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PETITIONER: MUKTI LAL AGARWALA

       Vs.

RESPONDENT: TRUSTEES OF THE PROVIDENT FUND OFTHE TIN PLATE CO.  OF INDIA

DATE OF JUDGMENT: 14/02/1956

BENCH: AIYAR, N. CHANDRASEKHARA BENCH: AIYAR, N. CHANDRASEKHARA BOSE, VIVIAN IMAM, SYED JAFFER

CITATION:  1956 AIR  336            1956 SCR  100

ACT: Provincial Insolvency Act, 1920 (V of 1920), s. 4-Insolvency of employees of a company-Having certain amounts standing to their  credit  in the Provident Fund of  the  said  company- Whether  the  said  amounts  were  the  properties  of   the insolvents over which they had disposing power and were thus available  for distribution amongst the  creditors-Provident Fund-Rules-Construction-Word  "Property" in  the  Insolvency Act-Meaning of.

HEADNOTE: The  six employees in the Tin Plate Co. of India  Ltd.  were adjudged insolvents.  They were members in a Provident  Fund of  the  said company, having certain  amounts  standing  to their credit in the Fund. The appellants creditor of the said employees-filed applica- tions  under s. 4 of the Insolvency Act against the  company and Trustees of the Fund for orders that amounts standing to the  credit of the insolvents in the Provident Fund  account were  their properties and had vested in the court and  were available   for  distribution  amongst  the  creditors   and therefore should be brought into court. The respondent pleaded in answer that the amount standing to the   credit  of  each  insolvent  in  the  Provident   Fund represented  the  contributions of the company  and  of  the employees and that the corpus was a trust fund in the  hands of the trustees of the fund; so they were not properties  of the  insolvents  over which they had a disposing  power  and that they were not debts due to the insolvents.  It was said that according to the rules governing the Provident Fund the monies become payable to the employee or any other member of his  family only on the happening of  certain  contingencies such  as retirement, discharge, dismissal or death and  that till then no right accrued to the insolvent.  It was further urged  that  the  trustees could not  be  removed  from  the custody and control of the fund by the Official Receiver. On  a construction of the Rules of the Provident  Fund,  the Insolvency Court held in favour of the creditor.  On appeal, the  High Court held that under the rules of the  Fund,  the insolvents  had no present disposing power over  the  monies standing to their credit and that the Fund had vested in the

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Trustee.  On appeal to the Supreme Court: Held  that  it is reasonably clear from these rules  that  a subscriber has  a  present interest in the Fund though the  moneys  may become  payable to him, or his nominee or heirs only in  the future.  Even where there is a declaration about the nominee who is to receive payment after the subscriber’s death,  the fund  would still be the property of the subscriber  in  the hands  of the nominee for the satisfaction of his debts,  as there is no present gift to take effect immediately. It  could  not  be maintained that the  subscribers  had  no right,  title or interest in the fund or that such  interest as   they  may  possess  was  dependent  upon   a   possible contingency which may or may not occur.  The amount standing to  the  credit of a subscriber even if  payable  in  future would be a debt due by the company to him within the meaning of  s.  60 of the Code and hence liable  to  attachment  and sale.   A person cannot enter into any arrangement or agreement by which  his own title will cease in the event  of  bankruptcy for  it would then be a fraud perpetrated on the  Insolvency Law. The liability of the estate to be attached by creditors on a bankruptcy or judgment is an incident of the estate, and  no attempt to deprive it of that incident by direct prohibition would be valid. Notwithstanding  the rules of the Fund in the present  case, the  subscribers  have an interest in the moneys  which  can vest in the Official Receiver on their adjudication. The  word  "property" in the Insolvency Act is used  in  the widest possible sense which includes even property which may belong  to  or  is  vested in another  but  over  which  the insolvent  has a disposing power which he may  exercise  for his  own  benefit;  and  this part  of  the  definition  has reference  obviously to powers of appointment and the  power of  a  Hindu  father who is the managing ember  of  a  joint family.   The fact that on the date of the adjudication  the insolvent could not transfer the property does not  militate against the view that he has a vested interest in the same.   Banchharam  Mojumdar  v. Adyanath  Bhattacharjee,  ([1909] I.L.R.  36 Cal. 936), Dugdale v. Dugdale ([1888] 38 Ch.   D. 176),  Ex  parte Dever.  In re Suse and  Sibeth  ([1887]  18 Q.B.D.    660),  Hudson v. Gribble ([1903] 1 K.B.  517),  D. Palaiya v.T.   P.  Sen and another (A.I.R. 1935  Pat.  211), Secretary, Burma Oil Subsidiary  Provident  Fund (India) Ltd. v.  Dadibhar  Singh (A.I.R.   1941  Rang.  256),  Gajraj  Sheokarandas  v.   Sir Hukamchand  Sarupchand  and another (A.I.R. 1939  Bom.  90). Anandrao  alias Adkoba s/o Risaram-ji v.  Vishwanath  Watuji Kalar  and others, (A.I.R. 1944 Nag. 144), Ismail Jokaria  & Co.  v. Burmah Shell Provident Trust Ltd. (A.I.R. 1942  Sind 47), Bishwa Nath Sao v. The Official Receiver ([1936] I.L.R. 16 Pat. 60), and Sat Narain v. Behari Lal and Others ([1924] 52 I.A. 22), referred to.

