Pension A 'Property' U/Article 300 & A Fundamental Right To Livelihood U/Article 21; Bombay HC Imposes 50K Cost On Bank For Deducting Pension Retrospectively

The Bombay High Court on Thursday imposed a cost of Rs.50,000 on State Bank Of India for deducting more than Rs.3 lakh from 85-year-old pensioner Naini Gopal's account after the bank concluded that an amount of Rs.872 per month was 'erroneously paid' in excess to the petitioner from the October 2007 due to technical error in the system. Court imposed cost towards mental agony and harassment caused by the bank and also for expenses of the said litigation. Division bench of Justice RK Deshpande and Justice NB Suryawanshi of the Nagpur bench heard the petition filed by the octogenarian after more than Rs.3.26 lakh was deducted from his account and observed- "We need to remind the Bank that the pension payable to the employees upon superannuation is a 'property' under Article 300-A of the Constitution of India and it constitutes a fundamental right to livelihood under Article 21 of the Constitution of India. The deprivation, even a part of this amount, cannot be accepted, except in accordance with and authority of law." Case Background The petitioner Naini Gopal retired as an Assistant Foreman from the Ordnance Factory at Bhandara with effect from October 1994. The last drawn basic salary of the petitioner was Rs.2,675 and the basic pension was fixed at Rs.1,334. After an increase in the pension and the dearness allowance as per the recommendations of the 5th, 6th and 7th Pay Commissions, the basic pension of Rs.25,634 was fixed, for which the petitioner was entitled to and accordingly he was paid. Petitioner approached the High Court and relied upon the letter dated December 4, 2019 addressed to him by the accounts officer of his former employer which states that the pension at the rate of Rs.26,000 has been correctly notified. Initially, the Court asked the bank whether the State Bank of India has acted on its own or on the basis of instructions issued by any other respondent in the matter and warned that if it is found that the action of the Bank is without any authority, heavy costs will be imposed. However, in its reply, the bank contended that an amount of Rs.872 per month was erroneously paid in excess to the petitioner from October 2007 due to a technical error in the system. Relying on clause (c) of an RBI circular, the bank claimed to have an authority to recover the excess payment made to the pensioner. It is the further stand taken in the reply filed by the Bank that it has not received any Memo from the respondent employers for enhancement of pension. Judgment The bench noted- "What we find in the present case is that the stand taken by the employer, the competent authority, is very clear and unequivocal in stating that the fixation of pension of the petitioner was correct and proper. The employer has supported the claim of the petitioner and has no role to play in the matter of reduction of pension or its recovery. We are of the view that it is not the authority of the Bank to fix the entitlement of the pension amount of the employees other than the employees of the respondent- Bank. We, therefore, hold that the action of the Bank to reduce the pension of the petitioner is unauthorized and illegal. Furthermore, the Bank has failed to demonstrate any technical error in the calculations." Moreover, the bench questioned why no intimation was given to the petitioner for such retrospective deduction- "If the Bank had any doubt about the correctness of fixation of pension, it should have carried the correspondence with the employer and got the clarification. At least, an explanation in respect of the proposed deduction with retrospective effect from October, 2007 should have been called from the petitioner. This is the bare minimum requirement of the principles of natural justice. The entire action of the Bank, in our view, is arbitrary, unreasonable, unauthorized and in flagrant violation of the principles of natural justice and cannot be sustained." Court asserted that the bank has committed a breach of trust by such action and noted- "The petitioner is of 85 years of age and in Para 5 of the petition, it is the claim that he bears a great liability of mentally disabled daughter, aged about 45 years, who has to be looked after mentally and physically, and the costly medical treatment is required to be administered. Instead of showing sensitivity to the problems of senior citizens, the Bank has shown arrogance and the petitioner was driven from pillar to post to know the reason for deduction of the amount from the pension payable to him." As per the bank's reply, an amount of Rs.3,26,045 has already been recovered and the recovery of the balance amount of Rs.42,042 is proposed to be made. Referring to the same, the bench observed- "We, therefore, need to direct the Bank to refund the amount of Rs.3,26,045 to the petitioner by crediting it in his pension account with interest at the rate of 18% per annum from...

Pension A 'Property' U/Article 300 & A Fundamental Right To Livelihood U/Article 21; Bombay HC Imposes 50K Cost On Bank For Deducting Pension Retrospectively

Nitish Kashyap

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