1976 (3) TMI 228 - SC - Indian Laws

Supreme Court Protects Provident Fund from Attachment, Rules in Favor of Union of India

UNION OF INDIA Versus JYOTI CHIT FUND & FINANCE & ORS.

The Supreme Court held that provident fund contributions and pensionary benefits cannot be legally attached, citing relevant provisions of the Provident ... Whether the whole, or part of the amount sought to be attached, represented provident fund or pensionary benefits nor did the High Court go into the question? Held that:- It is possible to take a broad view that cases where public policy is involved and the court has a certain duty to observe statutory prohibitions, a wider concept of locus standi has to be taken. Any public authority interested in the matter and not behaving partially as an officious busy- body may bring to the notice of the court the illegality of the steps it proposes to take. When the court's jurisdiction is so invoked, it may be exercised without insisting on some other directly affected party, like the judgment-debtor in the instant case, appearing to defend himself. The argument that the Rajya Sabha Secretariat is different from the Union of India is a new gloss which Shri Rohatgi has put upon his contention of locus standi. He has pressed into service Articles 300 and 98(2) of the Constitution of India, neither of which is helpful or applicable. This point has the merit of novelty, little else. Consequentially, we set aside the decision of the High Court and of the executing court, but this is not the end of the matter. We direct the court of the Subordinate Judge to go into the merits of the objection raised by the Union of India as to whether the entire amount or any portion thereof held by it on behalf of the Rajya Sabha Secretariat staff, so far as the judgment-debtor in this case is concerned, represents provident fund and compulsory deposits or pensionary benefits, excluded from attachability in execution of civil decrees under the provisions already adverted to. If it is feasible to effect service of notice on the judgment-debtor, well and good, but if it is not, the court cannot absolve itself of the duty to investigate into the merits of the claim or character of the amounts, so long as the Union of India is ready to make good its contention. The appeal is allowed Issues:- Whether amounts representing provident fund contributions and pensionary benefits can be attached legally.- Whether the Union of India has the right to object to the attachment of provident fund and pensionary benefits.- Whether the Rajya Sabha Secretariat staff's claims can be raised by the Union of India in civil court proceedings.Analysis:The Supreme Court addressed the issue of whether provident fund contributions and pensionary benefits can be legally attached. The Court emphasized the importance of public policy in protecting such funds from judgment-creditors. The Court held that attachment of these amounts is prohibited by law, citing relevant provisions of the Provident Funds Act and the Civil Procedure Code. The Court rejected the argument that retirement alters the nature of these funds, stating that they retain their character until received by the employee.Regarding the Union of India's right to object to the attachment, the Court ruled that a public authority, like the Union of India, can intervene in cases involving public policy concerns. The Court emphasized that a broadened view of locus standi is necessary when public interest is at stake. The Court held that the Union of India has the standing to challenge the attachment of provident fund and pension amounts, contrary to the lower court's narrow interpretation.The Court also addressed the issue of whether the Union of India could raise claims on behalf of the Rajya Sabha Secretariat staff in civil court proceedings. The Court rejected the argument that the Secretariat is separate from the Union of India, emphasizing that the government acts as a trustee for these funds. The Court directed the lower court to investigate the nature of the funds held by the Union of India on behalf of the Secretariat staff and determine their attachability under the relevant laws.In conclusion, the Supreme Court allowed the appeal, setting aside the decisions of the lower courts. The Court directed the Subordinate Judge to examine the Union of India's objections regarding the attachment of provident fund and pension amounts, ensuring a thorough investigation into the nature of the funds held on behalf of the Rajya Sabha Secretariat staff. The Court emphasized the importance of upholding statutory prohibitions and public policy considerations in such cases.