Bookmark
PDF
Share
CaseIQ

Laxmi Narain v. Man Singh .

Delhi High Court

Mar 31, 1972

Judgment

Subsequent
References

CaseIQ

Important Paras

Please sign up to view Important Paras.

Smart Summary (Beta)

Factual and Procedural Background

This is an execution second appeal preferred by the decree-holder against the appellate order of the Additional District Judge dated 18 March 1971, which affirmed the Subordinate Judge's order dated 14 August 1970. The courts below had upheld the objections of the judgment-debtor that dearness pay allowed by the Government was exempt from attachment in execution of the decree.

The appellant obtained a decree for Rs. 2,720 plus costs against the judgment-debtor on 6 March 1969 and initiated execution proceedings. The judgment-debtor was employed in the Electrical and Mechanical Office Workshop of the Government at Safdarjang Airport, New Delhi. His pay components at the time were: basic pay Rs. 233, dearness pay Rs. 110, dearness allowance Rs. 36, city compensatory allowance Rs. 27.44, house rent allowance Rs. 51.45 and children's allowance Rs. 50, totalling Rs. 507.89. There was no dispute about attachment of basic pay under section 60 of the Code of Civil Procedure; the controversy concerned whether dearness allowance/dearness pay could be attached or were exempt under clause (L) of the proviso to section 60.

Legal Issues Presented

Whether the dearness allowance / dearness pay received by the judgment-debtor is exempt from attachment under clause (L) of the proviso to section 60 of the Code of Civil Procedure.
Whether subsequent government actions (memoranda and treasury notes treating a portion of dearness allowance as "dearness pay" or as "pay" for specified purposes) remove the exemption from attachment or restrict that exemption.

Arguments of the Parties

Appellant's Arguments

The decree-holder (appellant) challenged the orders below that held dearness pay and dearness allowance exempt from attachment, thereby contending that these emoluments should be attachable in execution of the decree. (The appeal was directed against the finding that dearness pay/allowance were exempt.)

Judgment-Debtor's Arguments

The judgment-debtor objected to attachment on the ground that the dearness pay / dearness allowance conferred by the Government were exempt from attachment under clause (L) of the proviso to section 60, and the courts below upheld this objection.

Union of India / Government Submissions

The Union of India produced the Central Government notification(s) issued under clause (L) of the proviso to section 60 (Gazette of India Notification No. 57/4/49-Estss dated 25 March 1949, and its amendment of 31 May 1949) declaring exempt "All allowances granted to provide relief against the increased cost of living." The Union therefore supported the exemption of dearness allowance.
The Union placed before the Court an office memorandum dated 5 July 1954 dealing with treatment of dearness pay sanctioned on 9 May 1953 and a later memorandum F.1(34) E-II (B)/68 dated 18 January 1969. Those documents showed that while parts of dearness allowance were treated as "dearness pay" or as "pay" for certain specified purposes (pension, gratuity, house rent allowance, non-practising allowance, etc.), the Government had clarified that dearness pay was to be treated as pay only for specified purposes and not for other purposes; and that except as specified, dearness pay would not be treated as pay nor shown separately in pay bills or service records.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's analysis proceeded in these steps, based exclusively on the material placed before it:

The court identified section 60 of the Code of Civil Procedure and, specifically, clause (L) of the proviso which permits the appropriate Government by notification in the Official Gazette to declare certain allowances of servants of the Government exempt from attachment. The opinion reproduced clause (L) verbatim.
The court examined the Central Government notification of 25 March 1949 (as amended 31 May 1949) issued under clause (L), which declared exempt "All allowances granted to provide relief against the increased cost of living." The court found this notification directly relevant to the dearness allowance.
The court noted that dearness allowance was plainly an allowance granted to provide relief against increased cost of living, a point not seriously disputed, and therefore prima facie covered by the exemption in the notification.
The court then considered the contention that on or about 9 May 1953 the Government had decided to treat part of dearness allowance as having characteristics of basic pay (and therefore subject to attachment under clause (i) read with Explanation II). To address this, the court reviewed executive memoranda and treasury rules submitted by the Union of India:

