The Judgment of the Court was as follows:—
McNair, J.:— This is an application by the Plaintiff decree-holder for, inter alia, an order charging the funds in the hands of the receiver appointed by an order dated March 23rd, 1939; for the appointment of the receiver as receiver in execution and for the payment of Rs. 3,394-11 out of the said funds, by that order Mr. Chowdhury was appointed by this Court receiver of the estate of Frederick Stuart Harcourt deceased, including the moneys lying to the credit of the said deceased with the trustees of the provident fund of the Calcutta Tramways Co., Ltd. It appears that the entire estate of the deceased Harcourt consisted of a sum of money lying to his credit with the Calcutta Tramways Co., Ltd., in their president fund.
The present applicant has sued the heirs of Mr. Harcourt for the recovery of nearly Rs. 14,000 said to be due upon promissory notes, and applied for the appointment of a receiver in the suit on the ground that in the event of his being successful he would be unable to realise his decree if the money were paid over to the Defendants.
The application for a receiver was opposed by the Defendants on the ground that no receiver could be appointed of the money lying to the credit of the deceased in the provident fund. The argument in support of the Defendants' case was based on secs. 3 and 5 of the Provident Funds Act, 1925. The matter was heard by Sen J., who made the order appointing a receiver, and decided against the Defendants' contention under both those sections.
The opposition to the present application is once more based on those sections of the Provident Funds Act, but in my view that matter has already been decided by Sen, J., and cannot be raised again at this stage. If the Defendants were dissatisfied with Sen, J.'s decision it was open to them to appeal. They have not done so. But they seek to reagitate the same matter on this application.
There is no doubt that the money in the hands of the receiver is money which accumulated in the provident fund of the Calcutta Tramways Co., Ltd.
It is also clear that the present applicant obtained a decree on December 12th, 1939, by which the Defendants were ordered to pay to him out of the assets of Harcourt in their hands the sum of Rs. 3,380-11-0 with interest and costs, and the receiver was ordered to retain in his hands Rs. 5,000, and after deducting his commission to pay the balance to the Defendants.
It is argued in opposition to the application that the funds being provident fund money cannot be attached in execution by a decree-holder. That argument is based on sec. 60 of the Code of Civil Procedure, which prohibits attachment of all Compulsory deposits and other sums in or derived from any fund to which the Provident Funds Act applies.
The answer is that this is not a compulsory deposit within the meaning of sec. 3 of the Provident Funds Act, because a compulsory deposit continues to retain that character only so long as it remains in the hands of the provident fund trustees. Once it is paid out by the company, it loses the character of compulsory deposit, and may be attached in the hands of the party to whom at has been paid.
The trustees of the fund at first refused to pay to the receiver the amount due to Mr. Harcourt because in their view they were only entitled to pay to the person who had obtained letters of administration to the estate of the late Mr. Harcourt.
Eventually the Defendants wrote to the trustees stating that they had no objection to the trustees paying the amount due in respect of Mr. Harcourt's provident fund to the receiver and the money was paid to the receiver. The money has, therefore, ceased to be in the provident fund, and has been paid out.
It is true that sec. 60 of the Code of Civil Procedure prohibits the attachment of provident fund money, but although attachment may be prohibited, it is still open to the decree-holder to apply for the appointment of a receiver in execution. This method was recommended by the Judicial Committee in Rajindra Narain Singh v. Sundara Bibi, where Lord Shaw, delivering the judgment of the Board, said that the following view which appeared ill the judgment of the High Court appeared to the Board to be sound. The High Court stated,
“The appropriate remedy is what is known as equitable execution or indirect execution, namely, by the appointment of a receiver who takes the place of the debtor and acts as an officer subject to the directions of the Execution Court in collecting and disbursing the debtor's income in accordance with the directions of the Execution Court towards the discharge of the claim of the decree-holder.”
It has been suggested that the decision of Sen, J., with regard to the relevance of secs. 3 and 5 of the Provident Funds Act was unnecessary on the application before him. But it is admitted that these questions were argued and there is a decision on those questions. And further, the receiver was appointed to preserve the estate of the deceased, so that the Plaintiff, if he obtained a decree, which he did on December 12th, should be able to realise his decretal dues.
The object of the Plaintiff's suit was to obtain payment of Harcourt's debts put of his assets. The object of the appointment of a receiver was to secure that all the assets properly applicable for that purpose shall be so applied, and the receiver was appointed for the Security of the decree-holder.
It is clear that the provident fund money was held to be the assets of the deceased by the very fact that the receiver was appointed. Had there not been such assets the receiver would not have been entitled to take possession of them.
The Defendants have relied strongly on the decision in C.D.M Hindley v. Joynarain Marwari* and in particular on the judgment of Rankin, J., as he then was, setting out on pages 967 to 969 of the report the objects and the application of the Provident Funds Act. The learned Judge there makes it quite clear that the legislature has forbidden any Court to attach sums of money in a provident fund. In that case as the Court was acting under sec. 115 of the Code of Civil Procedure, it interfered in review of the decision of the Small Causes Court. In the present instance this Court is not acting either in review or on appeal from the decision of Sen, J., and where orders have been passed in a suit by one Judge, the circumstances would have to be exceptional to induce another Judge to interfere with or overrule those orders.
Further, as I have already pointed out, the funds are not in the hands of the provident fund trustees, but have been paid out; and even if the attachment were irregular, the method of appointing a receiver in execution in similar circumstances has received the sanction of the Privy Council.
There will be an order in terms of cls. 1, 3 and 6 of the summons, except that in cl. 3 the sum payable is Rs. 3,380-11-0. The payment by the receiver is to be made to the applicant's solicitor. The receiver will act on Counsel's endorsement.
It has been brought to the notice of the Court that there are attaching creditors and the receiver should not part with any funds other than those ordered on this application pending further orders of the Court. The Defendants may apply for payment out to them of any funds to which they consider themselves entitled on notice to the attaching creditors.
Certified for Counsel.
Solicitors: R.S Nahar for the Plaintiff Applicant; S.N Sen for the Defendant Respondent.
C.C