HC stays attachment of employee’s salary, disposal of appeal within two months

Shimla, Nov  5

Himachal Pradesh High Court has stayed coercive recovery action against an employee whose salary was ordered to be attached to the extent of Rs 40,000 per month by the Himachal Pradesh State Cooperative Bank over a loan default, observing that the authorities ought to have exercised restraint while his appeal against the recovery proceedings was pending.

Justice Sandeep Sharma, while disposing of a petition filed by Puneet Negi in CWP No. 20056 of 2026 on Thursday, directed the Additional Registrar (Monitoring), Cooperative Societies, Himachal Pradesh, to decide his pending appeal expeditiously, preferably within two months.

The Court further ordered that no coercive action be taken against the petitioner pursuant to the impugned orders dated October 13, 2026, and August 5, 2026, till the appeal is decided.

The petitioner had stood as a guarantor for another person who had availed a personal loan from the Himachal Pradesh State Cooperative Bank. Following the borrower’s default, recovery proceedings were initiated against both the principal borrower and the guarantor.

The Collector (Recovery) of the bank had initially ordered attachment of the petitioner’s salary on May 2, 2025. Challenging the order, Negi approached the arbitration authority under Sections 72 and 73 of the Himachal Pradesh Cooperative Societies Act, 1968. However, his plea was dismissed through an award dated March 31, 2026.

He subsequently filed an appeal before the Additional Registrar (Monitoring), Cooperative Societies, which is still pending adjudication.

On August 5, 2026, the appellate authority directed that further proceedings be kept in abeyance until the decision of a pending writ petition in the matter of Kishori Lal versus State of Himachal Pradesh and others. However, the interim stay operating against the original salary attachment order was also vacated.

Subsequently, the Collector (Recovery), through an order dated October 13, 2026, issued a revised salary attachment direction, ordering deduction of Rs 40,000 per month from the petitioner’s salary.

The High Court observed that since the petitioner had already approached the competent appellate authority against the recovery order and the appeal remained pending, the authority responsible for issuing the revised attachment order ought to have exercised restraint until its disposal.

It further observed that taking advantage of the August 5 order, the bank had succeeded in obtaining a revised salary attachment order, an action which did not appear justifiable.

During the hearing, counsel representing the bank fairly agreed that the appeal could be decided within a stipulated period and that the revised attachment order could remain stayed in the meantime.

The High Court clarified that it was not examining the merits of the dispute and confined its directions to expeditious disposal of the pending appeal and protection against coercive recovery until then.

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