Friday 1 March 2019

Whether monthly pension received by judgment debtor is exempt from attachment in execution of decree?

In the light of the decisions cited supra, I am of the view that the petitioner/judgment debtor who receives a monthly pension of Rs. 12000/- will be treated as capital income and when it reaches the hands of the petitioner, it will be treated as his income. The contention of the petitioner that the monthly pension received by him cannot be considered as his income and it is exempted from attachment has no relevance in the light of the aforesaid decisions. Moreover, there is absolutely no evidence to prove that the other members of his family are depending fully on the petitioner. The attempt of the petitioner is to avoid payment of the decree debt to the respondent and this kind of nature of the petitioner/judgment debtor cannot be accepted by a court of law. In the result, this petition fails and the same is accordingly dismissed.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

OP(C) No. 771 of 2015

Decided On: 21.05.2018

 Muralee Mohan Pillai Vs.  T.V. Varghese

Hon'ble Judges/Coram:
Annie John, J.

Citation: AIR 2019(NOC) 41 Kerala


1. The petitioner is the judgment debtor in E.P. No. 24 of 2014 in O.S No. 361 of 2002 on the file of the Munsiff's Court, Mavelikkara. The suit was filed by the respondent for the realisation of an amount of Rs. 75,000/- from the petitioner/defendant. He claimed the amount on the basis of a cheque issued by the petitioner/plaintiff. The petitioner is aggrieved by the order passed by the Executing Court directing him to pay a sum of Rs. 1,41,890/- and the consequential issuance of warrant to detain him in civil prison for a period of 60 days. As per the decree dated 06.08.2004, the respondent/decree holder is entitled to realise a sum of Rs. 75,000/- with interest @ 6% per annum from 10.07.2000 till the date of realisation of the decree debt from the petitioner/defendant and his assets. The petitioner/judgment debtor failed to pay off the debt. Hence the respondent herein filed Execution Petition seeking execution of decree dated 06.08.2004.

2. The petitioner entered appearance and filed Ext. P2 objection dated 20.01.2015 contending that the execution petition is not maintainable in law or on facts. It is stated that the judgment debtor is having no means to pay off the decree debt and that at present, he is holding no assets and is incapable of doing any job. It is also stated that he retired from the Postal Department owing to sufferance of various diseases and the monthly pension of Rs. 12000/- is insufficient to meet the livelihood of the judgment debtor. Seven members are depending upon the judgment debtor for their livelihood. His mother is suffering from old age diseases, his wife is undergoing treatment for heart diseases at Sree Chithra Medical Centre, Thiruvananthapuram and his son is suffering from mental disorder. His daughter and grandchildren are also residing with him as she is deserted by her husband. He resides along with the family in a property owned by his wife.

3. The respondent has given evidence to the effect that the petitioner is getting Rs. 12,000/- per month. So, the enquiry under Order XXI Rule 40 of the Civil Procedure Code was ordered so as to issue warrant of arrest against the petitioner. As part of the enquiry, decree holder's representative was examined as PW 1 and the petitioner was examined as DW 1. Exts. B1 to B4 were marked on the side of the petitioner. The Executing Court after hearing the parties allowed the Execution Petition and issued warrant against the petitioner holding that he has got sufficient means to pay off the debt.

4. Heard the learned counsel on both sides. I have gone through the records.

5. The learned counsel for the petitioner submits that the pension amount cannot be treated as an income and the issuance of arrest warrant against him cannot be sustained.

6. The respondent's counsel argued that the petitioner is getting Rs. 12000/- as monthly pension and therefore, he is capable of paying the entire decree debts and that the petitioner's adamant attitude is to avoid payment of the decree debt. Now the only question which arises for consideration is whether the pension amount can be treated as the income of the petitioner so as to issue arrest warrant. The definition of 'pension' in English by Oxford dictionaries is that a regular payment made by the state to people of or above the official retirement age and to some widows and disabled people. The Pensions Act, 1971 (Act No. 23 of 1871) was enacted to consolidate and amend the law relating to pensions and Grants by Government of money or land-revenue. A decree is the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final and it shall be deemed to include the rejection of a plaint.

