Civil Appeal No 132 of 1951
Appeal by Special Leave from the Judgment and Decree dated 17th May 1950 of the High Court of Judicature at Calcutta Harries CJ and Sinha J in Appeal No 41 of 1950 arising out of the Order of 766 Banerjee J dated 19th December 1949 in Suit No 132 of 1948
MC Setalvad Attorney General for India B Sen with him for the appellant
Naziruddin Ahmad Nuruddin Ahmad with him or respond ent No 1
SN Mukherjee for respondent No2 1952
May 21
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J
This Court granted special leave to appeal in this case on the Government agreeing to pay the costs of the respondents in respect of the appeal in any event
The decree holder was a lady named Hira Devi
The judg ment debtor was one Ram Grahit Singh who retired on 31st January 1 947 as a Head Clerk in the Dead Letter Office Calcutta
A money decree was obtained against him on 30th July 1948
On 1st February 1949 a receiver was appointed for collecting the moneys standing to the credit of the judgment debtor in a Provident Fund with the Postal authori ties
The Union of India intervened with an application dated 20th September 1949 for setting aside the order appointing the receiver
Mr Justice Banerjee dismissed the application of the Union of India holding that a receiver could be appointed for collecting the Fund
On appeal Trevor Harries CJ and Sinha J upheld his view
From the facts stated in the petition filed by the Union of India before the High Court it appears that a sum of Rs 1394 13 1 represents arrears of pay and allowances due to the judgment debtor and a sum Of Rs 1563 is the compulso ry deposit in his Provident Fund account
Different consid erations will apply to the two sums though in the lower court the parties seem to have proceeded on the footing that the entire sum was a compulsory deposit within the meaning of the provident Funds Act 1925
The main question to be decided
is whether a receiver can be appointed in execution in respect of provident Fund money due to the judgment debtor
767 Compulsory deposit and other sums in or derived from any fund to which the Provident Funds Act XIX of 1925 applies are exempt from attachment and sale under section 60 k Civil Procedure Code
Compulsory deposit is thus defined in section 2 a of the Provident Funds Act XIX of 1925 Compulsory deposit means a subscription to or deposit in a Provident Fund which under the rules of the Fund is not until the happening of some specified contingency repayable on demand otherwise than for the purpose of the payment of premia in respect of a policy of life insurance or the Payment Of subscriptions or premia in respect of a family pension fund and includes any contribution and any interest or increment which has accrued under the rules of the fund on any such subscription deposit contribution and also any such subscription deposit contribution interest or increment remaining to the credit of the sub scriber or depositor after the happening of any such contin gency
 Such a deposit cannot be assigned or charged and is not liable to any attachment
Section 3 1of the said Act provides  3
1 A compulsory deposit in any Government or Rail way 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 shall be entitled to or have any claim on any such compulsory deposit
 It is obvious that the prohibition against the assign ment or the attachment of such compulsory deposits is based on grounds of public policy
Where the interdiction is absolute to allow a judgment creditor to get at the fund indirectly by means of the appointment of a receiver would be to circumvent the statute
That such a frustration of the very object of 768 the legislation should not be permitted was laid down by the Court of Appeal as early as 1886 in the case of Lucas vs Harris 1 where the question arose with reference to a pension payable to two officers of Her Majesty s Indian Army
Section 141 of the Army Act 1881 provided Every assignment of and every charge on and every agreement to assign or charge any   pension pay able to any officer or soldier of Her Majesty s forces or any pension payable to any such officer   or to any person in respect of any military service shall except so far as the same is made in pursuance of a royal warrant for the benefit of the family of the person entitled thereto or as may be authorised by any Act lot the time being in force be void
In that case the appointment of a receiver to collect the pension was in question
Lindley LJ observed In considering whether a receiver of a retired officer s pension ought to be appointed not only the language but the object of section 141 of the Army Act
1881 must be looked to and the object of the section would in my opinion be defeated and not advanced if a receiver were appointed Lord Justice Lopes reiterated the same thing in these words  It is beyond dispute that the object of the legislature was to secure for officers who had served their country a provision which would keep them from want and would enable them to retain a respectable social position
i do not see how this object could be effected unless those pensions were made absolutely inalienable
preventing not only the person himself assigning his interest in the pension
but also preventing the pension being seized or attached under a garnishee order or by an execution or other process of law
Unless protection is given to this extent the object which the legislature had in view is frustrated and a strange anomaly would exist
A person with a 1 18 QB D 127
769 pension would not be able to utilise his pension to pay a debt beforehand but immediately his creditor had obtained judgment might be deprived of his pension by attachment equitable execution or some other legal process
It is impossible to suppose that the legislature could have in tended such an anomaly
 Section 51 of the Civil Procedure Code no doubt recognises five modes of execution of a decree and one of them is the appointment of a receiver
Instead of executing the decree by attachment and sale the Court may appoint a receiver but this can only be in a case where a receiver can be appointed
The Provident Fund money is exempt from at tachment and is inalienable
Normally no execution can lie against such a sum
