Amount payable under the voluntary retirement benefit scheme is not exempt from attachment
ORDER Radha Krishna Rao, J.
1. This revision is directed at the instance of the defendant in the suit against the order dated September 21, 1992 passed by the II Additional Subordinate Judge, Visakhapatnam allowing I.A. 294/92, in O.S. 332/90. on his file and restricting the attachment to an extent of Rs. 48,000/- out of the retirement benefits payable to the petitioner herein and subject to Section 60 C.P.C.
2. The facts leading to the filing of this petition are briefly as follows:- The defendant borrowed Rs. 10,000/- from the plaintiff on May 21, 1987, Rs. 15,000/- on July 22, 1987 and Rs. 8,000/- on August 11, 1987 for his domestic expenses agreeing to repay the said amounts with interest at rate of Rs. 27- per mensem per hundred. The defendant executed promissory notes in his own handwriting in favour of the plaintiff. Subsequently in spite of several demands made by the plaintiff the defendant failed to pay the amounts. Therefore, the plaintiff filed the suit against the defendant for recovery of Rs. 39, 433-04 basing on the three demand promissory notes. He has also filed another suit O.S. No. 578790 against the defendant for a sum of Rs. 17,200/- basing on a promissory note dated May 21, 1987. The defendant is an employee in Hindustan Shipyard Limited, Visakhapatnam. The Management of the Hindustan Shipyard Limited, Visakhapatnam has offered voluntary retirement scheme for the employees and in response to it the defendant has opted for the retirement under the said scheme for retirement by May 31, 1992. By virtue of his pre-mature retirement the defendant had to get a lumpsum amount of more than Rs. One Lakh. According to the plaintiff in case the defendant received the said amount and leaves the jurisdiction of the Court, it would be very difficult for him to realise the suit amount from the defendant. According to the plaintiff, the defendant has to get from his employer about Rs. 40,000/- towards provident fund, Rs. 25,000/-towards gratuity, about Rs. 50,000/- towards voluntary retirement benefit. Rs. 2,000/-towards L.T.C. and Rs. 3,000/- towards leave encashment. The plaintiff therefore filed the petition under Order 38 Rule 5 C.P.C. to direct the respondent to furnish security to the said amount together with costs and in the meanwhile to order attachment of the above said amounts payable to him.
3. The defendant denied the allegations made in his affidavit and he stated that the plaintiff has no prima facie case. The defendant states that the plaintiff completely misled the Court and misused the process of law by making false allegations. The defendant has further stated in his counter that the voluntary retirement benefits are wholly exempted under Section 60(g) of the Civil Procedure Code and that the plaintiff misled the Court and obtained an ex pane order which is liable to be raised.
4. The Court below, after considering the respective contentions of the plaintiff and defendant, observed that Provident Fund and Gratuity arc exempt from attachment and so restricted the attachment to an extent of Rs. 48,000/- out of the retirement benefits payable to the defendant. Challenging the same, the defendant has filed the present revision.
5. Section 60, Civil Procedure Code deals with property liable to attachment and sale in execution of decree. Under Clause (g) of Subsection (1) of Section 60, stipends and gratuities allowed to pensioners of the Government or of a focal authority or of any other employer or payable out of any service family pension fund notified in the official gazette by the Central Government or a State Government and political pensions are exempt from attachment. It is stated in Explanation I to Section 60, that the moneys payable in relation to the matters mentioned in Clauses (g), (h) (i), (i-a), (j), (l) and (o) are exempt from attachment or sale, whether before or after they are actually payable, and in the case of salary, the attachable portion thereof is liable to attachment whether before or after it is actually payable. Explanation II clarifies that in Clauses (i) and (i-a) "salary" means total monthly emoluments, excluding any allowances declared exempt from attachment under the provisions of Clause (1) derived by a person from his employment whether on duty or leave. On an analysis of the provisions of Section 60, C.P.C. it is clear that nowhere it is mentioned that the amounts payable to an employee on account of his voluntary retirement under the voluntary retirement benefit scheme are exempt from attachment. So long as the amounts payable under the head 'voluntary' retirement benefit scheme are not exempt from attachment under the statute, it cannot be said that the person who is receiving the amounts under the voluntary retirement scheme can claim the benefit of Sub-section (1) of Section 60, C.P.C.
6. The learned counsel for the petitioner has relied upon a decision of the Mysore High Court, reported in Kuppuswamy v. Yellammal (48 FJR 434, and contended that the amounts payable under voluntary retirement benefit scheme are exempt from attachment. In that case it was held that special compensation payable to an employee under a voluntary retirement scheme which is calculated at the rate of fifteen days' wages for every year of his service, is not a payment depending on the bounty of the employer, that it is a payment of the nature of retrenchment compensation or of a consolidated pension and it would, therefore, fall within the definition of "wages" and would be exempt from attachment under Section 60(1)(h) of the Civil Procedure Code. It was expressed in that decision that the word "wages" in the context must include, all payments in the nature of wages payable by the employer including retirement compensation benefit which is really in the nature of a pension. It may be noted that in the above said case the effect of consolidated amount that is being paid in lieu of giving up of the remaining service as per the voluntary retirement benefit scheme has not been taken into account. As already stated above, Section 60(1) C.P.C. does to refer to any amounts received under the voluntary retirement benefit scheme as having been exempt from attachment. In Union of India v. J.C. Fund & Finance, , the Supreme Court, after considering the provisions of Section 60(1) Clauses (g) and (k) of the Civil Procedure Code and Sections 3 and 4 read with Section 2(a) of the Provident Funds Act, held that a bare reading of Sections 3 and 4 of the Provident Funds Act, 1925 read with Section 2(a) of that Act will show that attachment of amounts bearing their description is prohibited, that Section 60(1) provisos (Sic. Clauses) (g) and (k) leave no doubt on the point of non-attachability. It was further held by the Supreme Court that so long as the amounts are Provident Fund dues, pensions and other compulsory deposits then, till they are actually paid to the Government Servant who is entitled to it on retirement or otherwise, the nature of the dues is not altered and that the Government is a trustee for those sums and has an interest in maintaining the objection in Court to attachment. There is no dispute about the G.P.F. amounts and pension amounts being exempt from attachment. But the amounts payable on account of voluntary retirement are payable on account of a scheme. In Union of India v. Hira Devi, while dealing with Clause (i) of Sub-section (1) of Section 60, C.P.C. held as follows:-
" 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 allowances due to the judgment debtor as they stand upon a different legal footing. Salary is not attachable to the extent provided in Section 60, C.P.C. Clause (1) 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".
Since the amount payable under the voluntary retirement benefit scheme is not exempt from attachment under any of the provisions of Section 60(1) CPC, I hold that the amount payable under the voluntary retirement benefit scheme is not exempt from attachment. The lower Court is perfectly right in ordering attachment of this particular amount and I do not see any reason to interfere with the same.
7. The C.R.P. is, therefore, dismissed. No costs.
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