The Madras High Court bench here has flayed the State Bank of India for overstepping its limit in recovering an educational loan provided to a retired commercial tax department employee’s daughter.

U. Ramu, a retired commercial department employee from Iyer Bungalow here, had moved the court alleging that the State Bank of India (SBI) had blocked his account, restraining the withdrawal of his monthly pension from the account, after he failed to repay the educational loan obtained for his daughter.

According to Mr Ramu’s counsel P. Subbiah, the petitioner received a monthly pension of Rs 13,000. Mr Ramu had obtained a loan of Rs 1.43 lakh for his daughter’s education from the SBI, Tallakulam branch, in 2002 by providing as collateral the original title deeds of three house plots, he added.

The counsel contended that the petitioner’s daughter did not get a job after the completion of her studies and got married.

Subsequently, Mr Ramu did not repay the loan, he added.

The bank issued a demand notice on December 18, 2009 asking the petitioner to repay Rs 1.90 lakh. The chairman of the Stressed Assets Resolution Centre filed a mortgage suit at the Second Additional Subordinate Court here to recover the loan from the petitioner and the case is pending, Mr Subbiah further said.

The bank authorities blocked the petitioner’s account from March 2013 because of which he is unable to withdraw money, the counsel alleged.

Mr Subbiah contended that the petitioner’s only source of income was his monthly pension.

"The bank had blocked the petitioner’s account with a malafide intention to force him to settle the educational loan. The bank had already withdrawn Rs 71,000 from the petitioner’s account", the counsel claimed.

"The petitioner has deposited the title deeds with the bank as security for the educational loan obtained. The bank should not have blocked the petitioner’s account", Justice S. Rajeswaran observed in his order.

While the bank was taking legal steps to recover the loan, the act of withholding the petitioner’s pension amount was not justifiable, the judge further noted.

"It is also stated by the petitioner that except the pension amount, he has no other source of income. In this case, the bank, in my opinion, has over-stepped its limits in interfering with the withdrawal of the pension amount of the petitioner", the judge ruled.

In his judgement, Justice Rajeswaran issued a direction forbearing the bank from blocking Mr Ramu’s account.

He further instructed the bank to refund Rs 71,000 drawn from Mr Ramu’s account without his consent in three weeks.

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