The KARNATAKA TODDY WORKERS WELFARE FUND ACT, 1981

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THE KARNATAKA TODDY WORKERS' WELFARE FUND ACT, 1981 
ARRANGEMENT OF SECTIONS 
Statement of Object and Reasons 
Sections: 
 1. Short title and commencement. 
 2. Definitions. 
 3. Establishment of Karnataka Toddy Workers Welfare Fund. 
 4. Scheme. 
 5. Constitution of the Board. 
 6. Appointment of the members of the staff. 
 7. Determination of amount due from employers. 
 8. Mode of recovery of moneys due from employers. 
 9. Prohibition against attachment. 
 10. Priority of payment of contribution over other debts. 
 11. Employer not to reduce wages, etc. 
 12. Members of the Board to be public servants. 
 13. Penalty, etc. 
 14. Offences by companies, etc. 
 15. Power to recover damages. 
 16. Directions by the State Government. 
 17. Protection for acts done in good faith. 
 18. Special provisions for transfer and vesting of welfare funds established by 
custom  or agreement. 
 19. Bar of jurisdiction of civil court. 
 20. Power to make rules. 
 21. Amendment of Schedule. 
  SCHEDULE 
STATEMENT OF OBJECTS AND REASONS 
 Act 31 of 1984.- Toddy workers in Karnataka are among the poorest sections of 
society and are wholly unorganised.  The need to provide a measure of security to them 
and to their dependents has long been felt. 
 It is therefore proposed to constitute a welfare fund by collecting contribution from 
both the employers and employees and an aut onomous Board to administer the said 
fund, prepare schemes for the welfare of the workers and other incidental matters. 
 Hence this Bill. 
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 (Published  in  the Karnataka Gazette  Part IV-2A (Extraordinary) No.491  dated  27-
6-1981 at page 14.) 
KARNATAKA ACT No. 31 OF 1984 
(First Published in the Karnataka Gazette Extraordinary on the Eighth day of 
June 1984) 
THE KARNATAKA TODDY WORKERS' WELFARE FUND ACT, 1981 
(Received the assent of the President on the Twenty-eighth day of April, 
1984) 
 An Act to provide for the constitution of a fund to promote the welfare of toddy 
workers in the State of Karnataka. 
 W HEREAS it is expedient to provide for the constitution of a fund to promote the 
welfare of toddy workers in the State of Karnataka ; 
 B E it enacted by the Karnataka State Legislature in the Thirty-second Year of the 
Republic of India as follows :- 
 1. Short title and commencement.- (1) This Act may be called the Karnataka 
Toddy Workers' Welfare Fund Act, 1981. 
 (2) It shall come into force on such 1[date]1 as the State Government may, by 
notification in the official Gazette, appoint. 
  1. Act came into force on 2.10.1984 by notification No. SWL 85 LBW 84 dated 29.9.1984.  
 2. Definitions.-  In this Act, unless the context otherwise requires ,- 
 (a) "Board" means the Karnataka Toddy Workers' Welfare Fund Board constituted 
under section 5 ; 
 (b) "contribution" means a contribution payable in respect of a member under the 
scheme ; 
 (c) "employer" means any person who employs whether directly or through another 
person, or whether on behalf of himself or any other person, one or more employees and 
includes any person who has a licence for the manufacture, distribution, transport, 
storage or sale of toddy, under the Karnataka Excise Act, 1965 (Karnataka Act 21 of 
1966) ; 
 (d) "employee" means any person who is employed for wages in connection with the 
manufacture, distribution, transport, storage or sale of toddy and who gets his wages 
directly or indirectly from the employer and includes any person employed by or through 
a contractor or through an agent in or in connection with the manufacture, distribution, 
transport, storage or sale of toddy ; 
 (e) "Fund" means the Karnataka Toddy  Workers' Welfare Fund established under 
section 3 ; 
 (f) "manufacture" means any process for the preparation and collection  of toddy and 
includes the preparation of a tree for tapping ; 
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 (g) "member" means a member of the Fund ; 
 (h) "Schedule" means the Schedule appended to this Act ; 
 (i) "Scheme" means the Scheme framed under this Act ; 
 (j) "toddy", means fermented or unfermented juice drawn from an excise tree as 
defined in clause (27) of section 2 of the Karnataka Excise Act, 1965; 
 (k) "wages" means all emoluments which are earned by an employee while on duty 
or on leave with wages in accordance with t he terms of the contract of employment and 
which are paid or payable in cash to him, but does not include,- 
  (i) the cash value of any food concession ; 
  (ii) overtime allowance, bonus and commission. 
