PETITIONER:
THE UNION OF INDIA
Vs.
RESPONDENT:
HIRA DEVI AND ANOTHER.
DATE OF JUDGMENT:
21/05/1952
BENCH:
AIYAR, N. CHANDRASEKHARA
BENCH:
AIYAR, N. CHANDRASEKHARA
MAHAJAN, MEHR CHAND
BOSE, VIVIAN
CITATION:
1952 AIR 227 1952 SCR 765
ACT:
Civil Procedure Code, 1908, s. 60 (k)--Provident Funds
Act (XIX of 1925), ss. 2 (a), 3 (1)--Compulsory deposit in
Provident Fund--Exemption from attachment--Appointment of
receiver-Legality.
HEADNOTE:
A receiver cannot be appointed in execution of a decree
in respect of a compulsory deposit in a Provident Fund due
to the judgment debtor. Whatever doubts may have existed
under the earlier Act of 1897, the definition of "compulsory
deposit" in s. 2 (a) of the Provident Funds Act (XlX of
1925) clearly includes deposits remaining to the credit of
the subscriber or depositor after he has retired from serv-
ice.
Arrears of salary and allowances stand upon a different
footing and are not exempt from being proceeded against in
execution.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 132 of
1951.
Appeal by Special Leave from the Judgment and Decree
dated 17th May, 1950, of the High Court of Judicature at
Calcutta (Harries C.J. and Sinha J.) in Appeal No. 41 of
1950 arising out of the Order of
766
Banerjee J. dated 19th December, 1949, in Suit No. 132 of
1948.
M.C. Setalvad, Attorney-General for India (B. Sen, with
him) for the appellant.
Naziruddin Ahmad (Nuruddin Ahmad, with him) or respond-
ent No. 1.
S.N. Mukherjee for respondent No.2
1952. May 21. The Judgment of the Court was delivered by
CHANDRASEKHARA AIYAR J.–This Court granted special
leave to appeal in this case on the Government agreeing to
pay the costs of the respondents in respect of the appeal in
any event.
The decree-holder was a lady named Hira Devi. The judg-
ment-debtor was one Ram Grahit Singh, who retired on 31st
January, “1’947, as a Head Clerk in the Dead Letter Office,
Calcutta. A money decree was obtained against him on 30th
July, 1948. On 1st February, 1949, a receiver was appointed
for collecting the moneys standing to the credit of the
judgment-debtor in a Provident Fund with the Postal authori-
ties. The Union of India intervened with an application
dated 20th September, 1949, for setting aside the order
appointing the receiver.
Mr. Justice Banerjee dismissed the application of the
Union of India, holding that a receiver could be appointed
for collecting the Fund. On appeal, Trevor Harries C.J. and
Sinha J. upheld his view.
From the facts stated in the petition filed by the Union
of India before the High Court, it appears that a sum of Rs.
1,394-13-1 represents arrears of pay and allowances .due to
the judgment-debtor and a sum Of Rs. 1,563, is the compulso-
ry deposit in his Provident Fund account. Different consid-
erations will apply to the two sums, though in the lower
court the parties seem to have proceeded on the footing that
the entire sum was a “compulsory deposit” within the meaning
of the provident Funds Act, 1925.
The main question to be decided. is whether a receiver
can be appointed in execution in respect of provident Fund
money due to the judgment-debtor.
767
Compulsory deposit and other sums in or derived from any
fund to which the Provident Funds Act XIX of 1925 applies
are exempt from attachment and sale under section 60 (k),
Civil Procedure Code.
“Compulsory deposit” is thus defined in section 2 (a)
of the Provident Funds Act XIX of 1925:–
Compulsory deposit means a subscription to, or deposit
in a Provident Fund which under the rules of the Fund, is
not, until the happening of some specified contingency
repayable on demand otherwise than for the purpose of the
payment of premia in respect of a policy of life insurance
(or the Payment Of subscriptions or premia in respect of a
family pension fund), and includes any contribution and any
interest or increment which has accrued under the rules of
the fund on any such subscription, deposit, contribution,
and also any such subscription, deposit, contribution,
interest or increment remaining to the credit of the sub-
scriber or depositor after the happening of any such contin-
gency.”
