Allahabad High Court rules bank cannot debit widow's account for husband's loan

The Allahabad High Court has ruled that banks cannot unilaterally debit a surviving spouse's independent accounts to settle the outstanding personal loans of a deceased borrower.

In the case of Ms. Neha Mishra v. Reserve Bank of India, the court addressed a dispute where the State Bank of India (SBI) debited nearly ₹20 lakh from a widow's fixed deposit to repay a ₹15 lakh personal loan taken by her late husband. The court determined that because the wife was not a co-borrower, guarantor, or surety, there was no contractual relationship or privity of contract between her and the bank.

The ruling emphasizes the distinction between a creditor's right to pursue remedies against a deceased borrower's estate and the unlawful appropriation of funds belonging independently to a legal heir.