Appeal allowed. Court held that provident fund credited to an employee's savings account loses its protected character and becomes attachable personal funds. The attachment of the account was deemed legal.
Order dated 11.02.2021 in W.P.(MD) No.1326 of 2021 set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
W.A.(MD) No.1401 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Judgment Reserved On Judgment Pronounced On 09.07.2024 29.07.2024
CORAM
JUSTICE N. SESHASAYEE
and
JUSTICE P.VADAMALAI
W.A.(MD) No.1401 of 2021 and C.M.P.(MD) No5847 of 2021
1.The Managing Director/Joint Registrar, Dindigul District Central Co-operative Bank Ltd., Dindigul. ... 1st Appellant/ 1st Respondent 2.Branch Manager, Dindigul Central Co-operative Bank, Dindigul Main Branch, Dindigul ... 2nd Appellant/ 3rd Respondent Vs 1.P.Muniyasamy ... 1st Respondent/Petitioner
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2.The Deputy Registrar of Co-operative Societies, Dindigul.
... 2nd Respondent/
2nd Respondent
Prayer: Appeal filed under Clause 15 of Letters Patent against the order dated 11.02.2021 passed in W.P.(MD) No.1326 of 2021 on the file of this Court.
For Appellants : Mr.S.Srinivasaraghavan For R1 : Mr.T.Palanisamy For R2 : Mr.A.Baskaran Additional Government Pleader
JUDGMENT
(Judgment was delivered by N.SESHASAYEE., J.)
This appeal is filed at the instance of Respondents 1 and 3 in W.P.(MD) No.
1326 of 2021 challenging an order dated 11.02.2021, passed by the learned Single Judge setting aside the proceedings of the second respondent dated 21.05.2020 attaching the savings bank of account which the first respondent/writ-petitioner has with the second appellant and to disburse the provident fund amount due to him.
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amount payable to an employee cannot be attached only as long as it retains the character of provident fund, and once it is credited into the savings bank account of the employee, it loses the character as 'provident fund' and it becomes his personal amount. In other words, when the provident fund amount is in the hands of the trustees of the provident fund, it cannot be attached as in a garnishee proceedings, but when it leaves the hands of the trustees of the provident fund, then it loses the very character as 'provident fund'. Reliance was placed on the ratio in M.Ravikumar Vs Registrar of Co-operative Societies and others [W.A.No.2362 of 2019, dated 13.04.2022] and Indian Overseas Bank vs. S.Mohammad Anis [Regular Second Appeal No.5344 of 2009, dated 22.11.2023].
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W.A.(MD) No.1401 of 2021
9.1 After carefully evaluating the rival contentions, this Court considers it fit to allow this appeal. The reasons are:
a) Besides the existence of a decree-debt, for a court of a tribunal to pass an order of attachment following conditions are required: (i) that the debtor should possess property; and (ii) that he must have power of disposition or alienation over the same. An order of attachment operates not on the ownership of the property but on the power of alienation or disposition which the judgement-debtor has over the property.
b) Accordingly, when the provident funds is in the hands of the trustees of the fund, then even the employee concerned does not have absolute power of alienation over the same. Besides the statutory bar that provident fund amount could not be attached, there is a jurisprudential basis for the same.
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W.A.(MD) No.1401 of 2021 that gets credited into his account, but so far as the power of disposition of the employee over the said sum is concerned, it is absolute which he could exercise like his money from any other sources. This precisely is the reason why the provident fund could be attached when the amount is credited into the savings bank account of the employee.
9.2 In the present case, no order of attachment of the provident fund of the first respondent has ever been passed as it is statutorily impossible, but it was made only to attach his savings account into which the provident fund amount was subsequently credited. And, this order attaching the savings bank account was not seen to have been made in anticipation that the provident fund of the first respondent might be credited to it. It could now be derived that the attachment of the savings bank account of the first respondent and freezing his power of operating the account is an extraneous factor, affecting only the first respondent's power of disposition of the amount which once possessed the character of his provident fund, and should not be construed as if the provident fund itself has been attached. An order of
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attachment of the savings bank account hardly affects the character of the amount in the said account, for it only impacts power of disposition and not the character of the amount in the account. As held earlier when once the provident fund leaves its custodian and is credited into the bank account of the employee, it loses its character as provident fund, and hence, the first respondent cannot have any grievance.
(N.S.S., J.) (P.V.M., J.) 29.07.2024 NCC : Yes/No Index : Yes/No Internet : Yes Abr
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W.A.(MD) No.1401 of 2021
N. SESHASAYEE, J. and P.VADAMALAI, J.
abr
To
The Deputy Registrar of Co-operative Societies, Dindigul.
Pre-delivery Judgment made in W.A.(MD) No.1401 of 2021
29.07.2024
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3 issues framed by the court
Whether a provident fund credited into an employee's savings bank account retains its character as provident fund and becomes attachable like other personal funds.
Whether the attachment of a savings account into which provident fund was credited constitutes an attachment of the provident fund itself.
Whether an order attaching an employee's savings bank account affects the character of the provident fund amount therein.
Colour shows how this judgement treated each authority
M.Ravikumar Vs Registrar of Co-operative Societies and othersReferred¶37
M.Ravikumar Vs Registrar of Co-operative Societies and others [W.A.No.2362 of 2019, dated 13.04.2022]
Indian Overseas Bank vs. S.Mohammad AnisReferred¶37
Indian Overseas Bank vs. S.Mohammad Anis [Regular Second Appeal No.5344 of 2009, dated 22.11.2023]
The Managing Director/Joint Registrar, Dindigul District Central Co-operative Bank Ltd., Dindigul
The Branch Manager, Dindigul Central Co-operative Bank, Dindigul Main Branch, Dindigul
The Deputy Registrar of Co-operative Societies, Dindigul
P.Muniyasamy
N.SESHASAYEE
P.VADAMALAI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
