A bench of Justice M.B. Lokur and Justice N.V. Ramana made it clear and directed that in terms of the MGNREGA and Schedule II thereof a "worker is entitled to payment of wages within a fortnight" of the date on which the work was done, failing which the worker is entitled to the compensation.
"The burden of compliance is on the state governments and Union Territory administrations as well as the Centre. One entity cannot pass on the burden to another and vice versa," it added.
"We direct the Centre through the Rural development ministry, in consultation with the state governments and Union Territory administrations to prepare an urgent time bound mandatory programme to make the payment of wages and compensation to the workers.
"This is not only in the interest of the workers who have expended unskilled manual labour but also in furtherance of the rule of law which must be followed in letter and spirit."
The court's verdict came on a PIL filed by an NGO Swaraj Abhiyan through advocate Prashant Bhushan, that alleged delay in payment of wages and compensation to the beneficiaries under the MGNREGA.
The bench in its judgment said "delays are simply not acceptable" and bureaucratic delays or red tape cannot be pedalled as an excuse to deny payment of wages to the workers.
"There cannot be any justifiable reason to delay payment of wages or justifiable denial of compensation for delayed payment of wages. Any delay in payment of wages or compensation violates statutory provisions," said the bench.
"Not withstanding the large number of pay orders, we are afraid delays are simply not acceptable. The law requires and indeed mandates payment of wages not later than a fortnight after the date on which the work was done by the worker or labourer.
"Any reason for the delay in receiving wages is not at all the concern of the worker. He or she is entitled to get the due wages within a fortnight of completion of the work. If there are any administrative inefficiencies or deficiencies or laxity, it is entirely for the State Government and the Ministry of Rural Development to sort out the problem."
The apex court also said that delayed payment adds several crores to the compensation bill and this is to "nobody's advantage" and merely "adds an avoidable financial burden" on the Centre.
Earlier, the Centre had told the bench that MGNREGA is a "huge public interest" project and no country in the world could have undertaken such an exercise where 10 lakh daily payments were made.
Bhushan, appearing for the NGO had argued that the Centre was forcing the states to slash their projected demand for funds under the scheme due to which the states were unable to provide employment to people.
The NGO had argued that the Centre cannot cap the funds under the Act which provides for 100 days of employment per family per year.
In 2016-17 financial year, 20 states had crossed the agreed budget and the Centre had provided the funds to them, the Centre added that the position was similar for 2017-18 with 12 state governments and Union Territory exceeded the agreed budget and funds were released.
The bench said the Ministry of Rural Development deserves compliment which has reacted positively and brought about some significant changes to make the MGNREGA and the scheme more effective.