17 SCC 174 – referred
to.
Case Law Reference
ILR (2007) 1 Del 1143 referred to Para 13
(1961) 2 SCR 537 referred to Para 13 C

[1984] 2 SCR 67 referred to Para 15
[2011] 13 SCR 214 referred to Para 17
[2004] 1 SCR 564 referred to Para 18
D
[2015] 9 SCR 675 referred to Para 20
(2011) 4 SCC 653 referred to Para 33
(2012) 3 SCC 336 referred to Para 37
(2015) 17 SCC 166 referred to Para 39
E
(2015) 17 SCC 169 referred to Para 42
(2015) 17 SCC 171 referred to Para 42
(2015) 17 SCC 173 referred to Para 44
(2015) 17 SCC 174 referred to Para 46
F
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil)
No. 318 of 2006
Under Article 32 of the Constitution of India
WITH
G
Contempt Petition (C) No. 52/2013 in W. P. (C) No. 318/2006.
Maninder Singh, ASG, D. K. Thakur, S.S. Shamshery, AAGs,
Vivek K. Tankha, Sr. Adv. (A.C.), Colin Gonsalves, Rana Mukherjee,
R. Venkataramani, Sr. Advs., Choudhary Ali Zia Kabir, Ms. Jyoti
Mendiratta, S. Wasim A. Qadri, R. Balasubramanian, Prabhas Bajaj,
H
210 SUPREME COURT REPORTS [2018] 9 S.C.R.

A Akhay Amritanshu, Pranay Rajan, Ms. Kasturika Kaumudi, Ms. Ekta
Pradhan, B.V. Balram Das, Bharat Singh, Ms. Sunita Sharma, Ms.
Gunwant Dara, Zaid Ali, Raj Bahadur Yadav, Mrs. G. Dara, Ms. Sreoshi
Chatterjee, Ms. Aarti Sharma, Ms. Anil Katiyar, Gurmeet Singh Makker,
B. Krishna Prasad, Ms. Anitha Shenoy, Ms. Srishti Agnihotri, Guntur
Prabhakar, Ms. Prerna Singh, Debojit Borkakati, Shuvodeep Roy, M/
B
s.Corporate Law Group, Anil Shrivastav, Gopal Singh, Manish Kumar,
A. P. Mayee, Avnish M. Oza, Chirag Jain, Ms. Hemantika Wahi, Ms.
Jesal Wahi, Ms. Puja Singh, Ms. Mamta Singh, Ms. Shodhika Sharma,
Dr. Monika Gusain, Piyush Hans, Ms. Parul Sharma, Varinder Kumar
Sharma, M. Shoeb Alam, Ms. Fauzia Shakil, Ujjwal Singh, Mojahid Karim
C Khan, Anil Kumar Jha, Ms. Priyanka Tiyage, V.N. Raghupathy, Parikshit
P. Angadi, G. Prakash, Jishnu M.L., Mrs. Priyanka Prakash, Mrs. Beena
Prakash, Vijay Shankar V. L., Mishra Saurabh, Mahaling Pandarge,
Nishant R. Katneshwarkar, Leishangthem Roshmani Kh, Ms. Maibam
Babina, Amit Kumar, Ranjan Mukherjee, Daniel Stone Lyngdoh, Ganesh
Bapu, Shikhar Garg, P.V. Yogeswaran, Mrs. K. Enatoli Sema, Edward
D
Belho, Amit Kumar Singh, K. Luikang Michael, Sibo Sankar Mishra,
Karan Bharihoke, S. S. Ray, Amit Sharma, Sandeep Singh, Ankit Raj,
Ms. Indira Bhakar, Ms. Ruchi Kohli, Ms. Aruna Mathur, Avneesh
Arputham, Ms. Anuradha Arputham, Ms. Simran Jeet (for M/s Arputham
Aruna & Co.), T.R.B. Sivakumar, S. Udaya Kumar Sagar, Mrityunjai
E Singh, Gopal Singh, Rituraj Biswas, Abhishek, Ramjee Pandey, Rajendran
Balan, Jatinder Kumar Bhatia, Ashutosh Kumar Sharma, Soumitra G.
Chaudhuri, Chanchal K. Ganguli, Bhupesh Narula, K.V. Jagdishvaran,
Mrs. G. Indira, V.G. Pragasam, S. Prabu Ramasubramanian, S. Manuraj,
Yashraj Singh Bundela, Praveen Vignesh, Rajvinder Singh, Hitesh Kumar
Sharma, T.V. Talwar (for Kuldip Singh), Ravi Prakash Mehrotra, Ashok
F
Kumar Singh, Parijat Sinha, Anil K. Chopra, Ms. Asha Gopalan Nair,
Vinay Garg, Advs. for the appearing parties.
The Judgment of the Court was delivered by
MADAN B. LOKUR, J.
G 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
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NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 211
UNION OF INDIA [MADAN B. LOKUR, J.]

