BENGALURU
The Karnataka High Court has granted interim protection to app-based platforms challenging the constitutional validity of the Karnataka Platform-based Gig Workers (Social Security and Welfare) Act, 2025, while directing them to deposit the disputed welfare fee for the second quarter with the court within three weeks.
The petitions have been filed by the Internet and Mobile Association of India (IAMAI) along with platform companies including Eternal Ltd, Zepto, Swiggy, Urban Company and Valmo Transportation. Justice M. Nagaprasanna directed the State government to file its objections by July 30 and posted the matter for further hearing on July 31. The court also ordered that no coercive action be taken against the petitioners until then.
Appearing for the petitioners, senior advocates Dhyan Chinnappa and C.K. Nandakumar argued that the State legislation encroaches upon a subject already covered by the Centre through the Code on Social Security (COSS). Since labour falls under the Concurrent List, they contended that the Karnataka law is repugnant to the Central legislation and is therefore liable to be struck down under Article 254 of the Constitution.
The petitioners also sought a stay on the show-cause notices issued under the Act, which came into force on September 11, 2025.
Advocate General Shashikiran Shetty, representing the State, argued that there was no inconsistency between the Central and State enactments. He submitted that platform companies had actively participated in consultations before the law was framed, including discussions on the welfare contribution payable for each ride or delivery.
Under the Act, welfare fees have been fixed at 50 paise for each two-wheeler delivery, 75 paise for three-wheelers and Re.1 for four-wheelers. The amount is to be credited to a welfare fund administered by the Karnataka Platform-based Gig Workers Welfare Board.
The Advocate General further informed the court that similar legislation had already been enacted in Rajasthan, Bihar and Telangana. However, the petitioners argued that those laws were yet to be implemented.
Appearing for the Centre, Additional Solicitor General Arvind Kamath supported the challenge, contending that several provisions of the Karnataka Act substantially mirror those contained in the Code on Social Security and are therefore hit by Article 254.
After hearing all parties, Justice Nagaprasanna directed the petitioners to maintain the disputed welfare fee in a separate account until it is deposited before the court. The companies have also been directed to furnish account details within a week, and the amount cannot be utilised for any other purpose pending adjudication. The petitions also challenge the Karnataka Platform-based Gig Workers (Social Security and Welfare) Rules, 2025, the notification constituting the Welfare Board, a government order dated February 12 and show-cause notices alleging non-compliance with provisions relating to internal dispute resolution committees, software integration for welfare fee payments and submission of information sought by authorities.
