Appeal No 105 of 1966
Appeal from the judgment and order dated February 3 1961 of the Calcutta High Court in Civil Revision No 2755 of 1957
D Narsaraju R M Mehta and section P Nayar for the appellant
Ganpat Rai for respondent No 1
The Judgment of the Court was delivered by SHAH J
G W Browne was an employee of the East India Railway and was a subscriber to the State Railway Provident Fund
He elected to be governed by the Provident Fund Sterling Accounts Rules whereunder payment of the provident fund credited in his account in rupees was on retirement to be made in sterling
On August 26 1947 Browne addressed a letter to the Financial Adviser and Chief Accounts Officer East India Railway requesting that the provident fund payable to him on retirement may be remitted to him by Bank Draft on the District Bank Water Street Liverpool
After Browne retired from service the Deputy General Manager Eastern Railway wrote a letter on July 27 1955 to the Chief Accounts Officer communicating the sanction of the General Manager for payment of the special contribution to provident fund to Browne in sterling in terms of r 14101 of the Railway Establishment Code
Another communication was received from Browne who had apparently by then migrated to the United Kingdom on February 22 1956 by which he requested that the amount standing to his credit in the Provident Fund Account be remitted to the Westminster Bank Birmingham
The Railway Administration then drew two cheques one for Rs 14428 8 9 and another for Rs 23018 11 10 in favour of the Reserve Bank of India with instructions to the Reserve Bank to convert amounts covered by the cheques into sterling and to transmit the fund in sterling to the bankers of Browne in England
The respondent Radha Kissen Agarwalla had obtained a money decree against Browne and he applied to the 3rd Court of the Subordinate Judge at Alipore for execution of that decree and obtained an order for attachment of the cheques lying with the Reserve Bank
The cheques were attached and under orders of the executing court the cheques were encashed and the amount realized was deposited in the executing court
30 The Union of India claimed immunity from attachment of the cheques on the ground that they represented provident fund money which by section 3 of the  was immune from attachment
The execution application filed by Radha Kissen Agarwalla was struck off on December 7 1956
On the next day Radha Kissen Agarwalla started another execution application and applied for and obtained an order for attachment of the money lying in the executing court in the execution case which had been struck off
The Union of India again applied for removal of attachment on the ground that the money represented provident fund money and was immune from attachment under the law and that the attachment was illegal and without jurisdiction
The executing court overruled the objection observing that the attachment issued by the Court on December 8 1956 was perfectly in order the moneys attached by the Court lost their character as Provident Fund moneys long before they were attached and hence they were not immune from attachment as claimed by the objector
The Union of India then applied to the High Court of Calcutta in revision
The High Court confirmed
the order passed by the executing court
Rule 1413 of the Provident Fund Sterling Accounts Rules insofar as it is relevant provides  1 Where under these Rules any payment is to be made to the subscriber in sterling a the subscriber prior to the date on which payment is to be made shall send written instructions to the Accounts Officer intimating the place at which payment is to be made such place being in a country where the rupee is not legal tender b the Accounts Officer on receipt of the written instructions referred to in the preceding clause shall remit the amount through a bank for payment at the place at which payment is required Accounts Officer for payment of the amount standing to his credit in a Provident Fund Account in sterling if the country in which it is to be paid the rupee is not legal tender
Browne had given intimation before he retired of his intention to receive the provident fund amount due to him at the foot of the Provident Fund Account in sterling in the United Kingdom
After retirement of Browne in order to carry out that obligation the Accounts Officer of the Railway made out two cheques in the name of Browne and sent them to the Reserve Bank for conversion of the amount in sterling
The Reserve Bank was the only authority which could permit such conversion in view of the 31 currency restrictions imposed by the Government of India
For purpose of conversion and transmission of the amount to Browne the Reserve Bank of India was the agent of the Railway Administration
Until the money was converted into sterling and was transmitted by the Reserve Bank to Browne the money remained at the disposal of the Railway Administration
The Railway Administration was in respect of the provident fund money in the position of a trustee for Browne and it had undertaken to discharge its obligation by arranging to have the amount converted into sterling and to remit it to Browne
Under section 60 1 k of the Code of Civil Procedure 1908 read with section 3 of the  the compulsory deposit in any recognised Provident Fund Account is exempt from attachment in execution of a decree of a civil court
Section 3  1  of the  provides  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 Reserve Bank was as already stated the agent of the Railway Administration for conversion of the amount into sterling and was not the agent of Browne to receive the amount on his behalf