adhering to and abiding by) two laws solemnly enacted by Parliament, A
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
B
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 C
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 D
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?
E
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 F
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 G
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
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212 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B the 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.
C 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
D 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.”
E
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
F other construction workers are one of the most numerous
and vulnerable segments of the unorganised labour in India.
The building and other construction works are characterised by
their inherent risk to the life and limb of the workers. The work is
also characterised by its casual nature, temporary relationship
between employer and employee, uncertain working hours, lack
G 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.
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NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 213
UNION OF INDIA [MADAN B. LOKUR, J.]

2. Although the provisions of certain Central Acts are applicable A
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
B
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 18th May, 1995, a general
consensus had emerged on the need for the proposed Central
Legislation. C
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 D
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 5th 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 E
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 F
Government on matters concerning the administration of the BOCW
Act (Sections 3 and 4); 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 G
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
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214 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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).
B 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
C takes to live a life of dignity. It is in this background and context that the
BOCW Act was 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
D 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
E 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
F 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
G 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
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NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 215
UNION OF INDIA [MADAN B. LOKUR, J.]

collection through a local authority where an approval of such A
building or other construction work by such local authority is
required, as may be prescribed.
(3) The proceeds of the cess collected under sub-section (2) shall
be paid by the local authority or the State Government collecting
the cess to the Board after deducting the cost of collection of B
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 C
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 D
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 E
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 F
that the cess is a compulsory and involuntary exaction without reference
to any special 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. G
13. In Builders Association of India v. Union of India1 the
contentions urged were repelled by the Delhi High Court and the
constitutional validity of the BOCW Act and the Cess Act was upheld.

1
ILR (2007) 1 Del 1143
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216 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 14. The Delhi High Court relied upon Hingir-Rampur Coal Co.
Ltd. v. State of Orissa2 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
B 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
C 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
D 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
E 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 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
F 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
G 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
2
(1961) 2 SCR 537
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 217
UNION OF INDIA [MADAN B. LOKUR, J.]

excessive extent as to be a pretence of a fee and not a fee in A
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 B
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 C
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 D
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
conditions of freedom and dignity, educational facilities, just and E
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 F
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 G
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
3
(1984) 3 SCC 161
4
(1981) 1 SCC 608 H
218 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B
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.
C
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 India5. This Court noted the scheme of the
BOCW Act in the context of Article 21 of the Constitution and observed
as follows:
D
“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
E 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
F 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
G 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
5
(2012) 1 SCC 101
6
H (2004) 10 SCC 201
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 219
UNION OF INDIA [MADAN B. LOKUR, J.]

also means an assessment or levy. Depending on the context and A
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
B
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…..”
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 C
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 D
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 E
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 F
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 G
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
7
(2016) 1 SCC 600 H
220 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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 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
B
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
C 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.
D 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
E 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
F 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
G 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 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.
H A few of them, referred to infra, are enough to indicate the progression
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 221
UNION OF INDIA [MADAN B. LOKUR, J.]

