Karnataka HC quashes 2023 notification reducing scholarships for construction labourers' children

Bengaluru: The Karnataka High Court has quashed the 2023 notification which grossly reduced the educational assistance payable to the registered construction workers and their children.

Justice M Nagaprasanna pulled up the Karnataka Building and Other Construction Workers Welfare Board for treating the funds belonging to the construction workers and their children as its property and for bartering it away for wasteful expenditure.

"The rights of construction workers cannot be railroaded in the broad daylight by the state, or the authorities like the Board," the court said while allowing the petition filed by the children of construction labourers whose applications for educational assistance was rejected citing the 2023 notification.

The petition was filed by two girls - daughters of construction labourers - and the Karnataka State Building and other Workers Federation Trade Union. The children had filed applications seeking educational assistance when the earlier notification dated August 13, 2021 was in operation. When their applications were pending, a new notification was issued on October 30, 2023, reducing the educational assistance from Rs 30,000 and Rs 35,000 to Rs 10,000 and Rs 11,000, respectively for LLB and MBA courses.

The counsel for the petitioners contended that the Board is over-spending on administrative expenditure, and underspending on welfare schemes. It was further contended that the Board has received Rs 6,700 crore as welfare funds and the same is invested in fixed deposits in violation of orders of the Apex Court. During the pendency of the petition, the board paid the amount pursuant to the interim order passed by the court.

After perusing the notifications, Justice Nagaprasanna observed that no reasons were assigned in the 2023 notification as to why it puts the clock back to a 2011 scale. The court said the lives of children of construction workers should be made good in a progressive manner and not in a regressive manner, as is done in the case at hand. “The Board shall consider the applications of similarly situated applicants, bearing in mind the observations made in the course of the order and not drive every person to knock at the doors of this Court seeking identical relief, as the State can bear the brunt of litigation, but not the poor citizen,” the court said.

Direction to CAG

The court examined the cess collected and observed that what is claimed by the Board appeared to be contrary to what is observed by the Comptroller and Auditor General of India (CAG). The court noted unnecessary expenditure in the 2019 CAG report and said the statute mandates the administrative expenditure or any other expenditure to be less than 5 per cent or 5 per cent to the maximum.

The court pointed out several wasteful expenditures such as Rs 7 crore on MGNREGA software, Rs 18 crore on Indira canteen expenses and a whopping Rs 745 crore on unauthorized health training scheme.

Further, the court said the callousness of officers of the Board of not applying for tax exemption to the Income Tax Department has resulted in a tax liability of Rs 3,548 crore. “The Comptroller and Auditor General of India shall take up, if not already taken up, and complete the audit of the funds of the Board within three months, if not earlier, and place the report before the Registry of this Court,” the court said.