2026:MHC:3029 WA No. 1901 of 2026 __________ Page1 of 10 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 16-07-2026 CORAM THE HON'BLE MR JUSTICE S. M. SUBRAMANIAM AND THE HON'BLE MR.JUSTICE N.SENTHILKUMAR WA No. 1901 of 2026 and C.M.P.No.16925 of 2026 Special Officer Z-156, Palayapalayam Primary Agricultural Co- operative Credit Society, Palayapalayam Post, Sirkazhi Taluk, Nagapattinam District. Now Mayiladuthurai District. ..Appellant(s) Vs 1. T.Mohan S/o.Thangappan, Kaduvetti Street, Palayapalayam Post, Sirkazhi Taluk, Nagapattinam District. 2. The Assistant Commissioner of Labour/ the Authority under the Payment of Subsistence Allowance Act, Trichy-20. ..Respondent(s) Writ Appeal filed under Clause 15 of Letters Patent to set aside the order passed in WP No.27379 of 2014 dated 16.03.2023 and allow the writ petition. For Appellant(s): Mr.S.Sadasharam For Respondent(s): Mr.C.Prakasam for R1 https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page2 of 10 JUDGMENT (Judgment of the Court was delivered by S.M.Subramaniam J.) The present intra-Court Appeal has been instituted challenging the writ order dated 16.03.2023 passed in W.P.No.27379 of 2014. 2. The petitioner Co-operative Society is the appellant before this Court. The writ petition has been filed challenging the order of the 2nd respondent, directing the petitioner to pay the subsistence allowance of Rs.16,53,795.40/- and Rs.9,06,391/- to the 1st respondent/workman under the Paymet of Subsistence Allowance Act . 3. Heard the learned counsel appearing for the parties. 4. The preliminary objection raised by the appellant is regarding the maintainability of an application before the competent authority for subsistence allowance under the provisions of Tamil Nadu Payment of Subsistence Allowances Act, 1981. Secondly, disciplinary proceedings as well as surcharge proceedings under the provisions of the Tamil Nadu Co- operative Societies Act was initiated against the 1st respondent. Therefore, the 1st respondent has to exhaust the alternate remedy contemplated under the provisions of the Tamil Nadu Co-operative Societies Act, 1983. In view of the above issue regarding jurisdiction and exhausting alternate remedy, the writ petition is not maintainable. Thus, the writ order is perverse. https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page3 of 10 5. Mr.C.Prakasam, learned counsel appearing on behalf of the 1st respondent would submit that subsistence allowance is the basic right of an employee under suspension. Special bye-laws provides payment of subsistence allowance to an employee under suspension. Therefore, the 1st respondent approached the competent authority, Assistant Commissioner of Labour under the Tamil Nadu Payment of Subsistence Allowance Act,1981, for settlement of subsistence allowance during the period of suspension. Thus, there is no infirmity and the Writ Appeal is to be rejected. 6. This Court has considered the rival submissions made between the parties to the lis. 7. Let us examine the jurisdictional ground raised on behalf of the appellant in the present Appeal. Rule 149 of the Tamil Nadu Co-operative Societies Rules, 1988, stipulates conditions of service of paid officers and servants of Co-operative Societies. Sub Rule (1) states that “Every Society shall taking into account its nature of business, volume of transaction and financial position, adopt in the prior approval of the Registrar, a Special bye-law governing the service conditions of its employee”. The special bye-law shall inter alia prescribe the service conditions as stated under Rule 149 of the Co-operative Societies Rules. https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page4 of 10 8. The appellant Co-operative Society is registered under the Tamil Nadu Co-operative Societies Act. Therefore, the Special Act will prevail over the general law. In the present case, Co-operative Societies Act is a Special Act and Subsistence Allowance Act is a general law. 9. Special bye-laws of the appellant Co-operative society has been approved by the Registrar under the provisions of the Tamil Nadu Co- operative Societies Act, 2008 and Tamil Nadu Co-operative Societies Rules, 1988. Clause 31 of the Special Bye-laws speaks about suspension. Sub- Clause (2) of Section 31 states about the authority competent to suspend an employee. Such competent authority may grant subsistence allowance to an employee suspended under the provisions of the Payment of Subsistence Allowance Act, 1981. Special bye-law, in clear terms, stipulates that the subsistence allowance to be granted and the procedures to be followed for grant of subsistence allowance shall be in accordance with the Payment of Subsistence Allowance Act. However, the power to grant subsistence allowance vests with the authority under the Co-operative Society as provided under the special bye-law of the Society. Thus, an aggrieved employee seeking payment of subsistence allowance has to approach the competent authority ie., Board or Special Officer, as the case may be, of the Co-operative Society and if his request is not acceded to, then he has to approach the revisional authority under Section 153 of the Tamil Nadu Co-operative https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page5 of 10 Societies Act. Thereafter, Section 154 provides for review. An aggrieved employee is bound to exhaust statutory remedies contemplated under the Cooperative Societies Act. Reference made in the Special bye-law about Payment of Subsistence Allowance Act is regarding the procedure and quantum of subsistence allowance to be paid to an employee and therefore the authority under the Subsistence Allowance Act has no jurisdiction to deal with the application of an employee of Co-operative Society seeking subsistence allowance. 