Court can attach salary
Salary, allowance or associated benefits of an official of the government, Company, Government owned Corporation, Railway, Local Authority or private establishment can be attached, as an item of property, while executing a decree by a court, as the law stipulates.
Provision relating to attachment of salary in CPC
The Section 60 (1) of the Civil Procedure Code, 1908 (CPC) deals with attachment of salary and other items in execution of decree relating to debt.
The items of property liable to attachment in execution of a decree, as per the section, include almost every moveable or immoveable property. But it excludes some specific items enlisted elsewhere below.
No attachment for Pension & such benefits
Pension, of different kinds including service pension, gratuities of pensioners, all deposits & the sum derived from such deposits in the provident fund account of the subscribers, etc are not liable to attachment under various provisions of law.
The important legal provisions governing attachment of salary or restraining the attachment are:
- Pensioners Act, 1871: Section 11
- Provident Fund Act, 1925 : Sections 3 and 4
- The Civil Procedure Code , 1908 : Section 60 and Order 21, Rule 48 & 48A
- State Government Rules, such as Kerala Service Rules (KSR): Part III, Rule 124
- Kerala Financial Code( KFC) : Article 89 authorizes the officers to attach attachable portion of salary
Let us see the legal provisions one by one under these laws in regard to attachment by a court, so as to get a clear and cohesive picture.
Attachment of salary of serving officials
In the case of a government employee, the first Rs. 1000/- of the salary and the two-third of the balance amount of salary is exempted from attachment, as per the Section 60 of the CPC.
The attachment in pursuance of a single decree can be made only for a period of 24 months. Thereafter the salary cannot be touched in execution of that decree, for the next 12 months even if there is any balance due. After the cooling period that portion of salary under attachment for a period of 24 months will be finally exempted from further attachment in that execution.
The High Court of Kerala, in Bindu S.J.George v Headmistress [WP(C) No 23037 of 2008 (P)] holds, 'As per Section 60, the first thousand rupees and 2/3rd of the balance shall be exempted and the recovery shall be only of the 1/3rd remaining. The said recovery shall be effected in the case of one debt only for 24 months and there shall be a holiday of one year granted after the same for any recovery towards another debt. With respect to different debts in different transactions; the recovery can be continued after the one year holiday; after every recovery for 24 months".
Portion attachable in maintenance decree
In the case of maintenance decree the attachable portion is 2/3 of the salary, unlike as in other money decrees. The exemption of first Rs.1000/- of the salary also does not apply for a maintenance decree.
That means in maintenance decree 2/3rd of the salary can be attached without deducting anything else as un-attachable portion.
What constitutes Salary?
The term ‘Salary’ means the total monthly emoluments received by an employee for the service he rendered.
Allowances form part of the salary. But Dearness Allowance (DA) and House Rent Allowance (HRA) of an employee are exempted from attachment as per Government of India notification (See Kousalya Devi v Praveen Bankers: 1979 KLT 932). City Compensatory Allowance (CCA) is also exempt from attachment ( Sasidharan v KCTSS Sangam : 1994(1) KLT 429).
If the employer deducts a part of the employee’s salary and held in deposit for the purpose of meeting the dues of the employee’s creditors, the amount of such deduction cannot be treated as the salary of employee.
While calculating the attachable portion of the salary the deduction towards repayment of temporary advance taken by the employee from GPF is not exempt. (Florence Mabel v State of Kerala: 2000 (3) KLT 37)
Only salary is immune from attachment but any arrear of salary is not (Sheeba C Thomas v Rosamma Thomas & another : 2009 (3) KLT 260). Salary is attachable only when it is due and not before ( R Viswanthan Nair v Thahasildar: 1974 KLT SN2).
In reckoning salary, the amount deducted and remitted to General Provident Fund (GPF) and Employees Welfare Fund need not be excluded (George v Kurisummoottil St George Chitty Fund : 1980 KLT 558)
Computation of attachable portion of salary
When there is only one decree
Assume that the salary of the person is Rs 7000/- per month. Then the salary to the extent of first 1000 is not liable to attachment: that means attachable amount is Rs 7000 - 1000 = Rs 6000.
Then 2/3rd of the remainder is also not liable to attachment: That means Rs 6000 x 2/3 = Rs 4000. Therefore, the total amount liable to attachment is Rs 6000 x 1/3= Rs 2000.
Then the portion of Rs 2000 of the salary can be attached for twenty-four months. After that Rs 2000 is exempted as per the second part of proviso to Section 60(1)(i) of the CPC.
The subsection states that, where such attachment is made in execution of one and the same decree, such portion of salary shall, after the attachment has continued for a period of 24 months, be exempt from attachment in execution of that decree until a further period of 12 months. Therefore the basic salary for the purpose of calculation of attachment after further 12 months becomes Rs 5000 (that means initial salary of Rs 7000 - exempted amount of Rs 2000 = Rs 5000 per month.
