A) ABSTRACT / HEADNOTE

The Supreme Court of India in The Union of India v. Hira Devi and Another, [1952 SCR 765], settled the critical legal question concerning the attachment of provident fund dues of a retired government employee under execution proceedings. The central issue revolved around the legality of appointing a receiver over amounts credited in a provident fund post-retirement and whether such funds could be made subject to judicial interference through execution processes. The Court held that any such deposit in a statutory Provident Fund, as defined under Section 2(a) and Section 3(1) of the Provident Funds Act, 1925, remained inalienable and immune from attachment, regardless of the employee’s retirement. The ruling specifically prohibited the use of the mechanism of a court-appointed receiver to indirectly achieve what the law explicitly prohibits — attachment. By overruling the High Court’s decision which permitted such appointment, the Court emphasized the sanctity of public policy underlying provident fund protections. However, the Court distinguished this from arrears of salary, which were held to be attachable. The ruling reaffirmed that circumventing statutory exemptions via equitable execution contravenes both legislative intent and judicial principle.

Keywords: Provident Fund, Receiver Appointment, Attachment, Civil Procedure Code Section 60, Provident Funds Act 1925, Equitable Execution.

B) CASE DETAILS

i) Judgement Cause Title:
The Union of India v. Hira Devi and Another

ii) Case Number:
Civil Appeal No. 132 of 1951

iii) Judgement Date:
May 21, 1952

iv) Court:
Supreme Court of India

v) Quorum:
Meher Chand Mahajan, Chandrasekhara Aiyar, and Bose JJ.

vi) Author:
Justice Chandrasekhara Aiyar

vii) Citation:
(1952) SCR 765

viii) Legal Provisions Involved:

• Section 60(k), Civil Procedure Code, 1908

• Sections 2(a) and 3(1), Provident Funds Act, 1925

ix) Judgments overruled by the Case (if any):
No judgments explicitly overruled, but distinguished earlier Privy Council precedents misapplied by the High Court.

x) Case is Related to which Law Subjects:
Civil Procedure, Labour Law, Constitutional and Administrative Law, Public Policy, Social Security Law.

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This case addressed an essential conflict between creditor rights under a civil decree and statutory protections granted to Provident Fund deposits. Hira Devi, the decree-holder, sought execution of a decree against a retired government employee’s provident fund. The High Court, following certain Privy Council precedents, permitted a receiver to collect the funds in question. However, the Union of India contended that the attachment or appointment of a receiver over statutory provident funds violated Sections 2(a) and 3(1) of the Provident Funds Act, 1925. The apex court stepped in to clarify the distinction between attachable and non-attachable assets, especially under the public policy protection of provident fund laws.

D) FACTS OF THE CASE

Hira Devi secured a money decree on July 30, 1948, against one Ram Grahit Singh, a former Head Clerk who retired on January 31, 1947, from the Dead Letter Office, Calcutta. A receiver was appointed on February 1, 1949, to collect amounts due in Singh’s provident fund account maintained by the Postal authorities. The Union of India objected and filed an application to vacate the appointment, citing statutory protection of the provident fund under the Provident Funds Act, 1925. The Trial Court and High Court dismissed the Union’s application, prompting an appeal before the Supreme Court by Special Leave. The fund involved Rs. 1,563 from the Provident Fund and Rs. 1,394.13 as arrears of salary.

E) LEGAL ISSUES RAISED

i) Whether a receiver can be appointed in execution over a judgment-debtor’s statutory Provident Fund dues post-retirement?

ii) Whether the Provident Fund deposits of a retired government servant continue to enjoy exemption from attachment under the Provident Funds Act, 1925?

iii) Whether arrears of salary and allowances can be differentiated from provident fund deposits for execution purposes?

