Dismissed¶82

Dharmapuri District Central v. the Appellate Authority

Madras HC29 Apr 2025WP/22855/2006

Case brief

AI extract

What is this about?

Tamil Nadu Payment of Subsistence Allowance Act; Section 2(a) definition of 'employee'; exclusion of persons employed mainly in managerial/administrative capacity; Section 2(a)(i); supervisory-capacity wage ceiling Rs.3,500 per mensem; suspended Manager of co-operative bank; Special By-laws of Dharmapuri District Central Co-operative Bank — subsistence allowance capped at 50% of basic pay; Appellate Authority and Assistant Commissioner of Labour, Salem; writ of certiorari dismissed after claimant's death; legal heirs substituted as respondents; (2009) 7 MLJ 1025 distinguished.

What did the court decide?

None to the petitioner; the prayer to quash the orders of respondents 1 and 2 was refused, those orders were left undisturbed, and the subsistence allowance already sanctioned was not modified. ¶82

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

What the court decided

AI extract

Outcome

None to the petitioner; the prayer to quash the orders of respondents 1 and 2 was refused, those orders were left undisturbed, and the subsistence allowance already sanctioned was not modified.

¶82

Issue for consideration

Whether the third respondent, employed as Manager of the petitioner bank and drawing 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, given the exclusions for persons employed mainly in a managerial/administrative capacity and for supervisory employees drawing wages exceeding Rs.3,500/- per mensem. +2 more

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Court's answer

The third respondent, working as Manager and drawing salary of Rs.14,850/- per month — above the Rs.3,500/- per mensem ceiling for supervisory employees and employed mainly in a managerial/administrative capacity (Section 2(a)(i)) — does not come within the definition of 'employee' under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act; the Act is therefore not applicable to him.

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Ratio / Principle

Since the Act does not apply, the Special By-laws relating to the service conditions of the employees of the Dharmapuri Central Co-operative Bank govern; as per the By-laws, the third respondent is entitled to 50% of the basic salary as subsistence allowance during the suspension period.

¶81

Key takeaways

Notwithstanding the above findings, because the third respondent died during the pendency of the writ petition and the petitioner Bank itself had stated at the time of the suspension order that he was entitled to subsistence allowance under the Tamil Nadu Payment of Subsistence Allowance Act, the amount already sanctioned need not be modified, the orders of respondents 1 and 2 need not be set aside, and it is not appropriate to set aside those orders after his demise.ratio¶81

Detailed headnote1 paragraphs

W.P.No.22855 of 2006 (Madras HC, delivered 29.04.2025, P. Dhanabal J.) — DISMISSED. Dharmapuri District Central Co-operative Bank sought a writ of certiorari under Article 226 against the Appellate Authority's order in P.S.A.A.No.2 of 2005 (dated 31.05.2006) confirming the Assistant Commissioner of Labour's order in P.S.A.No.20 of 2004 (dated 17.12.2004) directing payment of Rs.1,83,465/- subsistence allowance to its suspended Manager M. Muthu (suspended 19.06.2001 amid disciplinary proceedings; alleged misappropriation of Rs.22,83,000/- with surcharge proceedings in execution). An earlier appeal had been dismissed, revived by remand in W.P.No.25257 of 2004, and again allowed by the Appellate Authority. The Court held that Muthu, drawing Rs.14,850/- p.m. — above the Rs.3,500/- p.m. ceiling for supervisory employees — and employed mainly in a managerial capacity, fell outside the definition of 'employee' under Section 2(a) (including Section 2(a)(i)) of the Tamil Nadu Payment of Subsistence Allowance Act; the Act therefore did not apply to him, and the Bank's Special By-laws (rate not exceeding 50% of basic pay) governed instead. The Court relied upon but distinguished Special Officer, No.989, M.Pakkam Primary Agricultural Co-operative Bank, Pakkam Vilage v. Srinivasan, (2009) 7 MLJ 1025, as inapplicable to these facts. Nevertheless, because Muthu died during the pendency of the writ petition (his legal heirs substituted as R4 to R7) and the Bank had itself stated at the time of the suspension order that the Act applied, the Court held the amount already sanctioned need not be modified and the orders of respondents 1 and 2 need not be set aside; the writ petition was dismissed.

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W.P.No.22855 of 2006

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Reserved on : 31.01.2025

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Delivered on : 29.04.2025

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Coram: THE HONOURABLE MR.JUSTICE P.DHANABAL

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W.P.No.22855 of 2006

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Dharmapuri District Central Co-operative

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Bank Ltd.,

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

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... Petitioner

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Vs.

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1.The Appellate Authority,

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Tamil Nadu Payment of Subsistence Allowance Act, Salem.

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2.The Assistant Commissioner of Labour/

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Authority under Tamil Nadu Payment of Subsistence Allowance Act,

Salem -17.