Now the revised/new salary is Rs 5000 per month. So, salary to the extent of the first 1000 is not liable to attachment Rs 5000 - 1000 = Rs 4000.
Then again 2/3rd of the remainder is also not liable to attachment Rs 4000 x 2/3 = Rs 2667. So the total amount liable to attachment is Rs 4000 x 1/3 = Rs 1333.
Now the new/revised salary for calculation of attachment amount will be Rs 5000 - Rs 1333 = Rs 3667 per month.
This process will continue until the value of salary of judgment-debtor reaches up to Rs 1000 per month or the decree-holder’s claim is fully satisfied.
When there are two different decrees
Assume that the salary is Rs 7000 per month.
Date of calculation of attachment is 1 – 1 - 2005.
Salary to the extent of first 1000 is not liable to attachment Rs 7000 -1000 = Rs 6000. Then again 2/3rd of the remainder is also not liable to attachment Rs 6000 x 2/3 = Rs 4000.
So total amount liable to attachment is Rs 7000 - 1000 - 4000 = Rs 2000.
Now Rs 2000 has been attached for twenty-four months (up to 31 12 2006).
For next twelve months (from 31-12-2006 to 31-12-2007) for which the attachment amount is exempted. So the attachment amount for the period from 1-1-2007 to 31-12-2007 as salary will be Rs 5000. Now the salary for 1-1-2007 to 31-12-2007 is Rs 5000 per month.
Salary to the extent of first Rs 1000 is not liable to attachment Rs 5000 - 1000 = Rs 4000. Then again 2/3rd of the remainder is also not liable to attachment Rs 4000 x 2/3 = Rs 2667.
So total amount liable to attachment for the period 1-1-2007 to 31 12 2007 is Rs 5000 – 1000 - 2667 = Rs 1333.
Pension act prohibits attachment
The Section 11 of the Pensions' Act, 1871 states that no pension granted or continued by Government on political considerations, or on account of past services or present infirmities or as a compassionate allowance, and no money due or to become due on account of any such pension or allowance, shall be liable to seizure, attachment or sequestration by process of any court at the instance of a creditor, for any demand against the pensioner, or in satisfaction of a decree or order of any such Court.
Once the pension and gratuity amount comes into the hands of employees it will cease to be exempted from attachment. Therefore the amount of pension that reached in the account or hands of the pensioner is attachable since then. (Jayaraja Menon v Radhakrishnan : 1997(1) KLT 813)
No attachment for Provident Fund
The Section 3 (1) of the Provident Funds Act, 1925, states as follows:
"A compulsory deposit in any Government or Railway 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 Civil, Revenue or Criminal Court in respect of any debt or liability incurred by the subscriber or depositor, and neither the Official Assignee nor any receiver appointed under the Provincial insolvency Act, 1920, shall be entitled to, or have any claim on, any such compulsory deposit."
The Section 4 of the act also deals with the repayment of provident fund to the subscriber or his legal heirs when the amount becomes repayable and consequent discharge of all the liabilities on the part of the government or Railway on repayment.
That means all compulsory deposits and other sums in any fund and derived from it under the provident fund act cannot be attached.
In the case of Provident Fund dues, the nature of the dues does not change till they are actually paid to the government servant. The government is a trustee for such sums. The exemption from attachment will be available only till the amount continues to be Provident Fund in the hands of the trustees and not after it is received by the government servant entitled to get it. Once the amount reaches the employee, the exemption ceases to operate and the amount becomes attachable.
Provision relating to attachment in CPC
The Section 60 (1) of the CPC deals with attachment of salary and other items in execution of decree relating to debt.
As per the section, the items of property liable to attachment in execution of a decree include almost every moveable or immoveable property.
However it excludes the following amounts:
- any stipend or gratuities for the service pensioners,
- service family pension
- political pensions
- compulsory & other deposits and the sums derived from such deposits under the provident fund act
Here the pension and other payments listed above are treated as properties of the judgment debtor. These assets received from the central or state government, the local authorities and any employer are excluded from attachment.
Any allowance forming part of the emoluments of the government employee which is declared by notification to be exempt from attachment, such as Dearness Allowance (DA) and House Rent Allowance (HRA), cannot be attached. The subsistence allowance obtained during suspension also cannot be attached as per the Section.
Insurance payments cannot be attached
The amount payable under Insurance Policy is not liable to attachment as per Section 60(1) (kb) of the CPC.
