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Allahabad High Court Orders SBI to Refund Widow’s FD Money
Neha Mishra’s husband had taken a personal loan from SBI.
He died in May 2021.
SBI later tried to recover the loan from Mishra.
Mishra was not listed as a borrower or guarantor for the loan.
The bank moved her fixed deposit and took ₹19.90 lakh from it.
The Allahabad High Court said the bank had not shown a legal reason for doing this directly.
The court ordered SBI to return the money with interest.
It also ordered SBI to pay Mishra ₹1 lakh for the way the money was recovered.
The Allahabad High Court ordered SBI to refund ₹19.90 lakh debited from Neha Mishra’s fixed deposit.
The court said Mishra was not a co-borrower, guarantor, surety, indemnifier or nominee for her husband’s loan.
The deceased husband had taken a ₹15 lakh SBI personal loan in November 2020, reportedly covered by insurance.
The court described SBI’s recovery process as surreptitious and an “abominable” breach of banking practice.
SBI must refund the money with interest at the FD rate and pay ₹1 lakh compensation within four weeks.
- Who
- The Allahabad High Court, SBI and Neha Mishra, whose deceased husband had taken the loan.
- What
- The court ordered SBI to refund ₹19.90 lakh taken from Mishra’s fixed deposit and pay ₹1 lakh compensation.
- Where
- The case was heard by the Allahabad High Court’s Lucknow bench; the relevant SBI branches were in Ashiyana and Jankipuram, Lucknow.
- When
- The order was reported on September 17; the loan was taken in November 2020, and Mishra’s husband died in May 2021.
- Why
- The court found that Mishra was not a party to the loan agreement and that SBI had not established a legal basis for directly debiting her FD.
Court and widow’s position
SBI’s recovery action
Direct debit from the FD
Court and widow’s position
The court said Mishra was not a co-borrower, guarantor, surety, indemnifier or nominee, and that SBI had shown no legal provision allowing it to debit her account directly.
SBI’s recovery action
SBI transferred Mishra’s FD between its Ashiyana and Jankipuram branches, encashed it and debited ₹19.90 lakh while loan-recovery discussions were underway.
Recovery from a deceased borrower’s family
Court and widow’s position
The court said SBI could proceed against Mishra as the deceased’s legal heir only if legally entitled, and only through due legal process.
SBI’s recovery action
SBI had issued Mishra a legal notice demanding payment of the outstanding loan and attempted to recover the dues from her.
Key facts
- Refund ordered
- ₹19.90 lakh
- Compensation
- ₹1 lakh
- Original personal loan
- ₹15 lakh, taken in November 2020
- Outstanding amount demanded
- ₹13.87 lakh
- Insurance premium reportedly paid
- ₹8,803
- Refund deadline
- Within four weeks
- Interest on refund
- At the fixed-deposit rate
Sources
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