3.M.Muthu (died)

4.Suganthira

5.Balaji

6.Sridevi

7.Kuppammal ... Respondents

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(R4 to R7 are substituted as LRs of deceased/R3 vide order dated 30.07.2024 in W.M.P.No.6311 of 2020)

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

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

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W.P.No.22855 of 2006

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

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first respondent in P.S.A.A.No.2 of 2005, dated 31.05.2006 confirming the

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order of the second respondent in P.S.A.No.20 of 2004, dated 17.12.2004

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and quash the same.

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For petitioner : Mr. M.S. Palanisamy

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

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R3 - died Mr. G. Ethirajulu [For R4 to R7] *****

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O R D E R

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This Writ Petition is filed by the petitioner challenging the order

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passed by the first respondent in P.S.A.A.No.2 of 2005, dated 31.05.2006 confirming the order of the second respondent in P.S.A.No.20 of 2004, dated 17.12.2004 and quash the same.

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

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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

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

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W.P.No.22855 of 2006

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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.20 of 2004, claiming subsistence allowances for the period from 15.12.2002 to 31.01.2004 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.1,83,465/- to the third respondent. The said order was challenged through appeal before the first respondent in P.S.A.A.No.2 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

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W.P.No.22855 of 2006

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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.

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

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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

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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

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W.P.No.22855 of 2006

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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.

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This Court heard both sides and perused the records.

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The main contention of the petitioner is that the third respondent

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was working as Manager in Dharmapuri Central Co-operative 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 d oes not come under the purview of the Tamil Nadu Payment of Subsistence Allowances, Act. In respect of suspended employees, who come under the purview of the Tamil Nadu Payment of Subsistence Allowances, Act the subsistence allowance shall be paid in accordance with Section 3 of the Tamil Nadu Payment of Subsistence Allowances, Act. The petitioner, being Manager, will not come under the post of employee as per the Act. Therefore, he is entitled

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W.P.No.22855 of 2006

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to 50% of the basic pay as subsistence allowance during the suspension period.

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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.

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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 .

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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

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W.P.No.22855 of 2006

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employees for the Dharmapuri Central Co-operative Bank Ltd. As per the above said By-Laws, a person, who does not come under the purview of the Tamil Nadu Payment of Subsistence Allowances, Act, the subsistence allowance shall be paid at the rate 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.

¶68

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:

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“(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-

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

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(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

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W.P.No.22855 of 2006

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

¶76

The third respondent was working as Manager and he was

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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 Allowances, Act will not be applicable to the 3rd respondent who was working as Manager and drawing 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 the Dharmapuri District Central Co-operative Bank, 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

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W.P.No.22855 of 2006

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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 employees of the Dharmapuri Central Co-operative 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.

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In view of the above, this Writ Petition is dismissed.

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29.04.2025 Index:Yes/No (3/3) Neutral Citation:Yes/No Speaking order/Non-speaking order apd / mjs

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W.P.No.22855 of 2006

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

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2.The Assistant Commissioner of Labour/ Authority under Tamil Nadu Payment of Subsistence Allowance Act, Salem -17.

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

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W.P.No.22855 of 2006

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P.DHANABAL,J apd / mjs

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Pre-delivery order made in W.P.No.22855 of 2006

29.04.2025

(3/3)

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Issues for consideration

3 issues framed by the court

AI extract

1.
Whether the third respondent, employed as Manager of the petitioner bank and drawing 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, given the exclusions for persons employed mainly in a managerial/administrative capacity and for supervisory employees drawing wages exceeding Rs.3,500/- per mensem.¶68
The court held
The third respondent, working as Manager and drawing salary of Rs.14,850/- per month — above the Rs.3,500/- per mensem ceiling for supervisory employees and employed mainly in a managerial/administrative capacity (Section 2(a)(i)) — does not come within the definition of 'employee' under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act; the Act is therefore not applicable to him.ratio¶77
2.
Whether the subsistence allowance payable to the suspended Manager is governed by the Tamil Nadu Payment of Subsistence Allowance Act or by the bank's Special By-Laws, under which a suspended employee not covered by the Act may be sanctioned allowance at a rate not exceeding 50% of basic pay.¶56
The court held
Since the Act does not apply, the Special By-laws relating to the service conditions of the employees of the Dharmapuri Central Co-operative Bank govern; as per the By-laws, the third respondent is entitled to 50% of the basic salary as subsistence allowance during the suspension period.ratio¶81
3.
After the death of the third respondent during the pendency of the writ petition, whether the orders of respondents 1 and 2 awarding subsistence allowance under the Act should nonetheless be set aside.medium confidence¶81
The court held
Notwithstanding the above findings, because the third respondent died during the pendency of the writ petition and the petitioner Bank itself had stated at the time of the suspension order that he was entitled to subsistence allowance under the Tamil Nadu Payment of Subsistence Allowance Act, the amount already sanctioned need not be modified, the orders of respondents 1 and 2 need not be set aside, and it is not appropriate to set aside those orders after his demise.ratio¶81

Dharmapuri District Central v. the Appellate Authority

Case brief

What is this about?

What did the court decide?

Dharmapuri District Central v. the Appellate Authority

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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