The Karnataka High Court, in a significant ruling on Friday, decided not to halt the enforcement of the state’s gig workers welfare legislation, known as the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025. Despite this, the court provided interim protection to major aggregators like Zomato and Swiggy, as well as four other companies, from any immediate punitive measures under this law, contingent upon their deposit of the mandated welfare fee. This decision came in the case titled Internet & Mobile Association of India v. State of Karnataka.
Justice M Nagaprasanna presided over the proceedings and rejected a plea from the petitioners to substitute the deposit with a bank guarantee, emphasizing that the financial contribution was a statutory requirement rather than a charitable donation. “The amount is demanded in accordance with legislation,” Justice Nagaprasanna remarked.
The petitioners involved include the Internet and Mobile Association of India (IAMAI), along with companies such as Eternal Ltd (Zomato), Zepto, Swiggy, Urban Company, and Valmo Transportation. The court instructed these entities to deposit the due welfare contribution for the second quarter of the current year within three weeks.
In an effort to balance the interests of the companies, the state, and the gig workers who stand to benefit from the welfare provisions, the court ordered that no coercive actions be taken against the petitioners until the next scheduled hearing on August 14. The state government was also directed to submit its objections by July 30.
The court’s deliberations included questioning by Justice Nagaprasanna regarding the resistance from aggregators over what he described as a nominal welfare fee. “Why are you fighting? Say for fifty paise?” the judge queried, with Senior Advocate Dhyan Chinnappa responding by pointing to the cumulative financial impact.
More Read
The petitioners, represented by Senior Advocates CK Nanda Kumar and Dhyan Chinnappa, argued that the state law conflicts with the existing Code on Social Security, 2020 (CoSS), a federal statute, suggesting a violation of Article 254 of the Indian Constitution. They maintained that the central legislation already comprehensively addresses the welfare of gig and platform workers.
Additional Solicitor General Arvind Kamath echoed this sentiment, asserting that the state law should not be implemented while its constitutional validity is under challenge. In contrast, Advocate General K Shashi Kiran Shetty defended the state law, highlighting the participation of the petitioners in pre-legislation consultations and arguing that there is no contradiction between the state and central laws.
According to the state law, aggregators are required to contribute ₹0.50 per two-wheeler ride, ₹0.75 per three-wheeler ride, and ₹1 per four-wheeler ride to a welfare fund for gig workers. The Advocate General argued that suspending the law would negatively impact the livelihoods of countless delivery partners.
The court also remarked on the business model of aggregation platforms like Zomato and Swiggy, noting their role as facilitators without ownership of delivery vehicles. Senior Advocate Dhyan Chinnappa responded by explaining the long-term profitability challenges faced by such platforms, drawing a parallel with Amazon’s early business model.
The legal team representing IAMAI, Zomato, Swiggy, and others was led by Anuj Berry from Trilegal.
