Andhra Pradesh HC rules bank can’t freeze widow’s pension or gratuity for deceased husband’s loan liability.
Widow’s Pension and Gratuity Protected from Bank Recovery
The Andhra Pradesh High Court ruled that a bank cannot freeze a widow’s account or appropriate her pension and gratuity towards her deceased husband’s loan. The petitioner, a widow, challenged the bank’s recovery action after her husband’s death, arguing these funds were personal and statutorily protected.
The court held that pensions and gratuities are not part of the deceased’s estate and are meant solely for the survivor’s sustenance. Citing the Payment of Gratuity Act, 1972, and principles of natural justice, the bench directed the bank to release the funds immediately.
This decision offers critical protection to survivors. Practitioners must ensure financial institutions do not conflate personal survivor benefits with estate liabilities during recovery proceedings.
Citations
- Payment of Gratuity Act, 1972
- Indian Succession Act, 1925