Case Note & Summary
The dispute arose from a claim for subsistence allowance by an employee of a cooperative society who was placed under suspension pending criminal, disciplinary, and surcharge proceedings for financial irregularities. The employee, an accountant, approached the Assistant Commissioner of Labour under the Tamil Nadu Payment of Subsistence Allowance Act, 1981, which directed the society to pay Rs. 16,53,795.40 and Rs. 9,06,391 as subsistence allowance. The society challenged this order by way of a writ petition, arguing that the authority under the general Act lacked jurisdiction because the Tamil Nadu Co-operative Societies Act, 1983, being a special Act, governs service conditions of cooperative society employees, and the employee must exhaust remedies under Sections 153 and 154 of that Act. The single judge dismissed the writ petition, prompting the society to file the present writ appeal. The Division Bench analysed the interplay between the special bye-laws of the society, the Co-operative Societies Act, and the Payment of Subsistence Allowance Act. It found that Rule 149 of the Tamil Nadu Co-operative Societies Rules, 1988, and Special Bye-law Clause 31 clearly vested the authority to grant subsistence allowance with the cooperative society's management, though the quantum and procedure were to follow the Payment of Subsistence Allowance Act. The Court held that the Co-operative Societies Act, being a special statute, prevails over the general Subsistence Allowance Act, and therefore the application before the labour authority was not maintainable. The Court further observed that Sections 78 and 79 of the Co-operative Societies Act excluded the applicability of the Provident Fund and Gratuity Acts to societies with approved bye-laws, supporting the principle that general labour laws yield to the special cooperative legislation. While recognizing that subsistence allowance is a fundamental right under Article 21 of the Constitution, as held in Registrar of Co-operative Societies v. V.M.Elango, the Court emphasized that the employee must first approach the society's management and then avail the revisional remedy under Section 153. Accordingly, the Division Bench set aside the single judge's order, allowed the writ appeal, and directed that the employee be at liberty to submit an application to the management, which shall be considered on merits.
Headnote
A) Labour Law - Subsistence Allowance - Jurisdiction of Authority under Tamil Nadu Payment of Subsistence Allowance Act, 1981 - Tamil Nadu Payment of Subsistence Allowance Act, 1981, Tamil Nadu Co-operative Societies Act, 1983, Rule 149 of Tamil Nadu Co-operative Societies Rules, 1988, Special Bye-law Clause 31 - The employee of a cooperative society claimed subsistence allowance before the Assistant Commissioner of Labour under the Payment of Subsistence Allowance Act. The Court held that the Co-operative Societies Act is a special Act and prevails over the general Subsistence Allowance Act. Special bye-law Clause 31 provides that subsistence allowance is to be paid as per the Payment of Subsistence Allowance Act but the authority to grant rests with the cooperative society's competent authority. Thus, the application before the labour authority was not maintainable, and the employee must approach the cooperative society and then the revisional authority under Section 153. (Paras 7-9, 15) B) Cooperative Societies - Exhaustion of Statutory Remedies - Remedy under Sections 153 and 154 of Tamil Nadu Co-operative Societies Act - Tamil Nadu Co-operative Societies Act, 1983, Sections 153, 154 - The Court observed that the employee must exhaust the statutory remedies provided under the Tamil Nadu Co-operative Societies Act, including approaching the revisional authority under Section 153 and review under Section 154, before seeking judicial intervention. The existence of an alternate remedy under the special Act precludes direct application to other authorities. (Para 9) C) Cooperative Societies - Applicability of General Labour Laws - Sections 78 and 79 of Tamil Nadu Co-operative Societies Act, 1983 - Tamil Nadu Co-operative Societies Act, 1983, Sections 78, 79; Employees Provident Funds and Miscellaneous Provisions Act, 1952; Payment of Gratuity Act, 1972 - The Court noted that Sections 78 and 79 of the Co-operative Societies Act provide that the Provident Fund and Gratuity Acts do not apply to cooperative societies that have approved bye-laws governing these matters. By analogy, the Payment of Subsistence Allowance Act, being a general law, does not apply when the society's bye-laws provide for subsistence allowance. Thus, the employee cannot invoke the general Act. (Para 10) D) Constitutional Law - Right to Subsistence Allowance - Article 21 of the Constitution - Constitution of India, Article 21; Tamil Nadu Payment of Subsistence Allowance Act, 1981 - The Court referred to a Division Bench judgment in Registrar of Co-operative Societies vs. V.M.Elango, which held that subsistence allowance is a basic right and its denial would violate Article 21. However, the discretion to pay rests with the employer under the bye-laws, which must be exercised reasonably. A total denial without justification is impermissible. The Court directed that if the employee files an application before the management, it must be considered on merits. (Paras 14-15)
Issue of Consideration
Whether an application for subsistence allowance by an employee of a cooperative society is maintainable before the authority under the Tamil Nadu Payment of Subsistence Allowance Act, 1981, or whether the employee must exhaust remedies under the Tamil Nadu Co-operative Societies Act, 1983.
Final Decision
Writ appeal allowed; order dated 16.03.2023 in WP No.27379 of 2014 set aside. It was held that the application before the Assistant Commissioner of Labour under the Payment of Subsistence Allowance Act is not maintainable. The employee is at liberty to submit an application for subsistence allowance before the management of the cooperative society and then approach the revisional authority under Section 153 of Tamil Nadu Co-operative Societies Act if aggrieved. No costs.
Law Points
- Legal points not extracted
- Special Act prevails over general Act
- Co-operative Societies Act is special law
- Subsistence Allowance Act is general law
- Bye-law 31(2) governs subsistence allowance
- Exhaustion of statutory remedies under Sections 153 and 154 of Tamil Nadu Co-operative Societies Act
- EPF and Gratuity Acts inapplicable to cooperative societies with approved bye-laws
- Subsistence allowance is fundamental right under Article 21
