The Allahabad High Court has ordered the State Bank of India to refund Rs 19.9 lakh it debited from a woman’s own fixed deposit to recover a personal loan taken by her late husband, who died of Covid, holding that she had no privity of contract with the Bank and that the money was hers. Describing the Bank’s conduct of shuffling her account between branches to make the debit as ‘abominable’ and a serious breach of trust, the Court also awarded Rs 1 lakh compensation.
The Bombay High Court held that merely demanding repayment of a loan or following up with a borrower cannot amount to abetment of suicide. The Court clarified that Section 306 IPC requires clear evidence of intentional instigation, active encouragement, or conduct specifically intended to drive a person to take their own life.
The Kerala High Court ruled against the practice of publicly displaying defaulting borrowers’ photographs and details for loan recovery, citing violations of dignity and privacy under the Kerala Co-operative Societies Act. The court emphasized lawful alternatives for debt recovery exist, reinforcing borrowers’ rights under Article 21 of the Constitution of India.