of the case. Later, we will also refer to various affidavits filed by the A
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 12th May, 2008 it was informed by the petitioner that even after a B
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 C
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:
“4. State Advisory Committee.—(1) The State Government D
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.
E
(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;
F
(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 G
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), H
222 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B 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,
C registration of an 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.
D
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.
E
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 5th December,
F 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 13th January, 2009 the Court turned its attention
to yet another very important and significant aspect of the BOCW Act,
G
that is, the appointment of registering officers, registration of
establishments and the 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
H important is Section 7 of the BOCW Act, which requires the registration
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 223
UNION OF INDIA [MADAN B. LOKUR, J.]

of establishments. The necessity of such registration is that it facilitates A
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
B
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 C
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 attention was paid to it by any State D
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 E
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 F
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 G
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 reads as follows:
H
224 SUPREME COURT REPORTS [2018] 9 S.C.R.

A “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;
B (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;
C (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
D 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
E 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
F 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—
(a) the amount spent in providing welfare measures and
facilities as determined by the State Government or any person
G 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
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 225
UNION OF INDIA [MADAN B. LOKUR, J.]

thereon determined as aforesaid is less than the amount prescribed A
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 B
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 C
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 construction workers. This is not only a tragedy, but a travesty D
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 E
gave the following direction on 13th 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 F
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.”
G
33. Thereafter, on 18th 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:
8
National Campaign Committee for Central Legislation on Construction Labour v.
Union of India, (2011) 4 SCC 653
H
226 SUPREME COURT REPORTS [2018] 9 S.C.R.

A “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
B workers and about the benefits available under the Act. There
should be effective use of media, AIR and Doordarshan, for
awareness programmes regarding the Act, the benefits available
there under and procedures for availing the benefits.
4. Each State Government shall appoint Registering Officers and
C 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.
D
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.
E
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
F 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.
G 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
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 227
UNION OF INDIA [MADAN B. LOKUR, J.]

equally tragic is that on 25th April, 2011 when the case was taken up for A
consideration, the 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
B
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 C
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 D
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 E
UTAs under 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.
F
37. Therefore, taking all factors into consideration the following
general directions were issued by the Court on 7th February, 20129 :
“(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 G
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
9
National Campaign Committee for Central Legislation on Construction Labour v.
Union of India, (2012) 3 SCC 336 H
228 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B 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
C 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
D 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.”
38. Quite clearly, this Court was more concerned with the
implementation of the BOCW Act and the Cess Act and not with coercing
E 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
th
12 December, 2014 with the expectation that some positive steps had
F 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 16th January, 2015 and to discuss with them the
G 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
10
National Campaign Committee for Central Legislation on Construction Labour v.
Union of India, (2015) 17 SCC 166
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 229
UNION OF INDIA [MADAN B. LOKUR, J.]

40. Pursuant to the directions given on 12th December, 2014 a A
meeting was held as proposed and the Union of India filed an affidavit in
this regard. In the order dated 13th 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
B
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
C
2011-12 Rs.425.97 No figure supplied

2012-13 Rs.777.69 Rs.3.99

D
2013-14 Rs.788.60 Rs.53.34

(State of Maharashtra)

E
Year Cess collected in crores Expenditure incurred in
crores for various schemes

2011-12 Rs.154.01 No figure supplied
F
2012-13 Rs.173.83 Rs.11.95

2013-14 Rs.251.95 Rs.25.93
G
(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 H
230 SUPREME COURT REPORTS [2018] 9 S.C.R.