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that
The Attorney General for India, M.C. Setalvad, argued that Sections 2(a) and 3(1) of the Provident Funds Act, 1925, explicitly barred any form of attachment, assignment, or execution over the provident fund, even after the employee’s retirement[1]. He emphasized that permitting a receiver would indirectly circumvent this prohibition, undermining the purpose of statutory social security protections. The Provident Fund amount remained a “compulsory deposit” as defined, since it continued to be credited to the subscriber post-retirement and had not been disbursed. He also distinguished arrears of salary, conceding they could be subjected to attachment unlike the provident fund deposit.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that
Counsel for Hira Devi contended that since the employee had retired, the Provident Fund ceased to enjoy statutory protection, becoming attachable under execution. They leaned on the Privy Council’s ruling in Rajindra Narain Singh v. Sundara Bibi (1925) 52 I.A. 262, which upheld the appointment of a receiver over maintenance income under certain circumstances. They argued that if statutory exemptions did not survive post-retirement, the decree-holder could proceed to realize dues via equitable execution through a receiver. They also cited earlier interpretations from cases like Miller v. B.B. & C.I. Railway (1903) 5 Bom. L.R. 454, interpreting the older Provident Fund Act, 1897.

H) RELATED LEGAL PROVISIONS

i) Section 60(k) of the Civil Procedure Code, 1908
Specifies property not liable to attachment, including provident fund deposits under specific statutory schemes.
(Link: Section 60 CPC – Indian Kanoon)

ii) Section 2(a) and 3(1) of the Provident Funds Act, 1925
Define “compulsory deposit” and prohibit their attachment or assignment under any legal process.
(Link: Provident Funds Act, 1925 – Indian Kanoon)

I) JUDGEMENT

a. RATIO DECIDENDI

The Court held that a compulsory deposit in a statutory Provident Fund under Section 2(a) of the Provident Funds Act, 1925, retains its exempt status even after the retirement of the employee. Such a deposit cannot be reached by any indirect method, including the appointment of a receiver. The legislative intent is to protect the financial security of government employees and such protection cannot be circumvented by judicial interpretation[2].

b. OBITER DICTA 

Justice Aiyar referenced Lucas v. Harris, (1886) 18 QBD 127, to support the broader public policy that pensions and provident funds must remain protected from creditors, maintaining their role as social security instruments[3].

c. GUIDELINES 

1. Statutory provident fund deposits, whether pre or post-retirement, remain exempt from execution.

2. Appointment of receiver over such deposits is impermissible and circumvents statutory protections.

3. Arrears of salary, not being protected under Provident Funds Act, are attachable.

4. Courts must adhere to public policy embedded in the Provident Funds Act.

5. The decision distinguishes between maintenance cases and statutory funds.

J) CONCLUSION & COMMENTS

The Supreme Court reaffirmed the inviolability of statutory social security funds like Provident Funds by denying judicial tools like equitable execution to defeat such protections. The case is a critical precedent ensuring that public policy and legislative intent prevail over creditor claims, especially when the statute imposes an absolute bar on alienation or attachment. The Court rightly distinguished Rajindra Narain Singh by clarifying that maintenance rights and statutory Provident Fund protections are grounded in different legal doctrines. The judgment solidifies the position of provident funds as sacred trusts, immune from judicial or creditor interference, preserving the financial dignity of retired public servants.

K) REFERENCES

a. Important Cases Referred

[1] Rajindra Narain Singh v. Sundara Bibi, (1925) 52 I.A. 262.
[2] Lucas v. Harris, (1886) 18 Q.B.D. 127.
[3] Nawab Bahadur of Murshidabad v. Karnani Industrial Bank Limited, (1931) 58 I.A. 215.
[4] The Secretary of State for India v. Bai Somi, (1933) 57 Bom. 507.
[5] Vibhudapriya Thirtha Swamiar v. Lakshmindra Thirtha Swamiar, (1927) 54 I.A. 228.
[6] Miller v. B. B. & C. I. Railway, (1903) 5 Bom. L.R. 454.
[7] Janakinath v. Pramatha Nath, (1940) 44 C.W.N. 266.
[8] Dominion of India v. Ashutosh Das, (1950) 54 C.W.N. 254.
[9] Ramprasad v. Motiram, (1946) 25 Pat. 705.

b. Important Statutes Referred

[1] Provident Funds Act, 1925, Sections 2(a) and 3(1).
[2] Civil Procedure Code, 1908, Section 60(k).
[3] Army Act, 1881, Section 141 (as comparative law context).