PF Amount ...Liable To Attachment..?

Dear Experts,
One employee Mr. X died in Dec-2009 after 12 years continuous service prior to that he had availed loan of Rs. 1.5lakh from bank B in 2008
Due to his death His wife & two children ( son - 08 years, daughter - 06 years ) could not pay the EMIs for the loan
Can the bank B compel the legal heirs to clear the debt ( By adjusting PF & Gratuity Amount )towards Bank B?
If yes, How?

Dear Prashant B Ingawale,

First clarify whether he was an employee of the Bank B? and PF Trust is in operation at the Bank?

If so, you can make a request to the legal heirs to repay the arrear amount from the PF accumulation.

Please Note - you are not supposed to adjust the amount of your own.

If the PF operations are with EPFO, you have no right to ask the EPFO authorities to adjust the amount to the outstanding amount.

In the gratuity case you can forfeit the amount on the following grounds only

(a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee [may be wholly or partially forfeited]—

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

Legally speaking, this amount cannot be adjusted from PF and Gratuity. Moreover as this amounts are the terminal benefits/final benefit to legal heirs, whom lost their bread winner. Sympathetic consideration required here. This can be written off if possible.

S.Sethupathy

Excellent HR Services,

Erode.

Dear Sir,
Deceased was not employee of Bank he was employee of one of Engineering Company.

Dear Prashant,
Is there any undertaking letter given by the Company to the bank while in the process of sanctioning the loan?
Then let his Employer to deduct- if possible-from other components of F & F like leave encashment, Arrear Bonus, Prorate LTA etc.,but not from Gratuity for this adjustment.
That too with the consent of the legal heirs.
S.Sethupathy.

Dear Sethupathy Sir,
The employer has given undertaking but the amount of Full & Final settlement is lesser than the outstanding loan amount.

Pf is sacrocant and can not used in settling any debt of the employee whether alive or dead.

Is the sacrosanct term applicable to PF trusts maintained by the companies? I am not expert in PF related matters.
Pon

Can not do this at all, PF & Gratuity are social benefit acure to an employee and both can not be attached, even execution of a Court of law. Both have protection against attachmment.
On Gratuity there clear case on same facts, if search on this forum, will get easily.
Regards

Povident fund as long as it is held by PF authorities is not liable for attachment. However once it is credited to employees account after settlement of his account it could be attached as ordinary deposit of the employee.
It will loose the status of PROVIDENT FUND and the amount could be attached by any court.
Similar is the case of GRATUITY,as long as it is held by employer it could not be attached however once it is credited to employees account it could be attached as ordinary deposit.
P.N.PATHAK.
9822790693.

Dear Sri_Legal,
With reference to your answer about gratuity being attachable, please recheck provision of Sec.60(g) and confirm if you still hold your view that gratuity can be attached under sec.60 (or not).