A and expenditure; (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
B
steps and to issue appropriate directions under Section 60 of the BOCW
Act.11
42. When the matter was next taken up on 31st July, 2015 the
learned Amicus Curiae highlighted the shocking state of affairs that we
had noticed on 13th February, 2015. He pointed out the tragic state of
C 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
D 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
43. Unfortunately, the affidavits filed did not take the matter of
utilization of funds any further, in the sense that the State Governments
E 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
F plan concerning the utilization of the collected cess.
44. When the Secretary in the Ministry of Labour and Employment
appeared in Court on 11th 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
G 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
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
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 231
UNION OF INDIA [MADAN B. LOKUR, J.]

construction worker need to get registered in the other State; (ii) A
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 that is by 31st March, 2016; (iii) Ensuring that
B
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, C
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 D
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. E
(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 F
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 G
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.”
13
National Campaign Committee for Central Legislation on Construction Labour v.
Union of India, (2015) 17 SCC 173
H
232 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B
follows:
“(i) To ensure maximum coverage of the building and other
construction workers;
(ii) To ensure distribution of benefits and implementation of the
C 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;
D (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.”
47. Thereafter, it appears that in spite of directions given by this
E
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.
F
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
G 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
14
National Campaign Committee for Central Legislation on Construction Labour v.
H Union of India, (2015) 17 SCC 174
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 233
UNION OF INDIA [MADAN B. LOKUR, J.]

workers. This Court found that rather astonishing since it appeared that A
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 thereby exceeding
the 5% limit provided for in Section 24(3) of the BOCW Act. As far as
B
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 10th 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 C
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 30th June, 2017.
The overall expenditure had also increased from about Rs.5371 crores
to about Rs.9491 crores again as on 30th June, 2017. We were also D
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 E
construction workers,
Affidavits filed by the Union of India
50. The Union of India through the Ministry of Labour and
Employment has filed about a dozen affidavits from time to time. It is F
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 G
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) H
234 SUPREME COURT REPORTS [2018] 9 S.C.R.

A (iii) 27th February, 2014
(iv) 4th March, 2014
(v) 16th October, 2014
(vi) 9th September, 2015
B (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 11th
C September, 2015 that directions issued in the past have not yielded the
desired outcome 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 26th February, 2016
D 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
E 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 13th February, 2015 the number of schemes framed
F 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
G UTAs are only interested in announcing one 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
H statutory benefits. For example, it is stated that a large number of
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 235
UNION OF INDIA [MADAN B. LOKUR, J.]

construction workers would be entitled to the benefit of the Mahatma A
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)
B
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 C
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 (in covered areas); any
establishment, employing 10 or more building construction workers may
D
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 E
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 9th
October, 2015 that not a single State Advisory Committee, anywhere in F
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 G
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.
(d) Sobering features: Two sobering features come out of the
affidavits filed by the Union of India. They are: (i) There is a H
236 SUPREME COURT REPORTS [2018] 9 S.C.R.

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
B
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 26th
February, 2016 where the Union of India has provided a tabular
statement showing that several States have complied with
C 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
D 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.
E (f) Monitoring Committee: On 10th November, 2017 it was
stated before us by the Secretary in the Ministry of Labour &
Employment that a Monitoring Committee had been set up
sometime in 2015 (actually vide order dated 9th September,
2015) for effective implementation of the BOCW Act. The
Monitoring Committee consists of the Labour Secretary of each
F 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 15th January, 2016 it
was stated by the Secretary in the Ministry of Labour & Employment
G that the Monitoring Committee was actually set up by an order dated 9th
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
H Commissioner (Central) was a Member and the Director/DS, DG (LW)
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 237
UNION OF INDIA [MADAN B. LOKUR, J.]

was the Member Convenor. In view of the ambiguity, the composition A
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: B
“(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 C
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 (8th meeting) D
was held on 12th December, 2017. This meeting was held subsequent to
the order dated 10th 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. E
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. F
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 available from three sources:
G
1. The 28th Report of the Standing Committee on Labour (2016-
17) of the 16th Lok Sabha prepared in August 2017.
2. Affidavit of the CAG dated 6th 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 H
238 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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 10th November, 2017.
59. The collection and utilization mess can be appreciated from
B the tabular statement below:

