No exemption from attachment of ‘quarterly pension’ for Malvinder Singh

The Delhi High Court has rejected a plea by former Ranbaxy promoter Malvinder Singh seeking exemption of the quarterly ‘pension’ received by him (for being a former employee of Ranbaxy) from the ambit of an attachment order passed by the Court.

The arrangement with respect to the pension was made by Ranbaxy.  Even after Ranbaxy merged with Sun Pharmaceuticals Industries Limited,  the same arrangement continued.

The order was passed by a Single Judge Bench of Justice Rajiv Shakdher.

The application was part of the execution proceedings in Malvinder’s Rs 3500 crore arbitration row with Japanese  Drug-maker Daiichi Sankyo.

On August 10, 2018, the Court had directed Malvinder and other judgment debtors in case not to operate their bank accounts.

Malvinder had thus moved the Court seeking permission to operate the bank account and use the Rs  41,05,498 he received as quarterly ‘pension’. He claimed that the amount was needed to provide for himself, his brother Shivinder Singh, their families, including their ailing mother.

It was argued that these funds fell within the ambit of Section 60(1)(g) of the Code of Civil Procedure, 1908 and would thus be excluded from the purview of attachment. The contention was that the expression “stipend” would include pension, and in particular, pension paid to employees of private employers.

Daiichi Sankyo, on the other hand, argued that the application was “yet another device employed by him to keep his assets outside the reach of this Court and as a result impede the satisfaction of the subject decree.”

It emphasized the fact that the claim that his family members, especially brother Shivinder Singh, were dependant on him was false.

Daiichi further stated that the amount received by Malvinder did not fall within the ambit of Section 60(1)(g) of the Code.

The Court agreed with Malvinder that it would be “completely inequitable” to restrict the protection from attachment granted under Section 60(1)(g) of the Code only to employees of the State and its instrumentalities.

It, however, concluded that the quarterly amount being received by Malvinder Singh did not have the attributes of pension.

“..the pension scheme of private employers should be such which are generic, ubiquitous, and non-discriminatory…The expression “pension” as ordinarily understood is in the nature of a periodical payment received by an employee for past services rendered by him. These payments are made at regular intervals to enable the recipient to maintain himself and his near and dear ones. Therefore, while the subject pension scheme applied to a class of employees of RLL, the 2008 Employment Agreement makes an inexplicable exception only for judgment debtor No. 1. There is nothing on record to show that other employees who fell in the same class as judgment debtor No. 1 i.e. had resigned or intended to resign before completion of twenty (20) years or more of continuous service, were also entitled to the benefit of the Pension Scheme.“

It was thus inferred that the amount was being received pursuant to a general inter se arrangement with respect to emoluments payable to Malvinder by his employer, Ranbaxy.

Section 60(1)(g) of the Code does not protect a debt of this nature owed to a judgment debtor from attachment and sale in execution proceedings, the Court said.

In any case, monies which already stand credited, on this score, in the concerned bank account(s) of Malvinder Singh are not free from attachment, the Court clarified.

It thus rejected the application moved by Malvinder Singh.

Malvinder Singh was represented by Senior Advocate Akhil Sibal with Advocates Vijayalakshmi Menon, Ekta Kapil, Neeharika Aggarwal, Shobhit Ahuja, Pradeep Chhindra and Nitya Gupta.

Daiichi Sankyo was represented by Senior Advocates Arvind K. Nigam and Arun Kathpalia with Advocates Amit Kumar Mishra, Kanika Singhal, Mohit Singh, Samridhi Hota, Kazmi, Rohan Jaitley, Aditya Shankar, Bani Brar, Mikhil Sharda, Kunal Chaterji and Mehtaab Singh Sandhu. 

Read the order:

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