JUDGMENT: CIVIL APPELLATE, JURISDICTION: Civil Appeals Nos. 123 to 127 and 135 of 1953. 102 On  appeal from the judgment and decree dated the  12th  May 1950 of the Patna High Court in Appeal from Original  Orders Nos. 266, 267, 268, 271, 274 and 280 of 1948 arising out  of the  Order  dated  the 26th June 1948 of the  Court  of  the

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District  Judge,  Purulia  in Insolvency  Cases  Nos.  1/44, 13/46, 12/46, 10/46 and 44/41, respectively. S.   C.  Isaacs  (P.   K.  Chatterjee,  with  him)  for  the appellant.   Bhabananda  Mukherji, S. N. Mukherji and B. N. Ghose,  for the respondents. 1956.  February 14.  The Judgment of the Court was delivered by CHANDRASEKHARA  AIYAR J.-These appeals are by a creditor  of six  employees  in the Tin Plate Co. of India Ltd.  who  had been  adjudged insolvents.  The employees are members  in  a Provident  Fund of the Tin Plate Co. and there were  amounts standing to their credit in the said Fund.   The creditor, Mukti Lal Agarwala, filed applications under section 4 of the Insolvency Act for orders that the  amounts standing  to the credit of the insolvents in  the  Provident Fund  account  were their properties and had vested  in  the court  and  were  available  for  distribution  amongst  the creditors.   He  sought a direction that the monies  may  be brought  into Court.  The petitions were directed  primarily against  the  Tin  Plate Co. Ltd. and the  Trustees  of  the Provident  Fund.   They pleaded in answer  that  the  amount standing  to the credit of each insolvent in  the  Provident Fund represented the contributions of the Company and of the employees and that the corpus was a trust fund in the  hands of the trustees of the fund; so they were not properties  of the  insolvents  over which they had a disposing  power  and that they were not debts due to the insolvents.  It was said that according to the rules governing the Provident Fund the monies become payable to the employee or any other member of his  family only on the happening of certain  contingencies’ such as retirement, discharge, 103 dismissal  or death and that till then no right  accrued  to the insolvent.  It was further urged that the trustees could not  be removed from the custody and control of the fund  by the Official Receiver.   The Insolvency Court, which was the court of the  District Judge  at  Purulia,  heard  the petitions  and  found  on  a construction  of  the rules of the Provident Fund  that  the monies standing to the credit of A & C accounts in the  name of  each  insolvent  was his property over which  he  had  a disposing   power   and  hence  they  were   available   for distribution among the creditors under the Insolvency Act.   The trustees of the Fund and the Tin Plate Co. carried the matter  on  appeal to the High Court at Patna and  the  they were  successful.   The  learned Judges  (V.  Ramaswami  and Sarjoo Prasad, JJ.) held that under the rules governing  the Fund the insolvents had no present disposing power over  the monies standing to their credit and that the Fund was really vested in the trustees.   As  the  amount involved in the  several  petitions  taken together  was over Rs. 20,000, the High Court granted  leave to the creditors to appeal to this court. The  main contentions urged by Mr. Isaacs on behalf  of  the appellants were three in number:-   (a)     The   monies  standing  to  the  credit  of   each insolvent  in  the Provident Fund are his  property,  though payable  at  a  future  date and  the  question  of  present disposing power arises only for bringing within the scope of the  definition  what  may  not  otherwise  be  regarded  as "property".   (b)     Though  the Provident Fund rules speak of a  trust Fund  and  trustees, in reality, there was  no  transfer  of ownership  by  the employees in favour of the  trustees  and

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that there is no trust as such.  (c) In  any  event, even on the footing that  a  trust  was created over the Fund, the beneficial interest continues  in the  employees and this interest would vest in the  Official Receiver for the benefit of the creditors in insolvency.  We have to examine the soundness of these contentions. 104 The  Provident  Fund was started on the 1st  January,  1929. The rules and regulations of this Fund are found in the deed of  trust  dated the 15th July, 1930, marked as  Exhibit  1. These  rules,  as  amended  from time  to  time  in  certain respects  by supplementary deeds, are given in the  appendix to this judgment.   On  the making of an order of adjudication, the  whole  of the property of the insolvent shall vest in the court or  in a  Receiver and shall become divisible among the  creditors. (Section  28  (2) of the Provincial  Insolvency  Act).   The property of the insolvent for the purposes of vesting  shall not  include any property which is exempted by the  Code  of Civil  Procedure,  or by any other enactment  for  the  time being  in  force from liability to attachment  and  sale  in execution of a decree (section 28(5)).  Section 2(d) of  the Act states:" ’Property’ includes any property over which  or the profits of which any person has a disposing power  which he  may  exercise  for his own benefit".   A  person  has  a disposing power over property which he may exercise for  his own benefit, such as a power of appointment conferred on him under a will or a settlement, or the power of a Hindu father who  is  the  manager of a joint Hindu family  to  sell  the shares  of his sons in the family property in  discharge  of their pious obligation to pay off his debts.  In clause  (b) of  sub-section (2) of section 38 of the English  Bankruptcy Act, 1914, this power is specified in these words:-   "The  capacity  to exercise and to  take  proceedings  for exercising  all  such  powers in or over or  in  respect  of property  as might have been exercised by the  bankrupt  for his  own  benefit at the commencement of his  bankruptcy  or before  his discharge, except the right of nomination  to  a vacant ecclesiastical benefice;".   All  that  we  have to find out  is  whether  the  amounts standing  to  the credit of the several subscribers  in  the fund  who have been adjudged insolvents are divisible  among their creditors.  If so, they would vest 105 in  the  court  or the Official Receiver  and  would  become available  for distribution.  Whether they have any  present interest in the monies is the primary question that falls to be considered.   Section  60  of  the Civil Procedure Code  sets  out  what property is liable to attachment and sale and what items are not.  The first part of section 60 runs in these terms:   "The  following property is liable to attachment and  sale in  execution  of a decree namely, lands, houses,  or  other buildings,  goods,  money,  bank-notes,  cheques,  bills  of exchange,  hundis, promissory notes, Government  securities, bonds  or  other securities for money, debts,  shares  in  a corporation  and, save as hereinafter mentioned,  all  other saleable  property, movable or immovable, belonging  to  the judgmentdebtor,  or over which, or the profits of which,  he has  a  disposing power which he may exercise  for  his  own benefit,  whether  the  same  be held in  the  name  of  the judgment-debtor or by another person in trust for him or  on his behalf".   The  exempted items do not apply.  Clause (k)  deals  with funds  governed by the Provident Fund Act.   Reference  has,

