Borrower’s Loan Recovery from Guarantor’s Pension – Illegal

Judgment dated 13.11.2026 of the High Court of Jammu & Kashmir and Ladakh at Srinagar in FAO No.10/20 of Nazir Ahmad Kuchay  Vs.  Jammu and Kashmir Bank Limited

This Court is of the considered opinion that the guidance in these kinds of matters is required to be sought from the Judgment delivered by the Supreme Court in Radhey Sham Gupta case Supra, whereby the authoritative principle in respect of pension and other retiral benefits has been laid down, which specifies the said benefits to be protected from the attachment and coercive recovery measures. This Court also in Farooq Ahmad Khan supra and J&K Bank Limited and Anr. Vs. Chander Udey Singh, supra has affirmed the said legal position and held that the amount received as pension by a retired Government employee is insulated and protected from the coercive recovery measures.
FAO No. 10/2020
14. The appellant, admittedly, is a senior citizen and retired Government employee managing his and his family’s sustenance on the sole income of pension. A pension is a regular payment made to a Government employee upon his superannuation as a financial assistance so that the said Government employee does not feel dependent on someone else and he is protected from vagrancy and destitution in his olden days. The said benefit is a welfare measure aimed at to secure the interests of the retired employee and his family, which cannot be subjected to coercive recovery measures on the failure of a borrower to whom the said retired employee stood as a guarantor to repay the financial assistance received by him that too at the time when the said retired employee Government employee was in active service and was maintaining a different Bank Account at a different branch.