Dismissed¶75

Dharmapuri District Central v. the Appellate Authority

Madras HC29 Apr 2025WP/22854/2006

Case brief

AI extract

What is this about?

Tamil Nadu Payment of Subsistence Allowance Act; Section 2(a) definition of 'employee'; managerial/administrative exclusion; supervisory employee drawing wages exceeding Rs.3,500 p.m.; Section 3; co-operative bank Manager; Special By-laws service conditions; subsistence allowance 50% of basic pay; suspension; surcharge proceedings; writ of certiorari Article 226; writ petition dismissed; precedent (2009) 7 MLJ 1025 distinguished; legal heirs substituted after employee's death; Dharmapuri District Central Co-operative Bank.

What did the court decide?

No relief to the petitioner; the writ petition was dismissed. The orders of respondents 1 and 2 were left undisturbed (not set aside), and the subsistence allowance already sanctioned to the deceased third respondent was not to be modified. ¶75

Dharmapuri District Central Vs the Appellate Authority — Writ and Judicial Review | Madras HC (2025)

What the court decided

AI extract

Outcome

¶75

Issue for consideration

Whether the third respondent, employed as Manager of the petitioner Bank and drawing a salary of Rs.14,850/- per month, falls within the definition of 'employee' under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act so as to be entitled to subsistence allowance under the Act. +1 more

¶62

Court's answer

The third respondent, who worked as Manager and drew a salary of Rs.14,850/- per month (exceeding Rs.3,500/- p.m.), does not fall within the purview of 'employee' under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act; the Act is therefore not applicable to him. The authorities below had discussed the nature of his work but failed to consider the salary drawn by him.

¶70

Ratio / Principle

The judgment in Special Officer, No.989, M.Pakkam Primary Agricultural Co-operative Bank, Pakkam Vilage Vs. Srinivasan, (2009) 7 MLJ 1025, relied upon by the petitioner's counsel, is not applicable to the facts of this case, since the employee here was a Manager drawing Rs.14,850/- p.m. governed by the Bank's Special By-laws.

¶58

Key takeaways

A person not covered by the Tamil Nadu Payment of Subsistence Allowance Act is entitled, under the Special By-laws relating to the service conditions of the employees of Dharmapuri District Central Co-operative Bank Ltd., to subsistence allowance not exceeding 50% of basic pay during suspension; accordingly the third respondent is entitled to 50% of the basic salary as subsistence allowance under the By-laws.ratio¶74
Although the orders of respondents 1 and 2 holding the third respondent entitled to subsistence allowance under the Act were 'not correct', they need not be set aside: the third respondent died during the pendency of the writ petition, the petitioner Bank itself had stated at the time of the suspension order that he was entitled to subsistence allowance under the Act, and the amount already sanctioned need not be modified; after his demise it is not appropriate to set aside the orders of the Authorities.ratio¶74

Detailed headnote1 paragraphs

Madras High Court (P. Dhanabal, J.), W.P.No.22854 of 2006, delivered 29.04.2025 — Dismissed the writ petition of Dharmapuri District Central Co-operative Bank Ltd. challenging, under Article 226, the Appellate Authority's order in P.S.A.A.No.4 of 2005 (dt. 31.05.2006) confirming the Assistant Commissioner of Labour's order in P.S.A.No.35 of 2004 (dt. 31.01.2005) granting Rs.1,18,800/- subsistence allowance to M. Muthu (since deceased; legal heirs substituted as R4–R7), a suspended Manager drawing Rs.14,850/- p.m. Held: a Manager drawing more than Rs.3,500/- p.m. is excluded from the definition of 'employee' under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, so the Act does not attract him; under the Bank's Special By-laws he is entitled to subsistence allowance not exceeding 50% of basic pay. The orders of respondents 1 and 2 were found 'not correct' but were deliberately not set aside in view of the third respondent's demise during the writ petition and the Bank's own stand at the time of suspension that he was entitled under the Act; the amount already sanctioned need not be modified. The precedent reported at (2009) 7 MLJ 1025 was held inapplicable to these facts.

¶1

W.P.No.22854 of 2006

¶2

IN THE HIGH COURT OF JUDICATURE AT MADRAS

¶3

Reserved on : 31.01.2025

¶4

Delivered on : 29.04.2025

¶5

Coram: THE HONOURABLE MR.JUSTICE P.DHANABAL

¶6

W.P.No.22854 of 2006

¶7

Dharmapuri District Central Co-operative

¶8

Bank Ltd., rep. by its General Manager, Dharmapuri – 636 701.

¶9

... Petitioner

¶10

Vs.

¶11

1.The Appellate Authority, Tamil Nadu Payment of Subsistence Allowance Act, Salem.

