Delhi High Court: Deceased Employee’s Gratuity Can Be Attached Against A Decree For Recovery Of Money Passed Against His Legal Heirs

The Court dismissed a Petition filed under Article 227 of the Constitution by the Petitioner challenging the order of the Trial Court, which directed the release of a death gratuity amount to Canara Bank (Respondent). The Court had to determine whether the gratuity which was payable to an employee who had died was liable to be attached against a decree for recovery of money passed against the heirs of the employee.

A Single Bench of Justice Ravinder Dudeja held, “The retirement/death gratuity of the deceased employee Sh Pranab Kumar Chaudhary is therefore payable to her being a family member. Even though the deceased employee made no nomination, the gratuity amount was still payable to the family members and therefore, Rule 52 of CCS Pension Rules shall not be applicable in the present case.”

Advocate D.S. Mehandru appeared for the Petitioner, while Advocate Arjun Malik represented the Respondent.

Brief Facts

An execution petition was filed by the Respondent for the recovery of a term loan taken by an employee. During the execution proceedings, the Executing Court had directed the release of the death gratuity amount to the bank. The Petitioner had challenged this, arguing that the amount was not attachable.

Court’s Reasoning

The High Court noted, “No doubt as per Section 60 (1) (g) CPC, the gratuity amount allowed to the petitioners is exempted from attachment. The Hon’ble Supreme Court in the case of Radhey Shyam Gupta (Supra) held that the gratuity even when received by the retiree does not lose its character as gratuity and cannot be attached, in view of proviso (g) to Section 60 of CPC.”

The Bench further noted, “However, insofaras this case is concerned, employee expired before the release of gratuity to him. Such gratuity therefore becomes payable to the family/nominees of the deceased employee. The Decree holder in this case is seeking attachment of unreleased gratuity amount which by operation of CCS rules shall fall upon the hands of the Judgment Debtor.”

The Court referred to a decision by the High Court of Madras in Murugaiah Velar v. Velammal (2017), wherein it was held that “the respondents 1 to 3/defendants are claiming right over the gratuity amount only in their capacity as the legal representatives of the deceased borrower. In such circumstances, it is found that when the exemption provided to the gratuity amount would be made applicable only to the deceased borrower and the said exemption cannot be claimed by his legal representatives as they inherit the gratuity amount in their capacity as the legal representatives of the deceased and in such circumstances, the estate of the deceased lying in the hands of the legal representatives are liable for action pursuant to the decree passed in the suit and in such view of the matter, it is found that the respondents 1 to 3/defendants cannot claim the benefit of the provision of Section 60(g) of the Code of Civil Procedure as they cannot be equated as pensioners entitled to receive the gratuity amount as such.”

The Bench held, “In the view thereof, if the gratuity was released to Sh Pranab Kumar Chaudhary during his lifetime, the same would have been immune from attachment under Clause (g) of proviso to Section 60 of the CPC. The gratuity has not been received by Sh Pranab Kumar Chaudhary and therefore, insofar as his legal heirs are concerned, they would receive the same only as part of the estate of Sh Pranab Kumar Chaudhary which is not immune from attachment.”

Accordingly, the High Court dismissed the Petition.

Cause Title: Bureau Of Outreach and Communications and DD M/O Information and Broadcasting v. Canara Bank (Neutral Citation: 2025:DHC:4048)

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