Provident fund recovery through third parties fails where the bank is not holding money due to the employer.

Section 8F(3)(i) was analysed as permitting recovery from a bank only where the bank held money due to the employer or money that would become due to the employer. On the stated facts, the employer's larger debt to the bank and the hypothecation arrangement allowed the bank to appropriate insurance proceeds towards that liability, so the proceeds were not money due to the employer in the bank's hands. Section 11(2) was read harmoniously with Section 8F(3)(i), but it did not authorise recovery from a third party absent such funds. The provident fund demand was therefore unsustainable.

---

---

Issues: Whether the provident fund authorities could invoke Section 8F(3)(i) to compel the bank to remit money allegedly held on behalf of the employer when the bank had already adjusted the insurance proceeds towards the employer's outstanding liability, and whether Section 11(2) gave the provident fund claim priority in the facts of the case.

Analysis: The demand under Section 8F(3)(i) could be sustained only if the bank was holding money due to the employer or money that would become due to the employer. On the admitted facts, the employer owed the bank a much larger sum than the amount later received from the insurer, and the bank was entitled under the hypothecation arrangement to appropriate the insurance proceeds towards that debt. The amount received from the insurer therefore could not be treated as money due to the employer in the hands of the bank. Section 11(2) was read harmoniously with Section 8F(3)(i), but it did not permit recovery from a third party in the absence of money due to the employer in that party's hands. The impugned action was accordingly beyond the authority conferred by the Act.

Conclusion: The provident fund demand was not sustainable and was liable to be quashed; the bank succeeded.

---