Some of India’s biggest platform aggregators, along with the Internet and Mobile Association of India (IAMAI), moved Karnataka High Court on Monday (June 29) to challenge the constitutional validity of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025, according to a Bar and Bench report.
The writ petition was filed by IAMAI alongside Eternal Ltd, Zepto, Swiggy, Urban Company and Valmo Transportation. The matter had not yet been listed before the High Court at the time of reporting.
Besides contesting the law itself, the petitioners have also sought to quash a clutch of notices issued by the Chief Executive Officer under the Act. These notices directed them to set up Internal Dispute Resolution Committees (IDRCs), deposit welfare fees and share statutory information with authorities, the Bar and Bench report said.
What is the argument of petitioners?
At the heart of the petition is a straightforward argument that if there is already a central legislation on gig workers then why is the Karnataka government implementing a parallel law. The petitioners pointed to the Code on Social Security, 2020 (CoSS), which had consolidated labour welfare legislation into a single, uniform national framework covering gig and platform workers. It includes provisions on worker identification, welfare schemes, aggregator contributions and a regulatory structure for implementation.
According to the petitioners, the Karnataka government had gone ahead anyway. The State’s 2025 law created a parallel welfare structure, piled on additional financial obligations for aggregators and set up its own regulatory machinery. This triggered the doctrine of repugnancy under Article 254 of the Constitution, Bar and Bench reported petitioners as saying.
The companies also trained their guns on specific notices. Directives dated May 21, 2026, had asked them to constitute IDRCs under Section 22 of the Act. Show-cause notices had alleged non-cooperation, including failures to set up the committees, engage with onboarding processes and respond to information requests.
Then came welfare fee notices dated June 22, 2026, which demanded payment under Section 20 of the Act and required proof of payment, along with prescribed returns, by July 5, 2026, according to the Bar and Bench report.
Beyond repugnancy, the petitioners argued the law was arbitrary, violated Article 14 and encroached on other fundamental rights under Part III.
They sought a declaration of unconstitutionality against the Act, its rules, the Welfare Board notification and the February order. The companies also asked the court to quash all notices that had followed from the impugned framework.
How does this impact the investors?
For investors, the case carries real financial stakes. Several of the petitioners, including Eternal Ltd and Swiggy, are listed companies whose unit economics are closely watched by the market.
Additional compliance costs, welfare fee obligations and the administrative burden of running parallel regulatory systems have the potential to pressure margins at a time when profitability remains a key investor concern. More broadly, if the Karnataka law were to survive legal scrutiny, it could embolden other states to enact similar legislation.
This may create a fragmented, state-by-state regulatory landscape that would make cost forecasting and operational planning significantly harder for platform businesses across the country.