Can Gratuity Be Taken for Debt Recovery? Seeking Clarity from HR Professionals

Hi all,

Some of my HR professional colleagues have indicated that gratuity payable to a nominee/legal heir can be attached towards any kind of recovery. Is this true? Kindly provide your answers.

Regards,
R. Sudhakar

Hi,

As per my understanding, gratuity can be forfeited if the employee is found guilty and has committed an offense in matters related to money.

Dear R. Sudhakar,

According to Section 13 of the Payment of Gratuity Act, 1972, no gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop exempted under Section 5 shall be liable to attachment in execution of any decree or order of any civil, revenue, or criminal court.

Regards,

R.N. Khola

Thanks to Mr. Sridhar and Khola, but my question is: Is your answer correct when the ex-employee is alive? My question is, once the ex-employee has passed away, is the gratuity payable to his nominee/legal heir attachable or not? When the ex-employee is alive, there is no question of attachment. Your views, please.

Dear Sudhakar,

In my opinion, when section 13 states that no gratuity payable under this Act shall be liable to attachment in execution of any decree, it means that this includes gratuity payable to any nominee or legal heir as well.

Opinion submitted as requested.

Regards,
R.N. Khola

Mr. RN Khola is one hundred percent correct. Further, Mr. Sudhakar may please note that normally all kinds of terminal benefits of employees are protected from attachment like this. For example, The Employees Provident Fund and Miscellaneous Provisions Act 1952 - Sec. 10 Protection against attachment: (1) The amount standing to the credit of any member in the Fund (or of any exempted employee in a provident fund) shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the member... (2) Any amount standing to the credit of a member in the fund or of an exempted employee in a provident fund at the time of his death and payable to his nominee under the Scheme or the rules of the provident fund shall, subject to any deduction authorized by the said Scheme or rules, vest in the nominee and shall be free from any debt or other liability incurred by the deceased or the nominee before the death of the member or of the exempted employee and shall also not be liable to attachment under any decree or order of any court.

The Pension Act 1871 - Sec. 11. Exemption of Pension from Attachment: No pension granted or continued by the Government on political consideration or on account of past services or present infirmities or as a compassionate allowance, and no money due or to become due on account of any such pension or allowance, shall be liable to seizure, attachment, or sequestration by the process of any Court at the instance of a creditor, for any demand against the pensioner or in satisfaction of a decree or order of any such court.

S. Sampath, JT. Gen. Secretary
TNSTC Staff Federation, Madurai
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