The Bombay High Court held that Municipal Corporation Employees in the Octroi Department Do Not Have a Vested Right to Commission on Fees Paid to Evaders

Title: Municipal Commissioner Pune Municipal Corporation and Anr. v. Ashish Laxman Chavan

Decided on: 03 November, 2023

+ Writ Petition No. 8953 of 2018

CORAM: Hon’ble Justice Mr. Sandeep V. Marne


The Hon’ble Bombay High Court held that the workers employed by a Municipal Corporation’s Octroi department are not entitled to commission (Mushahira) on compromise fees that the department collects from those who avoid Octroi.

Facts of the Case

Pune Municipal Corporation has filed the current petitions in an effort to overturn the orders that the Industrial Court made in response to several complaints submitted by respondent employees. The Petitioner-Corporation has been required by the Industrial Court to pay the Respondent-Employees’ part of the “Mushahira” within a three-month term after the court accepted the concerns of the Respondent employees. A 20% incentive known as “mushahira” is given to staff members based on the compromise fees that are recovered from tax evaders. The Industrial Court has additionally mandated that if the amount owed is not paid within three months, interest at the rate of 6% per annum would be levied.

Courts analysis and decision

The court ruled that although Mushahira is not a part of salary, it is a special payment or allowance that needs the state government’s prior approval. According to the court, the 1984 Resolution might be viewed as having an enabling clause that gave PMC the authority to punish Mushahira for apprehending specific cars that were avoiding Octroi. However, the court determined that the employees had no legal basis for demanding Mushahira.

The court noted that granting certain workers more compensation would result in prejudice and unhappiness among other workers. “Such a method of payment of any amount above and above salary and allowances would result in employee discrimination and give other employees who are not stationed in the Octroi Department indigestion. The court stated that such a system would also lead to needless demands from the staff for postings in the Octroi Department. The court emphasized the exorbitant claims made by certain employees for Mushahira, noting an unacceptable demand of Rs. 12,00,000 as an example. As a result, the court overturned the Industrial Court’s ruling.

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Written by- Hargunn Kaur Makhija

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