7. Section 55 of CPC deals with the arrest and detention of the judgment debtor in civil prison. Section 55(1) reads thus:

"55. Arrest and detention.- (1) A judgment debtor may be arrested in execution of a decree at any hour and on any day, and shall, as soon as practicable, be brought before the Court, and his detention may be in the civil prison of the district in which the court ordering the detention is situate, or, where such civil prison does not afford suitable accommodation, in any other place which the State Government may appoint for the detention of persons ordered by the courts of such district to be detained:"
8. Section 51 of the Code of Civil Procedure Code deals with the powers of court to enforce execution. As per Section 51 of CPC, the Court, on the application of the decree holder, may order execution of the decree (a) by delivery of any property specifically decreed; (b) by attachment and sale or by sale without attachment of any property (c) by arrest and detention in prison for such period not exceeding the period specified in Section 58, where arrest and detention is permissible under that Section (d) by appointing a receiver.

9. Order XXI, Rule 37 of the Code of Civil Procedure, 1908 deals with the discretionary power to permit judgment debtor to show cause against detention in prison. It reads thus:

7. Discretionary power to permit judgment debtor to show cause against detention in prison.- (1) Notwithstanding anything in these rules, where an application is for the execution of a decree for the payment of money by the arrest and detention in the civil prison of a judgment debtor who is liable to be arrested in pursuance of the application, the court shall, instead of issuing a warrant for his arrest, issue a notice calling upon him to appear before the Court on a day to be specified in the notice and show cause why he should not be committed to the civil prison:

Provided that such notice shall not be necessary if the court is satisfied, by affidavit, or otherwise, that, with the object or effect of delaying the execution of the decree, the judgment debtor is likely to abscond or leave the local limits of the jurisdiction of the court.
(2) Where appearance is not made in obedience to the notice, the court shall, if the decree holder so requires, issue a warrant for the arrest of the judgment debtor."

10. Order XXI Rule 40 of CPC deals with the proceedings on appearance of judgment debtor in obedience to notice or after arrest and it reads as follows:

"40. Proceedings on appearance of judgment debtor in obedience to notice or after arrest.-(1) When a judgment debtor appears before the court in obedience to a notice issued under rule 37, or is brought before the court after being arrested in execution of a decree for the payment of money, the court shall proceed to hear the decree holder and take all such evidence as may be produced by him in support of his application for execution, and shall then give the judgment-debtor an opportunity of showing cause why he should not be committed to the civil prison."
11. On perusal of the order passed by the Munsiff, I find that a proper enquiry has been conducted under Section 40 of CPC before issuing arrest warrant to the petitioner/judgment debtor. On examination of the petitioner herein, the court below has found that the petitioner has got sufficient means to pay off the debt and accordingly the warrant of arrest has been issued. As per the decree, the petitioner/judgment debtor is liable to pay Rs. 75,000/- with interest to the decree holder. He has not paid even a single penny towards the decree debt. Instead of that, he is running court after court by filing applications against the decree holder to get the execution of the decree delayed. The decree was passed on 06.08.2004. Till date, he has not paid any amount. During cross examination, the petitioner has admitted that he has voluntarily retired from Railway Mail Service and that a sum of Rs. 1,30,000/- was received as pensionary benefits at the time of retirement. Even then, he has not cared to pay a single penny to the respondent/decree holder for satisfying the decree debt fully or partially. Now he has raised a contention that his pension is not sufficient enough to maintain his family. The fact that the petitioner is a pensioner and he is getting a monthly pension of Rs. 12,000/- is not disputed. The main argument advanced by the petitioner's counsel is that pension is exempted from attachment and it cannot be considered as income and therefore the warrant issued by the court below is unjust, unreasonable and erroneous. Hence the interference of the court is warranted.

12. The learned counsel for the petitioner has drawn my attention to Section 11 of the Pension Act, 1871 and contended that the pension cannot be treated as income and it is not liable for attachment in satisfaction of a decree or order of any court. In this connection, it is profitable to extract Section 11 of the Act, which reads thus:

"11. Exemption of pension from attachment.- No Pension granted or continued by Government on political considerations, or on account of past services or present infirmities or as a compassionate allowance, and no money due or to become due on account of any such pension or allowance, shall be liable to seizure, attachment or sequestration by process of any Court at the instance of a creditor, for any demand against the pensioner, or in satisfaction of a Decree or Order of any such Court."
13. Per contra, the learned counsel for the respondent argued that the exemption from attachment will be available only till the amount continues to be in the hands of the Government and once the pensionary benefits are released and the amount comes into the possession of the employee, no protection from attachment can be granted. According to the respondent, whenever the pensionary amount is released and it comes in the hands of the petitioner, the characteristics of the term 'pension' is changed and that will be treated as capital sum to the employee. It is also contended that the provident fund amounts, pension and other compulsory deposits retain their character until they reach the hands of the employee

14. The learned counsel for the petitioner has placed reliance on Union of India v. Hingorani [MANU/SC/0572/1987 : 1987 KHC 316], in which it is held that the words 'money due or to become due on account of pension' occurring in Section 11 of the Pensions Act, 1871 includes the commuted portion of the pension payable to an employee after his retirement. It is also held that the provident fund amounts, pensions and other compulsory deposits retain their character until they reach the hands of the employee and that the Government had no authority or power to unilaterally deduct the amount payable to an employee contrary to Section 11 of the Act.