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however,  been  made  to  clause (m)  which  speaks  of  "an expectancy  of  succession by survivorship or  other  merely contingent or possible right or interest".   Let us now advert to the relevant rules of the Fund.   The object of the Fund as set out in rule 2 is to accumulate for the  benefit of the Company’s employees who have joined  the Fund  certain  sums as a future provision for them  and  for their  families.   Under  rule  3,  any  employee,  who  has completed  one  year’s service with the  Company,  shall  be eligible for membership.  Rule 4 provides for a  declaration as  regards  the  disposition of the Fund in  the  event  of death.  This declaration can be cancelled and changed.  Rule 5  provides  that if the declaration becomes  obsolete,  the trustees could decide who were to be recognized as the next- of-kin  and that payment by them to such person will  be  an absolute  discharge.   Every  member  shall  be  allowed  to contribute any 11 106 sum  not  exceeding one-twelfth of his or her  earnings  and such amounts would be credited in the name of each member in an account called ’A’ Account  (Rule 6).  At the end of each year,  an  amount equal to the contribution  by  the  member shall be paid by the Company and credited to another account to be opened in the name of the member and to be denominated his  or her ’B’ Account.  An increased contribution  by  the Company  in certain events at particular specified rates  is contemplated by rule 7(B).  This further sum will go into  a ’C’ account to be opened in the name -of each member.   Rule 8 provides that the moneys of the Fund shall be invested  by the Trustees in accordance with the provisions from time  to time  in force under the Indian Income-tax (Provident  Funds Relief)  Act, 1929.  Every year the A, B and C Accounts  are to  be  made up including the income  from  the  investments according to certain calculations.   Then come the important rules 10, 11, 12, 13, 15, 16, 17 & 18.   Though the Fund is intended as a future provision  for the  employees and their families, the membership is  purely voluntary  and arises on an application to the Company,  the trustees  having  nothing to do with the admission.   It  is only the management of the Fund and the control of its funds which  vests  in  the trustees under rule  1.  There  is  no transfer  of the ownership of the Fund.   The  contributions made by the members are not compulsory in their nature.  The monies  of  the  Fund  may, no doubt,  be  invested  by  the trustees,  but  the subscriber does not  divest  himself  or herself of control over the Fund in certain respects.  He or she  can  declare to whom the monies are to be paid  in  the event of his or her death.  This declaration can be  changed at any time.  If the service terminates after fifteen years, the  subscriber  can  get the full amount in  the  A,B  &  C Accounts.   If he or she retires with the Company’s  consent before  completion of fifteen years’ service, he or she  can get  the amounts standing in A & C Accounts together with  a portion   in  B  account.   Dismissal,  or  misconduct,   or resignation without the 107 Company’s  consent before completion of the 15  years  would still entitle the subscriber to the payment of the moneys in A & C Accounts.  The provision in rule 16 that on the  death of  any member, the amount will be paid to the  next-of-kin, of  course  proceeds on the same footing that  the  property belongs to the subscriber. , Whether the provisions that  in the event of the declaration becoming obsolete, or a  member becoming  insane or demented, the moneys can be paid at  the

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absolute  discretion  of  the trustees  to  whomsoever  they determine to be the next-of-kin, or hold to be a proper  and suitable  person  to  receive payment, are valid  is  not  a question that arises in these appeals.   Retirement  or death is not a mere possibility.  It  is  a contingency  that  is  sure  to  happen,  sooner  or  later. Dismissal  for  misconduct or  resignation  without  consent before 15 years’ service will secure earlier payment.  (Rule 11).   It is reasonably clear from these rules that a  subscriber has  a  present interest in the Fund though the  moneys  may become  payable to him, or his nominee or heirs only in  the future.  Even where there is a declaration about the nominee who is to receive payment after the subscriber’s death,  the fund  would still be the property of the subscriber  in  the hands  of the nominee for the satisfaction of his debts,  as there is no present gift to take effect immediately.   It is not easy to see how it could be maintained that  the subscribers have no right, title or interest in the fund, or that  such interest as they may possess is dependent upon  a possible contingency which may or may not occur.  The amount standing  to the credit of a subscriber even if  payable  in future would be a debt due by the Company to him within  the meaning  of  section  60 of the Code  and  hence  liable  to attachment  and sale.  See Banchharam Majumdar  v.  Adyanath Bhattacharjee(1).  Rule  17,  which provides that on the adjudication  of  the debtor as an insolvent the amounts standing to his credit in the Fund shall be liable to be forfeited (1)  [1909] I.L.R. 36 Cal 936. 108 to  the Fund, was strongly relied upon by  the  respondents. But  such  a condition or agreement is invalid.  A  man  may give  (in  India only by will) property or its income  to  a donee with a condition that the donee’s interest will  cease on  bankruptcy  and the property will in that  event  go  to another;  if  insolvency supervenes, the property  will  not vest in the Official Receiver.  If there is no gift over  on the cesser of the donee’s interest, the property will revert to  the donee and will vest in the Official Receiver on  the donee’s  insolvency.   But a person cannot  enter  into  any arrangement  or agreement by which his own title will  cease in  the  event of bankruptcy, for it would then be  a  fraud perpetrated on the Insolvency Law.  This principle has  been enunciated  in an early English case Wilson v.  Greenwood(1) in the following words and adopted in later cases too:   "The  general distinction seems to be, that the  owner  of property  may,  on alienation, qualify the interest  of  his alienee,  by a condition to take effect on  bankruptcy;  but cannot,  by contract or otherwise, qualify his own  interest by  a like condition, determining or controlling it  in  the event of his own bankruptcy, to the disappointment or  delay of his creditors". In Re Dugdale(2) we find the following observations of  Kay, J.-   "The  liability of the estate to be attached by  creditors on  a bankruptcy or judgment is an incident of  the  estate, and  no  attempt to deprive it of that  incident  by  direct prohibition would be valid.  If a testator, after giving  an estate in fee simple to A, were to declare that such  estate should  not  be subject to the bankruptcy laws,  that  would clearly be inoperative.  I apprehend that this is the  test. An  incident  of the estate given which cannot  be  directly taken  away or prevented by the donor cannot be  taken  away indirectly  by a condition which would cause the  estate  to