¶12

2.The Assistant Commissioner of Labour/

¶13

Authority under Tamil Nadu Payment of Subsistence Allowance Act,

Salem -17.

3.M.Muthu (died)

4.Suganthira

5.Balaji

6.Sridevi

7.Kuppammal ... Respondents

¶20

(R4 to R7 are substituted as LRs of deceased/R3 vide order dated 30.07.2024 in W.M.P.No.6308 of 2020)

¶21

PRAYER : Writ Petition filed under Article 226 of the Constitution of

¶22

1/11

¶23

https://www.mhc.tn.gov.in/judis

¶24

W.P.No.22854 of 2006

¶25

India, praying to issue a Writ of Certiorari to call for the records of the

¶26

first respondent in P.S.A.A.No.4 of 2005, dated 31.05.2006 confirming the order of the second respondent in P.S.A.No.35 of 2004, dated 31.01.2005

¶27

and quash the same.

¶28

For petitioner : Mr. M.S. Palanisamy

¶29

For respondents : Mr. M. Murali [For R1 & R2] Government Advocate.

¶30

O R D E R

¶31

This Writ Petition is filed by the petitioner challenging the order

¶32

passed by the first respondent in P.S.A.A.No.4 of 2005, dated 31.05.2006 confirming the order of the second respondent in P.S.A.No.35 of 2004, dated 31.01.2005 and quash the same.

¶33

The case of the petitioner is that the third respondent, who was

¶34

working as Manager of the petitioner's Bank, committed serious irregularities in the affairs of the bank. Hence, he was suspended from the service on 19.06.2001 and the disciplinary proceedings were initiated

¶35

2/11

¶36

https://www.mhc.tn.gov.in/judis

¶37

W.P.No.22854 of 2006

¶38

against him. The third respondent created false accounts and forged documents and thereby, misappropriated of a sum of Rs.22,83,000/-. Therefore, Surcharge Proceedings were initiated against him and the same is in execution stage. While so, the third respondent filed a petition before the second respondent in P.S.A.No.35 of 2004, claiming subsistence allowances for the period from 01.02.2004 to 30.09.2004 and the second respondent, without considering the objection raised by the petitioner's bank, allowed the petition and ordered to pay subsistence allowance of Rs.1,18,800/- to the third respondent. The said order was challenged through appeal before the first respondent in P.S.A.A.No.4 of 2005, who is the Appellate Authority under the Tamil Nadu Payment of Subsistence Allowance Act (hereinafter referred as ‘the Act’) and the same was also dismissed. Therefore, by challenging the said order, the Writ Petition in W.P.No.25257 of 2004 was filed before this Court, wherein this Court remanded the matter back to the first respondent to consider the appeal under the Act. However, again the first respondent, without applying his mind, allowed the appeal filed by the third respondent. The third respondent was working as Manager of the bank. As per the Act, a person, who was drawing salary exceeding Rs.3,500/- p.m. will not come

¶39

3/11

¶40

https://www.mhc.tn.gov.in/judis

¶41

W.P.No.22854 of 2006

¶42

under the purview of the the Act. Therefore, the third respondent is not entitled to avail subsistence allowance, as he was drawing salary of Rs.14,850/- p.m. However, the first respondent, without considering the same, passed the order. Therefore, the impugned order passed by the first respondent is liable to be set aside.

¶43

During the pendency of the Writ Petition, the third respondent died and his legal heirs were impleaded as R4 to R7.

¶44

The learned counsel for the legal heirs of the third respondent/respondents 4 to 7 would submit that the third respondent was suspended by the authorities. During his suspension period, no subsistence allowance was sanctioned for the third respondent. Thereby, he approached the concerned Authority and they awarded the subsistence allowance as per the Act. Further, the Appellate Authority had also confirmed the order passed by the Authority. The Assistant Commissioner

¶45

of Labour/second respondent has analysed the judgment of the various High Courts and came to a conclusion that the third respondent is entitled to avail subsistence allowance and he has not come under Officer category

¶46

4/11

¶47

https://www.mhc.tn.gov.in/judis

¶48

W.P.No.22854 of 2006

¶49

and further, he had not been doing the duty of administrative post. Therefore, the order passed by the second respondent is in order. The first respondent/Appellate Authority also confirmed the order. Therefore, the present petition is liable to be dismissed.

¶50

This Court heard both sides and perused the records.

