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2024 Supreme(Kar) 37
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M.Nagaprasanna, J.
Sri. Prasanna Kumar Dixit S/o Javarayapap Dixit Lakshmipataiah - Appellant
Vs.
The Reserve Bank Of India Wrmp 4Q9, Rep. By Authorised Signatory/ General Manager - Respondent
Writ Petition No. 29103 OF 2023 (GM-RES)
Decided On : 11-01-2024
Advocate Appeared:
For the Appellant : Sri. Mahesh Kiran Shetty S., Adv.
For the Respondent: Smt. Sreedevi K.B., Adv.
IMPORTANT POINT
The main legal point established in the judgment is that the bank cannot place a lien or freeze the account containing gratuity and service benefits, as it is protected under the Payment of Gratuity Act.
Headnote:
Mandamus - Bank Account Freeze - Payment of Gratuity Act - Section 14
Fact of the Case:
The petitioner, a retired employee, sought a writ to de-freeze his bank account, which was frozen by the bank due to an ex-parte decree obtained by the bank for non-repayment of a housing loan. The frozen amount was the petitioner's gratuity and service benefits.
Finding of the Court:
The court found that the bank's action in freezing the account containing the petitioner's gratuity and service benefits was illegal and high-handed. The court held that the bank cannot place a lien or freeze the account containing gratuity, as it is protected under the Payment of Gratuity Act.
Issues: The main issue was whether the bank had the right to freeze the petitioner's account containing gratuity and service benefits due to an ex-parte decree obtained for non-repayment of a housing loan.
Ratio Decidendi: The court relied on Section 14 of the Payment of Gratuity Act, which mandates the overriding effect of the Act over any other enactment, instrument, or contract. The court held that the bank's action of freezing the account containing gratuity was illegal and against the provisions of the Act.
Final Decision: The court allowed the writ petition and issued a mandamus to the bank to de-freeze the petitioner's account and permit him to operate the account as before.
ORDER :
The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus to the 2nd respondent/HDFC Bank Limited (hereinafter referred to as ‘the Bank’ for short) to de-freeze the account of the petitioner maintained with the Bank and has sought a further direction not to hold the amount for any other purposes.
2. Facts, in brief, germane are as follows:-
The petitioner was an employee of IBM Solutions Private Limited and later gets transferred to another software company. At the time when the petitioner was in employment in the subsequent company – Kyndryl, he availed a housing loan from the Bank in respect of a flat built by the 3rd respondent. The 3rd respondent is the builder.
3. The petitioner had entered into a tripartite agreement on 1-08-2016 with the builder and the Bank, pursuant to which the loan was directly paid by the Bank to the 3rd respondent. On the ground that the loan had become sticky, as no repayment had happened, the Bank obtains an ex-parte decree in O.S.No.7994 of 2022 from the hands of the competent civil Court at Bangalore. In the meanwhile the petitioner retires from service of the company on attaining the age of superannuation on 01-03-2023. In the light of savings Bank Account being held by the petitioner with the 2nd respondent/Bank, the employer transferred Rs.19,00,000/- to the account of the petitioner maintained with the 2nd respondent/Bank. It was gratuity and other service benefits. The employer communicates to the petitioner that the amount has been credited to his account maintained with the Bank. No sooner the amount is deposited into the Bank, the Bank debit freezes the subject account on the ground that it has been in possession of a decree in O.S.No.7994 of 2022 and the amount had to be paid to the Bank towards the loan that was taken by the petitioner under the tripartite agreement. The petitioner then approached RERA by registering a complaint that the flat is not delivered in time due to which he is put to serious jeopardy by the act of the 3rd respondent/ builder. Freezement of the account of the petitioner in which the amount of gratuity and other service benefits are held is what has driven the petitioner to this Court in the subject petition.
4. Heard Sri Mahesh Kiran Shetty S, learned counsel appearing for the petitioner and Smt. K.B. Sreedevi, learned counsel appearing for respondent No.2.
5. The learned counsel appearing for the petitioner would vehemently contend that what is found in the account is gratuity and other terminal benefits which could not have been taken away by the act of the respondent/Bank directing freezement of the account. He would submit that the petitioner who has retired on attaining the age of superannuation is left without money as the entire amount lying in the account has been frozen. The learned counsel would submit that the very living of the petitioner is put to jeopardy due to the act of the Bank.
6. Per contra, the learned counsel representing the Bank would vehemently refute the submissions to contend that the petitioner owes EMI dues to the Bank. The Bank had every right and has first charge over any amount received to the account of the petitioner, be it gratuity or any other service benefits. The Bank is entitled to recover the amount as the 3rd respondent builder has not paid monthly installments. The learned counsel would submit that the right of the Bank to recover the amount is over and above the right of the petitioner towards the gratuity or service benefits. She would seek dismissal of the petition.
7. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
8. The afore-narrated facts are not in dispute. The petitioner was an employee of Kyndryl is a matter of record. During his service, he enters into a tripartite agreement for a loan of Rs.62/- lakhs towards flat which was to be built and developed by the 3rd respondent. I
