Orissa High Court
Bharat Chandra Mallick vs Branch Manager on 17 October, 2025
Author: Sanjeeb K Panigrahi
Bench: Sanjeeb K Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT,
CUTTACK
Date: 22-Oct-2025 15:32:00
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 19648 of 2025
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Bharat Chandra Mallick .... Petitioner(s)
-versus-
Branch Manager, State Bank of .... Opposite Party (s)
India
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. Braja Mohan Sarangi, Adv.
For Opposite Party (s) : Mr. Manoj Kumar Mohapatra-1, Adv.
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-02.09.2025
DATE OF JUDGMENT:-17.10.2025
Dr. 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 ₹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 ₹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 ₹5,90,000 sanctioned
on 12.06.2015, and Loan Account No. 61299626102 for ₹8,00,000
sanctioned on 07.12.2015, amounting to ₹13,90,000 in total, as well as a
car loan of ₹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 ₹2,30,000, and on 19.02.2024, a further sum of
₹2,70,000 were debited from Account No. 10368202110 held jointly by
the petitioner and his wife, totalling ₹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 ₹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 ₹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
India1 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 the loan, and that the petitioner was aware of the
recovery since February 2024.
(xii) The Bank contends that the writ petition was filed after more than a year
of the said debit transactions and hence suffers from delay, laches, and
suppression of material facts, whereas the petitioner maintains that the
recovery was arbitrary and violative of his fundamental right to
livelihood.
judgment dated 04.03.2025 passed in W.P.(C) No. 35266/2024
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) The petitioner submits that the impugned withholding of ₹5,00,000
from his pension account is wholly illegal, arbitrary, and
unconstitutional, being in violation of Article 21 and settled judicial
precedents. The action amounts to deprivation of livelihood without
authority of law.
(ii) The petitioner relies on D.S. Nakara (Supra) to assert that pension is not
a bounty but a right to livelihood and social security. Any unauthorized
deduction defeats the constitutional protection extended to pensioners.
(iii) The Karnataka High Court in W.P.(C) No. 35266/2024 categorically held
that even if a pensioner is a borrower, the Bank cannot deduct more
than 50% of the pension amount. Since the petitioner herein is only a
guarantor and not a borrower, the Bank's act of withholding 100% of
his pension savings is per se arbitrary.
(iv) The Bank's conduct amounts to unilateral recovery without due
process, as no notice, opportunity of hearing, or lawful order preceded
the debit transactions of 17.02.2024 and 19.02.2024. This violates
principles of natural justice and the Reserve Bank of India's guidelines
on recovery from pension accounts.
(v) The petitioner contends that since the underlying loan has already been
closed under the CGTMSE scheme in 2023, there is no subsisting
liability. Hence, the impugned recovery has no legal foundation and
constitutes unjust enrichment by the Bank.
(vi) The action of withholding pension deposits has caused grave financial
hardship, depriving the petitioner of means for subsistence and his
daughter's marriage expenses, amounting to a violation of the right to
dignity under Article 21.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:
4. The Learned Counsel for the Opposite Party earnestly made the
following submissions in support of his contentions:
(i) The Opposite Party-Bank submits that the petitioner, as guarantor, is
equally liable with the borrower under the principle of joint and several
liability recognized in contract law and banking practice. Therefore, the
recovery of dues from the joint account is fully lawful and within the
contractual rights of the Bank.
(ii) The debit of ₹5,00,000 from the joint account was carried out to close the
NPA transport vehicle loan accounts, for which both borrower and
guarantor were jointly responsible. There was no illegality or violation
of rights since the account belonged to both and was used for recovery
of public money due to default.
(iii) The Bank emphasizes that the loans were sanctioned without collateral
security. In such a situation, the Bank was compelled to debit funds
from the joint account to mitigate loss to public money. Hence, its
actions were consistent with prudential banking norms and lawful
contractual obligations.
(iv) The claim of the petitioner that his pension was withheld is factually
incorrect. The Bank has demonstrated through the account statement
(Annexure R/5) that the petitioner has been regularly withdrawing his
monthly pension since March 2024 without any obstruction. Thus, no
violation of his right to pension or Article 21 arises.
(v) The Bank argues that the cause of action is stale, as the transactions
occurred in February 2024 and the writ petition was filed more than a
year later. The petitioner's delay indicates an afterthought attempt to
misuse the writ jurisdiction and interfere with legitimate recovery of
dues.
(vi) The Bank maintains that the doctrine of limitation and the principle
against suppression of material facts should apply. The petitioner
knowingly concealed the existence of his guarantee obligations and the
fact of joint account operations with his wife, thereby misleading the
Court. Such suppression warrants dismissal with exemplary cost.
