Delhi High Court tells co-operative bank to refund Rs 3.87 lakh cut from retiree's dues
The Delhi High Court dismissed Delhi State Cooperative Bank's appeal, upholding a decree to refund Rs 3,87,064 it deducted from a retired officer's dues over missing loan files.
Key points
- The Delhi High Court on 6 November 2026 dismissed Delhi State Cooperative Bank's appeal against a recovery decree won by a retired officer.
- The bank must refund Rs 3,87,064 with 6% interest from 30 August 2016 and 9% future interest until payment, as the trial court ordered.
- The court held the bank had to prove the deduction was justified, and noted its own witness admitted no enquiry was held against the officer.
Photo: MaxnaCarta / Wikimedia Commons, CC BY-SA 4.0 (cropped). Representational image.
The Delhi High Court on 6 November 2026 dismissed an appeal by Delhi State Cooperative Bank against a decree ordering it to refund Rs 3,87,064 it had deducted from a retired officer's dues. The court held that the bank had not proved the officer was responsible for loan files it said had gone missing.
What Happened
The officer joined the bank as a clerk on 11 October 1973 and retired as an assistant general manager on 31 May 2016. About three months after retirement, a bank letter dated 30 August 2016 informed him that Rs 3,87,064 had been deducted from his dues to cover loans whose files had gone missing at the bank's Moti Nagar branch, where he was posted as manager in October 2007.
He sued for recovery. On 16 September 2023 an Additional District Judge decreed the suit for Rs 3,87,064 with interest at 6% a year from 30 August 2016 until the decree, and future interest at 9% a year until payment. The bank appealed.
The High Court held that the suit did not need a separate declaration against the deduction letter, because the letter only informed the officer of the deduction, and it was for the bank to prove the deduction was justified. It noted that the bank's own witness admitted that no enquiry was conducted against the officer and that a branch manager has no role in recovering defaulted loans. The bank, the court said, did not place on record any of the letters it claimed to have sent seeking an explanation, or any enquiry report fixing responsibility, and the officer was allowed to retire without objection. It upheld the 9% future interest as within the trial court's discretion under Section 34 of the Code of Civil Procedure.
What It Means
The ruling confirms the decree: the bank must pay the deducted amount with interest at the rates the trial court set. For employees and retirees of banks, the judgment shows that the court expected the employer to prove, with records and an enquiry, any liability it charges against retirement dues. The court's judgment may be challenged before a higher court.
Source: High Court judgment
Sources & Citations
- High Court judgment — Delhi High Court