The learned Judges in the Court below rested their view on the authority of the decision of the Privy Council in Rajindra Narain Singh vs Sundara Bibi1
This decision has caused all the difficulty and has created a current of thought that even though the property may not itself be liable to attachment a receiver can be appointed to take possession of the same and to apply the income or proceeds in a particular manner including the payment of the debts of the judgment debtor
It is necessary
therefore to examine the facts of the case carefully and find out whether the proposition sought to be deduced from it can be justified as a principle of general application apart from the particular circumstances
The original decision of the Allahabad High Court from which the appeal was taken before the Judicial Committee is reported in Sundar Bibi vs Raj Indranarain Singh2
In a suit between two brothers there was a com promise to the effect that the Judgment debtor shall possess and enjoy the immoveable properties mentioned in the list and estimated to yield a net profit of Rs 8000 a year without power of transfer during the lifetime of his broth er Lal Bahadur Singh he undertaking to pay certain public exactions and other dues 11925 52 IA 262
2 192143 All
617 770 to his brother Lal Bahadur Singh amounting in all to Rs 7870 11 6 in four equal instalments per annum each to be paid a month before the Government revenue falls due
The arrangement was stated to be in lieu of his mainte nance
When the judgment debtor s interest in the proper ties was sought to be attached and sold he raised the objection that they were exempt from attachment and sale by reason of clause n of Section 60 of the Code which speaks of a right to future maintenance
The High Court held that the words employed in sub clause n contemplated R bare right of maintenance and nothing more a right enforce able by law and payable in the future and that inasmuch as in the case before them the properties had been assigned to the judgment debtor in lieu of his maintenance it was not such a right which alone was exempt from attachment and sate
They thought that it was a fit case for the appoint ment of a receiver and remitted the execution petition to the subordinate judge for the appointment of a receiver after determining the allowance payable to the judgment debtor for his maintenance
With this conclusion of the High Court the Judicial Committee concurred
But they also expressed the view that they did not agree with the High Court on the subject of the actual legal position of the right of maintenance conferred upon the judgment debtor
Taking the prayer of the judgment creditor to be that the right of maintenance be proceeded against their Lordships observed that the right was in point of law not attachable and not saleable
If it was an assignment of properties for maintenance the amount of which was not fixed it was open to the judgment creditor to get a receiver appointed subject to the condition that whatever may remain after making provision for the maintenance of the judgment debtor should be made available for the satisfaction of the decree debt
The right to main tenance could not be attached or sold
In so far as the decree holder sought to attach this right and deprive the judgment debtor of his maintenance he was not entitled to do 771 so but where his application for the appointment of a receiver was more comprehensive and sought to get at any remaining income after satisfying the maintenance claim the appointment of a receiver for the purpose was justified
The decision of the Privy Council does not appear to lay down anything beyond this
In our opinion it is not an authority for the general proposition that even though there is a statutory prohibition against attachment and alienation of a particular species of property it can be reached by another mode of execution viz the appointment of a re ceiver
On the other hand it was pointed out in the case of Nawab Bahadur of Murshidabad vs Karnani Industrial Bank Limited1 that as the Nawab had a disposing power over the rents and profits assigned to him for the maintenance of his title and dignity without any power of alienation of the properties no question of public policy arose and that a receiver of the rents and profits was rightly appointed
This line of reasoning indicates clearly that in cases where there is no disposing power and the statute imposes an absolute bar on alienation or attachment on grounds of public policy execution should not be levied
Understood as mentioned above Rajindra Narain Singh s case creates no difficulty
We shall now refer to the decisions that followed or distinguished the same
In The Secretary of State for India in Council vs Bai Somi and Another2 the maintenance of Rs 96 per annum was made under a compromise decree a charge on the house which was to belong to the defendant the court fee due to Government was sought to be recovered by attachment of the house
The right to attach was negatived the house could not be at tached as it belonged to the defendant and the plaintiff s right to maintenance could not be attached under section 60 clause 1
In dealing with a prayer made by the Govern ment for the first time in the High Court for an order appointing a receiver of the plaintiff s maintenance Beaumont CJ and 1 1931 58 IA 215
2 100 772 another learned Judge held that even this could not be done
The Chief Justice said  If these exempted payments can be reached in execution by the appointment of a receiver by way of equitable execution the protection afforded by the section is to a great extent lost They steered clear of Rajindra Narain Singh s case by stating that there was in the judgment of the Board no clear expression of opinion and there was doubt whether the allowance then in question was maintenance or not
The Madras High Court in The Secre tary of State for India in Council vs Sarvepalli Venkata Lakshmamma1 has dealt with a question similar to the one in The Secretary of State for India in Council vs Bai Somi and Another2 but it merely referred to the ruling in Rajindra Narain Singh s case without dealing with the facts or the reasoning
It throws no light
The case in Janaki nath vs Pramatha Nath 3 was a decision by a single Judge and stands on the same footing as the Madras case