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revert  to  the  donor, or by a  conditional  limitation  or executory devise which would (1)  [1818] 86 E.R. 469, 476; 1 Swans. 471, 485. (2)  (1888) 38 Ch. 1). 176, 182. 109 cause it to shift to another person". The proposition is thus stated in Williams on Bankruptcyt(1) at page 293: "But the owner of property cannot, by  contract or  otherwise,  qualify  his own  interest  by  a  condition determining  or  controlling  it in the  event  of  his  own bankruptcy to the prejudice of his creditors".   It  appears  to us to be unnecessary to refer to  all  the decisions  cited  and  relied  upon in  the  course  of  the arguments  on  either side.  A few cases  may,  however,  be dealt  with.   The  English decisions  relied  upon  by  the learned  counsel  for  the appellant  do  not  furnish  much guidance.   Ex part Dever.  In re Suse and Sibeth(2)  was  a case  of what is obviously a contingent  interest  dependent upon  a  mere  possibility.   The  decision  in  Hudson   v. Gribble(3)  dealt  with  a  different  question  altogether. Under a scheme framed by the Municipal Corporation,  persons in  its  service  were  to contribute  to  a  Fund  for  the encouragement of thrift among their officers and servants  a certain  percentage  of their salaries to be  deducted  from time  to  time from those salaries.  Were they  exempt  from payment of income-tax under the first rule of section 146 of the Income-Tax Act, 1842, was answered in the negative.  The point  was whether they were exempt because they were  "sums payable  or chargeable on the salaries by virtue of any  Act of Parliament where the same have been really and bona  fide paid and borne by the party to be charged".  It is true that Lord Justice Vaughan Williams says at page 525 that the sums contributed  never ceased to be the property of the  persons from  whose salaries or wages they were deducted;  and  Lord Justice  Stirling observes at page 528 "It is obvious  that, though  the amounts so deducted are not immediately paid  to the  person  employed, they remain his property to  a  great extent".    Both  of  them  refer  to  the  fact  that   the subscribers  were entitled to get back  their  contributions upon retiring from the service.  But they were dealing  with particular words employed in an Act of Parliament (1) 16th Eaition.              (2) [1887] 18 Q.B.D. 660. (3)  [1903] 1.K.B. 517, 110 and  the  rules  made  under  a  Corporation  Act.   General observations  of the kind should not be extracted  from  the context  in which they were used and applied to other  facts and different language.   Coming  to the Indian decisions, D. Palaiya v. T.  P.  Sen and another(1) is a case where the rules of a provident fund created by the Tata Steel Company were similar to the  rules we have before us but the forfeiture clause was construed as applying only to the portion of the amount at the credit  of members’ account contributed by the -company and it was read to  mean  that it was inapplicable to the  subscribers’  own contributions.   Secretary, Burma Oil  Subsidiary  Provident Fund  (India) Ltd. v. Dadibhar Singh(2) which  held  against the  vesting  proceeded upon the footing that  there  was  a trust  created in favour of the trustees.  Even if so,  what was to happen to the beneficial interest was not dealt with. The relevant observations are:   "The  forfeiture does not vest the money in the  trustees, the  money having already vested in them.  The money  cannot be attached as a ’debt’ due to the judgment-debtor,  because the word ’debt’ as used in S. 60 and in 0. 21, R. 46,  Civil

