The Jammu and Kashmir and Ladakh High Court has restrained Jammu and Kashmir Bank from deducting any amount from the pension account of a retired police officer who had stood as a guarantor for a loan. Justice Moksha Khajuria Kazmi allowed an appeal filed by Nazir Ahmad Kuchay, setting aside a trial court order that had previously denied interim protection. The High Court held that the pensionary benefits of a retired government employee are immune from coercive recovery measures, even when the employee has guaranteed a loan for another person.
According to LiveLaw, the appellant, a senior citizen and retired police personnel, had guaranteed financial assistance for an individual. When that principal borrower defaulted on instalments, the bank began deducting outstanding amounts from Kuchay’s bank account. Kuchay informed the bank of his retirement and dependence on his pension, alleging that the bank had assured him no further deductions would be made. He stated that the deductions allegedly continued despite that assurance. Consequently, he filed a civil suit seeking an injunction and recovery of the deducted funds.
The trial court in Srinagar had dismissed Kuchay’s application for interim relief, relying on the principle that a guarantor’s liability is co-extensive with that of the borrower. The bank argued that contract law and banking practice recognized joint and several liability, citing Supreme Court precedents. However, the High Court found the trial court’s reasoning unsound. Justice Kazmi emphasized that pension is a welfare measure designed to protect retired employees and their families from destitution and dependence. The court observed that the appellant was managing his livelihood solely on his pension, which was intended to secure his financial interests in old age.
The High Court clarified that its decision does not absolve the bank of its right to recover dues from the principal borrower through legally permissible means. The court noted that Kuchay had stood as guarantor while in active service and maintained a separate account at a different branch, suggesting other avenues for recovery might exist. The judgment relies on the Supreme Court’s ruling in Radhey Sham Gupta v. Punjab National Bank, which established protection for pension against attachment. The High Court left the issue of refunding previously deducted amounts open for the trial court to decide on its merits, directing that the lower court adjudicate this claim without being influenced by the High Court’s observations on the pension’s protected status.