Calling the process “abominable” and “clearly an anathema to banking practice”, the Lucknow bench of the Allahabad high court has pulled up the State Bank of India (SBI) for debiting ₹ 19.90 lakh from a widow’s fixed deposit (FD) towards her deceased husband’s loan dues.
Mishra’s counsel argued that she had no contractual relationship with SBI and that the recovery was not legally permissible. He also relied on Supreme Court judgments holding that retiral benefits such as gratuity cannot be treated as a lien or forfeited except in circumstances permitted by law. After hearing the matter, the court directed SBI to refund ₹ 19,90,693 to Mishra with interest at the fixed deposit rate she was enjoying within four weeks. The bank was also directed to pay ₹ 1 lakh to Mishra as compensation.
Mishra’s husband, an assistant professor at a Lucknow hospital, had taken a ₹ 15 lakh loan from SBI on November 3, 2020. The order records that Mishra was neither a signatory nor a consenting party to the loan and was not a co-applicant, co-borrower, guarantor, surety, indemnifier, or nominee. The court, therefore, recorded that there was no privity of contract between Mishra and SBI.
The court held that SBI had failed to show any legal basis for debiting the said money from Neha Mishra’s account to cover her husband’s dues.
