Deelip Manga Chaudhary vs The Managing Director, The ...
2015 Latest Caselaw 301 Bom

                                              1




                                                                                
              IN THE HIGH COURT OF JUDICATURE OF BOMBAY
                          BENCH AT AURANGABAD




                                                        
                             WRIT PETITION NO.7237 OF 2014

    Shri Deelip Manga Chaudhary,
    Age-60 years, Occu-Nil,




                                                       
    R/o. Plot No.12, 
    Jai Hind Colony,
    Deopur, Dhule. 
                                                                    PETITIONER




                                             
    VERSUS 

    1. The Managing Director,
                               
        The Maharashtra State Co-operative 
        Marketing Federation Ltd.,
                              
        Head Office at Kanmoor House,
        4th floor, Narsenatha Street,
        Masjid Bunder,
        Mumbai-400 009.
      

    2. The District Marketing Officer, Dhule,
        The Maharashtra State Co-operative
   



        Marketing Federation Ltd.,
        Office at 101, Jai Hind Colony,                             RESPONDENTS

Deopur, Dhule 424002.

Mr.Shrikant S.Patil, Advocate for the petitioner. Mr.D.N.Suryawanshi, Advocate for respondent Nos. 1 and 2.

( CORAM : RAVINDRA V. GHUGE, J.)

DATE : 08/09/2015

ORAL JUDGMENT :

1. Rule. Rule made returnable forthwith and heard finally by the

consent of the parties.

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2. By order dated 28/07/2015, the respondent had been directed

to deposit an amount of Rs.75,000/- in this Court. The said amount

has been deposited vide DD No.953120 dated 05/08/2015.

3. The point for determination in this petition is as to whether the

respondent employer can carry out deductions from the subsistence

allowance ?

4. The petitioner is an employee of the respondent Federation and

was working as a "Senior Office Assistant". He was placed under

suspension pending disciplinary proceedings by order dated

08/08/2007 which continued till 23/09/2010, when he was

terminated from employment by way of punishment.

5. The petitioner has raised a grievance that the

respondent/Management has been deducting money from the

suspension / subsistence allowance being paid to him under various

heads like Provident Fund, Union Contribution, Repayment of

Provident Fund Loan installments, Profession Tax, Co-operative

Society Loan deductions and other deductions.

6. It is submitted that these deductions were normally carried out

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from the monthly wages payable to the petitioner prior to his

suspension, as is demonstrated by the ready reference chart for the

months of January-2010 till March-2011 placed on record. For the

sake of clarity, the said ready reference chart is marked as Exhibit

"X" for identification.

7. Being aggrieved with the deductions being carried out from the

suspension allowance, the petitioner preferred Complaint (ULP)

No.2/2010 before the Industrial Court. It was stated that the

suspension allowance cannot suffer deductions. At best, statutory

deductions on pro-rata/proportionate basis like P.F. Contributions

and/or E.S.I.C. Contributions could be permissible. The petitioner

raised a grievance as regards all other deductions being carried out

by the respondent / Management.

8. It is further submitted that the respondents have taken a

specific stand through their written statement at Exh.C-4 by which

they have admitted that various deductions have been carried out as

per Exhibit "X", noted above. It is, therefore, submitted that the

issue before the Industrial Court was as to whether such deductions

from the subsistence allowance would be permissible in law.

khs/Sept. 2015/7237-d

9. Mr.Patil further submits that the Industrial Court, vide the

impugned judgment dated 05/07/2014 has dismissed Complaint

(ULP) No.2/2010 on the ground that no interference is called for. He,

therefore, submits that the impugned judgment is perverse and

erroneous.

10. Mr.Suryawanshi, learned Advocate appearing on behalf of both

the respondents has strenuously supported the stand taken by the

Management in its written statement at Exh.C-4 and has supported

the impugned judgment. He submits that subsistence allowance

needs to be presumed to be a part of the wages and hence all

deductions earlier carried out from the monthly wages by the

respondents towards various heads as noted above in Exh.X, need to

be continued and there cannot be any embargo on such deductions.