Cess collected Amount spent Cess Amount Cess Amount
as per the as per the collected as transferred collected as spent as per
report of the report of the per the to the per the the statement
Standing Standing affidavit of Welfare statement of of the
C Committee as Committee as the CAG Board as the Secretary,
on 31.03.2017 on 31.03.2017 dated per the Secretary, Ministry of
(Provisional) (Provisional) 06.10.2017 affidavit of Ministry of Labour and
(in crores of (in crores of (in crores the CAG Labour and Employment
rupees) rupees of rupees dated Employment as on
6.10.2017 as on 30.6.2017
D (in crores 30.6.2017 (in crores
of rupees (in crores of rupees
of rupees
32632.96 7516.52 37060.90 37255.45 37482 9491
(not
necessarily
E utilized)15

60. The detailed figures as on 31st 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 14th December, 2016 that its estimate is
F
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.
G 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
15
There is an obvious discrepancy
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 239
UNION OF INDIA [MADAN B. LOKUR, J.]

required and accurate information, there is undoubtedly a financial mess A
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 B
them have small children to look after. That even they are victims of
ount official apathy truly reflects a very sad state of affairs, and the loss
nt as per already caused to them and other construction workers cannot be
statement remedied. The reason for this is that it is not known which construction
he worker is entitled to get how much in terms of money or what benefit
etary, and under which scheme. Some of these construction workers from the C
istry of
1990s and even later, may perhaps have unfortunately passed away or
our and
might be untraceable or old enough to deserve a pension. The question
ployment
n
therefore is: What should be done with the thousands of crores that
.2017 have been collected for the benefit of construction workers but cannot
crores be utilized for their benefit? Can the State Governments and the UTAs D
upees or the Welfare Boards unjustly benefit and fill their coffers at the expense
of unknown and helpless construction workers, some of whom are women
9491 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 E
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.
Discussion and directions F

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 G
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. H
240 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B
change. Governance is not about mouthing platitudes, or framing good
looking schemes, but about action and it is quite clear to us that insofar
as the rights of construction workers are concerned, that vulnerable
section of society has been badly let down by the governance structure.
To make matters worse for them, the number of construction workers
C 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
D
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.
E
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
F used by construction workers. On the other hand, the submissions of the
learned Additional Solicitor General appearing on behalf of the Union of
India were to the effect that all efforts are being made to ensure that
there is full and effective compliance with the provisions of the BOCW
Act and that the Monitoring Committee is supervising these efforts so
G 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 31st March, 2017 till 30th June, 2017 is
in the region of about Rs. 5000 crores. (The difference between the
H figure given by the Secretary in the Ministry of Labour and Employment
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 241
UNION OF INDIA [MADAN B. LOKUR, J.]

and the Standing Committee). This is a huge amount and would work A
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
B
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. C
68. Our first direction, therefore, is to the Ministry of Labour and
Employment, the State Governments and the UTAs to put in place and
strengthen the registration machinery, both for the registration of
establishments as well as registration of construction workers. This should
be done within a specified time-frame to be decided by them, but at the D
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 E
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 F
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 G
framed a large number of schemes allegedly for the benefit of construction
workers. The multiplicity of schemes brings to mind the adage that too
many cooks spoil the broth. Keeping a track of these schemes is by
itself an enormous task, perhaps resulting in administrative issues and
red tape. It would be worthwhile if a model scheme is framed by the H
242 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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.
B 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
C 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
D concerns of education, health, social security, old age and disability pension
and other benefits that are necessary for living a life of dignity as postulated
by the Constitution of India. We also expect the Model Scheme to be
framed and 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 30th September, 2018.
E
73. The CAG in its affidavit of 2nd 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
F 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
G 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
H are of opinion that it is necessary for the CAG to take stock of issues
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 243
UNION OF INDIA [MADAN B. LOKUR, J.]

and problems pertaining to the implementation of the BOCW Act and to A
ensure that effective and meaningful audits are carried out, keeping in
mind the huge 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 B
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. C

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 D
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 E
for their benefit. The sanctity of laws enacted by Parliament must be
acknowledged - laws are enacted for being adhered to and not for being
flouted. The rule of law must be respected and along with it the human
rights and dignity of building and construction workers must also be
respected and acknowledged, to avoid a complete breakdown of the
BOCW Act compounded by serious violations of Part III of the F
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 G
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 H
244 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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
B to pass, it is necessary to pass some general directions so that the BOCW
Act 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
C 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.
D 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
E being completed preferably within six months and in any event
by 30th 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
BOCW Act as well as the Cess Act.
F
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
G 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.
H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 245
UNION OF INDIA [MADAN B. LOKUR, J.]