There is nothing else on this subject in the judgment than the short observation the Provident Funds Act does not in my opinion prohibit the appointment of a receiver of the sum lying to the credit of the deceased in the Provident Fund
 Possibly the view was taken that on the death of the employee and in the absence of any dependent or nominee becoming entitled to the fund under the rules it became money payable to the heirs of the deceased and lost its original nature of being a compulsory deposit
The case of Dominion of India repre senting E 1
Administration and Another vs Ashutosh Das and Others4 refers no doubt to Rajindra Narain Singh s case but does not discuss it in any detail
Roxburgh J merely states surely it is an improper use of that equita ble remedy to employ it to avoid a very definite bar created by statute law to achieving the very object for which the receiver is appointed
 The decision in Ramprasad vs Moti ram5 related to the attachment and sale in execution of a 1 4 2 5 1946 25 Pat 705
3 773 money decree of the interest of a khoposhdar in a khorposh grant which was heritable and transferable
It affords us no assistance
The learned counsel for the respondents relied on three decisions of the Privy Council as lending him support
One is Nawab Bahadur of Murshidabad s case1 already referred to
Vibhudapriya Thirtha Swamiar vs Lakshmindra Thirtha Swamiar2 and Niladri Sahu vs Mahant Chaturbhuj Das and Others3 are the other two eases and they relate to maths and alienations by way of mortgage of endowed properties by the respective mahants for alleged necessity of the institu tions
They bear no analogy to the present ease
The mahants had a beneficial interest in the properties after being provided with maintenance
A receiver could be ap pointed in respect of such beneficial interest so that the decrees obtained may be satisfied
With great respect to the learned Judges of the Court below we are of the opinion that execution cannot be sought against the Provident Fund money by way of appointment of a receiver
This conclusion does not however apply to the arrears of salary and allowance due to the judgment debtor as they stand upon a different legal footing
Salary is not attach able to the extent provided in Section 60 clause 1 Civil Procedure Code but there is no such exemption as regards arrears of salary
The learned Attorney General conceded that this portion of the amount can be proceeded against in execution
The Provident Fund amount was not paid to the subscriber after the date of his retirement in January 1947
This however does not make it any the less a compulsory deposit within the meaning of the Act
Whatever doubt may have existed under the earlier Act of 1897 the decisions cited for the respondent Miller vs BB  CI Railway4 and Raj 1 1931 58 IA 215
3 1926 53 IA 253
2 1927 54 IA 228
4 774 Kumar Mukharjee vs WG Godfrey1 are under that Act the meaning has now been made clear by the definition in section 2 of the present Act any deposit remaining to the credit of the subscriber or depositor after the happening of any such contingency is also a compulsory deposit and the contingency may be retirement from service
In the result the appeal is allowed and the order of the lower court dated 1st February 1949 appointing a receiver is set aside as regards the Provident Fund amount of Rs 1563 lying to the credit of the judgment debtor
Under the condition granting special leave the Government will pay the 1st respondent s costs of this appeal
Appeal allowed
Agent for the respondent No 1 Naunit Lal
Agent for the respondent No 2 PK Chatterjee


Summary:
The vendors executed an agreement for sale in respect of a certain survey number which according to the agreement was to be diverted to non agricultural purposes and thereafter a sale deed was to be executed
In pursuance to the said agreement the vendors applied for diversion which was sanctioned subject to the payment of premium and other conditions
Before the sale deed was executed respondent No 1 Sridhar brought a suit for pre emption against the appellant on the ground that he had a co occupancy in the survey number in dispute being the owner of the adjoining survey number
The suit was decreed and on appeal the High Court inter alia held that the transaction was a sale which was subject to pre emption and that the failure to execute and register a sale deed was a subterfuge to defeat the right of pre emption
The question for decision was 1 whether a right of pre emption had accrued to respondent Sridhar under the provisions of the Berar Land Revenue Code 1928 and 2 whether the appellant was guilty of fraud in that in order to defeat the right of pre emption the deed of sale was not executed but for all intents and purposes the appellant had become the owner of the property
Held that the right of pre emption in Berar did not arise from Mohamedon Law and did not exist till it was brought from Land laws of the Punjab or North West Provinces
The right of pre emption under the Berar Land Revenue Code extended to transactions of sale usufructuary mortgages and leases for 15 years or more and right under Mohamedon Law applies only to sales
The word sale has no wider connotation under section 176 of the Berar Land Revenue Code than it has in the Transfer of Property Act
After the application of Transfer of Property Act to Berar a transaction of sale could not be effective except through a registered instrument
The contract of sale in the instant case created no interest in favour of the appellant and the proprietary title did not validly pass from the vendors to the appellant and until that was completed no right to enforce pre emption arose
The transfer of 249 property where the Transfer of Property Act applied had to be under the provisions of the Transfer of Property Act only and neither the Mohamedon Law nor any other personal law of transfer of property could override the statute law
There are no equities in favour of a pre emptor whose sole object is to disturb a valid transaction by virtue of the right created by statute
Held further that it is neither illegal nor fraudulent for the parties to a transfer to avoid and defeat a claim for preemption by all legitimate means and a person is entitled to steer clear of the laws of pre emption by all lawful means