11. It is further submitted that the complaint filed by the petitioner

before the Industrial court was vague and ambiguous. He had not

specifically pleaded under what heads, had the respondents carried

out the deductions from the subsistence allowance and the amounts

of such deductions. In the absence of pleadings, the complaint

naturally deserved to be dismissed and the Industrial Court has,

therefore, rightly dismissed the same.

khs/Sept. 2015/7237-d

12. Mr.Suryawanshi further relies upon the charge sheet issued to

the petitioner dated 01/11/2007 wherein it has been mentioned in

Charge No.2 that the petitioner was charged with having

misappropriated money and had indulged in financial irregularities.

It is, therefore, submitted that in the backdrop of these charges, the

petitioner cannot raise any grievance about the deductions carried

out in the subsistence allowance, being paid to him. It is, therefore,

prayed that this petition be dismissed with costs.

13. He further adds that the petitioner has now been terminated /

dismissed by way of punishment on account of proved mis-conducts

w.e.f. 23/09/2010 and his Complaint (ULP) No.30/2010 is pending

before the Labour Court, at Dhule.

14. I have considered the rival submissions of the litigating sides,

as have been recorded hereinabove.

15. The grievance of the respondent in response to the complaint

was that the complaint did not divulge the details of the deductions

carried out. I am not convinced that this objection deserves to be

entertained. The petitioner had specifically averred in the complaint

that unauthorized deductions are being carried out from the

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subsistence allowance under various heads. It would be difficult for

an employee to calculate the exact amount of deductions.

16. The respondent, has specifically taken a stand in its written

statement Exhibit C-4 that deductions have been carried out under

various heads besides the Provident Fund Contribution. All those

heads, as noted above, find place in Exhibit "X". In this backdrop, I

find that the Industrial Court has fallen in a grave error in

concluding that the complaint does not deserve to be entertained

since minute details have not been furnished by the petitioner.

17. The core issue in this matter is as to whether subsistence

allowance can be termed to be 'wages' paid to an employee. It is trite

law that subsistence allowance is aimed at enabling the suspended

employee to sustain his family in the light of the stoppage of payment

of wages. It is also well settled that non-payment of subsistence

allowance would weaken the suspended employee and would,

therefore, cause grave hardships and manifest inconvenience to such

an employee. Subsistence allowance, therefore, stands on a different

footing.

18. Under Section 7 of The Payment of Wages Act, 1936, it has

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been specifically provided that suspension allowance shall not be

deemed to be a deduction from wages in any case. Section 7 enables

the employer to carry out deductions as may be authorized by the

provisions of Law.

19. In the case of Karnataka Central Co.op.Bank Ltd., Dharwad

Vs. S.D.Karpi, [1988 LAB.I.C. 111], it has been held that subsistence

allowance is paid to an employee so as to ensure that he survives and

faces the enquiry. The said payment is not on account of any service

rendered to the employer. Subsistence allowance is not paid by way

of wages, but is only aimed at ensuring that the suspended employee

is not made to starve or struggle to survive while facing the domestic

enquiry.

20. In the case of K.Varadraja Vs. Corporation Bank, Manglore and

another, 2004(III) CLR 623, the Karnataka High Court held that

deduction of loan installments from the suspension allowance is

unauthorized as the rules do not permit such deductions from the

subsistence allowance. It was further concluded that if the service

rules applicable to the employee suspended, permit deduction from

the subsistence allowance, the employer may then cause such

deductions.

khs/Sept. 2015/7237-d

21. In the instant case, the respondent has been unable to point

out any specific rule from its Standing Orders or its Service

Regulations / Conditions whereby the respondents could be

permitted to deduct loan installments / salary advances from the

suspension allowance. There is no averment in the written

statement that such deductions, as have been carried out by the

respondents, are permitted under the Service Rules applicable to the

petitioner.