6. It is imperative that all construction workers should be given A
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
B
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 decide on an appropriate system
of identification and registration, provided it is effective and
meaningful. C
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 D
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. E
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 F
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 cess already collected. It appears to us that the benefits and
entitlements that have accrued to the construction workers (millions of G
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. H
246 SUPREME COURT REPORTS [2018] 9 S.C.R.

A 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.
B
81. List the Writ Petition for directions on 1st 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.
C ANNEXURE I
Standing Committee
Report CAG Report
Amount of Amount Amount of Amount of
Cess spent (Rs. Cess Cess
collected in Crore) as collected transferred
(Rs. in on (Rs. In (Rs. In
D Sr. Name of the Crore) as on 31.03.2017 Crore) from Crore) to the
No. States/UTs 31.03.2017 [Provisional] 1996 till Building and
[Provisional] 31.03.2017 Other
Construction
Workers
Welfare
Board
E
Andhra
1
Pradesh 1153.61 205.46 667.50 667.53
Arunachal
2
Pradesh 65.36 51.60 98.31 20.00
3
Assam 512.24 12.57 530.46 611.82
F 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
G
8 Haryana 1847.05 172.07 1847.05 1847.05
Himachal
9
Pradesh 335.39 44.49 353.25 360.62
Jammu &
10
Kashmir 566.00 221.00 625.99 653.03

H
NATIONAL CAMPAIGN COMMITTEE (NCC-CL) v. 247
UNION OF INDIA [MADAN B. LOKUR, J.]

11 A
Jharkhand 291.28 143.46 330. 95 NA
12
Karnataka 3 861.00 240.00 4106.43 4106.03
13 Kerala 1 474.73 1455.88 1483.81 439.47
Madhya
14
Pradesh 1 575.62 552.04 207. 10 NA
B
15 Maharashtra 5 074.16 255.50 5074.16 5074.16
16 Manipur 21.00 10.99 63.61 NA
17
Meghalaya 9 4.83 1.09 99.84 99.84
18 Mizoram 4 0.37 21.95 49.64 49.64
C
19 Nagaland 2 0.06 3.34 1. 65 1.65
20 Odisha 1 100.00 361.00 1118.35 1118.35
of
21
Punjab 921.55 391.61 973. 78 973.78
red
22 Rajasthan 1 600.00 620.00 1069.19 1266.52
o the D
23 Sikkim 6 4.67 20.68 76.00 76.00
g and
24 Tamil Nadu 1 706.00 600.00 1870.60 1870.60
ction
s 25 Telangana 443.12 98.69 667. 53 667.53
26 Tripura 129.28 12.36 140. 18 140.18
Uttar E
27
Pradesh 2 943.80 598.90 220. 78 184.25
7.53
28 Uttarakhand 170.41 31.21 189. 39 186.58
0.00 30 Delhi 1930.00 174.71 1793.67 1846.68
1.82 A& N
31
Islands 4 6.42 3.91 NA NA F
2.93 32 Chandigarh 9 6.09 3.72 NA NA
NA Dadra &
33 Nagar
5.78 Haveli 3.08 0.00 NA NA
Daman &
34
3.04 Diu 3 7.17 0.54 NA NA
G
35 Lakshwadeep 5.66 0.00 6. 15 6.15
7.05
36 Punducherry 8 2.04 51.13 96.44 96.4 4
0.62
Total 32632.96 7516.52 26136. 75 26008.83
3.03
Ankit Gyan Directions issued. H