Wife misses loan payments, bank recovers dues from husband's pension kept in joint bank a/c; Odisha HC tells bank to return money

Core Viewpoint - The Odisha High Court ruled that a bank cannot unilaterally deduct money from a pensioner's account to recover dues from a borrower's default, emphasizing the protection of pension funds as a fundamental right under Article 21 of the Constitution of India [7][24][27]. Summary by Sections Case Background - Mr. Mallick, a retired employee, acted as a guarantor for his wife's loans totaling Rs 21.35 lakh, which included two transport vehicle loans and a car loan [2][3]. - The loans defaulted, leading to their classification as Non-Performing Assets (NPA) on November 7, 2018 [3]. Bank's Actions - The bank debited Rs 5 lakh from the joint account of Mr. Mallick and his wife without prior notice, claiming it was to settle the defaulted loans [4][5]. - The bank argued that the joint account was not solely a pension account and that Mr. Mallick had been withdrawing his pension regularly [6]. Court's Findings - The court highlighted that pension funds are protected under various legal provisions, including Section 60(1)(g) of the Code of Civil Procedure, which exempts government pensions from attachment [9][27]. - The court ruled that the bank's action of debiting the account without a court order or prior notice violated the principle of due process [13][27]. Legal Precedents - The judgement referenced previous cases, including Radhey Shyam Gupta v. Punjab National Bank and State of Jharkhand v. Jitendra Kumar Srivastava, reinforcing that pension is considered property and cannot be taken without legal authority [10][12][27]. - The court noted that pension funds retain their protected status even when deposited in a joint account, and contractual agreements cannot waive this exemption [14][17]. Conclusion and Directives - The Odisha High Court ordered the bank to reverse the Rs 5 lakh deduction within four weeks and prohibited any future deductions from Mr. Mallick's pension without due process [24][28]. - The judgement clarified that while the bank retains the right to recover outstanding dues, it must do so through lawful means and cannot directly appropriate pension funds [24][25].