1. This revision petition raises a question of some importance, namely, whether a compulsory deposit in a railway provident fund standing to the credit of a depositor and payable to his wife under a nomination duly made by the depositor, is free from liability to be attached by a creditor in execution of a decree obtained by him against the wife for a debt incurred by her before the death of the depositor. The facts are not in dispute. On 18th September, 1943, one Kondiah Naidu, an employee of the South Indian Railway, and his wife, the present petitioner, executed a promissory note in favour of the respondent for Rs. 1,700. Kondiah Naidu died on 20th November, 1944. On 23rd June, 1944, he had duly nominated his wife, the petitioner, as the person to whom the Provident Fund amount should be paid on his death. The respondent filed a suit O.S. No. 35 of 1945, in the Court of the District Munsiff, Erode, against the petitioner, on the promissory note, obtained a decree and proceeded to attach the Provident Fund amount in the hands of the Railway. An objection was raised on behalf of the petitioner that the amount was not liable to be attached under the provisions of Section 3(2) of the Provident Funds Act. The learned District Munsiff of Erode upheld the objection: but, on appeal, the learned District Judge of Coimbatore overruled it and issued an order of attachment. The judgment-debtor applies to this Court to revise the said order of the District Judge.
2. No decided case has been cited before me, which directly governs the facts of this case. The decision must therefore depend upon the construction of the relevant provisions of the statute with such help as may be derived from observations in decisions under the Act, though not directly in point.
3. Section 3(2) of the Provident Funds Act is as follows:
Any sum standing to the credit of any subscriber to, or depositor in, any such Fund at the time of his decease and payable under the rules of the Fund to any dependant of the subscriber or depositor, or to such person as may be authorised by law to receive payment on his behalf, shall, subject to any deduction authorised by this Act, and, save where the dependant is the widow or child of the subscriber or depositor, subject also to the rights of an assignee under an assignment made before the commencement of this Act, vest in the dependant, and shall, subject as aforesaid, be free from any debt or other liability incurred by the deceased or incurred by the dependant before the death of the subscriber or depositor.
4. Section 4 contains provisions regarding repayment of the sum standing to the credit of the subscriber or depositor. It is not necessary to extract the entire section. It provides that the sum shall be paid to the dependant if the sum vests in the dependant under the provisions of Section 3, or, if the sum does not exceed Rs. 5,000 and if it is not payable to a dependant, then, it shall be paid to any person nominated to receive it, or, if any person is not nominated, to any person appearing to be otherwise entitled to receive it; and in case any sum or balance not payable to either a dependant or a nominee, as already mentioned, such sum shall be paid to a person nominated to receive it on the production of a probate or such other document, entitling him to receive payment, or, in the absence of a person nominated, to any person who produces such a document.
5. Section 5(1) before it was amended by Act XI of 1946, was as follows:
Subject to the provisions of this Act, but otherwise notwithstanding anything contained in any law for the time being in force or any disposition, whether testamentary or otherwise, by a subscriber to, or depositor in, a Government or Railway Provident Fund, of the sum standing to his credit in the Fund, or of any part thereof, any nomination, duly made in accordance with the rules of the Fund, which purports to confer upon any person the right to receive the whole or any part of such sum on the death of the subscriber or depositor, shall be deemed to confer such right absolutely, until such nomination is varied by another nomination made in like manner or is expressly cancelled1 by the subscriber or depositor....
Obviously, a person nominated under Section 5(1) of the Act could also be a dependant as defined in Section 2(c) of the Act. In this case, the petitioner in fact occupied the dual position of being both a nominee under Section 5 and a dependant within the meaning of Section 2(c).
6. To ascertain whether the petitioner is entitled to the exemption laid down in Section 3(2), the condition to be fulfilled is that the sum standing to the credit of the depositor should be payable under the rules of the Fund to any dependant of the depositor. Such sum vests in the dependant and shall be free from any debt or other liability incurred by the deceased or incurred by the dependant before the death of the depositor. The contention on behalf of the petitioner is that though she is a nominee, she does not cease to be a dependant within the meaning of the Act. She will, therefore, be entitled to the freedom declared in the above provision. On the other hand, the contention for the respondent is that the exemption applies only when the sum is payable under the rules to a dependant as such, that is to say, not under a nomination, but in the absence of a nomination and in accordance with a specific provision in the rules.
7. For the respondent, it was said that the decisions of this Court in Lakshmamma v. Subramanyam : AIR1939Mad489 and Sitaramaswami v. Venkatarama Rao (1944) 1 M.L.J. 198 support this contention in some way or other. In the first of these decisions, there was a dispute in respect of a Provident Fund amount between a person who claimed to be the widow of the deceased subscriber and who was also the person nominated by him as his successor to claim the amount and a son of the deceased subscriber, who opposed her claim on the ground that she was not the legally wedded wife of the depositor. The learned Judges held that the widow was entitled to the amount by virtue of the nomination in her favour. They point out that there is no restriction with regard to the persons, in whose favour the nomination can be made and nomination can also be made in favour of a person who is not a dependant. As it was not disputed that there was a valid nomination in favour of the person who claimed to be the widow, she would be entitled to the amount, whether she was in law his. widow or not. In the second case, Sitaramaswami v. Venkatarama Rao (1944) 1 M.L.J. 198, there was a nomination in favour of the first wife of a deceased depositor, but there was no subsequent variation of the nomination. It was held that the amount in deposit vested in the nominee and would be inherited by her son in exclusion of the other son of the depositor by his second wife. The learned Judges overruled the contention that Section 5 applies only to nominees who are not dependants. It was pressed before them that unless Section 5 were given restricted application, confined only to cases of nominees who are not dependants, that section could not be reconciled with Section 3 or Section 4. But the learned Judges observed that there was-no inconsistency between Sections 3, 4 and 5, even if a wide construction was given to Section 5 so as to include all nominees whether they were dependants or not. 7. I fail to see how these two decisions can have any bearing on the question to be decided in this case. They only lay down that a person who has been nominated is entitled to receive the amount in deposit, whether he or she be a dependant or not.
