The unilateral deduction of pension funds by a bank for loan recovery is unconstitutional and violates the right to livelihood, requiring legal due process.

JUDGMENT :

SANJEEB K. PANIGRAHI, J.

1. In this Writ Petition, the Petitioner seeks a direction from this Court to declare the Bank’s unilateral debit of Rs. 5,00,000/- from his pension account as illegal and arbitrary and to direct refund of the said amount with consequential reliefs and protection of his pensionary dues.

I. FACTUAL MATRIX OF THE CASE

2. The brief facts of the case are as follows:

(i) The petitioner, Bharat Chandra Mallick, is a retired employee of the Rail Coach Factory, Mancheswar, and presently a pension holder maintaining Account No. 10368202110 with the State Bank of India (SBI). His monthly pension is approximately Rs. 35,000, which constitutes his primary source of livelihood.

(ii) The petitioner’s wife, Smt. Susila Mallick, had availed several loan facilities from the Opposite Party-Bank. These included two transport vehicle loans, Loan Account No. 61275175315 for Rs. 5,90,000 sanctioned on 12.06.2015, and Loan Account No. 61299626102 for Rs. 8,00,000 sanctioned on 07.12.2015, amounting to Rs. 13,90,000 in total, as well as a car loan of Rs. 7,45,000 under Loan Account No. 37268579099 sanctioned on 31.10.2017.

(iii) The petitioner stood as guarantor for the transport vehicle loans taken by his wife and executed Guarantee Agreements to that effect. Both borrower and guarantor were jointly and severally liable for repayment.

(iv) Due to default in repayment of the said loans, the two transport vehicle loan accounts were classified as Non-Performing Assets (NPA) on 07.11.2018. The Bank states that, despite repeated demands, neither the borrower nor the guarantor cleared the dues.

(v) On 17.02.2024, a sum of Rs. 2,30,000, and on 19.02.2024, a further sum of Rs. 2,70,000 were debited from Account No. 10368202110 held jointly by the petitioner and his wife, totalling Rs. 5,00,000. The Bank claims this amount was utilized to close the two transport vehicle loan accounts.

(vi) The petitioner contends that he is not a borrower, only a guarantor, and that the said loans were already closed under the CGTMSE scheme in 2023. He alleges that the Bank’s deduction of Rs. 5,00,000 from his account, without notice or due process, is illegal, arbitrary, and violative of Article 21 of the Constitution of India.

(vii) The Bank, on the other hand, asserts that the car loan account (No. 37268579099) still remains outstanding and continues as an NPA with dues of Rs. 6,02,650.50 as of 01.07.2024, along with further interest.

(viii) The petitioner made a representation dated 07.01.2025 to the Bank seeking release of the withheld amount, stating that it was required for his daughter’s marriage, but no response was received from the Bank.

(ix) The petitioner relies upon judicial precedents, D.S. Nakara v. Union of India, judgment dated 04.03.2025 passed in W.P. (C) No. 35266/2024 wherein Karnataka High Court has observed that even if a pensioner is indebted, at least 50% of pension must remain untouched, and in his case, being a guarantor, the entire recovery is impermissible.

(x) The Bank maintains that the joint account from which recovery was made is not an exclusive pension account, and that the petitioner continues to withdraw his monthly pension regularly since March 2024, implying that his pension has not been attached or withheld.

(xi) The Bank further submits that the debit transactions were made lawfully from a jointly operated account between husband and wife, both being liable for