The Karnataka High Court has refused to grant an interim stay on the implementation of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, directing major platform aggregators, including Swiggy, Zomato, Blinkit and Zepto, to deposit the mandated welfare fee with the court registry within three weeks.
Justice M. Nagaprasanna declined to suspend the law, observing that since the petition challenges the constitutional validity of the Act, an interim stay could not be granted at this stage. However, the court provided interim relief by directing the Karnataka government not to take any coercive action against the petitioners until the next hearing, subject to compliance with the deposit order.
The petitions have been filed by the Internet and Mobile Association of India (IAMAI) along with several app-based platforms, which argue that the state legislation conflicts with the Centre's Code on Social Security, 2020, and is therefore unconstitutional under Article 254 of the Constitution. The companies have also challenged the Rules framed under the Act and related government notifications.
During the hearing, senior advocate Dhyan Chinnappa, appearing for the petitioners, requested the court to allow bank guarantees instead of depositing the welfare fee, arguing that transferring the money would affect the companies' financial statements. The court rejected the request, saying the fee was being collected under a validly enacted law and not as a voluntary contribution.
Justice Nagaprasanna also made strong oral observations in support of gig workers, questioning why platforms that charge customers a premium could not contribute a small amount towards workers' welfare.
The welfare fee under the Act requires aggregators to contribute 50 paise for every two-wheeler ride, 75 paise for every three-wheeler ride and Re 1 for every four-wheeler ride. For food and grocery delivery platforms, a welfare contribution is also levied to fund benefits such as life and accident insurance, disability cover, medical assistance, maternity benefits and old-age protection for gig workers.
The Karnataka government had issued show-cause notices asking platforms to pay the welfare fee, warning of penal action and interest in case of non-compliance. While staying coercive action for now, the High Court directed that the disputed amount remain with the court registry until the constitutional challenge is decided. The state has been asked to file its objections by July 30, with the matter scheduled for hearing on August 14
