Madras High Court
The Management Of Thekkalur Primary ... vs The Assistant Commissioner Of Labour, ... on 1 February, 2006
Equivalent citations: 2006(1)CTC784, (2006)IILLJ610MAD, (2006)1MLJ676
Author: Elipe Dharma Rao
Bench: Elipe Dharma Rao
ORDER Elipe Dharma Rao, J.
1. This writ petition was filed for the relief of issuance of a Writ of Certiorari, calling for the records of the second respondent in APSA No. 3/2000 and quash the order dated 27-11-2000.
2. Aggrieved by the order dated 27-11-2000 passed by thzze second respondent holding the third respondent was an "employee" of the petitioner within the meaning of Section 2(a) of the Tamilnadu Payment of Subsistence Allowance Act and, therefore, was entitled for the subsistence allowancethe petitioner has filed this writ petition.
3. Petitioner is a co-operative Bank and, according to the petitioner, the third respondent joined the services of the petitioner as "Secretary" and in such capacity, he was the chief executive of the administration of the bank and all the functions of the petitioner bank were carried out by the third respondent only. According to the petitioner, the third respondent was employed mainly in managerial and administrative capacity and as such he was not an "employee" within the meaning of Section 2(a) of the said Act.
4. While so, the third respondent, on certain alleged acts of misconduct, was suspended pending enquiry with effect from 9-1-1998 and a domestic enquiry was initiated against him. He was paid the subsistence allowance at the rate of 25% of his basic wages in terms of the by-law 12(c) of the petitioner bank.
5. The third respondent filed an application before the Assistant Commissioner of Labour, Coimbatore, first respondent herein, claiming subsistence allowance to the tune of Rs. 49,622.25 for the period from 9-1-1998 to 8-8-1998, which was resisted by the petitioner on the ground that the third respondent was not an "employee". The first respondent, on appreciation of the evidence adduced before him, by his order dated 3-12-1999 held that the third respondent was not an "employee" and therefore dismissed the application. Against the order passed by the first respondent, the third respondent preferred an appeal before the Deputy Commissioner of Labour, Coimbatore and the appellate authority, by his order dated 27-11-2000, set aside the order passed by the first respondent and held that the third respondent was an "employee" of the petitioner within the meaning of the said Act and, therefore, entitled for the subsistence allowance. Aggrieved, the petitioner has filed this writ petition.
6. Mr. Silambannan, learned counsel appearing for the petitioner submitted that the impugned order passed by the second respondent is not sustainable in law as he had taken into consideration extraneous issues and brushed aside the material evidence placed before him for holding that the third respondent was an "employee" of the petitioner. It was further contended that going by the nature of the duties performed by the third respondent and the quantum of salary drawn by him, it is evident that he was employed mainly in the managerial and administrative cadre of the petitioner bank. That apart, from the documentary evidence placed before the authorities concerned and also the oral evidence given by the third respondent before the first respondent, it is clear that the third respondent was discharging the managerial and executive functions of the petitioner bank. The second respondent committed a grave illegality by brushing aside such material piece of evidence against the third respondent. It was further asserted that the third respondent was dismissed from service by order dated 29-9-1999 and he has challenged the same before the Joint Registrar, Coimbatore. By the acts of serious irregularity and dishonesty, the third respondent had caused the financial loss to the petitioner bank to the tune of Rs. 5,55,252. In support of his contentions, learned counsel for the petitioner relied on the decision of this Court in The Management T.P. Spl.67 Goundanpalayam Primary Agriculture Co-Operative Bank Ltd. v. The Assistant Commissioner of Labour 2003 W.L.R. 371.
