Widow’s FD Illegal Encashment for Personal Loan of Deceased Husband
Judgment dated of the High Court at Allahabad at Lucknow in Writ C No.6722 of 2026 of Ms.Neha Misra Vs. Reserve Bank of India Thru Governor Central Officer and 5 others.
The husband of the petitioner was Assistant Professor at Medicine Hospital, Lucknow and availed personal loan of Rs.15 lacs fro the State Bank of India. The petitioner wife was neither signatory nor a consenting party to the said loan either as co-borrower or guarantor or surety or nominee. In nutshell, there exists no privity of contract between the petitioner and the respondent- State Bank of India. Further, it is available from the records that the said personal loan was secured through an insurance cover arranged from SBI General Insurance, for which a premium of INR 8,803/- was also allegedly paid by the husband of the petitioner.
husband of the petitioner left for his heavenly abode on 6th May, 2021 on account of Covid-19. The respondent-Bank instead of pursuing steps as permissible under law for recovery of the personal loan amount extended to the deceased husband of the petitioner, started coercing the petitioner for payment, including issuing a legal notice dated 23.09.2025, calling upon her to make payment of the full outstanding of Rs.13,87,382/- along with interest, failing which the Bank proposed to initiate legal proceedings against her including that of (i) Civil Suit for recovery of dues, (ii) initiating recovery proceedings under applicable banking and recovery law and (iii) reporting to credit recovering agencies.
respondent-Bank encashed the petitioner’s fixed deposit and as such debited an amount of Rs.19,90,693/- from her bank account maintained in the respondent-Bank. Interestingly, the Bank while debiting the petitioner’s bank account has shifted her account from Ashiyana Branch to Jankipuram Branch, and then back from Jankipuram Branch to Ashiyana Branch, allegedly without her permission and merely for debiting the said amount as the loan was extended to the husband of the petitioner from Jankipuram Branch. It is in this background that the present writ petition has been filed by the petitioner.
The entire process that has been adopted by the Bank of surreptitiously transferring the fixed deposit from one Branch to another to debit the same and upon debiting the same once again transferring the account back clearly indicates that the intention of the Bank was to achieve its purpose in a surreptitious manner.
Furthermore, the deplorable action of the Bank authorities in the present case, requires exemplary and punitive compensation to be paid to the petitioner. Though the petitioner has claimed a sum of Rs.25 lacs for the egregious mental agony, emotional trauma and flagrant violation of her fundamental rights, we are of the view that an amount of Rs.1 lac would be appropriate keeping in view the overwhelming circumstances narrated herein-above. Accordingly, we direct the respondent-Bank to pay a compensation of Rs.1 lac to the petitioner within a period of four weeks from date.
