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Section 15: Objects on which general funds may be spent

The Industrial Relations Code, 2020 (Act No. 35 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter III: Trade Unions
Competent Labour Forum
Act No. 35 of 2020
Section 14 All 104 Sections of Industrial Relations Code, 2020 Section 16

Legal Commentary & Landmark Judgments: Section 15

Section 15 of the Industrial Relations Code, 2020 establishes a strict statutory ring-fence around the general funds of a registered Trade Union, restricting disbursements to an exhaustive enumeration of legitimate trade union objects and rendering any diversion ultra vires and unlawful.

  • Exhaustive Statutory Expenditure Heads: Section 15 restricts the application of general funds exclusively to: (a) salaries, allowances, and expenses of office-bearers; (b) administrative expenses and audits; (c) prosecution or defense of legal proceedings for safeguarding trade rights; (d) conduct of trade disputes; (e) compensation for losses arising from trade disputes; (f) allowances to members/dependants on account of death, old age, sickness, accident, or unemployment; (g) insurance policies; (h) educational, social, or religious benefits; (i) publication of labor periodicals; and (j) contributions to other registered trade unions.
  • Strict Ultra Vires Prohibition & Fiduciary Liability: Trade union funds cannot be applied directly or indirectly to any objects other than those specified in Section 15; any unauthorized expenditure constitutes an ultra vires act, exposing office-bearers to personal liability for restitution and criminal breach of trust.
  • Inter-Union Solidarity & Educational Contributions: Authorizes general fund disbursements toward supporting other registered trade unions and funding workers' adult education and vocational upskilling, provided such expenditures are approved under the union's registered rules.
Key Landmark Precedents:
  • Mario Raposo v. H.M. Bhandarkar 1994 Supp (3) SCC 694: The Supreme Court held that trade union office-bearers hold general funds as trustees for the members; misappropriating or applying union funds to non-statutory purposes constitutes criminal breach of trust under the Indian Penal Code (now Bharatiya Nyaya Sanhita).
  • Radhakishan v. Bombay Company Ltd. AIR 1943 Sind 166: Ruled that any expenditure of general trade union funds on unauthorized speculative ventures or political purposes is ultra vires Section 15 and void, entitling members to injunctive relief.
  • T.A.S. Rathnam v. State of Madras (1964) 1 LLJ 551 (Mad): The Madras High Court held that expenditure incurred in funding legal representation for workers in industrial tribunals and providing subsistence allowances during a legal strike falls squarely within the protected heads of Section 15.
Courtroom Practice & Strategic Litigation Guidance:

Trade Union treasurers must maintain distinct ledger heads corresponding exactly to the statutory categories of Section 15. Every disbursement must be supported by a voucher identifying the specific statutory sub-clause (e.g., Section 15(c) for advocate fees, Section 15(f) for medical assistance). Dissident members suspecting financial impropriety can file an application before the Industrial Tribunal under Section 23 seeking an independent forensic audit and surcharging delinquent office-bearers.

Section 14 All 104 Sections of Industrial Relations Code, 2020 Section 16