 3. Establishment of Karnataka Toddy Workers' Welfare Fund.- (1) On the 
commencement of this Act, the State Government shall establish in and for the State, a 
fund called "The Karnataka Toddy Workers' Welfare Fund" which shall consist of ,- 
  (a) such sums as an employer shall fr om time to time contribute under clause 
(a) of sub-section (3) ; 
  (b) such sums as an employee shall from time to time contribute under clause 
(b) of sub-section (3) ; and 
  (c) the interest which may, from time to time, accrue on the sums of the Fund 
invested or reinvested under sub-section (4). 
 (2) The Fund shall vest in and be administered by the Board in such manner as may 
be provided for in the Scheme. 
 (3) There shall be contributed to the Fund ,- 
  (a) by the employer ,- 
   (i) an amount equal to five percent of the wages for the time being payable 
to each of the employees ; and 
   (ii) as gratuity an amount equal to five  per cent of the wages  for the time 
being payable to each of the employees ; 
  (b) by the employee an amount equal to five per cent of the wages for the time 
being received by him. 
 (4) The Board may from time to time invest or reinvest in the securities of the State 
Government or in any Scheduled Bank all or any sum at the credit of the Fund which 
may not be required immediately for any of the purposes for which it  may be spent. 
 4. Scheme.- (1) The State Government may, by notification in the official Gazette, 
frame a scheme called the Karnataka Toddy Workers'  Welfare Fund Scheme which 
may provide for all or any of the matters specified in the Schedule. 
 (2) The State Government may by notification in the Official Gazette, amend the 
Scheme from time to time either prospectively or retrospectively. 
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 5. Constitution of the Board.- (1) The State Government may, by notification in the  
official Gazette, constitute with effect from such date as may be specified therein a 
Board to be called the Karnataka Toddy Workers' Welfare Fund Board for the purpose of 
the administration of the Fund and to supervise or carry out the activities financed from 
and out of the Fund. 
 (2) The Board shall be a body corporate by the name aforesaid, having perpetual 
succession and a common seal and shall, by the said name, sue and be sued. 
 (3) The Board shall consist of such number of directors as may be appointed by 
notification in the official Gazette by the State Government, out of whom at least one 
shall be a person belonging to scheduled caste and one shall be from among toddy 
tappers and they shall be, chosen in such manner as may be provided for in the Scheme 
: 
 Provided that the Board shall include an equal number of directors representing the 
State Government, the employers and the employees. 
 (4) One of the directors of the Board shall be appointed by the State Government as 
Chairman. 
 (5) Subject to the pleasure of the State Government the term of office of the 
Chairman and other members of the Board shall be three years. 
 (6) The Board shall administer the Fund vested in it in such manner as may be 
specified in the Scheme. 
 6. Appointment of the members of the staff.-  (1) The State Government may 
appoint a Chief Welfare Fund Inspector and as many Welfare Fund Inspectors as they 
consider necessary to assist the Chief Welfare Fund Inspector in the discharge of his 
duties.  The Chief Welfare Fund Inspector shall be the Chief Executive Officer of the 
Board. 
 (2) The Board may with the previous approval of the State Government appoint such 
staff as it  may consider necessary. 
 (3) The methods of recruitment, salary and allowances, discipline and other 
conditions of service of the Chief Welfare Fund Inspector and the Welfare Fund 
Inspectors shall be such as may be specified by the State Government and the method 
of recruitment, salary and allowances, discipline and other conditions of service of the 
staff appointed by the Board shall be such as may be specified by the Board with the 
previous approval of the State Government. 
 7. Determination of amount due from employers.- The Chief Welfare Fund 
Inspector or any Welfare Fund Inspector authorised by him in this behalf may, by order, 
determine the amount due from any employer under the provisions of this Act or of the 
Scheme and for this purpose may conduct such inquiry as he may deem it necessary. 
 (2) The officer conducting the inquiry under sub-section (1) shall for the purposes of 
such inquiry have  the same powers as are vested in a court for trying a suit under the 
Code of Civil Procedure, 1908, in respect of the following matters, namely :- 
  (a) enforcing the attendance of any person or examining him on oath; 
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  (b) requiring the discovery and production of documents ; 
  (c) receiving evidence on affidavit ; and 
  (d) issuing commissions for the examination of witnesses. 
 (3) Any inquiry under this section shall be deemed to be a judicial proceeding within 
the meaning of sections 198 and 228 and for the purpose of section 196 of the Indian 
Penal Code. 
 (4) No order determining the amount due from any employer shall be made under 
sub-section (1) unless the employer has been given a reasonable opportunity of being 
heard. 
 (5) Any person aggrieved by an order under sub-section (1) may prefer an appeal to 
the State Government or any other authority as may be specified by the State 
Government within sixty days from the date of the receipt of the order and the decision 
of the State Government or of such authority on such appeal shall be final. 
