Bengaluru, The Karnataka Excessive Courtroom has directed Canara Financial institution to not deduct greater than 50 p.c of a retired financial institution worker’s pension to get better his excellent mortgage dues.
Karnataka HC restricts financial institution from deducting full pension of retired worker for mortgage restoration
The court docket emphasised that pension serves as monetary safety for retirees and shouldn’t be completely diverted towards debt reimbursement, besides in instances of fraud, forgery, or misconduct.
Justice S G Pandit, who delivered the decision, underscored that whereas banks have the authorized proper to get better dues, they have to adhere to laws that safeguard pensioners’ livelihoods.
He identified {that a} pensioner’s monetary stability is crucial, and forcing them to forfeit their total pension for mortgage reimbursement might infringe upon Article 21 of the Indian Structure, which ensures the best to life and private liberty.
The case was introduced earlier than the court docket by 70-year-old Murugan O Ok, a retired Canara Financial institution worker now residing in Thrissur, Kerala.
Murugan had retired on November 30, 2014, and had been constantly paying his mortgage EMIs from a portion of his pension. Nevertheless, beginning in July 2024, Canara Financial institution started deducting his total pension to settle the dues, prompting him to hunt authorized intervention.
He additionally requested the court docket to forestall the financial institution from imposing penal curiosity on an academic mortgage for which he was a co-obligant along with his daughter.
Canara Financial institution contended that Murugan owed ₹8.5 lakh and insisted it was inside its rights to get better the excellent quantity.
Nevertheless, the court docket dominated that the financial institution might solely deduct as much as 50 per cent of his pension for mortgage restoration and steered that it discover different legally permissible avenues, resembling imposing any collateral supplied towards the mortgage.
Justice Pandit highlighted that even for workers nonetheless in service, mortgage recoveries usually don’t exceed 50 per cent of their take-home wage.
He maintained that the identical precept needs to be utilized to pensioners to make sure their monetary well-being.