Lawwatch

Law relating to Attachment of Salary

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 2/3^rd^ 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 23^rd^ 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.