¶51

The main contention of the petitioner is that the third respondent was working as Manager in Dharmapuri Central Co-op Bank Ltd. There is a Specific By-laws relating to the service conditions of the employees. As per the Special By-Laws, the Authority, competent to suspend an employee, may sanction a subsistence allowance at a rate not exceeding 50% of the basic pay to the suspended employee during the period of his suspension, who does not come under the purview of the Tamil Nadu Payment of Subsistence Allowance Act. In respect of suspended employees, who come under the purview of the Tamil Nadu Payment of Subsistence Allowance Act, the subsistence allowance shall be paid in accordance with Section 3 of the Tamil Nadu Payment of Subsistence Allowance Act. The petitioner, being Manager, will not come under the post of employee as per the Act. Therefore, he is entitled to 50% of the

¶52

5/11

¶53

https://www.mhc.tn.gov.in/judis

¶54

W.P.No.22854 of 2006

¶55

basic pay as subsistence allowance during the suspension period.

¶56

According to the petitioner, the third respondent was working as Manager as per Section 2(a) of the Act and he will not come under the definition of employee. According to the respondents 4 to 7, the third respondent was not doing any administrative work, though he was in the post of Manager. Hence, he was not in any administrative work as per Section 2(a) of the Act.

¶57

The learned counsel for the petitioner also relied upon the judgment of this Court in Special Officer, No.989, M.Pakkam Primary Agricultural Co-operative Bank, Pakkam Vilage Vs. Srinivasan, reported in (2009) 7 MLJ 1025 .

¶58

On a careful perusal of the above said judgment, it reveals that the judgement will not be applicable to the facts of this case. In this case, the petitioner was working as Manager and was drawing salary of Rs.14,850/p.m. There are Special By-Laws relating to service conditions of employees of the Dharmapuri Central Co-op Bank Ltd. As per the above said By-Laws, a person, who does not come under the purview of the 6/11

¶59

https://www.mhc.tn.gov.in/judis

¶60

W.P.No.22854 of 2006

¶61

Tamil Nadu Payment of Subsistence Allowance Act, the subsistence allowance shall be paid at the rate of not existing 50% of basic pay during his suspension period. Therefore, the above said case will not be applicable to the facts of the present case.

¶62

The third respondent was drawing salary more than Rs.3,500/p.m. i.e., Rs.14,850/- p.m. Therefore, he will not come under the purview of employee. Moreover, as per Section 2(a)(i), who is employed mainly in the administrative capacity, the person will not come under the purview of the employee. Section 2(a) of the Act, reads as follows:

¶63

“(a) “employees” means any person employed in, or in connection with the work or activities of any establishment to do any skilled, semi-killed, Manual, Supervisory, technical, clerical or any other kind of work or activities for hire or reward, whether the terms of employmnet be expressed or implied, but does not include any such person-

¶64

(i) Who is employed mainly in a managerial or administrative capacity; or

¶65

(ii) Who, being employed in a supervisory capacity [draws wages exceeding three thousand and five hundred rupees per mensem] or exercise, either by the nature of the

¶66

7/11

¶67

https://www.mhc.tn.gov.in/judis

¶68

W.P.No.22854 of 2006

¶69

duties attached to the office or by reason of the powers vested to him, functions mainly of a managerial nature;”

¶70

The third respondent was working as Manager and he was drawing salary of Rs.14,850/- p.m. Therefore, he will not come under the purview of employee under Section 2(a) of the Act. Therefore, the Tamil Nadu Payment of Subsistence Allowance Act will not be applicable to the 3rd respondent who was working as Manager and drawing a salary of Rs.14,850/- per month. However, the first and second respondent had discussed about the nature of work done by the third respondent, but failed to consider the salary drawn by the third respondent. Therefore, as per the Special By-laws relating to the service conditions of the employees of M/s. Dharmapuri District Central Co-operative Bank Ltd.,, a person, who is not covered under the purview of the Act, is only entitled to not exceeding 50% of the basic pay as subsistence allowance during the suspension period. Since the petitioner was working as Manager and was drawing salary of exceeding Rs.3,500/- p.m., the Tamil Nadu Payment of Subsistence Allowance Act would not attract and the By-laws only applicable to the third respondent. Therefore, the order passed by the respondents 1 and 2 by holding that the third respondent is entitled to

¶71

8/11

¶72

https://www.mhc.tn.gov.in/judis

¶73

W.P.No.22854 of 2006

¶74

subsistence allowance under the Tamil Nadu Payment of Subsistence Allowance Act, is not correct and the 3rd respondent is covered by the special By-laws for service conditions of Dharmapuri Central Co-op Bank Ltd and as per By-laws, the third respondent is entitled to 50% of the basic salary as Subsistence Allowance. However, during the pendency of the Writ Petition, the third respondent died and the petitioner Bank also at the time of passing suspension order stated that the third respondent is entitled to subsistence allowance as per the Tamil Nadu Payment of Subsistence Allowance Act. Therefore, the amount already sanctioned to the third respondent need not be modified. Therefore, the order passed by the respondents 1 and 2 need not be set aside. In view of the said reasons, after demise of the third respondent, it is not appropriate to set aside the order passed by the Authorities.

¶75