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Procedure  Code  means an actually existing debt that  is  a perfected and absolute debt, not merely a sum of money which may  or  may not become payable at some future time  or  the payment of which depends upon contingencies which may or may not happen".  The  decision  of  Beaumont,, C. J. and  Rangnekar,  J.  in Gajraj   Sheokarandas  v.  Sir  Hukamchand  Sarupchand   and another(1)  does not apply because in that case there was  a clause in the articles providing that all moneys received by the East India Cotton Association from its members would  be under  the absolute control of the Association and could  be used  by  it  as if the moneys belonged  to  it  absolutely. Further  the  deposit  was also subject  to  certain  liens. Subject   to  the  liability  to  forfeiture  and   to   the satisfaction  of  the liens, the deposit with  interest  was repayable to (1) A.I.R. 1935 Pat. 211.  (2) A.I.R. 1941 Rang. 256, 259. (3) A.I.R. 1939 Bom.90. 111 the  member  on his ceasing from any cause to be  a  member. The  facts were, therefore, very different.  Anandrao  alias Adkoba   s/o  Risaramji  v.  Vishwanath  Watuji  Kalar   and others(1)  is again a case where the money ceased to  belong to  the  employee  and  the  title  was  in  the   trustees. Referring to a Karachi case reported in Ismail Jakaria & Co. v.   Burmah-Shell   Provident  Trust   Ltd.(2),   Bose,   J. distinguished it on the ground that there the money was  not vested in the trustees but was only handed over to them  for the  purposes of management, which was not the  case  before him. The  learned counsel for the respondents strongly relied  on Bishwa Nath Sao v. The Official Receiver(3) and argued  that there  can  be  no  property  within  the  meaning  of   the Insolvency  Act unless the insolvent had a present  absolute power  of disposal over the same but the decision  which  is that  of a Full Bench and which interpreted the decision  of the  Privy Council in Sat Narain v. Behari Lal(4)  does  not support any such position- all that was held was that on the insolvency of a father, his power to sell the shares of  his sons  in  the joint family property to discharge  the  pious obligation vests in the Official Receiver, though the shares themselves do not so vest.  Sufficient  has  been  stated  above  to  show  that   not- withstanding the rules of the Fund in the present case,  the subscribers have an interest in the moneys which can vest in the  Official  Receiver on their adjudication.  Even  if  we regard  the  deed  creating  the  fund  as  a  trust   deed, notwithstanding  that, no ownership has been transferred  to the trustees and all that they have got is the right of  the management and control, the subscribers, who joined the fund have  undoubtedly got a beneficial interest which will  vest in  the Official Receiver as property liable  to  attachment and  sale under section 60 which uses the language  "whether the  same be held in the name of the judgment-debtor  or  by another person in interest for him or in his behalf". (1)  A.I.R. 1944 Nag. 144. (3)  [1937] I.L.R. 16 Patna 60. (2)  A.I.R. 1942 Sind 47. (4)  [1924] L.R. 52 I.A. 22, 112  The  learned  Judges  of  the  High  Court  held  that  the ’property’ mentioned in the Insolvency Act must be such that the  insolvent  has an absolute  and  unconditional  present disposing  power over the same.  With great  respect,  this, however, does not seem to be a correct interpretation.   The

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word  ’property’ is used in the widest possible sense  which includes  even property which may belong to or is vested  in another  but over which the insolvent has a disposing  power which  he may exercise for his own benefit; and  as  pointed out  already,  this  part of the  definition  has  reference obviously to powers of appointment and the power of a  Hindu father  who  is the managing member of a joint  family.  The fact that on the date of the adjudicationthe insolvent could not transfer the property doesnot militate against the  view that  be has a vested interest in the same.   Reference  was made to section 56(3) of the Provincial Insolvency Act which provides  that "Where the Court appoints a receiver, it  may remove  the person in whose possession or custody  any  such property  as  aforesaid is from the  possession  or  custody thereof:  Provided  that nothing in this  section  shall  be deemed to authorise the court to remove from the  possession or custody of property any person whom the insolvent has not a present right so to remove".   This  has  no relevancy to the point at  issue.   Whenever possession  and custody could be taken by the Receiver,  the person  in whose possession and custody the property is  can be  evicted.  If possession or custody could not  be  taken, still  the right of the insolvent will vest in the  Official Receiver.   Mention has been made of three accounts in the Fund called A,  B and C; the first represents monies contributed by  the subscriber,  the  second  consists of  monies  paid  by  the Company  and  the  third  represents  what  may  be  roughly described  as  bonus which represents deferred  wages.   The learned  counsel  for the appellant confined the  relief  he wanted  to  the  .amounts standing to  the  credit  of  each subscriber  in his A and C Accounts and conceded that the  B Account monies would stand on a different footing.  In 113 fact,  even in the Insolvency Court the  creditor  concerned himself only with the A & C Accounts.  Mr.  Isaacs contended at first that he was entitled  to  an order  that  the  monies in the A &  C  Accounts  should  be brought to the Insolvency Court but later he abandoned  this contention.   For the respondents, it was urged  that  under section  10  of the Employees’ Provident  Funds  Act,  1952, which   came  into  force  after  these   proceedings   were instituted,  there could be no attachment.  This again is  a question   which  is  outside  the  scope  of  the   present proceedings.   Once  it is held that the  right,  title  and interest  of the insolvents in the A & C Accounts  with  the Fund vest in the Official Receiver, it is for him under  the directions of the Insolvency Court to take steps to  realize the same, in whatever manner the law allows him to do.  The  learned  counsel for the respondents handed  to  us  a paper showing which of the respondents was still in  service and which have been discharged, their dates of  appointments and  of  joining  the  posts.   Mohibulla,  Anjab  Alli  and Hasimulla,  respondents insolvents in Civil Appeal No.  124, Civil  Appeal  No. 127 and Civil Appeal No. 126,  have  been shown  as discharged from service.  A.M. Joseph, Rasid  Alli alias  Tasim  Alli, and Baldev Singh, respondents  in  Civil Appeals 135, 125 and 123, joined the Fund in 1933, 1932  and 1936 respectively and are still in service.  In  the  result, the appeals are partly allowed  and  there will be a declaration that the right, title and interest  of the  above  mentioned insolvents in the moneys  standing  to their credit in A & C Accounts respectively will vest in the Official Receiver.  In other respects the appeals will stand dismissed.  The Tin Plate Co. which is the respondent No. 2,