Such a deposit cannot be assigned or charged and is
not liable to any attachment. Section 3 (1)of the said Act
provides :–
3. (1)” A compulsory deposit in any Government or Rail-
way Provident Fund shall not in any way be capable of being
assigned or charged and shall not be liable to attachment
under any decree or order of any Civil, Revenue or Criminal
Court in respect of any debt or liability incurred by the
subscriber or depositor, and neither the Official Assignee
nor any receiver appointed under the Provincial Insolvency
Act, 1920 shall be entitled to, or have any claim on any
such compulsory deposit.”
It is obvious that the prohibition against the assign-
ment or the attachment of such compulsory deposits is based
on grounds of public policy. Where the interdiction is
absolute, to allow a judgment creditor to get at the fund
indirectly by means of the appointment of a receiver would
be to circumvent the statute. That such a frustration of
the very object of
768
the legislation should not be permitted was laid down by the
Court of Appeal as early as 1886 in the case of Lucas v.
Harris (1), where the question arose with reference to a
pension payable to two officers of Her Majesty’s Indian
Army. Section 141 of the Army Act, 1881 provided:
“Every assignment of, and every charge on, and every
agreement to assign or charge any ……… pension pay-
able to any officer or soldier of Her Majesty’s forces, or
any pension payable to any such officer ……… or to any
person in respect of any military service, shall except so
far as the same is made in pursuance of a royal warrant for
the benefit of the family of the person entitled thereto, or
as may be authorised by any Act lot the time being in force,
be void.
In that case, the appointment of a receiver to collect the
pension was in question. Lindley, L.J., observed:-
In considering whether a receiver of a retired officer’s
pension ought to be appointed, not only the language but the
object of section 141 of the Army Act. 1881 must be looked
to; and the object of the section would, in my opinion, be
defeated, and not advanced, if a receiver were appointed.”
Lord Justice Lopes reiterated the same thing in these
words :-
“It is beyond dispute that the object of the legislature
was to secure for officers who had served their country, a
provision which would keep them from want and would enable
them to retain a respectable social position. i do not see
how this object could be effected unless those pensions were
made absolutely inalienable. preventing not only the person
himself assigning his interest in the pension. but also
preventing the pension being seized or attached under a
garnishee order, or by an execution or other process of law.
Unless protection is given to this extent the object which
the legislature had in view is frustrated, and a strange
anomaly would exist. A person with a
(1) 18 (Q.B D. 127.
769
pension would not be able to utilise his pension to pay a
debt beforehand, but immediately his creditor had obtained
judgment might be deprived of his pension by attachment,
equitable execution, or some other legal process. It is
impossible to suppose that the legislature could have in-
tended such an anomaly.”
Section 51 of the Civil Procedure Code no doubt
recognises five modes of execution of a decree and one of
them is the appointment of a receiver. Instead of executing
the decree by attachment and sale, the Court may appoint a
receiver but this can only be in a case where a receiver can
be appointed. The Provident Fund money is exempt from at-
tachment and is inalienable. Normally, no execution can lie
against such a sum.
The learned Judges in the Court below rested their view
on the authority of the decision of the Privy Council in
Rajindra Narain Singh v. Sundara Bibi(1). This decision has
caused all the difficulty and has created a current of
thought that even though the property may not itself be
liable to attachment, a receiver can be appointed to take
possession of the same and to apply the income or proceeds
in a particular manner including the payment of the debts of
the judgment-debtor. It is necessary. therefore, to examine
the facts of the case carefully and find out whether the
proposition sought to be deduced from it can be justified as
a principle of general application apart from the particular
circumstances. The original decision of the Allahabad High
Court from which the appeal was taken before the Judicial
Committee is reported in Sundar Bibi v. Raj Indranarain
Singh(2). In a suit between two brothers, there was a com-
promise to the effect that the Judgment-debtor shall possess
and enjoy the immoveable properties mentioned in the list
and estimated to yield a net profit of Rs. 8,000 a year
without power of transfer during the lifetime of his broth-
er, Lal Bahadur Singh, he undertaking to pay certain public
exactions and other dues
(1)1925) 52 I.A. 262. (2) (1921)43 All. 617
770
to his brother, Lal Bahadur Singh, amounting in all to
Rs. 7,870-11-6, in four equal instalments per annum, each to
be paid a month before the Government revenue falls due.
