P.K. Divakaran vs R. Jayarajan

Shamsuddin, J.—The Plaintiff is the Appellant. Plaintiff filed a suit for recovery of Rs. 65,040 on the strength of a promissory note dated 10th March 1989. He filed I.A. 181 of 1991 seeking attachment before judgment an amount of Rs. 65,040 from a cheque for Rs. 1,33,526 drawn in the name of the Respondent in State Bank of Travancore, Puthenchanthai Branch. The Defendant filed a counter in the Interlocutory Application stating that the amount covers Provident Fund and Gratuity which are not attachable. That contention was upheld by the Court below. Aggrieved by the said order, the Plaintiff has come in appeal.

In C.M.P. No. 2204/1991 this Court passed an order granting interim stay of the final order in I.A. 181/91 in O.S. 48/91 and restoring the order originally passed by the Court below attaching the amount. In this appeal, learned Counsel for the Appellant submitted that the Court below has not considered the question whether the entire amount of Rs. 1,33,526 represents Gratuity, Pension and Provident Fund which are not attachable. Learned Counsel invited my attention to an affidavit filed by the Appellant in this Court stating that the Defendant has encashed the cheque and a certain portion of the amount has already been withdrawn by him. No counter affidavit has been filed by the Defendant controverting the averments. Learned Counsel submitted that since the Defendant has encashed the cheque, the amount is attachable.

There is great force in the contention of learned Counsel for the Appellant. In Union of India (UOI) Vs. Radha Kissen Agarwalla and Another, the Supreme Court held that the protection of Provident Fund amounts from attachment will be available until the amount is actually paid to the employee. In Union of India (UOI) Vs. Jyoti Chit Fund and Finance and Others, also the Supreme Court held that the exemption from attachment will be available only till the amount continues to be Provident Fund in the hands of the trustee and not after it is received by the employee who is entitled to the same. This observation is applicable to Gratuity and other pensionary benefits which are not attachable. In Madhavan Nambiar v. Syndicate Bank 1991 (2) KLT 127 this Court has followed the above decisions and held that once the amount reaches the employee, the exemption ceases to be available and amount becomes attachable. It follows that if the version of the Plaintiff that the Defendant has encashed the amount is true, no protection from attachment is available.

In the circumstances, I am unable to sustain the order passed by the Court below. I set aside the order and direct the lower Court to consider the question whether cheque was encashed by the Defendant. If the cheque is encashed by the Defendant, it will be open to lower Court to attach the amount to the extent of the plaint claim. So also, if the entire amount does not represent Gratuity, Provident Fund and other pensionary benefits, there is no bar in attaching so much amount not covered by gratuity and pensionary benefits. Until a final order is passed, the order passed by this Court in C.M.P. 2204/1991 would remain in force.

C.M.A. is disposed of as above. There will be no order as to costs.