Retiral benefits such as pension and gratuity even when received by the retiree, do not lose their character and continue to enjoy immunity against attachment

Citation

CDJ 2008 SC 1851

Radhey Shyam Gupta-vs.-Punjab National Bank 

the Apex Court held that retiral benefits such as pension and gratuity even when received by the retiree, do not lose their character and continue to be covered by proviso (g) to Sec. 60 (1) of the CPC and continue to enjoy immunity against attachment

(2009) 1 SCC 376.

Head Note

Civil Procedure Code - Order 21, Section 47, 60(1) proviso (g) - Alteration of the decree of the Trial Court - Alteration in the manner of recovery of the decretal amount - The appellant stood guarantee for the Principal Debtor for repayment of the loan - Having regard to proviso (g) to Section 60 (1) of the Code, the High court committed a jurisdictional error in directing that a portion of the decretal amount be satisfied from the fixed deposit receipts of the appellant held by the Bank. The High Court also erred in placing the onus on the appellant to produce the Matador in question for being auctioned for recovery of the decretal dues - The High Court erred in altering the decree of the Trial Court in its revisional jurisdiction, particularly when the pension and gratuity of the appellant, which had been converted into Fixed Deposits, could not be attached under the provisions of the Code of Civil Procedure - The High Court could not have gone behind the decree in the execution proceedings and the alteration in the manner of recovery of the decretal amount was erroneous and cannot be sustained. Even after the retiral benefits, such as pension and gratuity, had been received by the appellant, they did not lose their character and continued to be covered by proviso (g) to Section 60(1) of the Code - The High Court erroneously proceeded on the basis that a concession had been made by the appellant that he was willing to have the decretal amount adjusted partly from his fixed deposits, which represented his retiral benefits and that he had also volunteered to produce the vehicle before the Bank so that the same could be sold to recover the major portion of the dues. Further-more, although the Bank was entitled to proceed both against the principal-debtor and the guarantor for recovery of its dues, the mode of recovery was prescribed by the Trial Court, which, clearly indicates that the Bank should at first recover whatever amount it can from the sale of the Matador. The right of the Bank to proceed against either the principal-debtor or the guarantor stood restricted by the directions of the Trial Court. Except for recording that the vehicle was not traceable, nothing is recorded in the impugned judgment of the High Court as to what steps were actually taken by the Bank for recovery of the Matador for sale in order to recover its decretal dues. Instead of disturbing the order of the Executing Court, which was passed in consonance with the provisions of the Code of Civil Procedure, the High Court should have directed the respondent Bank and the Executing Court to seriously pursue the recovery of the Matador or against any other property of the principal-debtor, having particular regard to the finding of the Executing Court that the said fixed deposits represented the retrial benefits of the appellant - Therefore, allow the appeals, set aside the order passed by the High Court and restore that of the Executing Court. The respondent Bank may take appropriate steps for recovery of the Matador for recovery of its dues in the manner indicated in the judgment and in the decree of the Trial Court. Consequently, let the fixed deposit receipts of the appellant be released to him as per the directions of the Executing Court while disposing of the application dated 6.2.1999 and 27.7.2001 by its order dated 1.11.02.

Para 24 to 27

Cases Referred:
1. Industrial Credit and Development Syndicate vs. Smithaben H. Patel and Ors., 1999 (3) SCC 80
2. Rajasthan Financial Corporation v. Man Industrial Corporation Limited (2003) 7 SCC 522
3. State Bank of India v M/s. Indexport Registered and others (1992) 3 SCC 159
4. Calcutta Dock Labour Board and another v Smt. Sandhya Mitra and Others (1985) 2 SCC 1
5. Union of India v Wing Commander R. R. Hingorani (1987) 1 SCC 551
6. Gorakhpur University and others v Dr. Shitla Prasad Nagendera and others (2001) 6 SCC 591
7. Union of India vs. Jyoti Chit Fund and Finance and Others (1976) 3 SCC 607
8. Shiv Shakti Coop. Housing Society, Nagpur v Swaraj Developers and others (2003) 6 SCC 659
9. Surya Dev Rai v Ram Chander Rai and others (2003) 6 SCC 675

Comparative Citations:
2009 (1) KLT 40 (SN), 2009 (1) SCC 376, 2009 (2) SCJ 48, 2009 (2) ALT 9, 2009 (4) MLJ 1121, 2008 (15) Scale 24, 2009 (3) LW 937, 2008 (4) CLT 284, 2008 (9) SLT 454