Ravi Kant Abrol vs Punjab National Bank & Anr.

Petitioner is seeking the issuance of a writ of certiorari to quash the order of respondents whereby an amount of Rs. 1,00,000 out of the amount

of gratuity has been kept under banker's lien by respondent No. 1

Petitioner was an employee of respondent No. 1 who retired on 31.7.1997 as Asstt. Manager. His gratuity to the tune of Rs. 1,94,000/ as

postretiral benefit was sanctioned by the respondent which is evident from the letter of the Manager, Punjab National Bank, New Delhi dated

14.8.1997. The petitioner presented cheque No. 015851 dated 20.8.1997 for an amount of Rs. 1,94,000 before respondent no. 1 in order to

receive the payment of gratuity amount. The cheque was returned alongwith memo of the bank with remarks that ""the amount of Rs. 1, 00,000

kepi under banker's lien because of the liability of Shri R.K. Abrol in the account of M/s Malhotra Wires and Nails as guarantor"". Petitioner's claim

is that the action of the respondents for not releasing the amount is arbitrary and illegal.

Repondents have filed objections stating therein that the petitioner being guarantor to the loan advanced to M/s Malhotra Wires and Nails is

under an obligation to satisfy the banks outstanding. The bank has filed a suit for the recovery of Rs. 4,31,857.23 against the borrower and

guarantors including the petitioner which is pending in the court of learned District Judge Bank Cases Jammu. In the account of M/s Malhotra Wire

and Nails Smt. Sudesh Bala Abrol, one of the partners of the borrower firm is the wife of the petitioner. In view of the deed of guarantee executed

by the petitioner in favour of the bank and in view of the loans availed of by the firm (Malhotra Wire and Nails) the bank is within its rights to keep

under its lien an amount payable to the petitioner to the extent of his liability towards the bank.

The petition is admitted to hearing and is being taken up for disposal at this stage at the joint request of learned counsel for the parties as the

pleadings are complete in all respects.

I have heard learned counsels for the parties and perused the record.

It is admitted case of the parties that the petitioner is a guarantor in respect of the loan advanced to M/s Malhotra Wires and Nails. However,

Mr. Nanda learned counsel for the petitioner submitted that no such decree has been passed against the petitioner creating a liability or preferential

charge on the petitioner guarantor for liquidation or recovery of the amount. Respondent No.1 after having determined the rights of the parties in

the suit and obtaining a decree is well within its right to recover the amount. His contention is that respondent No. ""I has no jurisdiction to create

banker's lien to the extent of Rs. 1, 00,000 on the amount which is payable to the petitioner as part of the gratuity amount being the postretiral

benefit. There is substance in the argument of Mr. Nanda. In order to bring around his point he has relied upon Section 13 of the Payment of

Gratuity Act, which reads thus :

No gratuity payable under this Act shall be liable to attachement in execution of any decree or order of any civil, revenue or criminal court"".

This provision of law has been pro vided taking into consideration the object that it would be appropriate to give complete protection to the

amount of gratuity payable to an employee from being attached in execution of a decree or order of any civil court, revenue or criminal court.

Section 9 of the Act deals with the penalties envisaging that whosoever for the purposes of avoiding any payment of amount of gratuity to be made

by himself or of enabling any other person to avoid such payment knowingly makes or causes to be made any false statement of false

representation, shall be punishable for imprisonment for a term which may extend to six months or with a fine which may extend to Rs. 1,000/ or

with both. It further provides that an employer who contravenes or makes default in complying with any of the provisions of the payment of

Gratuity Act or any Rule or order made thereunder, shall be punishable with imprisonment for a term which may extend to one year or with fine

which may extend to Rs. 1.000/ or with both.

Proviso to Section 60 of the Code of Civil Procedure also prohibits the attachment of gratuity allowed to pensioners of the Government or of a

local authority or of any other employer and political pensioners.

Tested on the touch stone of the law referred to in the preceding paragraphs, the action of respondent No. 1 creating banker's lien to the extent

of the liability of the petitioner which is yet to be determined by the civil court, on the fact of it, is arbitrary. Learned counsel for the respondents

could not defend and justify the action of the respondents by citing any law to counter the contention canvassed by learned counsel for the

petitioner. The creation of lien on the amount to attachment as it cannot be operated by the petitioner. The law dealing with the payment of gratuity

under the payment of Gratuity Act and the Code of Civil Procedure protects the right of a retired government servant for securing payment of the

gratuity without any encumberance or charge to be created by the employer. The action of the respondents is found to be absolutely unsustainable

and against the provisions of law. The respondents can recover the amount by filing appropriate proceedings in case liability of the petitioner is

determined by the civil court in the suit which the respondents have filed for recovery of the loan amount.

For the foregoing reasons the petition is allowed and order of the respondents creating lien on the part amount of gratuity of the petitioner to

the extent of Rs. 1, 00,000 is set aside. The respondents are directed to release the gratuity amount in full, if not already released, in favour of the

petitioner. No order as to costs.