Home  /  Code on Wages, 2019  /  Section 64

Section 64: Saving of certain laws

The Code on Wages, 2019 (Act No. 29 of 2019) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IX: Miscellaneous
Competent Labour Forum
Act No. 29 of 2019
Section 63 All 67 Sections of Code on Wages, 2019 Section 65

Legal Commentary & Landmark Judgments: Section 64

Section 64 of the Code on Wages, 2019 creates a statutory ring-fencing mechanism that protects money deposited by an employer with the appropriate Government (e.g., performance security, earnest money, contract deposits) from attachment by civil, revenue, or criminal courts, reserving those funds exclusively for the satisfaction of wage and bonus liabilities owed to workers employed on that specific contract.

  • Scope of Statutory Ring-Fencing: Any sum deposited by an employer with the appropriate Government to secure a contract or work, or any money due to them from the Government on that account, is statutorily protected against attachment under any decree or order of any civil, revenue, or criminal court.
  • Workers' Wage Liabilities as the Sole Super-Priority Exception: The sole statutory exception to this protection is for debts or liabilities incurred by the employer towards persons employed by them on that specific contract or work. Workers' wage claims take absolute super-priority over third-party commercial creditors.
  • Subordination of General Commercial and Tax Creditors: General judgment creditors, bank lenders, and suppliers cannot attach government contract deposits to satisfy general debts. The funds are legally quarantined to guarantee the wage security of project workers.
Key Landmark Precedents:
  • Union of India v. Jyoti Chit Fund and Finance (1976) 3 SCC 607: The Supreme Court examined statutory provisions protecting funds held by the government against civil attachment, holding that public policy demands funds allocated for statutory purposes remain immune from execution by general creditors.
  • Radha Kissen Chamria v. Durga Prosad Chamria AIR 1940 PC 167: The Privy Council affirmed that money held under specific statutory trust or ring-fencing cannot be attached by outside decree-holders.
  • State of West Bengal v. B.K. Mondal and Sons AIR 1962 SC 779: The Supreme Court underscored that obligations arising from government contracts must be fulfilled in accordance with public law and statutory welfare guarantees.
Courtroom Practice & Strategic Litigation Guidance:

Workers and trade unions engaged on government infrastructure or outsourcing contracts who face wage defaults by contractors should immediately petition the Section 45 Authority and notify the government contracting department under Section 64. The department is legally barred from releasing contract deposits to the contractor or general creditors until all wage liabilities of the project workforce are fully satisfied.

Section 63 All 67 Sections of Code on Wages, 2019 Section 65