Pension amounts are exempt from attachment under the Insolvency and Bankruptcy Code, retaining their character as protected funds.

ORDER

1. The Present application is filed by the Mr. Vysysraju Lakshman Raju personal guarantor of M/s. Varam Bio Energy limited (hereinafter referred as ‘Applicant’) against the Respondents under section 60(5) of ‘The Insolvency and Bankruptcy Code, 2016’ (hereinafter referred as ‘IBC’) read with rule 32 and 11 of NCLT Rules, 2016, seeking the following relief:

A. To direct Respondent No.1 to lift his attachment over the Pension Account bearing No. 054310013014805 being maintained with Respondent No.2 bank; and

B. To direct Union Bank of India, the Respondent No.2 to unfreeze the bank account of the applicant and allow the Applicant / Personal Guarantor to operate his pension account and to facilitate him to draw his pension receipts in the interest of justice.

BRIEF FACTS

2. A Company Petition vide C.P. (IB) No. 101/95/HDB/2021 was filed by State Bank of India (SBI) (herein after referred as “4^th respondent”) seeking initiation of Insolvency Resolution Process of Mr. Vysyaraju Lakshmana Raju, the Personal Guarantor of M/s. Varam Bioenergy Private Limited. The said Petition was admitted by this Tribunal by an order dated 18.04.2022 and appointed Mr. Dantu Indu Sekhar (herein after referred as “1^st respondent”) as the Resolution Professional of the Personal Guarantor.

3. Due to non-submission of any repayment plan by the Applicant during the process of Insolvency Resolution process against the personal guarantor, the 4^th Respondent (SBI) filed an application before this Tribunal to initiate the Bankruptcy process against the Personal Guarantor. This Tribunal vide order dated 09.12.2024 admitted the personal guarantor into Bankruptcy process and appointed 1^st respondent Mr. Dantu Indu Sekhar as Bankruptcy Trustee.

CASE OF THE APPLICANT

4. It is averred that the Applicant is a super senior of aged about 87 years retired from Geophysics Division of Geological survey of India Southern region, Government of India on superannuation as director and receiving his monthly pension through his savings bank account (pension) No. 054310013014805 in Union Bank of India (Erstwhile Andhra Bank) (herein after referred as “2^nd Respondent”)

5. It is averred that this Tribunal vide order dated 09.12.2024 admitted the Applicant into Bankruptcy process. That the 1^st Respondent vide letter dated 17.12.2024 has directed the 2^nd respondent bank to freeze the pension account of the applicant herein. The 2^nd respondent on 10.02.2025 has kept the Account in frozen status.

6. It is averred that the frozen account is maintained primarily for the purpose of depositing monthly pension amount to meet the livelihood and day-to-day expenses. It is essential for the applicant herein to withdraw the required money to meet his basic needs. It is also averred that attaching the pension amount is impermissible in law, and relied upon the judgement of Radhey Shyam Gupta Vs. Punjab National Bank and another, (2009) 1 SCC 376, wherein it was held that pension amount cannot be attached or recovered for the purpose of recovery of any outstanding payable by the Applicant.

Brief Averments of the Respondent No.1

7. Denying the averments of the Applicant, it was submitted that this Tribunal appointed 1^st Respondent as Bankruptcy trustee of the Applicant on 09.12.2024. As per the duties of the Bankruptcy Trustee, the 1^st respondent informed the Applicant to provide statement of financial position as per section