The provident fund amount payable to dependants is exempt from attachment due to statutory vesting upon the subscriber's death.

JUDGMENT

Though challenge in this original petition is to Exts.P2 and P3, orders on I.A. Nos. 1259 of 2011, 89 of 2012 and 730 of 2012 in O.S. No. 162 of 2011 of Sub Court, Hosdurg, learned Senior Advocate appearing for petitioners submits that challenge to Ext.P3, order is not being pursued. It is also submitted that challenge is to Ext.P2, order to the extent it concerns attachment of amount payable under the Group Insurance is also not pursued. Challenge now is only to the attachment of provident fund of deceased debtor as per Ext. P2, order.

2. According to the first respondent/plaintiff, certain amount was due from the deceased debtor (Prakasan) whose legal representatives are petitioners and the second respondent. An item of property which belonged to the deceased and which was allegedly inherited by the petitioners and the second respondent was placed under attachment as per Ext.P3. First respondent has a case that petitioners 1 to 3 sold that property to the first petitioner's sister's husband.

3. Learned Senior Advocate for petitioners contends that amount payable under the provident fund is not attachable in view of Sec.60(1) (k) of the Code of Civil Procedure (for short “the Code”) and by virtue of Sec.3(2) of the Provident Funds Act , 1925 (for short “the Act”). It is argued that the trial court was not correct in attaching amount payable under the Provident Fund. Reliance is placed on the decision inThomas George V.

Soudamini Manakkal ( 1996(2) KLT 891 ).

4. Learned counsel for first respondent has contended that provident fund, on the death of subscriber lost its character as such and hence is attachable. Learned counsel has placed reliance on the decisions inSathyavathy V. Bhargavi (1991(1) KLT 866) and Madhavan Nambiar V. Syndicate Bank ( 1991 (2) KLT 127 ).

5. In view of what I have first above mentioned, what is required to be decided is only whether amount payable under the provident fund to the dependants of deceased is liable to be attached ? Under Sec.60(1)(k) of the Code, all compulsory deposits and other sums in or derived from any fund to which the act applied in so far as they are declared by the said Act not to be liable to be attached are exempted from attachment. In Thomas George V. Soudamini Manakkal (supra) a Division Bench of this court has held that in view of Sec.3(2) of the Act, there is statutory vesting of the amount in the provident fund on the dependant on the death of subscriber, free from any debt or other liability incurred by the deceased debtor or incurred by the dependant before death of the subscriber or depositor. Learned counsel for the first respondent has attempted to distinguish that decision in the light of the decision inSathyavathy V. Bhargavi and Madhavan Nambiar V. Syndicate Bank (supra). The Division Bench inThomas George V. Soudamini Manakkal has referred to those decisions in paragraph 9 and distinguished the same.

6. In this case, amount deposited under the provident fund by virtue of provisions of the Act was payable to the petitioners and second respondent as dependants of deceased debtor. In view of Sec.3(2) of the Act, that amount statutorily vests with the dependants of deceased - debtor free from all encumbrance or other liability incurred by the deceased debtor during his life time. Therefore, by virtue of statutory vesting under Sec.3(2) of the Act and Sec. 60(1)(k) of the Code, amount payable to the petitioners and second respondent in their capacity as dependants of the deceased debtor from his provident fund is exempt from attachment. To that extent Ext.P2, order passed by the learned Sub Judge, Hosdurg, is illegal and is liable to be set aside.

Resultantly, this original petition is allowed in part as under:-

1) Ext.P2, order to the extent it concerns amount payable to the petitioners and the second respondent (or any of them as the case may be) being dependants of the deceased debtor from the provident fund is set aside. Attachment over the said amount is lif