Indian Kanoon - Search engine for Indian Law

(b) hold the action of the Managing Trustee of the Trust as well as the Regional Provident Fund Commissioner, Hyderabad in not arresting the above said illegality and being a mute spectator as bad, illegal, arbitrary, discriminatory and unconstitutional.

2. Heard the learned counsel for the petitioner Sri.J.Sudheer and the Senior Counsel Sri.V.Srinivas, representing the learned Standing counsel, Sri.Ravi Mudra, appearing for respondent No.3.

3. The brief facts leading to the filing of this writ petition are that the petitioner had joined the respondent bank as a clerk cum cashier in the year 1984 and was promoted to various cadres. While he was working as a Manager in-charge of Khammam Branch, certain allegations were made against the petitioner and a charge sheet dated 08.08.2014 was also issued. The charge sheet eventually led to dismissal of the petitioner from service vide proceedings dated 13.02.2015. The appeal filed against the said order was also dismissed vide proceedings dated 25.04.2015 and the writ petitioner contemplated to challenge the same. In the meantime, the respondent No.2 credited an amount of Rs.14,01,525/- in ODOS account of the petitioner in full and final settlement of his Provident Fund account by specifically mentioning in the letter dated 14.07.2015 that the employee's contribution is Rs.7,75,099/- and the employer's contribution is Rs.6,26,426/- and vide letter dated 15.07.2015, the petitioner was informed that the petitioner was dismissed from services of the bank due to serious irregularities committed by him while he was working as Manager in-charge of Khammam Branch and that there was a huge financial loss to the tune of Rs.164.86 lakhs to the bank and in view thereof, the respondent bank has recovered an amount of Rs.6,26,426/- from the petitioner ODOS account by exercising the Banker's General Lien, towards the financial loss suffered by the bank. Thereafter, they have also freezed the account so that the petitioner could not withdraw the employee's contribution of Provident Fund. The petitioner made representation to all the respondents and since there was no response to his representation, the present writ petition is filed.

4. The learned counsel for the petitioner submitted that under Rule 10 of the Employees' Provident Funds and Miscellaneous Provisions of the Act, 1952, the amount credited to the Provident Fund account shall not, in any way, be capable of being assigned, changed or shall be liable for attachment under any decree or order of any Court in respect of the debt or liability incurred by the member or the employee and that no one will have any claim in such amount. He has drawn the attention of this Court to the impugned order of respondent bank, wherein it is stated that by virtue of the General lien on the accounts of the petitioner, the employer's contribution of Rs.6,26,426/- has been recovered. However, according to the learned counsel for the petitioner, the General lien can only be in respect of the accounts of a customer and not on the amounts held in Public Provident Fund account of the petitioner on account of his being an employee of the respondent bank. He therefore sought a direction to the respondent bank to release the amount to the petitioner.

6. In rebuttal, learned counsel for the petitioner has brought to the notice of this Court that the respondent bank had credited to the ODOS Account of the petitioner, both the Bank's as well as the petitioner's contribution to the Provident Fund account, but it has withheld only the employer's share of contribution. It is submitted that Section 10 of the Public Provident Fund Rules, prohibits attachment of any provident fund by 2022 AIR SC 1045 (2003) 10 SCC 733 virtue of even a Court order and that even the service rules adopted by the bank also prohibit any such attachment and therefore, the general lien as claimed by the respondent bank for attachment of PPF is not available to the respondent bank. Further, the learned counsel for the petitioner submitted that this Writ Petition filed by the petitioner is not against any bank activity carried on by the respondent bank, but that it is against the failure of the respondent bank in fulfilling its statutory obligation in making payment of the Bank's contribution of Provident Fund to the petitioner on his removal from service and failure to make the said payment is an illegality, which can be challenged under the Article 226 of Constitution of India.

14. From a reading of both the above rules, it is clear that even under an order of Court, the Provident Fund Account of the Writ Petitioner cannot be attached and appropriated. The general lien of the bank can be applied only in respect of banking transactions and not in respect of service conditions of an employee. Therefore, the respondent bank is directed to refund the sum of Rs.6,26,426/- and also the employee's contribution of Rs.7,75,099/- with interest @ 6% per annum from the date of recovery till the date of payment.