Mahatma Gandhi National Rural Employment Guarantee Act, 2005:
ss. 3(1), 3(3), 3(4) and 14(6); Schedule I Paragraph 7, Schedule II Paragraph 29 – Writ petition filed u/Art. 32 of Constitution, highlighting deficiencies in implementation of the Act – It was alleged that “approved labour budget” fixed by Central Government violated essence of the Act; that there was unreasonable reduction in the funds made available to the States and there was, delay in payment of wages to the labourers – Held: Central Government is statutorily empowered (by National Employment Guarantee Fund Rules) to scrutinize and assess the funds to be released – Therefore, fixation of “approved labour budget” is not arbitrary – If there is unreasonable reduction of funds to States, it is for the States to object to that – In absence of such objection by any State, such plea cannot be raised in the petition – It is left to the Central Government to find a solution in order to avoid delay in release of funds to the States – In terms of ss. 3(3) and 3(4) and Schedule II of the Act, worker is entitled to wages within a fortnight failing which he is entitled to compensation – The burden of compliance is on the State Government and Central Government – The State and Central Governments are directed to prepare an urgent time-bound programme to make payment of wages and compensation to the workers – National Employment Guarantee Fund Rules, 2006 – r. 5.
The Court
HELD: 1.1 Rule 5 of The National Employment Guarantee Fund Rules, 2006 provides, inter alia, for release of grants from the National Employment Guarantee Fund (NEGF) to the State Governments and Union Territory Administrations. Thus. the Central Government is statutorily empowered to scrutinize and assess the funds to be released to the State Governments and Union Territory Administrations for the purposes of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. The final assessment is made by the Empowered Committee in consultation with the State Governments and Union Territory Administrations. Therefore, it is not as if the ‘agreed to labour budget’ or the ‘approved labour budget’ is fixed arbitrarily by the Central Government. There is nothing objectionable in this, more particularly since the process is backed by statutory provisions. [Paras 18 and 19] [408-C-D, H; 409-A-B]
1.2 Meaningful discussions are necessary while approving or finalizing the labour budget. The fact that so many States and Union Territories have exceeded the expenditure postulated by the ‘agreed to labour budget’ is an indication that the Scheme is either well received by the unemployed or the Empowered Committee is being a little tight-fisted. The release of funds is for a good socio-economic cause and therefore expeditious and sufficient availability of funds should be the objective. Under the circumstances, it is not correct to say that the Central Government cannot prepare an ‘agreed to labour budget’ or that the process of preparing an ‘agreed to labour budget’ is impermissible or that there is an informal cap on release of funds. [Para 27] [411-D-F]
2.1 If there is some sort of a cap or an unreasonable reduction in the funds made available to the State Governments, it is really for the concerned State Government to object to the cap and non-availability of funds. The Court has not been shown any objection raised by any State to the effect that it has not received adequate funds for implementation of the Scheme for various activities. In the absence of any objection or demand having been raised for funds by the State Governments (and denial of funds by the Central Government), the petitioner cannot be allowed to raise such a contention which ought really to be raised by the affected State Government. [Para 24] [410-D-F]
3. Regarding delayed payments, according to the Central Government, there is some laxity by the State Governments and Union Territory Administrations in respect of obtaining another mother sanction, when the Mother sanction based on the “agreed to labour budget” nears exhaustion or is exhausted. This is a bottleneck that must be addressed and, as stated in the affidavit, checklists have been prepared in consultation with the State Governments and Union Territory Administrations to facilitate smoother processing of proposals. Perhaps something more needs to be done and it is left to the Ministry of Rural Development to find a solution. One of the positive measures adopted by the Ministry of Rural Development to reduce delays in release of funds is conducting a Mid Term Review with the State Governments and Union Territory Administrations. [Paras
25 and 26] [411-A-C]
4.1 Section 3(3) and Section 3(4) of the Act provide that every person who has done work given to him or her under the Scheme, shall be entitled to receive wages and the disbursement of daily wages shall be on a weekly basis or in any case not later than a fortnight after the date on which such work was done. Schedule II to the Act mentions the conditions for guaranteed rural employment and the minimum entitlements of labourers. Paragraph 29 relates to wage payment and is of great significance. It provides, inter alia, that in case wages are not paid within 15 days from the date of closure of the Muster Roll, the wage seeker or labourer shall be entitled to receive compensation for the delay at 0.05% of the unpaid wages per day of delay beyond the sixteenth day of closure of the Muster Roll. Thus, the provisions mandate timely payment and compensation for delayed payment. [Paras 29, 30 and 31] [411-G-H; 412-A-C; 413-E]
4.2 While admitting and appreciating that there is delay in payment of wages (whatever the cause) the Central Government has stated that steps have been taken to ensure that payment of wages is not delayed. The Central Government has suggested timelines for payment of wages within 15 days. The Central Government has required the State Governments and Union Territory Administrations to formulate rules or issue notifications for payment of compensation for delayed payment of wages. As many as 27 States and Union Territories have formulated and issued rules or notifications or guidelines or advisories in this regard. [Paras 35 and 36] [416-B-D; 417-A-B]
4.3 The law requires and indeed mandates payment of wages not later than a fortnight after the date on which the work was done by the worker or labourer. Any reason for the delay in receiving wages is not at all the concern of the worker. He or she is entitled to get the due wages within a fortnight of completion of the work. If there are any administrative inefficiencies or deficiencies or laxity, it is entirely for the State Government and the Ministry of Rural Development to sort out the problem. Bureaucratic delays or red tape cannot be pedalled as an excuse to deny payment of wages to the workers. It is precisely to overcome any inefficiency or deficiency that payment of compensation is postulated, otherwise the purpose of Section 3 and paragraph 29 of Schedule II of the Act would get completely defeated. The delayed payment adds several crores to the compensation bill. This is to nobody’s advantage and merely adds an avoidable financial burden on the Central Government. [Paras
39 and 40] [417-E-H; 418-A]
4.4 The Central Government cannot be seen to shy away from its responsibility or taking advantage of a person who has been placed in the unfortunate situation of having to seek employment under the Act and then not being paid wages for the unskilled manual labour within the statutorily prescribed time. The State Governments and Union Territory Administrations may be at fault, but that does not absolve the Central Government of its duty. [Para 41] [418-C]
4.5 Therefore, it is made clear and directed that in terms of the Act and Schedule II thereof a worker is entitled to payment of wages within a fortnight of the date on which the work was done, failing which the worker is entitled to the compensation as prescribed in paragraph 29 of the Schedule II of the Act. The burden of compliance is on the State Governments and Union Territory Administrations as well as the Central Government. One entity cannot pass on the burden to another and vice versa. The Central Government through the Ministry of Rural Development, in consultation with the State Governments and Union Territory Administrations, is directed to prepare an urgent time bound mandatory programme to make the payment of wages and compensation to the workers. This is not only in the interest of the workers who have expended unskilled manual labour but also in furtherance of the rule of law which must be followed in letter and spirit. [Paras 44 and 45] [419-G-H; 420-A-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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