7. On the other hand, Mr. M. Sathiyanarayanan, learned counsel for the third respondent submitted that the claim of the petitioner that the third respondent was not an "employee" within the meaning of Section 2(a) of the Act is baseless. Learned counsel submitted that dominant purpose of employment of the third respondent was clerical and to carry out the instructions of the President and Special Officer of the petitioner bank and that the third respondent did not have any independent supervisory or managerial control over the other employees of the petitioner and also did not have the power to either recommend or sanction leave, to appoint or terminate or to take disciplinary action against the other employees or to operate the petitioner's bank account independently. Learned counsel denied the allegation of the petitioner that the third respondent himself in his evidence before the first respondent made certain significant admissions. Learned counsel argued that to determine the issue whether the third respondent was an "employe" of the petitioner has to be determined with reference to the dominant purpose of his employment and whether the third respondent, by the nature of his duties, was in a position to bind his employer in respect of the decisions that he had taken or in exercise of such power had control over them and going by the materials available on record and the evidence placed before the authorities, by no stretch of imagination it can be said that the third respondent was employed in the managerial and administrative capacity of the petitioner bank. The second respondent was, therefore, perfectly justified in setting aside the order passed by the first respondent and passing the impugned order holding that the third respondent was an "employee" of the petitioner and, therefore, he was entitled to claim subsistence allowance. In support of his contentions, learned counsel relied upon the decision of this Court in Selvaraj and Ors. v. Deputy Commissioner Of Labour, Salem 1989 I LLN 689 and the judgment of the Kerala High Court in Travancore Cochin Chemicals Co-Operative Limited v. Labour Court, Ernakulam 1989 I LLN 67. Learned counsel also relied on G.O. Ms. No. 55, Cooperation, Food and Consumer Protection Department, dated 24-3-2000 to contend that Secretary of a co-operative bank being a cadre employee, as per Clause 29(d) of the said Government Order, he is entitled to subsistence allowance as per the Payment of Subsistence Allowance Act, 1981.
8. The point for consideration is whether the third respondent, who was appointed as "secretary" in the petitioner bank and was drawing the salary of more than Rs. 3,500/- per month on the date of his suspension, was an "employee" within the meaning of Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act to claim subsistence allowance under the said Act during the period of his suspension from 9-1-1998 to 8-8-1998.
9. It is not in dispute that the third respondent joined the services of the petitioner bank as "Secretary" and drawing a salary of Rs. 10,447/- per month on the date when he was suspended from service on the ground of certain alleged acts of misconduct and that a domestic enquiry was initiated against him wherein the charges levelled against him were proved and he was terminated from service on 8-8-199. The third respondent claimed subsistence allowance as per the provisions of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 to the tune of Rs. 49,622.25 for the period from 9-1-1998 to 8-8-1998, which was resisted by the petitioner on the ground that the third respondent was not an "employee" within the meaning of Section 2(a) to claim subsistence allowance as per Section 3 of the said Act and that since he was working as "Secretary" of the petitioner-bank and falling within the definition of "Officer" under Section 2(19) of the Tamil Nadu Co-operative Societies Act, 1983, he can claim subsistence allowance at the rate of 25% of his basic wages as per the bylaw 12(c) of the petitioner bank whereas the petitioner is claiming subsistence allowance as per the provisions of the Tamil Nadu Payment of Subsistence Allowance Act, 1981. Therefore, let us have a glance at the Statement of Objects and Reasons and the relevant provisions of the Act.
10. When it was reported to the Government that out of the 1675 establishments for which Standing Orders under the Industrial Establishments (Standing Orders) Act, 1946 (Central Act XX of 1946) have been certified, 1631 establishments have not yet amended their Standing Orders to provide for payment of subsistence allowance to employees during the period of their suspension. The progress made by establishments in amending the Standing Orders providing for subsistence allowance has been far from satisfactory and further the Government have also been receiving representations that incorporation of the provisions relating to subsistence allowance in the Model Standing Orders in every industrial establishment is a cumbersome process and that a separate legislation might be thought of to make it obligatory on the part of the managements to pay subsistence allowance to the employees during the period of their suspension in any enquiry. The Government, accordingly, enacted the Tamil Nadu Payment of Subsistence Allowance Act, 1981.
