Ragini Dandekar vs State Of Chhattisgarh

Arvind Kumar Verma, J

By way of this petition, the petitioner has sought direction to the respondent authorities to deduct the amount of installment for repayment of loan from the salary of the petitioner whereby the respondent No.4 has no authority to recover the amount of loan after the death of her husband as he same amount of loan was the personal liability of the deceased and the petitioner cannot be made liable for repayment of the same. He has therefore prayed seeking for the relief(s) as under:

“10.1. this Hon’ble Court may kindly be pleased to direct the respondent authorities not to deduct the amount of installments for repayment of loan from the salary of the petitioner.

10.2. this Hon’ble Court may kindly be pleased to direct the respondent authorities to pay back the total amount of loan which has been deducted as installments of repayment of bank loan from the salary account of the petitioner.

10.3. Any appropriate writ, direction or order may also kindly be passed in favour of the petitioners which this Hon’ble Court deems fit in the circumstances of the case.”

Briefly stated facts are that the husband of the petitioner namely Late Ashwani Kumar Dandekar had taken a personal loan (MC-TL-Express Credit JUN-19) of Rs. 4,00,000/- from the respondent No.4-State Bank of India, Main Branch, Raigarh during his lifetime which was sanctioned on 27.08.2020. Thereafter the petitioner was making repayment of the said loan along with interest by monthly instatement of Rs. 7600/- being deducted from his salary account. On 12.04.2022, husband of the petitioner died due to some health issue and after his death the repayment of loan amount could not be paid to the respondent No.4 from April 2022 to June 2022. Since the loan was the personal liability of the deceased and therefore it could not be recovered from his wife. The respondent No.4 contacted the petitioner that she has to make repayment of loan as some of the amount is still outstanding. Thereafter, the petitioner got compassionate appointment in the eduction department as Assistant Grade-III and the respondent No.4 after making adjustment for deducting the repayment of loan amount from the salary of the petitioner, it could not be recovered.

The husband of the petitioner had taken express credit loan from the State Bank and as per the terms and conditions of the Bank, it has been stated that any amount of standing loan could be recovered by the Bank from the amount payable as terminal benefits like PF and Gratuity of the deceased employee but no where it ha been mentioned that the said outstanding loan could be recovered from the relative of the deceased person. The petitioner made objection to the SBI officials with regard to deduction of repayment of loan from her salary. Being aggrieved by the said deduction, the petitioner has filed this petition.

Contention of the counsel for the petitioner is that the action on the part of respondents ie. Education Department and the SBI, deducting the salary from the account of the petitioner is arbitrary, illegal and not sustainable in the eye of law. He submits that the respondent No.4 has no authority to recover the amount of loan from the petitioner as the petitioner could not be made liable for repayment of the same. There is no provision available in terms and conditions of the Express Credit Loan, which could justify the action of the education department and the Bank for deducting the amount of loan from the salary of the petitioner. He submits that the respondent No.4 did not proceed to recover the amount of loan from the terminal benefits like the PF and Gratuity of the deceased but has proceeded to recover the same by deducting from the salary of the petitioner which is illegal. It is submitted that nowhere in the application form, for providing loan of express credit, it is mentioned that any amount could be recovered from the legal heirs or relatives of the deceased.

Contention of the counsel for respondent No.4 is that the petition filed by the petitioner is misconceived and baseless. The husband of the petitioner had taken Express Credit Loan of Rs. 4,00,000/- from State Bank of India and in the said loan agreement, it was specifically mentioned that the husband of the petitioner ie. borrower has to repay the loan in 72 equated monthly installments of Rs. 7,532/- and Clause 12(iii) clearly stipulates that the Bank shall have the paramount right of set of and in exercise of the Bank’s general lien under law, the Bank shall also have a paramount right of lien on all monies, accounts, securities, deposits, goods and other assets and properties belonging to the borrower or standing to the borrower’s credit (whether singly or jointly with any other person(s) which are or may at any time be with or in the possession or control of any branch of the Bank for any reason or purpose whatsoever.

He submits that the petitioner had received the terminal benefits like PF, Gratuity, Leave Encashment etc. of her late husband who was a government employee. On 01.06.2022, a letter was also sent by the Chief Manager of the Bank (respondent No.4) to the petitioner vide Annexure R-4/2 for submitting the death certificate stating that out of the retiral dues received by her, the outstanding loan amount of Rs. 3,16,000- with interest was to be repaid. Thereafter on 20.07.2022, again a letter was sent to the petitioner and she was also communicated telephonically but didn’t get any response and the Bank was constrained to deduct Rs. 7,600/- from the savings account of the petitioner for which the petitioner has to deposit from her salary as she has got compassionate appointment on account of death of her husband. He further contended that the husband of the petitioner had given an irrevocable letter of authority to the Principal, Govt. Higher Secondary School Risda, Balodabazar specifically mentioning that “in case of his death, retirement, resignation or discontinuing the service for any reason, he authorizes her to pay an amount payable on my account including the amount payable by way of terminal benefits like PF and Gratuity by the reason aforesaid to the State Bank of India Raigarh Branch towards the balance outstanding in the aforesaid loan account together with interest, costs and/or any money as may be due to Bank in respect of aforesaid loan.” This letter of authority was also given by the husband of the petitioner to the Branch Manager, State Bank of India, Raigarh Main Branch on 20.08.2020. The bank sent a legal notice to the petitioner on 10.08.2022 informing her that she is liable to pay the outstanding loan amount taken by her husband of Rs. 2,97,348/-.

It is submitted by the counsel for respondent No.4 that the petitioner being wife and legal representative is bound to make repayment of the loan and she should have made the repayment of the outstanding loan from the retiral dues/terminal benefits which were received by her. The loan agreement executed between the respondent Bank and the deceased borrower mentions that the term ‘borrower’ shall include his or her representative, heirs, executors, administrator and assignees. He has referred to the matter of Kamal Gupta Vs. Bank of India AIR 2008 Delhi 51 whereby it has dealt with Section 37 of the Indian Contract Act holding that the relationship between the borrower and the bank or the financial institution is created by a contract under the Indian Contract Act, 1872. Promise made by the promisor is binding on his representative in case of his/her death, unless contrary intention appears from the contract. Promise to perform an obligation under contract is not personal to the contracting party but is also binding on his representatives. He therefore contends that the petitioner herself has admitted that one of the term and condition of the loan agreement is that the outstanding loan could be recovered by the Bank from the amount payable to the petitioner as terminal benefits like PF and Gratuity of the deceased but despite the undertaking in favour of the Bank, the petitioner failed to repay the outstanding amount taken by the deceased borrower. It is pertinent to mention here that on receiving the terminal dues directly from the employer of the deceased borrower, the petitioner become responsible to pay the amount due as he is holding the amount so received on behalf of the Bank ie. creditor. Thus, the petition sans merit and is liable to be dismissed.

Heard learned counsel for the parties and perused the documents on record.

As per the contract, borrower includes his legal representative. A conjoint reading of the provisions of the Contract defined in Section 2(f) would mean the original borrower and after his death his legal representative. The legal representatives to the extent they have inherited the estate from the deceased become a ‘borrower’ for the purpose of Section 2(f) of the Act. The legal representatives step into the shoes of the predecessor. Therefore the letter of authority being executed by the predecessor with the Bank would not lose force on his death but the legal representatives would be liable to get absolved the repayment of the outstanding loan amount. Thus, the petition being devoid of merits is hereby dismissed.