The Lucknow bench of the Allahabad High Court has strongly reprimanded the State Bank of India (SBI) for deducting money from the account of loan borrower’s wife.
The bank had deducted ₹19.90 lakh from a woman’s fixed deposit to settle the loan taken by her husband.
The court has directed SBI to refund the wife ₹19,90,693, including interest, within four weeks at the rate at which she was receiving fixed deposit benefits. The court also directed the bank to pay the woman ₹1 lakh as punitive damages.
A division bench of Justices Shekhar B. Saraf and Abhdesh Kumar Chaudhary passed this order, granting a petition filed by Lucknow resident Neha Mishra. The court held that SBI had not cited any legal basis for recovering her husband’s dues from her account.
Mishra’s husband, an assistant professor at a Lucknow hospital, had taken a loan of ₹15 lakh from SBI on November 3, 2020. According to the order, Mishra was neither a signatory nor a consenting party to the loan, nor was she a co-applicant, co-borrower, guarantor, surety, indemnifier, or nominee. Therefore, the court recorded that there was no contractual relationship between Mishra and SBI.
The loan was secured by an insurance cover from SBI General Insurance. The order stated that Mishra’s husband had reportedly paid a premium of ₹8,803 for this cover. He died of COVID-19 on May 6, 2021.
Subsequently, SBI demanded Mishra’s payment of the outstanding loan amount, issuing a legal notice on September 23, 2025, demanding ₹13,87,382, including interest. SBI encashed a fixed deposit in Mishra’s name and withdrew ₹19,90,693 from his account.
Mishra’s lawyer argued that she had no contractual relationship with SBI and that recovery was legally impermissible. In response, SBI cited judgments relating to the recovery of loan dues from gratuity and other retirement benefits.
After hearing the case, the court directed SBI to refund Mishra ₹19,90,693, along with interest, within four weeks at the rate at which she was receiving fixed deposit benefits. It also directed the bank to pay Mishra ₹1 lakh as punitive damages.
