Pension is a Fundamental Right and Cannot be Deducted: High Court of Bombay

Naini Gopal is a Nagpur resident who retired as an assistant foreman from Ordnance Factory, Bhandara in October of 1994. He filed a petition that the Centralized Pension Processing Centre of the State Bank of India was recovering an amount of Rs. 369,035 from his pension by deducting it in monthly installments of Rs. 11,400. 

Bank’s Response

The Bank responded by saying that since October 2007, an amount of Rs. 782 was mistakenly being paid in excess to the petitioner, due to a technical error. SBI treated him as a personnel below officer rank instead of a civil pensioner. It was because of this wrong  fact that the petitioner’s pension was fixed. The Bank also claimed that it can recover the excess pension paid mistakenly as it was authorized by  Reserve Bank of India.

Court’s Decision 

The Bombay High Court rejected the arguments put forth by the bank. The Court stated that even though the bank cited a technical error it has failed to demonstrate it. After the Ordnance Factory clarified that there was no error in fixing the 85-year old’s pension, the Bench of Justice Ravi Deshpande and Justice NB Suryawanshi held that the bank had no good reason to deduct the amount from the petitioner’s pension. 

The Bench categorically stated that the bank cannot fix pension payable to retired employees. “Pension payable to employees upon superannuation is ‘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 an authority of law.” 

The Court directed the bank to stop the recovery and credit the amount recovered so far to the account of the petitioner. Demonstrating its annoyance at the bank officer’s “insensitive” approach towards the senior citizen, the Court also imposed a cost of Rs 50,000 on the bank and directed it to deposit the amount of cost imposed in the petitioner’s pension account in eight days. If the bank fails to comply then it will have to pay a fine of Rs 1,000 for every day of delay.

The Court clarified that the bank has no authority in the eyes of law to decide the amount of pension payable to an employee. It is simply a trustee of its account holders.