15. The petitioner's counsel also relied on the decision in MANU/SC/0076/1976 : AIR 1976 SC 1163, in which it is held that the amount kept in the hands of the Government due to an employee towards provident fund and pensionary benefits is not liable to be attached.

16. In Crowe v. Price [(1989) 58 LJ QB 215], it is held that money paid to a retired officer of His Majesty's force for the commutation of his pension does not retain its character as pension so as to prevent it from being taken in execution.

17. In Municipal Council, Sales v. B. Gururajah Rao [MANU/TN/0041/1934 : ILR (1935) 58 Mad. 469], it is held that when pension or portion thereof is commuted, it ceases to be pension and becomes a capital sum. In that decision, the issue considered was whether the commuted portion of the pension of a retired Subordinate Judge was income for the purpose of assessment of professional tax under Section 354 of the Madras District Municipalities Act, 1920. It is also held that where pension is commuted, there is no longer any periodical payment and the pensioner receives once and for all a lump sum in lieu of the periodical payments. The pension is changed into something else and becomes a capital sum. On that view, they held that the sum received by the retired Subordinate Judge in lieu of the portion of his pension when it was commuted was no longer pension and therefore he is not liable to pay professional tax under Section 354 of the Madras District Municipalities Act.

18. The learned counsel for the respondent has placed reliance on the decision in Divakaran v. Jayaraman [MANU/KE/0259/1992 : 1992 KHC 41], in which it is held that attachment is possible on the provident fund and gratuity after the amount is received by the employee on his retirement and exemption cannot be allowed on such attachment.

19. In Rajappan v. Shaju [2009 (4) KHC 602], it is held that the burden cast on the decree holder is only to show that the judgment debtor is possessed of means to discharge the decree debt and he cannot be expected to prove the means of the judgment debtor with documentary evidence. The argument advanced by the petitioner's counsel that Section 11 of the Pension Act, 1871 is squarely applicable to this case is not correct.

20. In the light of Section 11, it prohibits seizure, attachment or sequestration of pension or money due or to become due on account of any person. The word 'money due or to become due on account of pension' by necessary implication means the money that has not yet been paid on account of pension or has not been received by the pensioner. Section 60(1) and provisos (g) and (h) leave no manner of doubt on the point of non-attachability.

21. To sum up, the pension, provident fund and other compulsory deposits covered by the respective provisions retain their character until they reach the hands of the pensioner. Only when the amount is released and reached the hands of the pensioner, it become capital income.

22. It is an admitted fact that the petitioner/judgment debtor gets pension at the rate of Rs. 12,000/- per month in the year 2014. Once the Government releases the pension, it becomes capital income of the pensioner. If that be so, as observed by the Munsiff that the petitioner/judgment debtor has sufficient means to pay the decree debt is correct and no interference is warranted. The respondent/decree holder obtained decree on 06.08.2004 and the petitioner/judgment debtor has not repaid the amount or expressed his willingness to pay off the amount. There is some element of bad faith beyond mere indifference to pay, some deliberate or recusant disposition in the past or alternatively, current means to pay the decree or a substantial part of it. The petitioner/judgment debtor is agitating for the last three years for not remitting the decree debt. Even though he has sufficient means to pay the debt, he is deliberately not paying it. The arguments advanced by the learned counsel for the petitioner has no merit.

In the light of the decisions cited supra, I am of the view that the petitioner/judgment debtor who receives a monthly pension of Rs. 12000/- will be treated as capital income and when it reaches the hands of the petitioner, it will be treated as his income. The contention of the petitioner that the monthly pension received by him cannot be considered as his income and it is exempted from attachment has no relevance in the light of the aforesaid decisions. Moreover, there is absolutely no evidence to prove that the other members of his family are depending fully on the petitioner. The attempt of the petitioner is to avoid payment of the decree debt to the respondent and this kind of nature of the petitioner/judgment debtor cannot be accepted by a court of law. In the result, this petition fails and the same is accordingly dismissed.




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