Surrender value of life insurance policies cannot be subjected to attachment. But when the amount is received by the policy holder during his lifetime or by his legal heir after his death, it would be liable to attachment (Sebastian Jose v Indian Overseas Bank Ltd & another: 2010(1) KLT 980).
In determining the attachable part of the salary, monthly contribution to the insurance policy cannot be excluded (Sreedharan v Krishnan : 1986 KHC 4).
Bonus of labourer not attachable
Bonus of a labourer is part of his wages and hence not attachable but bonus of other workers is attachable is the stand of the court in some decisions (Kunjamma George v Velayudhan : 1960 KLT 483).
Kerala Service Rules (KSR) prohibits pension attachment
The Rule 124 of the Kerala Service Rules Part III speaks about the liability for attachment or pension.
It says that no pension granted or continued on political consideration or on account of the past service or present infirmities or as a compassionate allowance and no money due, or to become due, on account of any such pension or allowance shall be liable to seizure, attachment or sequestration by process of any Court in India at the instance of a creditor for any demands against the pensioner, or in satisfaction of a decree or order of any such Court.
Death-cum-Retirement Gratuity( DCRG) also cannot be attached as per the Section of KSR.
Some case laws of the Supreme Court
The Radha Kissen case (Union Of India v Radha Kissen Agarwalla & Anr: AIR 1969 SC 762) is probably the authority for the view that the government in the matter of provident Fund is the trustee for the sums of money received as provident fund from the officials. The judgment says so long as the amount is provident fund dues then it does not cease to be in the nature of provident fund till it is actually paid to the government servant. Once it reaches the subscriber it ceases to be provident fund.
In Union of India v Jyoti Chit Fund and Finance (AIR SC 1163) the Supreme Court says Provident Fund amounts, Pensions and other Compulsory Deposits covered by the provisions of law retain their character until they reach the hands of the employee. The court adds that the attachment is possible and lawful only after such amounts are received by the employee.
View of the High Court of Kerala in this issue
In B.Sukesh v The Assistant General Manager, the High Court of Kerala in its judgment delivered on 23rd March 2017 states the law in this regard, as follows:
'Emphatic declarations in law, that pensions are not amenable to attachment or recovery under the provisions of the Civil Procedure, have been made by several courts including the Hon'ble Supreme Court. A learned Judge of this court has also considered this issue in detail in the year 2014 and in the judgment reported as Leela Bhai v Indian Overseas Bank [2014 (1) KLT 1036], it is concluded that the pension granted on account of past services shall not be liable to be seized, attached or sequestered by any court at the instance of the creditor for any demand against such pension. A similar view has been taken by the Madras High Court in the judgment reported in Muthuiruvakkal A. v. State Bank of India and Another [2016 KHC 2587], wherein that Court has taken a further view that even amounts in SB accounts which relates to the pension of the employee cannot be subjected to attachment or recovery'.
Wages of labourers are exempted
The wages of labourers and domestic servants are exempted from attachment in execution of a decree. This is specifically mentioned in the CPC in its Section 60(1).
Leave salary amenable to attachment
The benefit of encashment of leave salary is not a part of the retirement benefits admissible under Central Civil Services (Pension) Rules, 1972 or its equivalent in the states. It is payable in terms of CCS (Leave) Rules. Therefore it is amenable to attachment.
But Payment by way of leave encashment received by Central & State Government employees at the time of retirement in respect of the period of earned leave at his credit is fully exempted from income tax.
This difference, unless specifically noted, may cause some confusion among some people.
Property attached by several courts
When an amount under salary is under attachment in execution of decrees of more than one court, the court of highest grade among them shall receive or realize the money and shall determine any claim or objection thereto to the attachment.
If there is no difference among such courts, the court which first attaches the property shall determine such things.
Disbursing officer to deduct & remit the salary to court
The attachment of salary, allowance or associated benefits of an official of the government, Company, Government owned Corporation, Railway or Local Authority is done by a court order as provided for by law. The Order XXI, Rules 48 & 48A of the CPC prescribe the procedure for attachment.
The disbursing officer of salary, on receiving a court order, shall withhold and remit the installment of salary to the court. If the attachable portion of the salary of the official is remitted to a court in pursuance of a previous court order, the officer shall return the subsequent order received from another court with a full statement of particulars to the latter court.
The portion of salary that can be attached in any decree other than the maintenance decree is arrived at by excluding the first one thousand rupees and the two third of the remainder from the total salary. Here the salary means the total monthly emoluments, excluding any allowance declared exempted from attachment.
Attachment of salary of the private employees is possible by an order of the court. The disbursing officer is bound to deduct the amount and remit it to the court. If attachable portion of his salary is under already under attachment by another court order the particulars of it should be informed to the court.
When a court order exists the employer will be responsible for any payment in contravention of the order to the concerned official.
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