Non-Payment Of Subsistence Allowance To An Employee During Suspension Will Be Antithetical To Article 21:Madras HC [Read Judgment]

A Division Bench of the Madras High Court comprising Chief Justice Amreshwar Pratap Sahi & Justice Subramonium Prasad has emphasized that subsistence allowance cannot be denied to employee(s) during the tenure of their suspension.

It was held that,

"The underlying principle for making payment of subsistence allowance is to allow an individual to sustain himself. In the present context of the suspension of an employee, one has to keep in mind that services of an employee have not been

snapped and the employer-employee relationship during suspension continues to subsist"

Facts of the Case:

The Respondent was the Secretary of a Primary Agricultural Cooperative Credit Society and had been suspended on charges of misappropriation, which appeared to have arisen on account of some audit exercise. In terms of the provisions of the Tamil Nadu Cooperative Societies Act, 1983 (for brevity, "the 1983 Act"), an enquiry was carried out vide Sections 81 and 87.

On account of certain charges on 30.07.2016, the Appellants terminated the Respondent on 25.08.2018.

The Respondent filed a Writ petition before the single judge of the High Court wherein he averred that he had not been paid subsistence allowance between the period of 30.07.2016 and 25.08.2018, which he was liable to be paid.

The Single Judge allowed the Writ petition relying upon K.Avanasiappan v. The Management of Thekkalur Primary Agricultural Co-operative Bank and

Others and issued the payment of subsistence allowed between the said period.

Aggrieved by the Order dated 25.10.2018 passed by the Single Judge of the Madras High Court, the Appellants, who were the authorities of state came up before the Division Bench in Appeal, seeking assailing of the judgment passed by the Single Judge.

Contentions Raised:

It was contended by the Advocate General appearing for the appellants that the appellant was excluded from the scope of "employee" in terms of section 2 of the Payment of Subsistence Allowance Act, 1981.

It was further contended by the Appellants that according to the By-law No.31(2) of the Special By-laws relating to the service conditions of the Agricultural

Cooperative Credit Society Limited, of which the respondent/petitioner was stated to have been the Secretary at the time when the incident occurred, fell within the definition of "officer".

Moreover, the payment of subsistence allowance only applied to employees and excluded anybody employed in a managerial or administrative capacity, it was averred by the Appellants.

The Appellants further contended that the Respondent in its writ petition before the Single Judge had wrongly averred that Regulation 29(d)(i) of the Tamil

Nadu Primary Agricultural Cooperative Banks Common Cadre Service Regulations, 2000 (for brevity, "the 2000 Regulations") promulgated by the State Government under G.O.Ms.55, Cooperation, Food and Consumer Protection Department, dated 24.3.2000, would govern the field of payment of subsistence

Allowance as the applicability of the said government order was only in respect

of a cadre employee as defined in Regulation 29(d)(i) of the 2000 Regulations.

Counsel for the Respondent contended that the Respondent could not be excluded from the payment of subsistence allowance following the principle of Article 21 of the Constitution.

What the Court Held:

The Court held that even though, provisions of the 1981 Act clearly excluded the applicability thereof to a Secretary who was not in the definition of employee under the 1981 Act, the payment of subsistence allowance was to be treated as a right guaranteed under Article 21 of the Constitution of India.

It was emphasized,

"To "subsist" means to manage to stay alive, especially with limited resources or money. The state of living as such is known as subsistence, which is indicative of the fact that one has enough resources to sustain life with basic minimum needs. This means of existence or continuance with meagre resources of livelihood for a salaried employee is known as a subsistence allowance, which is an advance payment to cover immediate living expenses while being kept away from service. It is, therefore, an

income that is sufficient to provide bare necessities and is an adequacy of support that exists as a reality while undergoing a compulsory distress. The idea is to preserve sustenance at the minimum economic level to sustain a minimum standard of living."

Arguments on behalf of the Appellants were led by Advocate General Narmadha Sampath. The Respondent was respresented by Advocate Mr.G.Murugendran.

Click here to download the Judgment