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will  pay  to the appellant his costs here and in  the  High Court.  But the costs in this Court will be limited only  to one set.                          APPENDIX. This Indenture made the fifteenth day of July, one  thousand nine hundred and thirty BETWEEN THE 15 114 TINPLATE COMPANY OF INDIA LIMITED a Joint Stock Company with Limited   Liability  duly  incorporated  under  the   Indian Companies  Act  and having its Registered Office at  No.  4, Bankshall Street in the City of Calcutta (hereinafter called "the  Company"  of  the first part  HARRY  DOUGHLAS  TOWNEND CHARLES ROLAND HATFIELD AND JAMES PERCY AINSCOUGH all of No. 4, Bankshall Street aforesaid Merchants (hereinafter  called the  "the Trustees" which expression shall mean and  include the  said Harry Douglas Townend Charles Roland Hatfield  and James  Percy Anscough or other the -"-Trustees of  the  fund herein mentioned for the time being appointed as hereinafter mentioned)  of the Second Part and the PERSONS  whose  names appear  in  the  Schedule  hereto or  who  may  by  separate writings agree to become parties hereto and bound hereby  of the  third part WHEREAS the Company has decided to start  as from the first day of January one thousand nine hundred  and twenty-nine  a  Provident  Fund  for  the  benefit  of   the employees  of  the  Company (hereinafter  called  "the  said fund")  and  has accepted contributions from  the  employees from  the  first  January, one  thousand  nine  hundred  and twenty-nine  and for the management and regulations of  such fund  has framed rules and ’regulations NOW  THIS  INDENTURE WITNESSETH  and  it  is hereby agreed  between  the  parties hereto that the said Fund shall be governed by the following rules and regulations:                    Rules and Regulations 1.   The Fund shall be called "THE PROVIDENT FUND OF THE TIN PLATE COMPANY OF INDIA LIMITED".  The management of the Fund and the control of its funds shall be vested in the Trustees who will undertake such management without remuneration. 2.   The object of the Fund is to accumulate for the benefit of the Company’s Employees who have joined   115 the Fund certain sums as a future provision for them and for their families. 3.   All  employees  of  the Company  (excepting  only  such covenanted  employees on the higher grades of pay as may  be excluded   by  the  Trustees  at  their   discretion)   upon completion of one year’s services with the Company shall  be eligible  for membership of the Fund.  Applications to  join the  Fund shall be in writing to the Company in a  specified form and written notification shall be given by the  Company to applicants of their inclusion as members. 4.   Every  application for membership shall be  accompanied by a declaration in a specified form signed by the applicant in the presence of two witnesses who shall not be in any way related to the applicant.  Such declaration shall set  forth the  disposition  in the event of his or her death  while  a member  of the Fund of the money which shall be standing  to the applicant’s credit in the Fund.  Should a member at  any time  desire to cancel his or her form of declaration be  or she  may  do so by submitting to the Company  a  revised  or substituted form in writing duly signed and witnessed in the same manner as in the case of the original form which should specifically   cancel  and  annul  all  previous  forms   of declaration deposited by the member with the Fund. 5.In the event of the declaration as made under rule   4

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having become obsolete full discretion shall rest with   the Trustees as to the disposition of any sums   standing to the credit  of a member on his or her decease and no  person  or persons  shall  be recognised as having any  claims  thereto save and except such as shall be ascertained by the Trustees or their delegate duly appointed to make enquiry in that be- half  upon  satisfactory evidence adduced as  to  which  the Trustees or their delegate appointed to conduct the  enquiry shall  be sole judge to be the next-of-kin of  the  deceased member  and payment by the Trustees the moneys  representing his or her share in the fund 116 to the persons or person so ascertained shall operate as  an absolute discharge to the Trustees from all liability  there for to all persons whomsoever. 6.   Each  member shall be allowed to contribute a  definite proportion not exceeding one-twelfth of his or her  earnings during any one year which shall be deducted from his or  her earnings in monthly or weekly instalments.  Contributions as above  shall be credited to an account to be opened  in  the name  of  each  member  to be denominated  his  or  her  ’A’ Account.     For the purpose of this fund, earnings shall be deemed to mean  solely the monthly or weekly sum paid to the  Employee for  wages  excluding  from the purview  of  such  term  all accretions  thereto  and perquisites in the  way  of  acting allowance   commissions  bonus  payments  overtime   messing housing allowance lodging money travelling expenses and  all such similar   payments. 7.(a) On or as at the thirty first December in each    year a sum equal to the amount contributed by each     member  to his or her ’A’ account during that year shall be credited by the  company to another account to be opened in the name  of each  member and to be denominated his or her  ’B’  Account. The Company reserves to itself liberty to make such  further contributions  as may be requisite for the purposes of  Rule 14 below.   (b)     If  the  net dividend paid by the Company  on  its ordinary  share  capital in respect of  any  financial  year shall  be  at a rate of not less than seven and a  half  per cent on such ordinary share capital a further sum calculated as hereinafter set out shall be paid by the Company.  Unless the Company shall decide that such further sum shall be paid into  a separate Fund or otherwise than into this Fund  such further sum shall be paid into this Fund to another  account to be opened in the name of each person who shall have  been a  member  on the thirty-first day of December in  the  said financial year and to be denominated his or her ’C’ account. The amount of such further sum 117 shall depend upon the rate of such net dividend and shall be ascertained according to the following scale:- Rate of net dividend paid      Amount of the further sum as aforesaid.                      sum payable. Not less than 7-1/2% and not       One week’s wages. exceeding 8-3/4% Exceeding 8-3/4 but not ex-     Two week’s wages. ceeding 11-1/4% Exceeding 11-1/4 but not         Three weeek’s wages. exceeding 13 3/4% Exceeding 13 3/4% but not        Four week’s wages. exceeding 16-1/4% Exceeding 16-1/4% but not        Five week’s wages. exceeding 181% Exceeding 18-3/4% but not       Six week’s wages.