22. This Court, in the matter of A.C.D'Mello Vs. Shipping

Corporation of India Limited, [1988 MH.L.J. 78], has dealt with a

similar aspect. Considering the act of deduction from suspension

allowance, this Court in the said case, scrutinized the rules to find

out whether there was any provision indicating existence of a power

vested in the employer to deduct amounts under different heads from

the suspension allowance. It was, therefore, concluded that unless

the rules provide for such deductions, there could not be any power

to withhold any part of the basic salary and dearness allowance from

an employee placed under suspension.

23. The Apex Court, in the case of O.P.Gupta Vs. Union of India,

[AIR 1987, SC 2257] has heavily criticized the act of the employer of

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carrying out deductions under different heads from the suspension

allowance payable to an employee. It was concluded that the

employer cannot be permitted to pay inadequate quantum of

subsistence allowance to a suspended employee.

24. In the case of Vijaykumar Laxman Kabir Vs. N.R.C. Limited

and others, [2004(2) BCR 563], this Court considered the scope of

section 10-A of the Industrial Employment (Standing Orders) Act,

1946, which provides for payment of subsistence allowance and a

remedy as against the inadequate payment of suspension allowance.

While concluding that the failure to pay adequate suspension

allowance is a breach of Section 10-A, it was held that the same

would amount to an unfair labour practice under item 9 of Schedule

IV of the M.R.T.U. and P.U.L.P. Act, 1971. As such, a complaint u/s

28(1) was maintainable.

25. In the case of Jagdish V.Gursahani Vs. Air India Limited and

others, [2001(1) BCR 576], this Court has concluded that though

income tax or statutory deductions like provident fund could be

permitted from the suspension allowance on pro-rata basis, there

could not be any other deduction since the suspension allowance is

not deemed to be salary / wages within the meaning of the Payment

khs/Sept. 2015/7237-d

of Wages Act. It was concluded that any deduction made from the

subsistence allowance would be in violation of the principles of

natural justice.

26. The definition of "Wages" under Section 2 (vi) of the Payment of

Wages Act, 1936, has to be ascribed a meaning as is found in the

expression under Section 2(rr) of the Industrial Disputes Act, 1947.

"Wages" necessarily mean all remuneration capable of being

expressed in terms of money, which would, if the terms of

employment, express or implied, are fulfilled, and is payable to an

employee for the service performed. It is trite law that suspension

allowance is aimed at softening the rigours of non-payment of wages

and the said allowance is not towards any service performed by an

employee, but is purely aimed at keeping his body and soul together

(which includes his family) while facing a departmental enquiry.

27. In my view, in the light of the crystallized position of law,

suspension / subsistence allowance payable to a workman, who is

under suspension pending disciplinary proceedings, would not

amount to wages. Deductions carried out by the

respondent/Management from the subsistence allowance paid to the

petitioner in the light of Exh.X from 08/08/2007 till 23/09/2010 is

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legally impermissible.

28. Having considered the impugned judgment of the Industrial

Court dated 05/07/2014 in the light of the the position in law

discussed as above, I have no hesitation in concluding that the

impugned judgment is perverse and erroneous.

29.

As such, this petition is allowed. The Judgment and order

dated 05/07/2014 delivered by the Industrial Court in Complaint

(ULP) No.2/2010 is quashed and set aside. Complaint (ULP)

No.2/2010 stands allowed.

30. The respondent is, therefore, directed to calculate the

deductions carried out from the subsistence allowance of the

petitioner barring provident fund contributions and shall forward the

said calculations to the petitioner within 3 (three) weeks from today.

31. The petitioner is permitted to withdraw Rs.75,000/- deposited

by the respondent in this Court with accrued interest and without

conditions, by producing tangible proof of identity in the nature of an

Election Identity Card and PAN Card (Income Tax).

khs/Sept. 2015/7237-d

32. The respondent shall, accordingly, adjust this amount being

withdrawn by the petitioner from this Court and shall accordingly

pay the residual amount to the petitioner or before 30/10/2015.

Failure to do so, shall invite interest @ 6% p.a. on the unpaid amount

from the month of September 2007 till its actual payment to the

petitioner.

33.

Rule is, accordingly, made absolute in the above terms.

( RAVINDRA V. GHUGE, J.)

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