The arrangement was stated to be “in lieu of his mainte-
nance”. When the judgment debtor’s interest in the proper-
ties was sought to be attached and sold, he raised the
objection that they were exempt from attachment and sale by
reason of clause (n) of Section 60 of the Code which speaks
of “a right to future maintenance”. The High Court held
that the words employed in sub-clause (n) contemplated R
bare right of maintenance and nothing more–a right enforce-
able by law and payable in the future–and that inasmuch as
in the case before them the properties had been assigned to
the judgment-debtor in lieu of his maintenance, it was not
such a right, which alone was exempt from attachment and
sate. They thought that it was a fit case for the appoint-
ment of a receiver and remitted the execution petition to
the subordinate judge for the appointment of a receiver
after determining the allowance payable to the judgment-
debtor for his maintenance.
With this conclusion of the High Court the Judicial
Committee concurred. But they also expressed the view that
they did not agree with the High Court on the subject of the
actual legal position of the right of maintenance conferred
upon the judgment-debtor. Taking the prayer of the judgment
creditor to be that the right of maintenance be proceeded
against, their Lordships observed that the right was in
point of law not attachable and not saleable. If it was an
assignment of properties for maintenance, the amount of
which was not fixed, it was open to the judgment-creditor to
get a receiver appointed subject to the condition that
whatever may remain after making provision for the
maintenance of the judgment-debtor should be made available
for the satisfaction of the decree debt. The right to main-
tenance could not be attached or sold. In so far as the
decree-holder sought to attach this right and deprive the
judgment-debtor of, his maintenance, he was not entitled to
do
771
so, but where his application for the appointment of a
receiver was more comprehensive and sought to get at any
remaining income after satisfying the maintenance claim, the
appointment of a receiver for the purpose was justified.
The decision of the Privy Council does not appear to lay
down anything beyond this. In our opinion, it is not an
authority for the general proposition that even though there
is a statutory prohibition against attachment and alienation
of a particular species of property, it can be reached by
another mode of execution, viz., the appointment of a re-
ceiver. On the other hand, it was pointed out in the case
of Nawab Bahadur of Murshidabad v. Karnani Industrial Bank
Limited(1) that as the Nawab had a disposing power over the
rents and profits assigned to him for the maintenance of his
title and dignity without any power of alienation of the
properties, no question of public policy arose and that a
receiver of the rents and profits was rightly appointed.
This line of reasoning indicates clearly that in cases where
there is no disposing power and the statute imposes an
absolute bar on alienation or attachment on grounds of
public policy, execution should not be levied.
Understood as mentioned above, Rajindra Narain
Singh’s case creates no difficulty. We shall now refer to
the decisions that followed or distinguished the same. In
The Secretary of State for India in Council v. Bai Somi and
Another(2), the maintenance of Rs. 96 per annum was made
under a compromise decree a charge on the house which was to
belong to the defendant. ‘the court-fee due to Government
was sought to be recovered by attachment of the house. The
right to attach was negatived; the house could not be at-
tached as it belonged to the defendant; and the plaintiff’s
right to maintenance could not be attached under section
60, clause (1). In dealing with a prayer made by the Govern-
ment for the first time in the High Court for an order
appointing a receiver of the plaintiff’s maintenance,
Beaumont C.J. and
(1) (1931) 58 I.A. 215. (2) (1933) 57 Bom. 507.
100
772
another learned Judge held that even this could not be done.
