Observing that the amount from the Karnataka Building and Other Construction Workers Welfare (KBOCWW) Fund is being used for non-welfare-related activities, besides being used for administrative purposes in excess of the permissible limit, the High Court of Karnataka has directed the Comptroller and Auditor General of India (CAG) to audit the fund and submit a report to the court within three months.

Also, the court quashed the State government’s October 13, 2023, notification, which reduced the financial assistance to the children of registered construction workers pursuing undergraduate and postgraduate courses to ₹10,000 per year from the earlier ₹30,000 to 35,000 per year.

Justice M. Nagaprasanna passed the order while allowing a petition filed by Amrutha M., an MBA student, and Ankitha H., a student of the LLB course. They are the daughters of two registered construction workers, Manjegowda and Harish K., respectively.

The petitioners had complained about non-disbursement and reduction of educational assistance stating that it impacted their studies. They also questioned the legality of the reduction of educational assistance when the KBOCWW Fund collected around ₹6,700 crore in the form of KBOCWW Cess, which was deposited in various banks and earned interest.

‘Absolute gibberish’

The court pointed out that the reduced education assistance offered in the 2023 notification is equal to the assistance provided in 2011. It observed that “educational assistance to the poor children should only increase and not decrease to such abysmal levels” while pointing out that no reasons are forthcoming as to why the notification resets the clock back to 2011. It termed the government’s claim that educational assistance was reduced due to the non-availability of funds as “absolute gibberish.”

The court said that when ₹6,700 crore has been invested in fixed deposits, the interest generated can cover the entire educational assistance expenses of the children of construction workers.

Questionable expenditure

Noticing petitioners’ claim that around ₹1,100 crore was spent from the fund on “ inadmissible and wasteful expenditures,” including ₹18 crore for Indira canteens, etc., the Court pointed out that CAG’s reports for the period 2013-19 also raised several red flags against the State government, disclosing many instances of mismanagement of the fund.

The Court also pointed out that there is no accounting of the interest earned on deposits close to ₹7,000 crores. “The action of the State, in treating the funds that belonged to the construction workers and their children as the property of the Board, for bartering away for wasteful expenditure must be stopped, and stopped forthwith,” the Court observed.

Meanwhile, the court gave liberty to the Government to vary educational assistance so that it does not become detrimental to the welfare of construction workers and their families while directing the Board to disburse educational assistance to all the applicants in terms of this order without driving other poor applicants to knock on the doors of the court.