(vii) It is further submitted that loan dues constitute public money, and
recovery actions taken by the Bank to safeguard such funds cannot be
equated with arbitrary deprivation. The petitioner's plea of violation of
Article 21 is misplaced, as the debit was from a joint account lawfully
held and used for loan transactions.
(viii) The Bank thus prays that the writ petition be dismissed at the threshold,
as it is devoid of merit, filed with suppression of material facts, barred
by limitation, and aimed solely at obstructing lawful recovery of public
money.
IV. COURT'S REASONING AND ANALYSIS:
5. Heard Learned Counsel for parties and perused the documents placed
before this Court.
6. This case raises a narrow but important question: whether a bank can,
on its own, deduct money from a pensioner's account to recover dues
arising from a borrower's default. What appears at first glance to be a
routine banking dispute, in fact, cuts to the core of a larger issue: the
protection of pension as a lifeline for survival in old age, and the limits
of contractual power when weighed against the constitutional right to
livelihood.
7. It is evident from the legal framework that pensionary benefits are
accorded special protection. Section 60(1)(g) of the Code of Civil
Procedure, 1908 exempts government pensions from attachment in
execution of a decree. In fact, the Supreme Court in the case of Radhey
Shyam Gupta v. Punjab National Bank2 underscored that even after a
pension or gratuity amount is credited to a bank, it does not lose its
character as a protected sum. The Court held that such retiral benefits
could not be attached under the provisions of the Code of Civil
Procedure despite being in the bank's possession. The relevant excerpts
are produced below:
"However, we are also of the view that having regard to
proviso (g) to Section 60 (1) of the Code, the High court
committed a jurisdictional error in directing that a portion of
the decretal amount be satisfied from the fixed deposit receipts
of the appellant held by the Bank. The High Court also erred
in placing the onus on the appellant to produce the Matador
in question for being auctioned for recovery of the decretal
dues. In other words, the High Court erred in altering the
decree of the Trial Court in its revisional jurisdiction,
particularly when the pension and gratuity of the appellant,
which had been converted into Fixed Deposits, could not be
attached under the provisions of the Code of Civil Procedure.
(2009) 1 SCC 376.
The decision in the Jyoti Chit Fund case (supra)has been
considerably watered down by later decisions which have
been indicated in paragraphs 15 and 16 hereinbefore and it
has been held that gratuity payable would not be liable to
attachment for satisfaction of a Court decree in view of
proviso (g) to Section 60(1) of the Code."
8. In other words, what the law forbids by way of formal attachment
cannot be indirectly accomplished by the bank unilaterally adjusting or
debiting pension funds.
9. The petitioner's reliance on D.S. Nakara (Supra) is apt. Pension is not a
matter of charity or a bounty from the State, but rather a hard-earned
benefit which accrues to an employee, reflecting the right to live with
dignity in old age. In State of Jharkhand v. Jitendra Kumar Srivastava3
the Supreme Court took a similar stance and held that a person cannot
be deprived of pension without the authority of law, as pension is
considered "property" under Article 300A of the Constitution. Any
executive or contractual action that takes away a pensioner's money
without explicit legal sanction is ultra vires. The relevant excerpts are
produced below:
"It hardly needs to be emphasized that the executive
instructions are not having statutory character and,
therefore, cannot be termed as "law" within the meaning of
aforesaid Article 300A. On the basis of such a circular, which
is not having force of law, the appellant cannot withhold -
even a part of pension or gratuity. As we noticed above, so far
as statutory rules are concerned, there is no provision for
withholding pension or gratuity in the given situation. Had
there been any such provision in these rules, the position
would have been different"
(2013) 12 SCC 210.
10. Here, the Bank's debit of ₹5,00,000 from the petitioner's account, which
contained his pension, was done without any court order or prior
notice, and thus prima facie violates the principle that pension cannot
be taken except by due process.
11. The Bank contends that because the petitioner stood as a guarantor and
the account was held jointly with the borrower (his wife), it was within
its rights to debit the joint account for loan recovery. However, this
argument cannot override the statutory safeguards on pension funds.
The High Court of Jammu and Kashmir in the case of J&K Bank Ltd. v.
Chander Udey Singh4 was faced with a strikingly similar matter,
wherein it held that pension retains its exempt status even after being
deposited in a bank account and such funds cannot be attached or
deducted unilaterally, even under contractual agreements like deeds of
guarantee. The relevant excerpts are produced below:
"...pension amounts are statutorily insulated from any
coercive recovery measures, including unilateral deduction
by banks.
...
