Bombay HC: ‘Pension’ Is a Property Under Art. 300 and a Fundamental Right Under Article 21

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The Bombay High Court addressed the issue of arbitrariness on part of the banks while depriving pensioners of the entitled amount. It further discussed the ordeals of senior citizens in recent times and called upon the need for preventive measures for the same.

Brief Facts of the Case

The petitioner was an 85-year old pensioner retired in 1994 as an Assistant Foreman form the Ordnance Factory, Bhandara. The basic pension was fixed at Rs. 1334 which was subsequently upgraded after 5th, 6th and 7th Pay Commissions. The petitioner was entitled to a pension of Rs. 25,634. Moreover, it was notified by the accounts department former employer via a letter dated 04.12.2019 that the amount was revised to Rs. 26000. The petitioner, thus, approached the Bombay High Court.

However, it was contended by the State Bank of India (respondent) that a technical error in the system since October 2007 resulted in excess remittance of Rs, 872 per month to the petitioner’s account. Further, according to the clause (c) of the RBI circular, the bank claimed authority to recover the excess payment with interest by deducting the calculated amount. Therefore, the Court had to deal with the issue of whether the bank was rightful in claiming the impugned amount.

Court’s Observations

According to Article 300 of the Constitution of India, the Government can sue or be sued for any legal proceedings under Article 300A – the right to property. The Court sustained the jurisdiction of the matter on the grounds that ‘pension’ shall be considered as a property under the aforementioned provision. Thus, the State Bank of India can be sued under the functional interpretation of ‘State’ under Article 13 of the Constitution.

The Court was also reminded of the various constitutional provisions under fundamental rights and directive principles which recognize assistance in the cases of old age. Moreover, the pension is a means for sustenance for the majority of senior citizens and hence included in ‘Right to Life’ under Article 21 of the Constitution. The court remarked that it is an obligation on the State to promote economic interests and protect the life and property of senior citizens.

Further, the bench noted that the bank had no authority to fix the remittance amount unless the employer notifies otherwise. The employer, in the present case, clearly stated the amount and supported the claim of the petitioner. Therefore, the act of the bank was unauthorized and illegal. Upon realizing the glitch in the system, the bank neither corresponded with the employer nor intimated the petitioner. This omission has led to serious violations under principles of natural justice. In addition, the bank had also failed to produce any proof of the technical error.

Court’s Order

Justice R. K. Deshpande and Justice B.B. Suryavanshi passed the judgement at Nagpur bench of the Bombay High Court. The bench held the action of the respondent bank as arbitrary, illegal and unjustified. The bank was directed to refund the deducted amount with an interest of 18% per annum and restrain recovery of the balance amount from the petitioner. The court made an amount of Rs. 50,000 to be payable by the bank to the petitioner for mental agony and costs of the litigation.


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