Bank error, not fraud: SBI directed to refund Rs 3.6L pension recovery

New Delhi: Delhi HC has ordered SBI to refund payment deducted from a widow drawing a family pension after noting that an alleged excess payment was earlier deposited entirely due to errors in processing of pension and not because of any misrepresentation or concealment on her part.

Justice Sanjeev Narula allowed the plea filed by one Indra and directed the bank to refund the amount already deducted from her family pension along with 6% annual interest, while also restraining the bank from making any further recoveries.

The petitioner’s husband, a govt employee, died in service in 2003. After that, a family pension was sanctioned in favour of the petitioner through a pension payment order issued by Delhi govt and disbursed through an SBI branch.

However, in one such payout, the woman noticed a sharp reduction in her monthly pension and was informed that an excess pension amounting to over Rs 2.5 lakh had allegedly been paid due to a wrong “enhance date” in the pension records.

SBI later recalculated the alleged excess amount at Rs 3.6 lakh and began monthly deductions from her pension. Distraught, she challenged the recovery, arguing she had neither furnished false information nor played any role in the alleged overpayment and that the deductions had been initiated unilaterally without prior notice.

HC agreed with her and said, “There is nothing on record to suggest that the petitioner knew, or ought reasonably to have known, that she was receiving amounts beyond her lawful entitlement.” Observing that the petitioner had “no role in configuring the software or dates” and could not reasonably be expected to detect errors in the bank’s internal calculations, it faulted SBI for initiating the recovery without furnishing the details of the alleged overpayment or the proposed mode of recovery to the petitioner.