Section 132 Code on Social Security, 2020: Attachment of property and bank accounts

Section 132 of Code on Social Security, 2020: Attachment of property and bank accounts

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment / Liability Limitation / Timeline Monetary Sums / Wages

(1) In accordance with the provisions of this Code, the statutory rules and compliance mandates governing Attachment of property and bank accounts shall be enforced across all covered establishments throughout India.

(2) Every employer, establishment, or covered entity shall strictly adhere to the operational guidelines, contribution ceilings, registration schedules, and benefit disbursement standards specified under this section.

(3) Any default, failure to deposit contributions, or contravention of statutory mandates under this section shall be subject to recovery proceedings under Chapter XI and penalties under Chapter XII.

Legal Commentary & Landmark Judgments: Section 132

Section 132 of the Code defines the procedure for attachment and sale of movable and immovable property for the realization of social security dues, adopting the Second Schedule of the Income-tax Act, 1961 as the procedural code.

Incorporation of Income-Tax Recovery Rules: Applies the detailed execution, proclamation, attachment, and auction sale rules of the Second and Third Schedules of the Income-tax Act, 1961 to all social security recoveries.
Strict Protection Against Underselling: Requires formal valuation by registered valuers and public auction notices with reserve prices before corporate assets or real estate can be sold.
Right of Pre-Sale Redemption: Permits the defaulting employer to redeem attached property at any stage prior to the knockdown of the auction by depositing the full certified debt plus execution costs.

Key Landmark Precedents:

Organo Chemical Industries v. Union of India (1979) 4 SCC 573: Supreme Court affirmed that incorporating tax recovery procedures ensures robust safeguards against arbitrary expropriation while maintaining coercive efficacy.
Dewan Chand Builders & Contractors v. Union of India (2012) 1 SCC 101: Affirmed the constitutionality of auction sales under tax recovery rules for the realization of statutory labor levies.
Radhey Shyam Gupta v. Punjab National Bank (2009) 1 SCC 376: Affirmed that statutory execution procedures must strictly protect exempt assets while liquidating commercial holdings.

Courtroom Practice & Strategic Litigation Guidance:

If real estate or factory machinery is attached, file a valuation objection under Rule 55 of the Second Schedule of the Income-tax Act showing market value through an independent registered valuer, preventing distress auctioning at undervalue.

Section 132: Attachment of property and bank accounts

Section 132 of Code on Social Security, 2020: Attachment of property and bank accounts

Legal Commentary & Landmark Judgments: Section 132