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Report No. 27

Section 60

1. Pensions of private employees.-Section 60(1), proviso (g) exempts from attachment stipends, etc., of Government pensioners. The amendments made by the Bombay and Madras Legislatures, by inserting clause (gg), extend it to pensioners of local authorities. It is considered that it should extend to pensions of all employers. Necessary change has been proposed.

2. Private salaries.-The object of the amendment to section 60(1), proviso clause (i) is to extend the existing proviso to private salaries also. It is considered that there is no reason why the exemption from repeated attachment, embodied in the proviso, should not extend to private salaries;

3. Navy Act.-The object of the amendment to clause (j) is merely to substitute a reference to the latest enactment on the subject.

4. Right to future maintenance.-A right to future maintenance is, by virtue of provisions of section 6(dd), Transfer of Property Act, not transferable, "whatever be the manner in which it is arising, secured, or determined". This is the effect of the amendment made to that Act by Act 10 of 1929. It has been suggested that the provision in the Civil Procedure Code on the subject should also be brought into line with the provision as contained in the Transfer of Property Act. It is, however, considered unnecessary to make any such change, which would be purely a verbal one, as the existing working has caused no difficulty.

5. Explanation 1.-The amendment to Explanation 1 is intended to achieve the following objects:-

(i) To insert in Explanation 1 a reference to clause (ia), which has been inserted in 1956, for exempting one-third of salary in execution of a decree for maintenance.

(ii) To provide that even private salaries can be attached before they are actually payable. At present, section 60(1), Explanation I, latter half, saves the attachable portion of private salaries from attachment until it is actually payable. The result of this provision, in practice is, that it is only when the salary is about to be paid on the 1st (or other appropriate date) of the month that the creditor can attach it. If the creditor obtains attachment on the 30th of the preceding month, he is too early; and if he is late even by a moment after the time fixed for payment on the 1st, he is too late. This practical difficulty was pointed by Chagla, C.J., in one case1-2. Attachment before the actual date of payment should therefore be available.

(iii) To make it clear that in the case of salaries of public servants, the attachable portion can be attached, before or after it is actually payable. This proposition has, at present, to be deduced by inference from the earlier half of Explanation 1. As was pointed out by the Federal Court3, the implication of theExplanation is that the salary of a Government servant is attachable before it is due and payable. It is considered, that instead of leaving this proposition to be implied, it would be better if it is expressly enacted.

6. Explanation 2.-Explanation 2 to section 60(1) defines "salary". It contains a reference to clause (h), but clause (h) no longer contains the expression "salary" (after its amendment in 1937). The reference to that clause should therefore be omitted. Secondly, the Explanation makes no mention of clause (ia) inserted in 1956 which uses the expression "salary". The Explanation should refer to that clause also. Necessary changes have been proposed.

Validity of agreements waiting the protection.-The question has been raised whether an agreement waiving an exemption granted by section 60 is valid. It is considered that the matter should be left to the courts for decision according to the object sought to be achieved by a particular exemption, etc. It is unnecessary to make any specific provision on the subject4, as has been done by the Punjab Amendment which has inserted section 60(3) making such agreements void.

1. Vasant v. Jagannath, AIR 1955 Born 450 (451).

2. See also V.V. Subba Rao. v. Mohammad Hussain, AIR 1964 AP 395. (September).

3. State of Punjab v. Tarachand, AIR 1947 PC 23 (28).

4. As examples of the conflicting views held on the subject, the following decisions may be cited:-

AIR 1948 Nag 392;

AIR 1952 Pat 78;

AIR 1940 Lah 65.

For the opposite view, see-

AIR 1950 Born 155;

AIR 1950 Mad 114;

AIR 1952 All 680.

Section 60 and policies of insurance

In the Law Commission's Report on Insolvency Laws1, in the clause dealing with description of property of the insolvent divisible amongst his creditors, a provision has been proposed that policies of life insurance, etc., in respect of the insolvent's own life shall not be comprised in the property of the insolvent divisible among his creditors (except to the extent of a charge on the policies in respect of the amount of the premium paid on the policies during the two years preceding the insolvency). The question whether an exemption from attachment in respect of insurance policies should be given, either absolutely or subject to a certain maximum, has been considered.

It has been decided not to recommend any such change. There are certain points of difference between insolvency on the one hand and execution by a single decree-holder on the other. In insolvency, the hypothesis is that the debtor has not sufficient assets for meeting his debts, and therefore (apart from the property specifically exempted), everything else goes for the satisfaction of the creditors. Secondly, in insolvency, the law has to strike a balance between the debtor's needs and the claims of the whole body of creditors, while that is not so in the case of execution of a single decree. Thirdly, in insolvency, the carrying on of business, the acquisition of property and other economic activities by the insolvent are subject to the control of the court, which is not the case in execution.

1. 26th Report (Insolvency Laws) App. I, clause 48(1)(b).

Section 60 and tenancies

The question whether tenancies to which the Local Rent Control Act applies should be exempt from attachment has been considered. A provision exempting them from vesting in the Official Assignee on insolvency has been proposed in the Law Commission's Report on Insolvency1, but the case of execution stands on a different footing, and no change is, therefore, considered necessary on this point.

1. 26th Report (Insolvency Laws), App. 1, clause 48(1).

Code of Civil Procedure, 1908 Back

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