An office memorandum dated 5 July 1954 addressed the treatment of the dearness pay sanctioned on 9 May 1953 and recorded that—after consultation with the Ministry of Law—the dearness pay should not be treated as part of basic pay for the purposes of attachment in execution of decrees.
A later memorandum (F.1(34) E-II (B)/68 dated 18 January 1969) clarified that amounts of dearness allowance indicated therein were to be treated as pay only for specified purposes and to the extent indicated (e.g., pension and gratuity, house rent allowance). Paragraph 14 of that memorandum expressly stated that except as so specified, dearness pay would not be treated as pay for other purposes and would not be shown separately in pay bills or service records.
The court also referred to Note 3 to rule 225 of the Treasury Rules of the Central Government, acknowledging that while those rules (issued under section 151 of the Government of India Act, 1935) have statutory force, the note itself is not part of the statutory rules; nevertheless, the note corroborated the position that dearness pay is part of dearness allowance and is treated as pay only for certain specified purposes.

On the basis of the notification and the government memoranda, the court concluded that dearness pay is an element of dearness allowance granted to relieve increased cost of living and that although part of that allowance has been designated as "dearness pay" for limited, specified purposes, it does not in general constitute basic pay nor does the Government's internal classification remove the exemption from attachment conferred by the Gazette notification under clause (L).
Therefore, the court held that the dearness pay received by the judgment-debtor is exempt from attachment under entry 6 of the Government notification issued under clause (L) of the proviso to section 60, and the courts below were correct in so holding.

Holding and Implications

DISMISSED. The appeal is dismissed.

Implications:

Direct effect on the parties: The decree-holder's appeal fails; the dearness pay (as part of dearness allowance) received by the judgment-debtor is held exempt from attachment in execution of the decree. The orders of the Subordinate Judge and the Additional District Judge upholding the exemption are affirmed. There will be no order as to costs of the appeal.
Broader implications: The opinion does not purport to lay down a novel legal precedent; it applies the Government notification under clause (L) of the proviso to section 60 and interprets subsequent government memoranda as limiting the classification of dearness pay to specified purposes without removing the statutory exemption from attachment. No new legal principle beyond this application is announced in the judgment.

Show all summary ...

B.C Misra, J.:— This execution second appeal has been preferred by the decree-holder against the appellate order of the Additional District Judge dated 18th March, 1971, by which the learned Judge affirmed the order of the Subordinate Judge dated 14th August, 1970 uplolding the objections of the judgment debtor that the dearness pay allowed to him by the Government was exempt from attachment in execution of the decree.

2. The appellant obtained a decree for a sum of Rs. 2,720/- besides costs against the judgment debtor on 6th March, 1969 and thereafter he took out execution and proceeded to attach the salary of the judgment debtor employed in the Electrical and Mechanical Office Workshop of the Government at Safdarjang Airport, New Delhi His basic pay was Rs. 233/- and dearness pay Rs. 110/- and Rs. 36/- was dearness allowance. Besides he was getting city compensatory allowance of Rs. 27.44 and house rent allowance of Rs. 51.45 and children allowance of Rs. 50/-, making a total of Rs. 507.89

3. There is.no dispute before me relating to the attachment of the basic pay in accordance with the provisions of section 60 of the Code of Civil Procedure. The dispute, however, centres round the fact whether dearness allowance of Rs. 36/- and dearness pay of Rs. 110/- per month which had been paid to the judgment-debtor can be attached or were exempt from attachment under clause (L) of the proviso to section 60 of the Code of Civil Procedure. Both the courts below found that they were exempt from attachment.

4. I have heard the learned counsel for the parties, I had called upon the respondent to produce the gazette notification declaring the exemption in dispute, but on his failure to do so, 1 issued notice to the Union of India to appear and contest or support the appeal. Mr. R.L Tandon has appeared, on behalf of the Union of India and has produced the relevant notification before me the relevant provisions are contained in section 60 of the Code of Civil Procedure where all saleable properties belonging to the judgment debtor and over which he has a disposing power are liable to attachment, but a proviso has been inserted exempting certain properties from attachment and sale. Clause (L) of the said proviso reads as follows:—

“(1) Any allowance forming part of the emoluments of any servant of the Government or of any servant of a railway company or local authority which the appropriate Government may by notification in the Official Gazette declare to be exempt from attachment, and any subsistence grant or allowance made to any such servant while under suspension.”

