This week in Indian law: Karnataka became the first Indian state to mandate a welfare fee for platform gig workers, creating a groundbreaking model for gig economy regulation. The Supreme Court ruled that notice under Section 35(3) of the BNSS before arrest is mandatory, not discretionary, strengthening procedural safeguards for accused persons. Parliament passed retroactive amendments to the Industrial Relations Code 2020, while the NCLT recalled a CIRP order after ED intervention, and SEBI eased certification norms for research analysts. 5 significant legal developments this week across labour legislation, criminal procedure, insolvency, and securities regulation.
Top story
Karnataka Mandates Welfare Fee for Platform Gig Workers
Category: legislative-policy | Date: March 2026
Karnataka has enacted legislation making it the first Indian state to mandate a welfare fee of 1-2% of transaction value payable by platform companies — including food delivery, ride-hailing, and logistics aggregators — into a dedicated gig worker welfare fund. The law covers platform-based workers who have been largely outside the ambit of traditional labour legislation due to their classification as independent contractors rather than employees. The welfare fund will finance social security benefits including health insurance, accident coverage, and pension contributions for gig workers. The legislation establishes a regulatory framework that defines the obligations of platform companies, the entitlements of gig workers, and the governance structure of the welfare fund.
Why it matters: This is a watershed moment in Indian labour law. Karnataka's legislation provides a template that other states and potentially the Central Government will follow. Platform companies operating in Karnataka must immediately assess the financial and compliance impact. The law effectively creates a new category of labour welfare obligation without requiring the reclassification of gig workers as employees — a pragmatic middle path that addresses welfare gaps while preserving platform business models.
Court judgments
SC Rules BNSS Section 35(3) Notice to Accused Is Mandatory
Court: Supreme Court of India | Date: March 2026
The Supreme Court has held that notice to an accused person under Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita (BNSS) before arrest in cases punishable with imprisonment of less than 3 years is mandatory and not discretionary. The ruling addresses early interpretive uncertainty around the BNSS, which replaced the Code of Criminal Procedure in 2024. Some police authorities had treated the notice requirement as optional, proceeding to arrest without first giving the accused an opportunity to appear. The Court held that the legislative intent behind Section 35(3) is to provide a procedural safeguard against unnecessary arrests in less serious offences, and this purpose would be defeated if the provision were treated as merely directory.
Key point: Police must issue notice under BNSS Section 35(3) before arresting any person accused of an offence carrying less than 3 years imprisonment — non-compliance renders the arrest procedurally infirm and may constitute grounds for challenging custody.
Why it matters: Defence practitioners now have a clear Supreme Court ruling to challenge arrests made without prior notice in sub-3-year offences. This is one of the first significant judicial pronouncements interpreting the BNSS arrest provisions, and it signals the Court's intent to enforce the procedural safeguards built into the new criminal code.
Legislative and policy developments
Parliament Amends Industrial Relations Code 2020 Retroactively
Date: March 2026
Parliament has passed retroactive amendments to the Industrial Relations Code 2020, one of the four labour codes that were enacted to consolidate and simplify India's labour law framework. The amendments address implementation gaps that had left key provisions in a state of ambiguity since the Code's enactment. While the specific operative sections and rules under the original 2020 Code had faced delays in notification and enforcement, these retroactive amendments seek to clarify transitional provisions and resolve inconsistencies that emerged during the prolonged implementation process.
Why it matters: Employers, trade unions, and labour law practitioners must review the amendments to understand how they affect ongoing compliance obligations. Retroactive application means that existing arrangements — including standing orders, dispute resolution procedures, and worker classification — may need reassessment in light of the amended provisions.
Regulatory updates
NCLT Recalls CIRP Against Alchemist After ED Intervention
Tribunal: National Company Law Tribunal | Date: March 2026
In an unusual procedural development, the NCLT recalled its own order initiating the Corporate Insolvency Resolution Process against Alchemist following intervention by the Enforcement Directorate. The ED's objection was grounded in the attachment of the company's assets as proceeds of crime under the Prevention of Money Laundering Act. This case highlights the growing tension between the IBC resolution framework and PMLA enforcement, where competing claims on the same assets create procedural deadlocks. The recall of a CIRP initiation order on ED's intervention is a relatively rare occurrence and may set a concerning precedent for the primacy of insolvency resolution.
Why it matters: This development raises critical questions about the hierarchy between IBC proceedings and PMLA attachments. Resolution professionals and creditors must now factor in the possibility of ED intervention derailing insolvency proceedings, particularly where the corporate debtor's assets have connections to money laundering investigations.
SEBI Eases Certification Norms for Research Support Staff
Regulator: Securities and Exchange Board of India (SEBI) | Date: March 2026
SEBI has relaxed the NISM (National Institute of Securities Markets) certification requirements for research support staff employed by registered research analysts. The relaxation recognises that support staff — who assist with data compilation, formatting, and administrative tasks — do not perform the analytical functions that necessitate full NISM certification. The revised norms differentiate between research analysts who generate investment recommendations and support personnel who facilitate the research process.
Why it matters: Research analyst firms can now onboard and retain support staff more easily without the compliance burden of mandatory NISM certification for non-analytical roles, reducing operational costs while maintaining certification standards for personnel who actually produce research recommendations.
By the numbers
- 1-2% — Welfare fee on transaction value that Karnataka platforms must pay for gig workers
- 3 years — Imprisonment threshold below which BNSS Section 35(3) pre-arrest notice is now confirmed mandatory
- 6 years — Time since the Industrial Relations Code 2020 was enacted, now retroactively amended to address implementation gaps
Looking ahead
- Karnataka implementation: The gig worker welfare fee rules and implementation timeline will be closely watched by other states, platform companies, and labour rights organisations
- BNSS interpretation: More Supreme Court pronouncements on BNSS provisions are expected as the new criminal code's application generates fresh interpretive questions across India's courts
- Income-Tax Rules 2026 comments: The public comment period on the draft Income-Tax Rules 2026 (released last week) continues, with professional bodies expected to submit detailed responses
This is the Veritect Weekly Legal Roundup for Week 10 of 2026 (5-11 March). For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.