The Bombay High Court held that the employees of the Municipal Corporation cannot demand any incentives in form of the commission on octroi being collected from the evaders.

The Court was deciding a batch of petitions filed by Pune Municipal Corporation against the orders of the Industrial Court in various complaints filed by the respondents i.e., employees.

A Single Bench of Justice Sandeep V. Marne observed, “Payment of such exceptionally high amount in the form of commission for collection of Octroi over and above salary and allowances to selected few employees is otherwise unjustifiable and cannot be countenanced. The Municipal Commissioner has rightly discontinued the system, which has no statutory recognition. The employees of Octroi Department perform their duties in apprehending vehicles evading Octroi. For performing their duties, they cannot demand any incentives in the form of commission on the Octroi so collected. In my view therefore the Municipal Corporation has rightly discontinued the scheme of payment of Mushahira.”

The Bench also held that the Municipal employees cannot demand anything over and above salary and allowances payable to them as per the Rules of the Municipal Corporation.

Advocate Abhijit Kulkarni appeared on behalf of the petitioners while Advocate A.S. Rao appeared on behalf of the respondents.

In this case, the Industrial Court had allowed the complaints of respondents (employees) and directed the petitioner-Corporation to pay the amount of ‘Mushahira’ coming to the share of the respondents within a period of three months. ‘Mushahira’ is sort of 20% incentive payable to employees on the compromise fees recovered from Octroi evaders. The respondents were employees of Pune Municipal Corporation who were posted on various posts in the Octroi Department. The General Body of Municipal Corporation adopted a Resolution in its meeting and resolved that 20% of amount recovered towards the compromise fees from Octroi evaders be paid as ‘Mushahira’ to the employees apprehending the goods. The respondents were deployed on the duty of apprehending the Octroi evaders and were paid 20% amount of compromise fees towards ‘Mushahira’ up to the year 2007.

From the year 2008-2009, the Municipal Corporation discontinued the system of paying such Mushahira to Octroi employees and the Union, therefore, made representations, complaining about such discontinuation. Additionally, the concerned employees also made representations and a notice was also served upon the Municipal Corporation. Since the system of payment of Mushahira was not continued, the Union sent a letter and the employees finally approached the Industrial Court via complaints under Section 28(1) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTP & PULP Act) alleging unfair labour practices and demanding payment of unpaid amount of Mushahira for various periods.

The High Court after hearing the contentions of the counsel for parties said, “Even though Mr. Rao attempted to take me through the evidence recorded before the Industrial Tribunal, in my view, once the system of payment of Mushahira is found to be in breach of statutory provisions on account of non-grant of prior sanction by the State Government, no amount of evidence would confer any right on the Respondents which statutorily does not exists.”

The Court further noted that merely because the Municipal Corporation might have paid such Mushahira to its employees in the past would not create any right in their favour to continue to receive it and hence, the Municipal Commissioner rightly discontinued the system of payment of Mushahira, which has no statutory recognition.

“As rightly pointed out by Mr. Kulkarni such system of payment of any amount over and above salary and allowances would create discrimination amongst employees and would be a cause of heartburn for other employees not posted in Octroi Department. Such system would also create unnecessary demand amongst the employees to seek posting in the Octroi Department. The amount demanded by Respondent-employees towards Mushahira in their complaints also appear to be considerably high”, also observed the Court.

The Court, therefore, concluded that no right is vested in the employee of Octroi Department of the Municipal Corporation to claim any amount towards Mushahira from the Municipal Corporation and that the Industrial Court erred in allowing the complaints.

Accordingly, the High Court set aside the judgments of Industrial Court.

Cause Title- Municipal Commissioner, Pune Municipal Corporation and Anr. v. Shri. Ashish Laxman Chavan (Neutral Citation: 2023:BHC-AS:33175)

Click here to read/download the Judgment