Civil Law : Pension, gratuity cannot be attached for debt recovery: SC
Posted on : 04 December 2008 by Admin [ Scorecard : 102]
The Supreme Court has held that retirement benefits like pension and gratuity cannot be attached by authorities for recovery of dues.
The apex court passed the ruling while quashing a Rajasthan High Court ruling which had ordered attachment of the retirement benefits of Radhey Shyam Gupta, who was a guarantor in a mortgage deal.
The High Court had ordered attachment of Gupta's retirement benefit deposited in the Punjab National Bank (PNB) as principal debtor Durga Prasad, for whom he stood guarantor for a loan of Rs 83,000, defaulted in the repayment of the loan taken for a vehicle.
The vehicle mortgaged by Prasad was also untraceable.
The High Court ordered the attachment of retirement benefits after recording the submission of the bank that the matador van of Prasad which was mortgaged was not traceable.
It also ordered Gupta to produce the matador vehicle so that it could be auctioned and the loan amount recovered.
Aggrieved by the ruling, Gupta filed a special leave petition in the apex court.
The apex court agreed with the submission of Gupta's counsel Shobha that proviso (g) of Section 60(1) of the civil procedure code precluded the authorities from attaching retirement benefits of a person.
Citing its earlier rulings, the apex court said that pensionary benefits accruing to a person cannot be attached by the authorities or ordered to be done so by the courts.
"The High Court also erred in placing the onus on the appellant (Gupta) to produce the matador in question for being auctioned for recovery of the decretal dues," the bench of Justices Altamas Kabir and Markandeya Katju observed while disposing off the petition