11. From the above Statement of Objects and Reasons, it is evident that the Government has enacted the above said Act when the industrial establishments have failed to amend their Standing Orders providing for payment of subsistence allowance and that a number of industrial establishments have not amended their Standing Orders and that representations were received by the Government that incorporation of the provisions relating to subsistence allowance in the Model Standing Orders in every industrial establishment is a cumbersome process. Therefore, to have a uniform law with regard to the payment of subsistence allowance to the employees in the industrial establishments during the period of their suspension pending enquiry, the Government passed the Tamil Nadu Payment of Subsistence Allowance Act, which came into effect from 1-1-1982. Therefore, the said Act was enacted with a view to pay uniform subsistence allowance only to the employees who are working in the industrial establishments and not to others who are working in other establishments such as the primary agricultural co-operative societies and banks.
12. Payment of subsistence allowance to an employee working in an industrial establishment who was placed under suspension by his employer is governed by the provisions of the Tamil Nadu Payment of Subsistence Allowance Act, 1981, which came into force with effect from 1-1-1982. An employee, within the meaning of Section 2(a) of the said Act, suspended from work pending enquiry, is entitled to claim subsistence allowance from his employer to an amount equal to 50% of the wages which he was drawing immediately before suspension for the first ninety days from the date of his suspension and if the period of suspension exceeds ninety days but does not exceed 180 days, he is entitled to claim subsistence allowance equal to 75% of his wages drawn by him immediately before suspension and if the period of suspension exceeds 180 days, the employee will be entitled to receive his wages in full which he was drawing immediately before his suspension. Therefore, for claiming claiming subsistence allowance under the provisions of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 the claimant must first satisfy that he is an "employee" within the meaning of Section 2(a) of the said Act.
13. Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, which defines "employee", reads as under:
employee means any person employed in, or in connection with the work or activities of, any establishment to do any skilled, semi-skilled or unskilled, manual, supervisory, technical, clerical or any other kind of work or activities for hire or reward, whether the terms of employment be expressed or implied but does not include any such person -
(i) who is employed mainly in a managerial or administrative capacity; or
(ii) who, being employed in a supervisory capacity draws wages exceeding three thousand and five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested to him, functions mainly of a managerial nature.
A plain reading of Section 2(a) makes it clear that a person who is employed mainly in a managerial or administrative capacity or who, being employed in a supervisory capacity draws wages exceeding Rs. 3,500/- per month or exercises, either by the nature of the duties attached to the office or by reason of the powers vested to him, functions mainly of a managerial nature is excluded from claiming subsistence allowance under the said Act.
14. Section 5 of the Act contemplates saving of certain rights and privileges to which an employee is entitled on the date of commencement of this Act under any law for the time being in force or under any contract, custom or usage which is more favourable to him than any right or privilege conferred upon him by this Act.
15. Section 9 provides for imposition of penalty for the contravention of any provisions of this Act or any rule made thereunder with imprisonment for a term which may extend to three months or with fine which shall not be less than Rs. 1000/- or both. Section 11 of the Act provides for taking cognizance of the complaint by the Metropolitan Magistrate or a Judicial Magistrate of First Class.
16. Section 2(19) of the Tamil Nadu Co-operative Societies Act, 1983 reads as under:
Officer" includes a President, Vice President, Managing Director, Secretary, Assistant Secretary, Member of Board and any other person empowered under the rules or the by-laws to give directions in regard to the business of the registered society.
The post of "Secretary" in a Co-operative Society is classified as an "officer". By-law 12(c) of the petitioner bank provides for payment of subsistence allowance at the rate of 25% of the basic wages.
17. It is not in dispute that the petitioner bank is a society, registered and functioning under the Tamil Nadu Cooperative Societies Act, 1983 and Rules, 1988 and that there is a special by-law relating to the service conditions of the employees. Therefore, basically it has to be decided whether the third respondent is an "employee" under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 or an "Officer" under Section 2(19) of the Tamil Nadu Cooperative Societies Act.
