Public Provident Fund protection bars bank attachment for debt recovery from exempt savings

Public Provident Fund balances are stated to be protected from attachment or debit for recovery of a subscriber's debt or liability. Section 9 of the Public Provident Fund Act, 1968 provides that the amount standing to the credit of a subscriber is not liable to attachment, and that protection is reinforced by the proviso to Section 60(1)(ka) of the Code of Civil Procedure, 1908, together with Rule 10 of Schedule II to the Income-tax Act, 1961. On that basis, the bank could not appropriate PPF funds towards a partnership debt or guarantee liability, and the debit is described as illegal and requiring refund.

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Issues: Whether the amount standing to the credit of a Public Provident Fund account could be debited or attached by the bank towards recovery of a debt or liability.

Analysis: The amount in a Public Provident Fund account is protected by the statutory scheme governing provident fund savings. Section 9 of the Public Provident Fund Act, 1968 declares that the amount standing to the credit of a subscriber shall not be liable to attachment in respect of any debt or liability incurred by the subscriber. The exemption is reinforced by the proviso to Section 60(1)(ka) of the Code of Civil Procedure, 1908, and by Rule 10 of Schedule II to the Income-tax Act, 1961, which preserves properties exempt from attachment under the Code. In view of these provisions, the bank could not appropriate the PPF amount for recovery of the partnership debt or guarantee liability.

Conclusion: The debit from the Public Provident Fund account was illegal and unjustified, and the amount was required to be refunded.

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