The Chief Justice said ,’If these exempted payments can be
reached in execution by the appointment of a receiver by way
of equitable execution, the protection afforded by the
section is to a great extent lost.” They steered clear of
Rajindra Narain Singh’s case by stating that there was in
the judgment of the Board no clear expression of opinion
and there was doubt whether the allowance then in question
was maintenance or not. The Madras High Court in The Secre-
tary of State for India in Council v. Sarvepalli Venkata
Lakshmamma(1) has dealt with a question similar to the one
in The Secretary of State for India in Council v. Bai Somi
and Another(2) but it merely referred to the ruling in
Rajindra Narain Singh’s case without dealing with the facts
or the reasoning. It throws no light. The case in Janaki-
nath v. Pramatha Nath (3) was a decision by a single Judge
and stands on the same footing as the Madras case. There is
nothing else on this subject in the judgment than the short
observation, “the Provident Funds Act does not in my opinion
prohibit the appointment of a receiver of the sum lying to
the credit of the deceased in the Provident Fund.” Possibly
the view was taken that on the death of the employee and in
the absence of any dependent or nominee becoming entitled to
the fund under the rules, it became money payable to the
heirs of the deceased and lost its original nature of being
a compulsory deposit. The case of Dominion of India, repre-
senting E. 1. Ry. Administration and Another v. Ashutosh Das
and Others(4) refers no doubt to Rajindra Narain Singh’s
case but does not discuss it in any detail. Roxburgh J.
merely states “surely it is an improper use of that equita-
ble remedy to employ it to avoid a very definite bar created
by statute law to achieving the very object for which the
receiver is appointed.” The decision in Ramprasad v. Moti-
ram(5) related to the attachment and sale in execution of a
(1) (1926) 49 Mad; 567. (4) (1950) 54 C.W.N. 254.
(2) (1933) 57 Bom. 507. (5) (1946) 25 Pat. 705.
(3) (1940) 44 C.W.N. 266.
773
money decree of the interest of a khoposhdar in a khorposh
grant which was heritable and transferable. It affords us no
assistance.
The learned counsel for the respondents relied on three
decisions of the Privy Council as lending him support. One
is Nawab Bahadur of Murshidabad’s case(1) already referred
to. Vibhudapriya Thirtha Swamiar v. Lakshmindra Thirtha
Swamiar(2) and Niladri Sahu v. Mahant Chaturbhuj Das and
Others(3) are the other two eases and they relate to maths
and alienations by way of mortgage of endowed properties by
the respective mahants for alleged necessity of the institu-
tions. They bear no analogy to the present ease. The
mahants had a beneficial interest in the properties after
being provided with maintenance. A receiver could be ap-
pointed in respect of such beneficial interest so that the
decrees obtained may be satisfied.
With great respect to the learned Judges of the Court
below, we are of the opinion that execution cannot be sought
against the Provident Fund money by way of appointment of a
receiver.
This conclusion does not, however, apply to the arrears
of salary and allowance due to the judgment-debtor as they
stand upon a different legal footing.Salary is not attach-
able to the extent provided in Section 60, clause (1),
Civil Procedure Code, but there is no such exemption as
regards arrears of salary. The learned Attorney-General
conceded that this portion of the amount can be proceeded
against in execution.
The Provident Fund amount was not paid to the subscriber
after the date of his retirement in January 1947. This,
however, does not make it any the less a compulsory deposit
within the meaning of the Act. Whatever doubt may have
existed under the earlier Act of 1897 the decisions cited
for the respondent, Miller v. B.B. & C.I. Railway(4) and Raj
(1) (1931) 58 I.A. 215. (3) (1926) 53 I.A. 253.
(2) (1927) 54 I.A. 228. (4) (1903) 5 Bom. L.R. 454.
774
Kumar Mukharjee v. W.G. Godfrey(1) are under that Act, the
meaning has now been made clear by the definition in section
2 of the present Act; any deposit “remaining to the credit
of the subscriber or depositor after the happening of any
such contingency” is also a compulsory deposit; and the
contingency may be retirement from service.
In the result, the appeal is allowed and the order of
the lower court dated 1st February, 1949, appointing a
receiver is set aside as regards the Provident Fund amount
of Rs. 1,563 lying to the credit of the judgment-debtor.
Under the condition granting special leave, the Government
will pay the 1st respondent’s costs of this appeal.
Appeal allowed.
Agent for the appellant: P.A. Mehta.
Agent for the respondent No. 1: Naunit Lal.
Agent for the respondent No. 2: P.K. Chatterjee.
(1) A,I.R. 1922 Cal. 196,
775