8. I must confess that it is possible to take two views on the construction of the phrase:
payable under the rules of the Fund to any dependant of the subscriber or depositor.' These words may mean, ' payable under the rules to any dependant as dependant only,' or, they may mean, ' payable under the rules to a person who falls within the class of persons ' defined in Section 2(c) of the Act. I have come to the conclusion that the better view to take is that the benefit of the exemption will be available when the sum is paid to any person who would be a dependant within the meaning of Section 2(c) of the Act, whether she becomes entitled to the sum by virtue of a nomination or by virtue of the general law or special rule.
9. The rules relating to the Provident Fund in question appear to have been available to the Courts below, though a copy of the rules has not been formally exhibited. Learned Counsel before me agree that the summary of the relevant rules given in paragraph 4 of the learned District Judge's judgment is substantially correct. Rule 27 is the most material rule. The learned District Judge gives a summary of it as follows:
Rule 27(a) mentions the mode of distribution ; it states by the saying in Clause (a) that the distribution shall be according to Section 4(1) of the Provident Funds Act but subject to the provisions of the same Rule 27(A). Sub-clause (i) of Clause (b) refers to some special contributions and it is not material in this case. Sub Clause (ii) mentions that if a nomination made in accordance with Rule 8 subsists, the amount shall be payable in accordance with such nomination, provided that if the nominee is not a dependant and the amount exceeds Rs. 5,000, it shall be paid only on production of probate, etc. Sub-clause (iii) mentions that if the nomination subsists or if the nomination relates only to a part of the amount, the whole or balance shall become payable to the members of his family in equal shares.
The learned District Judge points out that Rule 3(2) defines family so as to include, more or less, persons falling under the definition of dependant. This rule, to my mind, obviously recognises that the nomination can be in favour of a dependant and makes special provision to benefit a nominee who is also a dependant. If the nominee is not a dependant and the amount exceeds Rs. 5,000, it is payable to such nominee only to the production of a probate or such similar document. But if the amount is payable to a nominee who is a dependant, the rule does not require the production of a probate or like document or authority. It therefore follows that the rules not only recognise, as they ought to, the efficacy of a nomination, but also reveal that the identity of the nominee is not completely lost. If the nominee happens to be also a dependant, certain consequences follow. If therefore, under the rules, the amount is payable to a dependant as a nominee, then, I think it is not extravagant to hold that in that case the amount is payable, under the rules of the Fund, to a dependant of the subscriber or depositor.
10. Though ordinarily, it is not permissible for the Court to enquire into the intention of the Legislature,-and very often it is unsafe to rely upon a presumed intention of the Legislature, and, on that ground, to disregard the plain language of the enactment-nevertheless, there are occasions, when if there is a reasonable doubt as to the proper construction of the enactment in cases where two alternative constructions are possible, to adopt that construction which is more in consonance with the expressed policy underlying the Act, as can be gathered from the entire provisions of the Act itself. In Caledonian Railway Company v. North British Railway Company (1881) 6 A.C. 114, Lord Selborne, L.C., observed as follows:
The more literal construction ought not to prevail if...it is opposed to the intentions of the Legislature, as apparent by the statute; and if the words are sufficiently flexible to admit of some other construction by which that intention will be better effectuated.
11. Dealing with the provisions corresponding to the present Section 3(2) in the old Act, Rankin, J., observed as follows in Hindley v. Joynarain Marwari I.L.R. (1919) Cal. 962:
It is a further provision directed to a wholly different matter. It ensures that money payable to a widow or child as such directly shall not, even in their hands, be treated as assets of the deceased's estate. Nay more ; the Leigislature, knowing that this might be rendered ineffective by getting the widow or child to incur or to join in incurring the debt, provides (for the more complete discouragement of creditors) that such money, although in the hands of the widow or the child, shall not be made to answer for their own debts if incurred in the lifetime of the deceased. The only light thrown by the second sub-section upon the first is that the first did not go far enough.
12. Looking at the facts of the present case, the force of these observations is manifest. An acceptance of the construction sought to be put on the words in question by the respondent would lead to this anomalous result, that while a widow without a nomination in her favour would get the benefit of the freedom from liability to a debt incurred by her before the death of her husband, she would lose that right, because she is also entitled to the amount by virtue of a nomination in her favour. In my opinion, the words in Section 3(2) are flexible enough to permit the construction which I have decided to adopt.
13. In the result, the civil revision petition is allowed ; the order of the learned District Judge is set aside and that of the learned District Munsiff is restored.
14. The petitioner will be entitled to the costs of the civil revision petition and the costs in the lower Courts.