 8. Mode of recovery of moneys due from employers.-   Any amount due from the 
employer in pursuance of the provisions of this Act or the Scheme may, if the amount is 
in arrears be recovered together with the interest thereon at the rate of nine percent per 
annum in the same manner as an arrear of land revenue. 
 9. Prohibition against attachment.-  (1)  The amount standing to the credit of any 
member in the Fund shall not in any way be capable of being assigned or charged and 
shall not be liable to attachment under any decr ee or order of any court in respect of any 
debt or liability incurred by the member and no receiver appointed under the Provincial 
Insolvency Act, 1920 shall be entitled to or have any claim on any such amount. 
 (2) Any amount standing to the credit of a member in the Fund at the time of his 
death and payable to his nominee under the Scheme shall, subject to any deduction 
authorised by the Scheme vest in the nominee and shall be free from any debt or other 
liability incurred by the deceased or the nominee before the death of the member. 
 10. Priority of payment of contributions over other debts.-  Where any employer 
is an adjudicated insolvent or being a company, an order for winding up is made, the 
amount due from the employer under the schem e shall, where the liability therefor has 
accrued before the order of adjudication or winding up is made be deemed to be 
included among the debts which under section 61 of the Provincial Insolvency Act, 1920 
or under section 530 of the Companies Act, 1956 are to be paid in priority to all other 
debts in the distribution of the property of the insolvent or the assets of the company 
being wound up, as the case may be. 
 11. Employer not to reduce wages, etc.-  No employer shall by reason only of his 
liability for the payment of any contributi on to the Fund, reduce, whether directly or 
indirectly, the wages of any employee to w hom the Scheme applies or the total quantum 
of benefits to which the employee is entitled under the terms of his employment, express 
or implied. 
 12. Members of the Board to be public servants.- Every Director of the Board, the 
Chief Welfare Fund Inspector and every Welfare Fund Inspector and every member of 
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the staff of the Board appointed under this Act shall be deemed to be a public servant 
within the meaning of section 21 of the Indian Penal Code. 
 13. Penalty, etc.- (1) Whoever for the purpose of avoiding any payment to be made 
by himself under this Act or under the Scheme or for the purpose of enabling any other 
person to avoid such payment knowingly makes or causes to be made any false 
statement or false representation shall be punishable with imprisonment for a term which 
may extend to three months or with fine which may extend to five hundred rupees or with 
both. 
 (2) Whoever contravenes or makes default in complying with any of the provisions of 
this Act or of the Scheme shall, if no other penalty is elsewhere provided by or under this 
Act for such contravention or non-compliance, be punishable with imprisonment for a 
term which may extend  to three months or with fine which may extend to five hundred 
rupees or with both. 
 (3) No court shall take congnisance of any offence punishable under this Act except 
on a report in writing of the facts constituting such offence made with the previous 
sanction of the State Government or such aut hority as may be specified in this behalf by 
the State Government. 
 14. Offences by companies etc.- (1) If the person committing an offence under this 
Act is a company, the company as well as every person in charge of and responsible to 
the company for the conduct of its business at the time of the commission of the offence 
shall be deemed to be guilty of the offence and shall be liable to be proceeded against 
and punished accordingly : 
 Provided that nothing contained in this sub-section shall render any such person 
liable to any punishment if he proves that the offence was committed without his 
knowledge or that he exercised all due diligence to prevent the commission of such 
offence. 
 (2) Notwithstanding anything contained in sub-section (1), where an offence under 
this section has been committed by a company  and it is proved that the offence has 
been committed with the consent or connivance of, or that the commission of the offence 
is attributable to any neglect on the part of any director, manager, secretary, or other 
officer of the Company, such director, manager, secretary or other officer shall also be 
deemed to be guilty of that offence and shall be liable to be proceeded against and 
punished accordingly. 
 Explanation.-  For the purposes of this section,- 
 (a) "Company" means any body corporate and includes a firm or other association of 
individuals; and  
 (b) "director" in relation to a firm, means a partner in the firm. 
 15. Power to recover damages.- Where an employer makes default in the payment 
of any contribution to the fund under this Act, the State Government may recover from 
the employer damages not exceeding twenty five per cent of the amount in arrears as 
they may think fit to impose. 
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 16. Directions by the State Government.- The State Government may, after 
consultation with the Board, give to the Board general instructions to be followed by the 
Board. 
 (2) In the exercise of its powers and performance of its duties under this Act, the 
Board shall not depart from any general instructions issued under sub-section (1), 
except with the previous permission of the State Government. 
 17. Protection for acts done in good faith.- No suit or other legal proceeding shall 
lie against any director of the Board or the Chief Welfare Fund Inspector or any Welfare 
Fund Inspector or any other member of the staff of the Board or any person in respect of 
anything which is in good faith done or intended to be done under this Act or under the 
scheme. 
