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In case of death of subscriber, the amount lying at the credit of subscriber to be paid to his nominee: Gujarat High Court

When a subscriber of a provident fund passes away, then the money to be recovered must be given to the nominee who survives such a person. This must be given to the nominee even without any necessary reference for establishing her right to claim the amount or any necessary order from the concerned Court. This was decreed by the Hon’ble Justice Dr. A.P. Thakur in the case of Chief Manager and Ors. Vs. Purnima A Andharia W/O Deceased Ashokbhai D Andharia [R/SPECIAL CIVIL APPLICATION NO. 4696 of 2010 With R/SPECIAL CIVIL APPLICATION NO. 4697 of 2010] on the 16th of July before the Hon’ble High Court of Gujarat.

The brief facts of the case are, the husband of the respondent namely Ashokbhai D. Andharia was employee of the petitioner – Bank and was working as Cashier and during his tenure, he has misappropriated the amounts to the tune of Rs.15,40,000/- and has caused loss to the Bank. It is the case of the petitioners that the deceased workman was suspended from the service w.e.f. 23.11.2001. He died on 19.06.2002. the deceased has operated Savings Bank Accounts in the names of other relatives wherein he was one of the beneficiary and by creating such accounts, he has misappropriated the huge amounts of the Bank. It is further contended that as per the Rules and Regulations of the petitioner – Bank, he was paid medical bill, subsistence allowance and leave encashment. It is also contended that as per Bipartite Settlement dated 01.08.1979, the outstanding loan amounts of the deceased could be adjusted against the provident fund balance which is permissible to the petitioners under the law and in view of that, the amounts standing at the credit of the deceased was adjusted against various loans obtained by him. Special Civil Application No.4696 of 2010 is filed under Articles 16, 226 and 227 of the Constitution of India against the order dated 16.10.2009 passed by Industrial Tribunal – Cum – Labour Court in Recovery Application No.3 of 2006 whereby the Labour Court has ordered to pay medical bill, subsistence allowance and leave encashment of 184 days to the respondent. Whereas, Special Civil Application No.4697 of 2010 is filed against the order dated 16.10.2009 passed by the Labour Court in Recovery Application No.472 of 2006 whereby the Labour Court has granted relief of payment of provident fund amount lying at the time of death of the deceased employee of the Bank to the respondent. The present petition has been filed challenging both the above petitions.

The counsel for the petitioner submitted that the respondent’s husband was employee of the Bank and he has committed fraud and criminal action was initiated against him. She has submitted that without any adjudication of the rights of the respondent to claim medical bill, subsistence allowance, leave encashment and provident fund amount, she had straightway filed the recovery applications which are not legally maintainable. She has submitted that when there was dispute raised by the employer regarding entitlement of the workman for the aforesaid amounts, no recovery application could be filed. It is also contended that the Tribunal has no authority to pass such order under Section 33C(2) of the Industrial Disputes Act, 1947 (hereinafter be referred to as the “I. D. Act”) as there was no right created in favour of the respondent. It is also contended that the respondent ought to have filed necessary reference for establishing her right to claim the amount and ought to have got necessary order from the concerned Court or the Tribunal fixing the amount which may be liable to the paid by the petitioners to the respondent herein. The counsel for the respondent submitted that, the submissions made on behalf of the petitioners regarding the provisions of Section 33C(2) of the I. D. Act are not correct. He has submitted that under this provision, the rights are given to the workman for recovery of his/her dues from the employer. merely because the disputes raised by the other side it cannot affect the rights available under Section 33C(2) of the I.D. Act to the workman and it does not affect jurisdiction and the power of the Labour Court in adjudicating the money payable to the workman. He has submitted that the rights accrued to the workman in the present case is already crystallized due to the provisions contained in Bipartite Settlement produced as well as averments and observations made by the Labour Court. He has submitted that the Labour Court has rightly decided Lis between the parties. He has submitted that Bipartite Settlement clearly provides that the workman is entitled to get the amount of entire medical bills, subsistence allowance and leave encashment at the credit of the workman at the time of his retirement as the case may be.

The learned judge heard the contentions of both the parties and observed that the right has been created in favour of the workman who would be entitled to encash the accumulated leave to his credit at the time of retirement and in case of the death of the workman, his heirs is entitled to be paid salary for the leave accrued to him at the time of the death. Thus, the entitlement of encashment of privilege leave is already created by Bipartite Settlement. The court relied on the judgement in Lalitabehn Bhanabhai daughter of Bhanabhai Vs. Malabhai Vs.Lalibehn Bhanabhai wife of Bhanabhai Malabhai and others, 1992 I.L.L.N. 792, it was held that, “the amount lying in the provident fund and governed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is not liable to attachment or decree or order of any Court in respect of any debt or liability incurred by member.” It also relied on the judgement in the case of Ugra Sen Singh and another Vs. State of Uttar Pradesh and others, 1995 II L.L.N. 363, wherein, “it has been observed that under the Provident Funds Act, 1925, in case of death of subscriber, the amount lying at the credit of subscriber to be paid to his nominee”.

Applying the rules from the above mentioned cases, the court allowed both the petitions and ruled that, “In view of the aforesaid discussions, both the petitions are hereby partly allowed. So far as Special Civil Application No.4696 of 2010 is concerned, the amount of difference of medical bill of Rs.91,659.38, salary of suspension allowance of Rs.52,165/-, and leave salary of 184 days of Rs.78,696/- are payable by the petitioner herein with interest at the rate of 6% instead of 12% from the date of filing of the recovery application till the amount is deposited before the Registry of this Court. The difference of the interest amount be refunded to the petitioner – Bank herein. The cost awarded by the Labour Court is not disturbed. With the aforesaid observations, the award dated 16.10.2009 passed by the Labour Court in Recovery Application No.3 of 2006 stands modified to the aforesaid extent.”

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