10. Similarly, Sections 78 and 79 of the Tamil Nadu Co-operative Societies Act states about Provident Fund and Gratuity Fund. Accordingly, a registered Society is not an establishment to which the Employees Provident Fund and Miscellaneous Provisions Act applies and also Payment of Gratuity Act, 1972. The two general Acts are inapplicable to the Co-operative Societies if the Payment of Provident Fund and Gratuity are governed under the special bye-laws as approved by the Registrar of Co-operative Societies. Thus, in the event of existence of schemes for Provident Fund and Gratuity to the employees of Co-operative Societies, no application before the competent authority under either of the Acts is maintainable and an aggrieved employee has to exhaust the remedy contemplated under the Tamil Nadu Co-operative Societies Act. 11. It is needless to state that an employee placed under suspension is entitled for Subsistence Allowance. However, the Subsistence Allowance is to https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page6 of 10 be paid subject to the terms and conditions stipulated under the bye-laws and the orders passed by the Registrar. Even for payment of Subsistence Allowance, an employee has to produce necessary certificate to the employer in compliance of the procedures as contemplated. On production of all requisite documents and complying with the procedures, the authority competent is bound to pay the subsistence allowance. 12. In the present case, the learned counsel for the appellant would submit that the 1st respondent was employed as accountant in the appellant society and on account of certain irregularity in the maintenance of accounts, a criminal case has been filed against him. Therefore, multiple actions are initiated under the Co-operative Societies Act. 13. In this regard, the Co-operative Societies Act contemplates three fold actions against the employee. If an allegation of misappropriation of funds or any other illegalities are noticed and actions are initiated, then the competent authority is empowered to register a police complaint before the Commercial Crime Investigation Wing of the Police Department. Secondly, departmental disciplinary proceedings may be initiated under the Discipline and Appeal Rules. Thirdly, surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act may be initiated to recover the financial loss occurred to the Co-operative Society. All the above actions can be initiated simultaneously by the respective competent authorities against an https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page7 of 10 employee involved in such financial and other irregularities in Co-operative Societies. In order to protect the financial interest of the Co-operative Societies, Section 167 of the Act contemplates furnishing of security and attachment of property .Therefore, the competent authority is empowered to attach the property during the pendency of the disciplinary proceedings, surcharge proceedings etc. by invoking the provisions under the Tamil Nadu Co-operative Societies Act. This being the scope of the Act, 1983, the authorities are well within their powers to proceed against the 1st respondent by conducting an enquiry and by following the procedures as contemplated and by affording opportunity to the 1st respondent and other persons involved in the financial irregularities or illegalities etc. 14. In the present case, the learned counsel for the appellant relied on the judgement of the Division Bench of this Court in the case of Registrar of Co-operative Societies vs. V.M.Elango reported in 2021 (1) CTC 4651, wherein it is held as follows: 32. 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. There is a possibility of the Employee being exonerated and he may in such circumstances be entitled to 1 2021 (1) CTC 465 https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page8 of 10 his entire emoluments of the said period. On the other hand, an Employee can be found partially guilty and the Employer may choose to deduct part of the emoluments by imposing a condition that the Employee would not be entitled to any further emoluments, apart from what he has received during his period of Suspension. It is, therefore, the discretion of the Employer according to the By-laws and Rules applicable, but at the same time, it is the right of sustenance of an Employee to receive Subsistence Allowance. As to what would be the ratio to which an employee may be entitled in the present context will have to be left to the discretion of the employer, as By-law 31(2) indicates that the Employer may pay Subsistence Allowance as he may deem fit. This discretion, however, should be exercised reasonably and may be subject to any such deductions in the event an Employee is found to be ultimately guilty of heavy financial irregularities or misappropriations. On this ground, we therefore find favour with the Respondent/Writ Petitioner that his representation for payment of Subsistence Allowance also deserves consideration in the background aforesaid. A total denial of Subsistence Allowance to a suspended Employee, in our opinion, would be violative of Article 21 of the Constitution of India, unless it can be shown that payment of Subsistence Allowance is not warranted on the facts of a particular case, as illustrated above. We are conscious that a possible sense of injustice or inconvenience resulting in a temporary hardship by itself cannot be a ground to claim a right bereft of the statutory provisions, but where the very sustenance is a single salaried source, a total denial thereof may result in an abrupt punishment with hardly any justification thereby violating basis Fundamental Rights. https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page9 of 10 15. In view of the facts and circumstances, this Court is of the considered view that an application filed by the 1st respondent before the competent authority for subsistence allowance/ Assistant Commissioner of Labour, under the provisions of Payment of Subsistence Act, is not maintainable. However, the 1st respondent is at liberty to submit an application claiming subsistence allowance before the Management of the Co-operative Society and thereafter, if aggrieved, may approach the revisional authority under Section 153 of Tamil Nadu Cooperative Societies Act, for redressal of his grievances. In the event of filing any such application, the same may be considered on merits and in accordance with law. 16. In view of the discussions made in the aforementioned paragraphs, the writ order impugned dated 16.03.2023 passed in W.P.No.27379 of 2022 is set aside and the writ appeal stands allowed. No costs. Consequently connected miscellaneous petition is closed. (S.M.S.,J.) (N.S.,J.) 16-07-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No vsi To The Assistant Commissioner of Labour/ the Authority under the Payment of Subsistence Allowance Act, Trichy-20. https://www.mhc.tn.gov.in/judis 2026:MHC:3029 WA No. 1901 of 2026 __________ Page10 of 10 S.M.SUBRAMANIAM, J. AND N.SENTHILKUMAR, J. vsi WA No. 1901 of 2026 16-07-2026 https://www.mhc.tn.gov.in/judis