 18. Special provisions for transfer and vesting of welfare funds established by 
custom or agreement.- All welfare funds established by custom or agreement before 
the date of commencement of this Act and standing to the credit of any employee on the 
date of commencement of this Act shall, notwithstanding anything to the contrary 
contained in any law for the time being in force or in any deed or other instrument, stand 
transferred to and vest in the Fund and shall be credited to the accounts of the 
employees entitled thereto in the Fund. 
 19. Bar of jurisdiction of civil court.- No civil court shall have jurisdiction to settle, 
decide or deal with any question or to determine any mater which is by or under this Act 
required to be settled, decided or dealt with or to be determined by the State 
Government or the Board or the Chief Welfare Fund Inspector or any Welfare Fund 
Inspector. 
 20. Power to make rules.- (1) The State Government may, by notification in the 
Official Gazette, make rules for the purpose of carrying into effect the provisions of this 
Act. 
 (2) Every rule made under this Act shall be laid, as soon as may be after it is made, 
before each House of the State Legislature while it is in session for a total period of thirty 
days which may be comprised in one session or in two or more successive sessions and 
if, before the expiry of the session in which it is  so laid or the session immediately 
following, both Houses agree to make any modification in the rule or decides that the 
rule should not be made, the rule shall thereafter have effect only in such modified form 
or be of no effect as the case may be; so, however,  that any such modification or 
annulment shall be without prejudice to the validity of anything previously done under 
that rule. 
 21. Amendment of Schedule.-  The State Government may, by notification, add any 
matter to the Schedule : 
 Provided that no matter unrelated to the objects of this Act shall be so added. 
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SCHEDULE 
[See section 4 (1)] 
Matters for which provisions may be made in the Scheme : 
 1. The time and manner in which contributions shall be made to the Fund by 
employers and by or on behalf of employees (whether employed directly or by or 
through a contractor), the contributions which an employee may make under 
section 3 and the manner in which such contributions may be recovered. 
 2. The manner in which employees' contributions may be recovered by contractors 
from employees employed by or through such contractors. 
 3. The payment by the employer of such sum of money as may be necessary to meet 
the cost of administering the Fund and the rate at which and the manner in which 
such payment shall be made. 
 4. The constitution of any committee for assisting the Toddy Workers'  Welfare Fund 
Board. 
 5. The manner in which accounts shall be kept, the investment of money belonging to 
the Fund in accordance with any directions issued or conditions specified by the 
State Government, the preparation of the budget, the audit of accounts and the 
submission of reports to the State Government. 
 6. The conditions under which withdrawals from the Fund may be permitted and any 
deduction or forfeiture may be made and the maximum amount of such deduction 
or forfeiture. 
 7. The fixation by the State Government in consultation with the Board the rate of 
interest payable to members. 
 8. The form in which an employee shall furnish particulars about himself and his 
family whenever required. 
 9. The nomination of a person to receive the amount standing to the credit of a 
member after his death and the cancellation or variation of such nomination. 
 10. The register and records to be maintained with respect to employees and the 
return to be furnished by the employers or contractors. 
 11. The form or design of any identity card, token or disc for the purpose of identifying 
any employee, and for the issue, custody and replacement thereof. 
 12. The fees to be levied for any of the purposes specified in this Act or Schedule. 
 13. The powers, if any,  which may be exercised by the officers appointed under this 
Act. 
 14. The conditions under which a member may be permitted to pay premia on life 
insurance from the Fund. 
 15. The manner in which the directors of the Board shall be chosen and appointed. 
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 16. The conditions of service, duties and remuneration of officers appointed under this 
Act. 
 17. The manner in which any welfare fund vested under section 18 is to be brought 
and credited to the accounts of the employees entitled thereto in the Fund. 
 18. The rate of gratuity payable to members and the conditions for such payment. 
 19. The conditions under which any amount due to the Board may be written off. 
 20. Any other matter which is to be provided for in the scheme or which may be 
necessary or proper for the purposes of implementing the scheme.  
 
NOTIFICATION 
Bangalore, dated 29th September, 1984.  [No. SWL, 85 LBW 84] 
 S.O. 1387.- In exercise of the powers conferred by sub-section 2 of section 1 of the 
Karnataka Toddy Workers Welfare Fund Act 1981 published in part IV-2B of Karnataka 
Gazette (Extraordinary) dated 8th June, 1984,  the Government of Karnataka specifies 
2nd October, 1984 as the date from which the said Act shall come into force. 
   By order and in the name of the Governor of 
Karnataka, 
 
H.H. SAIT 
Under Secretary to Government, 
Social Welfare and Labour Department. 
 (Published in the Karnataka Gazette (Extraordinary) Part IV- 2C (ii) as No. 550 dated 
1-10-1984.)
 
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