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exceeding 211% For each additional 2-1/2%     An additional week’s                                   wages. For the purpose of this clause one week’s wages ’shall  mean in the case of a worker in receipt of daily wages six  times his daily rate of pay at the thirty first day of December in such financial year as aforesaid and in the case of a worker in  receipt of monthly pay one fifty-second part  of  twelve times  his  monthly rate of pay at the thirty-first  day  of December in such financial year".    "Provided  always  that  if at  any  time  the  Company’s Ordinary share capital shall be increased by  capitalisation of  any of its undistributed profits (not including  profits arising  from  a  revaluation of assets, from  the  sale  of assets or from the sale of shares at a premium) or  reduced, then the rate of net dividend paid by the Company in respect of  any  financial year after the coming into force  of  any such  increase or reduction shall for the purposes  of  this clause be deemed to be the rate of net dividend actually  so paid  by the company altered in the ratio which the  nominal value  of the Company’s paid up capital at the end  of  such financial year (excluding therefrom all 118 portions of such capital which represent capitalised profits derived  from revaluation of assets sale of assets or  issue of  shares  at a premium) shall bear to the value  which  it would have had if such increase or increases or reduction or reductions  of capital as shall come into effect  after  the first  day of January one thousand nine hundred  and  thirty eight had never taken place".   "The payment into each member’s ’C’ Account in  accordance with  the  above  provisions  shall  be  made  as  soon   as conveniently may be after the holding of the annual Ordinary General Meeting of the Company at which such net dividend as aforesaid is finally declared and ascertained". 8.   The  moneys  of  the  Fund shall  be  invested  by  the Trustees in accordance with the provisions from time to time in  force  under  the  Indian  Income-tax  (Provident  Funds Relief) Act, 1929. 9.   (1) (a) On or as soon as may be after the thirty  first day  of December in each year the Trustees  shall  determine the amount standing to the credit of each member in  his’A’, B and C accounts on that date and for that purpose a general account shall be taken of the assets of the fund and of  the receipts  payments dealings and transactions  in  connection therewith  during  the  calendar year  terminating  on  such thirty first day of December (hereinafter referred to as the period of account).   (b)     Each  such  general account shall  comprise  three revenue Accounts to be known as the ’A’ Revenue Account, the ’B’   Revenue   Account   and  the   "C"   Revenue   Account respectively.   The  "A" Revenue Account shall  be  credited with  all  income  accrued or profits  realised  during  the period of account in respect of the investments representing moneys  lying  to  the credit of the "A"  accounts  and  the appreciation (if any) of such investments during the  period of  account.  The "A" Revenue Account shall be debited  with all losses (if say) in respect of 119 depreciation  of such investments and all sums  paid  during the   period   of  account  in  respect   of   interest   on contributions to retiring members or the representatives  of deceased members as herein before provided.  The ’B’ Revenue Account  shall be credited with all forfeits and all  income accrued  or profit realised during the period of account  in

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respect of the investments representing moneys lying to  the credit of the ’B’ Accounts and the appreciation (if any)  of such  investments  during the period of  account.   The  ’B’ Revenue account shall be debited with all losses (if any) in respect of depreciation of such investments and all expenses of the Fund.  The "C" Revenue Account shall be credited with all  income accrued or profit realised during the period  of account  in respect of the investments  representing  moneys lying to the credit of the ’C’ Accounts of the members,  the appreciation  (if any) of such investments during  the  said period  and  all  interest received  by  the  Trustees  or., withdrawals  made  under Rule 18 hereof.   The  "C"  Revenue Account shall be debited with all losses (if any) in respect of depreciation of such investment as last aforesaid.   (c)     The  balance  of  the "A",  "B"  and  "C’  Revenue Accounts respectively shall be appropriated to the "A",  "B" and  "C" accounts of the members in each case in  proportion to  the amounts standing to the credit of  their  respective "A",  "B"  and "C’ accounts at the close of  the  period  of accounts  provided  always  that for  the  purpose  of  such appropriation  the Trustees may if they think fit  disregard any sum standing to the credit of any member in his "A"  "B" or  the "C" Revenue Account not exceeding on( rupee and  may carry forward to the next period of account any part of  the balance of the "A" revenue account, the "B" revenue  account or  the "C" Revenue account which will not suffice to pay  a complete  one half percent on the total amount  standing  to the "B" or "C" accounts as the casecredit of the "A", may be of all the members.  Provided also that in ascertaining  the amount at credit of a member’s "C’ 120 account  for  the  purpose of  calculating  the  proportions herein  mentioned  there  shall be deducted  from  such  "C" Account  only those sums withdrawn under the  provisions  of Rule  18 hereof on which interest is not payable by  him  to the Fund.   (d)For  the purpose of such Revenue Account  the  Trustees shall value the investments and securities of the Fund,  and if the same shall in their opinion, which shall be final and conclusive,  have appreciated or depreciated since the  date of  purchase, or if a general account shall have been  taken subsequent  to the date of purchase then since the  date  of the last preceding general account the amount of such appre- ciation or depreciation shall be credited or debited to such revenue account as though the same were a realised profit or loss as the case may be.  (2)Notwithstanding  the  terms of Rule  9(1)  the  Trustees shall  have  the  right should they  in  their  uncontrolled discretion deem it necessary in the interests of the members as  a whole to take out a general account of the  assets  of the  fund  as  at  any date in any year  other  than  or  in addition  to  the thirty first day of December  and  Members "A", "B" and "C" accounts shall be adjusted accordingly.  (3)In  the  case of the taking of a general  account  under rule 9(2) the words "the period of account" used  throughout these rules shall mean and refer to (where the context shall admit) the period whereof such general account of the assets of the fund was taken under rule 9(2). 10.On  retirement  of  any member with the  consent  of  the General  Manager  of the Company before completion  of  more than fifteen years service with the company he or she  shall be  paid  the entirety of the amount then  standing  to  the credit of his or her "A" and "C" account together with  one- fifteenth of the moneys standing to the credit of his or her "B" account for such completed years service.