So long as the money remained under the control of the Railway Administration as provident fund money it was exempt from attachment
Clause b of r 1413 1 which we have already noted imposed upon the Accounts Officer an obligation to send the amount through a bank for payment at the place at which Payment was required and the payment was required either under the first intimation at Liverpool by bank draft or under the later intimation by payment to the bankers of Browne at Birmingham
The High Court relied upon illustration d to section 50 of the Indian Contract Act in support of the view that by sending the two cheques to the Reserve Bank of India in performance of the manner of Payment prescribed by Browne the debt was discharged and the money must be deemed to have been paid out to the subscriber Browne
Section 50 of the Contract Act provides The performance of any promise may be made in any manner or at any time which the promise prescribes or sanction 32 It enacts the elementary rule relating to the performance of a promise under a contract  performance has to be in the manner and at the time which the promisee prescribes or sanctions
Browne had not authorised the Reserve Bank to receive payment of the money on his behalf nor had he sanctioned payment to the Reserve Bank in discharge of the liability of the Railway Administration
Illustration d to section 50 of the Contract Act on which reliance was placed by the High Court reads  A desire B who owes him Rs100 to send him a note for Rs 100 by post
The debt is discharged as soon as B puts into the post a letter containing the note duly addressed to A The illustration only covers cases in which a creditor has directed the debtor to send him the amount owed by the debtor in a certain manner
Browne asked the Railway Administration by the first intimation to send the amount by bank draft and later to the Westminster Bank Birmingham
Only after the direction of Browne regarding transmission of the fund was complied with the obligation of the Railway Administration could be discharged and not till then
In our view the High Court was in error in holding that the money in the hands of the Reserve Bank of India had ceased to be provident fund money and was liable to be attached
It was somewhat faintly suggested that the Union of India had no interest in maintaining an application for removal of attachment
But the Union of India was a trustee for the subscriber of the money
When the amount lying with the Reserve Bank as the agent of the Railway Administration was attached the Union had clearly an interest to maintain the application for removal of attachment
The order of attachment of the amount into which the two cheques drawn by the Railway Administration were converted on encashment was contrary to the terms of section 3 of the 
The appeal is therefore allowed and the order passed by the High Court is set aside
There will be no order as to costs
RKPS Appeal allowed


Summary:
B was an employee of the East India Railway and a subscriber to the State Railway Provident Fund
He elected to be governed by the Provident Fund Sterling Account Rules according to which payment of his provident fund on retirement was to be made in sterling
B addressed letters to the Railway Accounts Officer in August 1947 and again after his retirement in February 1956 requesting that the amounts standing to his credit in the provident fund account be remitted to his bank in the United Kingdom
The Railway administration drew cheques in respect of B s provident fund in favour of the Reserve Bank of India and instructed that bank to convert the amount into sterling and to transmit it to B s Bank in the United Kingdom
The respondent had obtained a money decree against B and upon applying for execution of that decree obtained an order for attachment of the cheques lying with the Reserve Bank
The cheques were encashed and the amount realised was deposited in the executing court
The appellant claimed immunity from attachment of the cheques under section 3 of the and the respondent s execution application was thereupon struck off
On filing a second execution application the respondent obtained an order for attachment of the money lying in the executing court
A further application by the applicant claiming immunity from attachment was rejected by the executing court on the ground that the monies attached by the court lost their character as Provident fund monies long before they were attached and were not therefore immune from attachment
The High Court in revision confirmed the order of the executing court
On appeal to this Court HELD  Allowing the appeal The order of attachment passed by the executing court was contrary to section 3 of the 
The Railway administration was in respect of the provident fund money in the position of a trustee for B and it had undertaken to discharge its obligation by arranging to have the amount converted into sterling and to remit it to B The Reserve Bank was the agent of the Railway administration for converting and remitting the amount on its behalf
Until the money was converted and transmitted by the Reserve Bank to B it remained at the disposal of the Railway administration
So long as the money remained under the control of the Railway administration as provident fund money it was exempt from attachment under section 601k PC read with section 3 of the Provident Funds Act 1925131 B F 29 The High Court was in error in relying on illustration d of section 50 of the Contract Act
B had not authorised the Reserve Bank to receive payment of the money on his behalf nor had he sanctioned payment to the Reserve Bank in discharge of the liability of the Railway Administration
32 A B