The apex court also said it was "ridiculous" that the money meant for the workers was spent on the 'babus' and advertisements.
"It is simply shocking and amazing. It cannot get worse than this. This is the sorry state of affairs," said a social justice bench of Justices Madan B Lokur and U U Lalit.
Expressing dissatisfaction over the replies filed by the governments of Delhi, Uttar Pradesh, Haryana and Rajasthan on collection and utilisation of the amounts and the proposals for utilisation, the bench asked the Union Labour Secretary to file an affidavit on how the Centre wanted to utilise the money.
It was particularly harsh on Delhi government for spending Rs 2.5 crore from the fund for advertisements.
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"Why you are spending Rs 2.5 crore on advertisements? Give us the list of beneficiaries," it said, adding "we are extremely disturbed that there are thousands of crores of rupees which are not being used for the purpose for which it was collected."
Earlier, the court had asked Haryana, Rajasthan, Uttar Pradesh and Delhi governments to "file their submissions on affidavit with regard to collection and utilisation of the amounts and proposals for utilisation within two weeks."
The court had passed the order after certain facts were pointed out to it, including that Haryana had over the years collected Rs 1314.86 crore under the Building and Other Construction Workers' Welfare Cess Act, but disbursed only Rs 52 crores, with even the details of which being unavailable.