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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.

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   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

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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

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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

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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.

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   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