Rajamannar, C.J.-This Full Bench has been constituted at the instance of Ramaswami Gounder, J., who considered that there should be an authoritative expression of opinion on the question whether a compulsory deposit when it is paid over to the subscriber or depositor, loses its character and becomes liable to attachment or vests in the Official Assignee or the Receiver in Insolvency on the subscriber or depositor being adjudged an insolvent, or, whether the immunity under section 3(1) of the Provident Funds Act, 1925, continues to attach itself to such monies even after they are paid into the hands of the subscriber or depositor. It is difficult to understand how any question can arise of an attachment of money in the hands of the debtor himself. There is no such attachment in this case. We shall therefore confine the scope of this reference to the latter part of the question, namely, whether the immunity under section 3(1) of the Act continues to attach itself to moneys paid into the hands of the subscriber or depositor. On this question there is a direct decision of a Division Bench of this Court in Ranganayaki Ammal v. The Official Assingee of Madras1, which affirmed the decision of a single learned Judge in The Official Assignee of Madras v. Ranganayaki Ammal2, according to which the question has to be answered in the negative. Ramaswami Gounder, J., however, thought "though with considerable reluctance," that this decision required reconsideration. Section 3(1) and (2) of the Provident Funds Act run as follows:

"3(1). 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 (V of 1920), shall be entitled to, or have any claim on, any such compulsory deposit.

(2) Any sum standing to the credit of any subscriber to, or depositor in, any such Fund at the time of his decease and payable under the rules of the Fund to any dependant of the subscriber or depositor, or to such person as may be authorised by law to receive payment on his behalf, shall, subject to any deduction authorised by this Act and, save where the dependant is the widow or child of the subscriber or depositor subject also to the rights of an assignee under an assignment made before the commencement of this Act, vest in the dependant, and shall, subject as aforesaid, be free from any debt or other liability incurred by the deceased or incurred by the dependant before the death of the subscriber or depositor."

The definition of "compulsory deposit" in clause (a) of section 2 of the Act is as follows:

‘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 or contribution, and also any such subscription, deposit contribution, interest or increment remaining to the credit of the subscriber or depositor after the happening of any such contingency."

The short question is whether the protection afforded by section 3(1) of the Act will continue even after the money in such compulsory deposit has been paid over to the subscriber or depositor on the happening of any contingency which entitles the subscriber or depositor to draw out the money. In our opinion, there can be only one answer to the question, namely, that it will not, and for the simple reason that money thus paid over ca

Click Here to Read the rest of this document