Non-payment of subsistence allowance and retrospective termination violate employee rights and can lead to dismissal being set aside.

D. Murugesan, J.

This writ appeal questions the Order in the writ petition, dated 211. 2002. The Management of T.N. Spl. 139 Vasudevanallur Primary Agricultural Co-Operative Bank Limited, Vasudevanallur, is the appellant. The second respondent by name S.Ramaiah was employed as Secretary in the appellant Co-Operative Bank which was constituted under The Tamil Nadu Co-Operative Societies Act, 1983. He was placed under suspension on 03.02.1997 for various misconducts and ultimately after enquiry, he was terminated from service w.e.f. 01.08.1997. The said order was taken on appeal by the second respondent before the first respondent Appellate Authority under the Tamil Nadu Shops and Establishments Act, Tirunelveli and the appellate authority has set aside the order of termination on the grounds that (1) the second respondent though was suspended, was not paid subsistence allowance and therefore, he was denied the opportunity to effectively participate in the enquiry; (2) the order of termination was issued retrospective with effect from the date of suspension and (3) even on merits, the management did not prove the charges. The said order of the appellate authority was questioned in W.P.No. 8504 of 1998 and the learned single Judge had dismissed the writ petition. Hence, the present writ appeal.

2. We have heard Mr.N.Thiagarajan, learned counsel appearing for the appellant Co-Operative Bank and Mr.R.Thirugnanam, learned Special Government Pleader for the first respondent and also Mr.V.Gangadharan, learned counsel appearing for the second respondent/employee.

3. It is not in dispute that by virtue of notification issued in G.O.Ms.No.2905 Development, dated 31.05.1948, the Provisions of the Shops Act were made applicable to all the Major Panchayats and an employee of the Co-Operative Bank situated in major Panchayat is also entitled to invoke the provisions of Section 41 of the Tamil Nadu Shops and Establishment Act.

.4. That apart,on merits, it could be seen that during the period of suspension, the second respondent was not paid subsistence allowance and thereby he was deprived of his valuable right to participate and defend the charges in the enquiry. The payment of subsistence allowance is also to be considered as a fundamental right guaranteed under Article 21 of the Constitution, as it encompasses that the employee suspended pending inquiry should survive to maintain his family and also to effectively participate in the disciplinary proceedings. Unless subsistence allowance is paid, the employee would be deprived of his valuable right to effectively defend the disciplinary inquiry. In Jagdamba Prasad Shukla V. State of U.P. and others (2000) 7 Supreme Court Cases 90, the Apex court has held that the payment of subsistence allowance is a matter of right and not a bounty. Further, the Apex Court in Capt. M.Paul Anthony v. Bharat Gold Mines Ltd., and another ( 1999 Supreme Court Cases (L & S) 810, of course, while considering the payment of subsistence allowance to a Government Servant had in fact observed that an act of non payment of subsistence allowance could be linked to slow poisoning and if the employee is not permitted to sustain himself on account of non payment of subsistence allowance, he would gradually starve to death.

5. The above said principle has been evolved keeping in mind the valuable right of an employee to effectively defend the charges. Unless and until the subsistence allowance is paid, the employee, whose services are dispensed, cannot effectively defend the enquiry.

6. However, it cannot always be held that mere non payment of subsistence allowance by itself would be a sole ground to interfere with the order of termination, as the employee must show the prejudice caused to him on account of such non payment of subsistence allowance. In this context, we may usefully refer to the judgement in U.P. State Textile Corporation Limited v. P.C. Chaturvedi and others, 2005 (8) SCC 211. In the pre