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11.  If any member before completion of fifteen 121 years  service  with  the company  shall  be  dismissed  for misconduct or shall resign therefrom without the consent  of the General Manager he or she shall be paid only the  amount then  standing to his or her credit in "A" account  and  ’C" Account. 12.  The  residue of any moneys standing to the credit of  a member’s "B" account after payment of the moneys payable  to him or her there out under Rule 10 and the entirety  thereof if   he  or  she  shall  be  dismissed  or  resign  in   the circumstances as mentioned in rule 11 shall be forfeited  to the Fund and carried to the "B" Revenue Account to be  dealt with under Rule 9 (1) 13.  Upon termination by any means of a member’s service  if more  than  fifteen  years  thereof  shall  then  have  been completed he or she shall be paid the entirety of the amount then  standing  to  the credit of his or  her  "B"  and  "C" account.  For  the  computation  of  length  of  service  under   the foregoing rules continuous service only shall be reckoned as from the date or last date on which the employee entered  or re-entered service. 14.  If  in  consequence of depreciation of  securities  the amount as received by a member or his or her representatives in  respect  of  his  or her  "A"  account  under  the  last preceding  rules  shall  fall  short of  the  total  of  the contributions  as  made  thereto the  company  may  make  an additional  and contingent contribution to the fund  to  the amount of the deficiency for payment thereof to the member. 15.  If it shall be proved to the satisfaction of any of the trustees  that  any member has become  insane  or  otherwise incapacitated  from  exercising  proper  control  over   his affairs they make payment out of the moneys standing to  his or her credit in the Fund and at such time or times to  such person or persons on his or her account as they may in their absolute  discretion think expedient.  The above  provisions for 16 122 payment  shall not apply to moneys forfeited under  Rule  17 which shall be dealt with by the Trustees at their  absolute discretion thereunder. 16.  On  the death of any member while still in the  service of the Company the sum standing to his or her credit in "A", "B" and ’C" accounts shall be paid to the person or  persons named in the declaration form signed under Rule 4 or failing such  declaration  to  the person or persons  who  shall  be ascertained  to be next-of-kin under the provisions of  Rule 5. 17.  No  member  of  the Fund shall have any  claim  on  the moneys standing to his or her credit therein otherwise  than in  accordance  with the provisions of these  rules  and  no person  or persons other than a member save and except  such as   shall  be  nominated  in  the  declaration  under   the provisions  of  Rule  4 or shall be ascertained  to  be  the member’s  next-of-kin  under  Rule 5 shall  have  any  claim thereto in any right whatsoever.  Any assignment by a member of the moneys which would otherwise be payable to him or her under these rules whether absolute or by way of charge shall be wholly void and in the event of any member executing  any such  assignment  or being adjudicated insolvent or  if  any order  shall be served upon the Trustees of the Company  for payment  of the moneys standing to his or her credit to  any person  under any attachment or -other process of any  Court

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the  said  moneys  shall at the time when  they  would  have otherwise  become  payable  to  the  member  but  for   such assignment   insolvency  or  attachment  be  liable  to   be forfeited  to  the FUND PROVIDED ALWAYS  that  the  Trustees shall  at  their absolute discretion and without  any  legal obligation  so to do pay and apply the same for the  benefit of the member or his or  her dependents and relatives. 18.  Withdrawals by members of the money standing to   their credit  with the Fund shall not be allowed by  the  Trustees except  that  withdrawals from the amount  standing  to  the credit of a member’s ’C’ 123 account may be allowed on the special grounds to -the extent and  subject  to  the conditions laid  down  by  the  Indian Income-Tax Act and the Rules made thereunder in that  behalf as in force from time to time. 19.  There shall be not less than three Trustees of the said Fund. 20.  If and whenever any Trustees shall die resign or become incapable of acting or shall permanently leave India one  or more persons in his place shall be appointed by the  Company as such Trustees. 21.  No copy shall be furnished to any member of his or  her account but member may have inspection thereof in the  Books of the Fund at all reasonable times. 22.  These  Rules  may  from time to  time  be  altered  and amended  and  other Rules and Regulations may  be  added  or substituted  for the management and working of the  Fund  in every  case  by the Company and the Trustees  and  with  out reference to the parties hereto of the third part,  provided always  that should such addition or alteration curtail  the rights  or  increase the obligations of the members  of  the Fund  any member shall be entitled to withdraw from  and  at his or her own request in writing to the Fund, cease to be a member of the Fund in which case he or she shall be paid the money  standing to his or her credit in the  Fund  (provided that the same shall not have become forfeited under Rule 17) or  such  portion  thereof  as he or  she  would  have  been entitled  to if he or she had then retired from the  service of  the Company with the consent of the General  Manager  of the Company. Any  such  alteration  or amendment shall,  be  notified  in writing to the parties responsible for according recognition to  the Fund under the provisions of the  Indian  Income-Tax (Provident Fund Relief) Act, 1929. 124 23.  The Company may at any time in its discretion  dissolve or  terminate the Fund and shall in such case carry out  the winding  up  of the Fund and the members of the  Fund  shall receive  all  the moneys standing to their  credit  provided they  shall  not then have  become forfeited under  Rule  17 ’A’, ’B’ and C’. 24.  Any  payment made in accordance with the Rules  of  the Fund  to  the  member,  his  nominee  or  next  of  kin   as ascertained  or  to  any person or persons  other  than  the foregoing shall operate as a full and efficient discharge of all liability of the Fund in respect thereof 25  These Rules and Regulations shall come into  force  with effect from the 1st day of January, 1929. 125