Pensionary benefits, being the sole means of sustenance for
most retired individuals, acquire heightened significance in
such circumstances. The withholding or deduction of pension
funds, particularly when such funds are statutorily
protected, would not only cause financial distress but also
amount to a violation of the respondent's right to live with
dignity... Thus, when weighed against the irreparable
inconvenience to the bank if any does not tilt the balance of
convenience in its favour."
12. In the present case, although the petitioner's liability as a guarantor is
co-extensive with the borrower, the mode of recovery chosen by the
CM (M) No. 156/2022, Jammu & Kashmir High Court
Bank, a unilateral withdrawal from an account fed by pension, runs
afoul of this public policy.
13. The fact that the amount was taken from a joint account, held by the
petitioner and his wife, does not legalize the recovery. if a debt is owed
by one person, the bank cannot simply seize money from a joint account
held with another person who is not a co-debtor. In this case, while the
petitioner (guarantor) and his wife (borrower) are both liable for the
loan, the joint account was effectively being treated as a convenient
source without distinguishing whose funds were being taken. The
petitioner is a retiree whose contribution to that account was his
pension, which is protected. Simply because the account was joint does
not strip the funds of their pensionary nature in his hands. The Chander
Udey Singh (Supra) ruling is instructive: pension funds do not lose their
statutory protection merely by being in a joint account, and contractual
consent in a guarantee cannot waive the exemption given to pension
under law. Thus, the Bank's resort to the joint account in this manner
was legally improper.
14. The manner in which the recovery was effected also fails basic norms of
natural justice. It is undisputed that the Bank did not issue any prior
notice or obtain consent from the petitioner before debiting the amounts
on 17.02.2024 and 19.02.2024. A unilateral debit from a customer's
account, especially when it consists of pension money, is an extreme
step. The petitioner was entitled to at least a notice or demand, and an
opportunity to be heard on why the sum was being taken. He could
have, for instance, pointed out his contention that the loans had been
settled under a credit guarantee scheme, or offered an alternate
repayment plan. By bypassing any dialog or process, the Bank's action
was arbitrary. The proper course for a bank in case of loan default is to
resort to lawful recovery channels, such as invoking security, filing a
suit or approaching a tribunal, rather than self-help by dipping into a
pension account.
15. The Bank contends that the petition is vitiated by delay and laches,
having been filed more than a year after the recovery, and further
alleges suppression of material facts such as the petitioner's guarantor
role and joint account details. The Court, however, is not convinced that
these technical objections foreclose relief. The petitioner has shown that
he made a representation to the Bank in January 2025, within eleven
months of the disputed debit, seeking restitution of the amount, yet
received no response. He approached this Court only after realizing that
the Bank would not rectify the matter.
16. Given the continuing impact on his livelihood and the fundamental
rights violation alleged, a marginal delay cannot defeat substantive
justice. There is no indication that the petitioner ever acquiesced in the
recovery; merely continuing to use the same account for pension credits
cannot be construed as consent to the ₹5,00,000 deduction. As for the
existence of alternative remedies, while monetary disputes ordinarily
fall within the realm of civil courts or tribunals, that does not curtail writ
jurisdiction where a public sector bank acts with manifest illegality
infringing constitutional guarantees.
17. The writ jurisdiction of this Court is designed to check arbitrary
executive action and to uphold the rule of law without being
constrained by procedural formalities. Where a citizen's basic means of
sustenance is imperilled by an unlawful act of the State or its
instrumentalities, the Court's duty is to intervene. Accordingly, the
matter deserves adjudication on its merits.
V. CONCLUSION:
18. In view of the foregoing discussion, the impugned action of the
Opposite Party-Bank in debiting a sum of ₹5,00,000 from the petitioner's
joint account (Account No. 10368202110) is held to be illegal and
unsustainable in law. It violated the statutory protections afforded to
pension funds as well as the petitioner's fundamental right to livelihood
under Article 21.
19. Consequently, the Bank is directed to reverse the sum of ₹5,00,000/- to
the petitioner's account within four weeks from the date of publication
this judgment. The petitioner shall be permitted to operate his account
freely, and the Bank shall not de futuro recover any amount from his
pension without adhering to due process of law.
20. It is clarified that this judgment does not extinguish the underlying loan
obligations; the Bank remains at liberty to recover any outstanding dues
by lawful means, for instance by enforcing security or pressing its claim
before the appropriate forum. However, under no circumstances can
the Bank directly appropriate a pensioner's entire pension or savings in
violation of the guidelines discussed above.
21. The Writ Petition is allowed with the above directions.
22. Interim order, if any, passed earlier stands vacated.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 17th October, 2025/