5. On 25th March, 1949 by Gazette of India Notification No. 57/4/49-Estss, the Central Government declared under clause (L) of the aforesaid provision of law that all allowances granted to provide relief against increase in cost of living will be exempted from attachment by order of the Court. This notification was slightly amended on 31st May, 1949 and it now reads as follows:—

“All allowances granted to provide relief against the increased cost of living”

6. The entries in these exemptions were also added subsequently but they are not material for purposes of this case.

7. There is no doubt that dearness allowance was awarded by the Government to provide relief against the increased cost of living as is apparent from the use of the expression itself and it has not been seriously disputed that dearness allowance is covered by the entries themselves and is exempt from attachment. What has been agitated is that on or about 9th May, 1953, the Government decided to treat part of the dearness pay partakes of the characteristics of basic pay and is subject to attachment within the meaning of clause (i) read with Explanation II, which Explanation defines the word ‘salary occurring in clauses (h) and (i) as meaning the total monthly emoluments excluding any allowance declared exempt from attachment under the provisions of clause (1), derived by a person from his employment whether on duty or on leave.

8. The learned counsel for the Union of India has placed before me an office memorandum of the Government of India (Ministry of Finance) dated 5th July, 1954 where they decided the question that the dearness pay sanctioned on 9th May, 1953 under Memorandum No. F. 6(5)-E-11/53 should be treated as pay for purposes of attachment by order of the Court and after holding consultation with the Ministry of law, it was decided that the dearness pay should not be treated as part of the basic pay for purposes of attachment in execution of the decree. The matter has further been clarified by an office Memorandum No. F. 1(34) E-II (B)/68 dated 18th January, 1969 In this memorandum, the Ministry of Finance has observed that the question of treatment of a portion of dearness allowance as pay for certain purposes has been engaging the attention of the Government of India and the President has been pleased to direct under Articles 309 and 148(5) of the Constitution that in modification of the existing rules and orders, the amount of dearness allowance indicated in the memorandum shall be treated as pay for the purposes and to the extent specified therein. Then scale is provided to indicate how much of the dearness allowance will by treated as dearness pay in respect of various categories of the employees. Paragraph 3 of the memorandum lays down that dearness pay shall count as ‘emolument’ for pension and gratuity while paragraph 6 further states that dearness pay would be treated as pay for the purposes specified therein like house rent allowance or non-practising allowance. In this memorandum, paragraph 14 expressly specifies that except as specified in these orders, dearness pay will not be treated as pay for any other purpose, for example for fixation of pay, drawal of increments or for fixation of deputation allowance, nor will it be taken into account for the drawal of clearness allowance and that it would not also be shown as a separate element either in the pay bills or the service records.

9. It is, therefore clear that it is dearness allowance which was granted by the Government to provide relief against the increased cost of living and part of the same allowance has been treated as clearness pay for some specified purposes, but it does not wholly constitute basic pay as is mentioned in the office memorandum. There is Note 3 subscribed to rule 225 of the treasury rules of the Central Government. Although the rules issued under section 151 of the Government of India Act, 1935 have statutory force, the note is not part of the statutory rules; still the note correctly clarified the legal position that dearness pay is really part of the dearness allowance and is treated as pay only for certain specified purposes and is as such exempt from attachment by order of the Court, in execution on decree.

10. Accordingly, I am of the view that dearness pay received by the judgment-debtor is exempt from attachment, under entry 6 of the notification of the Government issued under clause (L) of the proviso to section 60 of the Code of Civil Procedure and the orders of the Courts below are, therefore, correct and are affirmed. The appeal is consequently dismissed but there will no order as to costs of this appeal.

11. Appeal dismissed.