Construction ban: judicial overreach

At a time when the misadventure of demonetisation has already caused unprecedented job losses and acutely hurt the informal sector, another blow has been dealt to the right to life and livelihood of India’s informal sector workers.

This time, however, it is not an ill-conceived and fatally flawed policy of the government that has caused this harm but an ill thought-out order by the Supreme Court of India that might end up being the cause of further misery for over 35 million workers employed by India’s construction industry.

The order is part of an ongoing case that was taken up suo motu by the apex court following the death of a seven-year-old child due to Dengue, most likely caused by an increase in vector-borne diseases attributable to the abysmal handling of solid waste in the country.

After having given the state governments repeated orders and many months to comply with them to frame Solid Waste Management policies as required by the Solid Waste Management Rules, 2016, and seeing that two-thirds of the states were yet to comply with the orders, the Supreme Court on August 31 imposed costs ranging from Rs 3-5 lakh on the defaulting states and imposed a blanket ban on construction in the states of Maharashtra, Madhya Pradesh, Uttarakhand and on the Union Territory of Chandigarh.

The broadly worded order has in effect banned all construction activities, including private realty projects and government infrastructure projects including construction of roads, bridges, metro rail, sea links, etc.

The ban will inevitably have an adverse ripple effect on the economy. It bears repetition that at a time when the country is still recovering from the monumental failures of demonetisation and the ill-implemented Goods and Services Tax regime, this is an ill-timed and ill thought-out order from the Supreme Court.

The construction ban, if not stayed, will have a wide ranging impact not just on the construction sector alone but also on allied sectors such as cement, tiling, electronics and the mining sector.

It will also likely severely impact construction delivery dates of housing projects in the country where there is already an acute shortage of housing, estimated to be around 18.8 million and 47.4 million dwelling units in urban and rural areas respectively. The orders have already had a negative impact on the stock market as most realty stocks were trading in the negative territory after the order came to public notice.

Further, considering the meandering nature of the course of justice in the country, this could potentially impact months of work and earnings and will likely lead to mass emigration of construction labour from the three states and the Union Territory in question.

Millions of lives at stake

If not vacated post-haste, the negative impact this ban is likely to have on over 35 million daily wage construction workers cannot be overstated. “Over four lakh daily wage workers are employed in the city of Mumbai alone, who are set to lose their daily earnings due to the ban”, said Niranjan Hiranandani, managing director of the Hiranandani Group.

In fact, the orders in this case are fairly reminiscent of the order of the Supreme Court in the case of the State of Tamil Nadu vs K. Balu, in which the court had imposed a ban on sale of liquor within 500 meters along all national highways.

The broadly worded order of the Supreme Court had led to extreme hardship to hotels and restaurants and loss of employment of lakhs of people across the country. Due to the huge backlash and severe negative impact on the sector, the apex court was forced to backtrack and clarify its stance through another order stating that the ban did not apply to licensed establishments within municipal areas.

While it cannot for a moment be denied that there is an urgent need to tackle the solid waste management crisis in India, less extraordinary and less damaging measures could definitely have been ordered by the Supreme Court. Solutions ranging from a ban only on new constructions, penalties limited to state administrations and the setting out of guidelines to ensure adoption of zero waste technologies have already been made.

The lesson to be learnt here is that the courts in the country need to take a more nuanced approach that considers potential impact not only on those the courts seek to rightly penalise but also on the innocent bystanders their judgements are likely to affect.

As of September 6, the Supreme Court had lifted the ban in the states of Maharashtra and Uttarakhand. The next hearing is scheduled for October 9. It is hoped that the court will vacate the order post-haste for Madhya Pradesh and Chandigarh as well to avoid the immense potential harm it could cause to some of the most vulnerable people in India.

(The writer is Research Fellow, Vidhi Centre for Legal Policy, Bengaluru)