18. As stated earlier, the case of the petitioner bank is that the third respondent was appointed as Secretary and was employed mainly in managerial and administrative capacity and that on the date of his suspension he was drawing a monthly salary of Rs. 10,447/- and, therefore, he was not an "employee" under Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 to claim subsistence allowance under Section 3 of the said Act. In support of this claim, the petitioner bank has produced documentary evidence as well as oral evidence before the respondent authorities to show the managerial and administrative as well as supervisory nature of the duties discharged by the third respondent. The Secretary being an "officer" of a cooperative society or bank is the Chief Executive having all the powers not only appointing, determining the salary and having the powers to dismiss its employees but also doing all such executive acts which are necessary in the functioning of the cooperative society or bank. Therefore, he cannot under any circumstances be brought under the definition of Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act,1981 as a mere "employee" especially in the absence of any good and valid reasons to show as to how he ceases to be an "officer" as defined under Section 2(19) of the Cooperative Societies Act. Admittedly, the third respondent herein was vested with the managerial, administrative and supervisory powers such as signing of cheques, extracting work from the subordinates, sanctioning of leaves, maintenance of service records of the employees, etc. When the third respondent claims subsistence allowance under the Tamil Nadu Payment of Subsistence Allowance Act, he must first satisfy that he was an "employee" within the meaning of Section 2(a) of the said Act. The third respondent failed to establish the same.
19. The judgment of this court in Goundanpalayam Primary Agricultural Cooperative Bank case, cited supra, relied on by the learned counsel for the petitioner applies on all fours to the facts and circumstances of the present case. That was also a case where the petitioner bank resisted the claim of the respondent, who was employed as "secretary" and was suspended and terminated from service after enquiry, for payment of subsistence allowance during the period of his suspension as per the provisions of the Tamil Nadu Payment of Subsistence Allowance Act. This court dismissed the claim of the respondent holding that since the respondent was classified as an "officer" under the Tamil Nadu Cooperative Societies Act, 1983, there was no question of second thought whether he could be again reclassified as an "employee" within the purview of the definition of Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, 1981.
20. The Government Order, G.O. Ms. No. 55 dated 24-3-2000, which was relied on by the learned counsel for the third respondent, has no application to the facts and circumstances of the present case since the said Government Order came into force only with effect from 24-3-2000 much later after the suspension of the third respondent on 9-1-1998 and as such on the said date the said Government Order was not in force and for the first time, the provisions of the Act was extended to the Cadre Employees after constitution of Common Cadre Service for Primary Agricultural Cooperative Banks under G.O. Ms. No. 55, Cooperation, Food and Consumer Protection Department, dated 24-3-2000. Further, the petitioner was suspended from service on 9-1-1998, on which date the Act was also not in force and therefore the provisions of the Tamil Nadu Co-operative Societies Act alone would govern the case of the third respondent. I, therefore, hold that the third respondent cannot claim subsistence allowance under provisions of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 since the said Act was not extended on the date when he was suspended from service and that he can claim subsistence allowance only under By-law 12(c) of the petitioner bank.
21. The judgments relied on by the learned counsel for the third respondent, viz. Selvaraj and Ors. v. Deputy Commissioner of Labour, Salem 1989 I LLN 689 and the judgment of the Kerala High Court in Travancore Cochin Chemicals Co-Operative Limited v. Labour Court, Ernakulam 1989 I LLN 67 are not helpful to the case of the third respondent since as on the date of these judgments, the Tamil Nadu Payment of Subsistence Allowance Act, 1981 was not extended and further in the said decisions the learned Judge has not taken into consideration the salary drawn by the employees therein. Therefore, the two judgments are not helpful to the third respondent.
22. Further, if the third respondent is aggrieved by the non-payment of subsistence allowance in accordance with the provisions of the Tamil Nadu Payment of Subsistence Allowance Act, Sections 9 and 11 provides for filing of a criminal complaint before the Metropolitan Magistrate or before the Judicial Magistrate of First Class, as the case may be, and the jurisdiction under Article 226 of the Constitution of India is ousted.
23. For the reasons stated above, I am of the considered view that the third respondent is not an "employee" within the purview of Section 2(a) of the Tamil Nadu Payment of Subsistence Allowance Act, 1981 to claim subsistence allowance under Section 3 of the said Act. Therefore, the impugned order dated 27-11-2000 passed by the second respondent is set aside and the writ petition is allowed. No costs.