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1965 DIGILAW 96 (BOM)

Pearly Andrew Franz v. Official Assignee

1965-06-25

H.K.CHAINANI, N.A.MODY

body1965
Judgment Chainani C.J. – The appellant was formerly employed in M/s. Killick Nixon Co. Ltd., Bombay. They has established a Provident Fund for the benefit of their employees. The appellant used to contribute to that fund. In 1962 the Employees Provident Funds Act, 1952, hereinafter referred to as the Act, was made applicable to the establishment of M/s. Killick Nixon Co. Ltd. The appellant then became a member of the fund established under the scheme framed under the Act. Under Sub -s.(2) of s.15, the accumulations in the Provident Fund of his employers became liable to be transferred to the fund established under the provisions of the Act. The appellant retired from service in the beginning of 1964. On June 16, 1964, he was adjudicated insolvent. 2. The Official Assignee then addressed letters to the Regional Provident Fund Commissioner and also to the appellant’s ex -employers asking them not to play to the appellant the amountsd lying to his credit in his Provident fund account. The appellant then took out a Notice of Motion, in which prayer (c) was a follows: - “(c) that the Official Assignee may be directed to withdraw his letters to the ex -employees of the Insolvent and Provident Fund Commissioner requesting them to detain the insolvent’s Provident Fund, and he may be further directed no to write any further letters in order to deprive the insolvent of his Provident Fund.” This motion was dismissed by Mr. Justice K.K. Desai. Against the order made by him the present appeal has been filed. 3. Justice K.K. Desai. Against the order made by him the present appeal has been filed. 3. Sub -section (1) of s.10 of the Employees Provident Funds Act is in the following terms: - “The amount standing to the credit of any member in the Fund or of any exempted employee in a provident fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the member or the exempted employee, and neither the official assignee appointed under the Presidency -towns Insolvency Act, 1909, nor any receiver appointed under the Provincial Insolvency Act, 1920, shall be entitled to, or have any claim on, any such amount." The latter part of this sub -section provides that the Official Assignee appointed under the Presidency -towns Insolvency Act, 1909, shall not be entitled to or have any claim on the amount standing to the credit of any member in the fund. The reference to the Presidency -towns Insolvency Act in this sub -section makes it clear that when the Legislature enacted this provision, it was aware of the provisions of the Presidency -towns Insolvency Act, under s. 17 of which Oil the making of an order of adjudication, the property of the insolvent wherever situate vests in the Official Assignee. Notwithstanding that provision the Legislature has specifically provided that the Official Assignee shall have no title to or any claim on the amount standing to the credit of the insolvent in the Provident Fund. The intention of the Legislature is, therefore, clear and that is that this sub -section should override the provisions of the Presidency town Insolvency Act. It follows that so long as the amount stands to the credit of the insolvent in the fund, that is, so long as it is lying with the Regional Provident Fund Commissioner and has not been paid to the insolvent, the amount does not vest in the Official Assignee and he cannot lay any claim to it. The immunity given by sub -s. (1) of s. 10 will, however, not continue after the amount has been paid to the insolvent, see Bonjour V. Official Assignee, Madras (1). 4. The immunity given by sub -s. (1) of s. 10 will, however, not continue after the amount has been paid to the insolvent, see Bonjour V. Official Assignee, Madras (1). 4. The learned Judge has referred to sub -s. (3) of s. 69, which provides for certain percentages of the employers contribution and interest thereon being forfeited to the Fund, when a member withdraws any amount under sub -s. (2) of this section. The learned Judge was inclined to hold that sub -s. (1) of s.10 applies only to those amounts, which are liable to be deducted and forfeited under the provisions of the Act and which not being payable to the insolvent cannot vest in the Official Assignee. With respect, it seems to us that the view taken by the learned Judge on this point is not correct. The amounts, which have to be deducted from the sum standing to the credit of a member in the Fund or which are liable to be forfeited under the provisions of the Act, are not payable to the member. As he is not entitled to them, they cannot be attached under any decree or order of any Court, in respect of any "Debt" or liability incurred by him. No special provision in regard to such amounts was, therefore, necessary. The object underlying sub -s. (1) of s.10 appears to be much wider. One of the purposes of a Provident Fund is to make some provision for the families of the employees. The Legislature, therefore; appears to, have provided by s. 10 that the amount standing to the credit of a subscriber in the Provident Fund shall not be available to his creditors. 5. We,; therefore, allow ,the appeal, set aside the order made by the learned Judge dismissing the notice of motion taken out by the appellant in so far as prayer (c) in the notice of motion is concerned and make an order in terms of prayer (c) in the notice of motion dated July 2, 1964. 6. The appellant should get his costs of the appeal from respondent No.2. Appeal allowed.