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Section 7: Disqualification and removal of member of any Social Security Organisation

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter II: Social Security Organisations
Competent Labour Forum
Act No. 36 of 2020
Section 6 All 163 Sections of Code on Social Security, 2020 Section 8

Legal Commentary & Landmark Judgments: Section 7

Section 7 of the Code on Social Security, 2020 mandates the constitution of State Building and Other Construction Workers' Welfare Boards in every State and Union Territory, establishing body corporate institutions to administer construction worker welfare funds financed through building cess.

  • Statutory Constitution & Body Corporate Status: Every State Government is statutorily mandated under Section 7(1) to constitute a Building and Other Construction Workers' Welfare Board, endowed with perpetual succession and common seal, headed by an eminent Chairperson nominated by the State Government.
  • Tripartite Board Composition & Representation: Section 7(2) requires balanced representation, comprising one member nominated by the Central Government, and equal numbers of members representing State Governments, construction employers, and building workers.
  • Statutory Fiduciary Functions & Cess Administration: Vests the Board with absolute custodianship of the Building and Other Construction Workers' Welfare Fund financed by the 1% to 2% construction cess under Chapter VIII, mandating direct expenditure on worker pensions, accidental death benefits, educational grants, maternity coverage, and medical assistance.
Key Landmark Precedents:
  • Dewan Chand Builders & Contractors v. Union of India (2012) 1 SCC 101: The Supreme Court upheld the constitutional validity of the construction workers' welfare legislation and cess levy, holding that the statutory boards are created for the explicit socio-economic upliftment of vulnerable construction laborers.
  • National Campaign Committee for Central Legislation on Construction Labour v. Union of India (2018) 5 SCC 607: The Supreme Court issued sweeping continuous mandamus directions to all State Building Workers' Welfare Boards, holding that hoarding cess funds while construction workers suffer without social security violates fundamental rights under Article 21.
  • Lanco Anpara Power Ltd. v. State of Uttar Pradesh (2016) 10 SCC 329: The Supreme Court held that the welfare provisions and cess obligations administered by State Building Boards apply comprehensively to all construction sites, even where factory registration is subsequently sought.
Courtroom Practice & Strategic Litigation Guidance:

Real estate developers, EPC contractors, and infrastructure conglomerates must ensure that every construction project site is registered with the State Building Workers' Welfare Board. In addition to remitting the 1% building cess prior to plan approval, project managers must actively enroll on-site contractual and migrant workers with the Board so that accident relief and medical benefits can be directly availed from the Board's fund.

Section 6 All 163 Sections of Code on Social Security, 2020 Section 8