Recovery from a Widow Pensioner for Bank's Own Error is Arbitrary and Harsh: Punjab & Haryana High Court Quashes SBI Demand Notice

“Asking a widow to sign on dotted lines and later using that undertaking for recovery is exploitative; equity bars recovery when no misrepresentation or fraud is shown” – Punjab and Haryana High Court

Punjab and Haryana High Court delivered a significant judgment protecting the rights of vulnerable pensioners, quashing a demand notice issued by the State Bank of India seeking recovery of ₹6.5 lakhs in alleged excess family pension. Justice Kuldeep Tiwari held that forcing recovery from a widow solely dependent on family pension—especially due to the bank’s own error—would be harsh, inequitable, and contrary to established principles of justice and equity.

The Court ruled that “in the absence of fraud, misrepresentation or concealment by the pensioner, recovery of pension paid in excess over a decade ago cannot be permitted when it causes grave hardship.” The Court found the demand unsustainable in law, despite the petitioner having signed an undertaking authorising recovery.

“When Equity Is on the Widow’s Side, No Undertaking Can Justify Recovery”

The petitioner, Paramjit Kaur, was the widow of late Kesar Singh, a retired Special Secretary of the Punjab & Haryana High Court. After his death, she was paid enhanced family pension by SBI—designated as the disbursing authority—for over 11 years. However, in 2021, the bank raised a demand of ₹8,03,840 citing overpayment due to failure to revise the pension amount as per the Pension Payment Order (PPO), which clearly stipulated reduction of pension after 2010.

SBI argued that the petitioner had signed an undertaking in 2005 allowing the bank to recover excess amounts. However, the Court squarely rejected this defence, observing:

“Such undertakings obtained on dotted lines from retirees or their family members... amount to exploitation and cannot, by themselves, justify recovery.”

Justice Tiwari relied on a Division Bench judgment in Chief Postmaster General, Haryana v. Kavita Devi, where similar undertakings signed by widows were declared exploitative and unenforceable in equity.

Court Finds Recovery to Be a Result of SBI’s Own Error, Not Pensioner’s Fault

It was undisputed that the petitioner neither misrepresented any facts nor had any role in calculation or disbursal of the pension. The Court noted:

“There is no wrangle to the fact that there was no misrepresentation, fraud, concealment of any material information on the part of the petitioner, rather it was solely on account of an error on the part of the S.B.I.”

The Court rejected SBI’s reliance on Jagdev Singh (2016), where the Supreme Court had upheld recovery based on an undertaking. Justice Tiwari distinguished the case by observing that Jagdev Singh involved an in-service officer who had opted into a revised pay scale with a clear condition of refund. Here, however, the petitioner was a dependent widow, with no role in the pension process.

Court Applies Rafiq Masih and Thomas Daniel – Recovery from Pensioners Barred in Such Cases

The High Court found the facts squarely covered by the Supreme Court's decision in State of Punjab v. Rafiq Masih (2015) 4 SCC 334, which carved out exceptions where recovery from employees or pensioners would be impermissible. Relying on that precedent, Justice Tiwari stated:

“The petitioner is a widow in the twilight years of her life, solely dependent on meagre pension, and if recovery is permitted, it would cause hardship of such magnitude as would far outweigh the equitable balance of the SBI’s right to recover.”

Further reliance was placed on Thomas Daniel v. State of Kerala (2022), where the Supreme Court similarly restrained recovery from a pensioner who had no role in excess payment.

“No Employer-Employee Relationship – Bank’s Claim of Recovery Unsustainable”

SBI attempted to argue that it was merely a disbursing agency and not the petitioner’s employer, and hence entitled to recover excess disbursed amounts. However, the Court held that even if SBI was not the employer, it cannot recover amounts paid due to its own clerical lapse without assessing the hardship caused to the pensioner.

Justice Tiwari observed:

“Seeking recovery from a widow... would be manifestly harsh and inequitable. The recovery of ₹10,587/- and ₹11,851/- per month from her pension would leave her with virtually no means to survive.”

Court Orders Quashing of Demand – Allows Petitioner to Retain Amount Already Received

In its final relief, the High Court quashed the SBI’s demand notice only to the extent of the remaining outstanding recovery. It did not interfere with the amount of ₹1,52,010 already recovered but barred further deductions. The Court also clarified that the petitioner would henceforth be entitled only to pension strictly as per the PPO.

Justice Tiwari concluded:

“This Court finds no merit in the submissions advanced on behalf of the S.B.I. Accordingly, the present writ petition is allowed, and the impugned demand notice is set aside to the extent of the remaining outstanding recovery.”

Relief to Widows and Pensioners from Bureaucratic Injustice

This judgment is a reaffirmation of the judiciary’s commitment to protect vulnerable citizens—especially elderly pensioners—from arbitrary administrative actions. It sends a clear message that even when undertakings are signed, recovery cannot be enforced mechanically without balancing equity, fairness, and the impact on the pensioner’s livelihood.

The decision sets an important precedent for similar disputes where pensioners, particularly family pensioners, are sought to be burdened with recovery years after payments are made due to systemic or bank-level errors.

Date of Decision: 19 January 2026