Arevarapu Indira Vs Indian Overseas (Andhra Pradesh High Court)
Summary: The Andhra Pradesh High Court held that a bank could not freeze a widow’s savings bank account or unilaterally appropriate pension, gratuity and other terminal benefits credited to that account towards loans obtained by her deceased husband. The petitioner’s husband, R. Vijaya Kumar, died on 15.04.2020 while working as a lecturer.
Family pension, gratuity and other terminal benefits were subsequently credited to the petitioner’s account. The respondent bank relied on undertakings executed by the deceased borrower and debited Rs.12,09,251/- and Rs.87,364/- from the petitioner’s account towards his outstanding loans. Examining Section 60(g) and (k) of the Code of Civil Procedure and Section 11 of the Pensions Act, 1871, the High Court held that pension, gratuity and provident fund enjoy statutory protection. Relying particularly on Radhey Shyam Gupta Vs. Punjab National Bank, the Court observed that pension and gratuity continue to retain their protected character even after receipt by the beneficiary.
The Court further held that the deceased borrower’s undertaking did not confer an unconditional right upon the bank to transfer terminal benefits from an account belonging to the petitioner, who was a third party to the loan transaction. The Bank also failed to establish any statutory or RBI authority supporting its unilateral action. The writ petition was allowed. The Bank was directed to permit operation of the petitioner’s account forthwith and re-deposit the amounts withdrawn towards her deceased husband’s loan within one week, with interest at 7.5% per annum. Costs of Rs.3,000/- were also awarded.
