Karnataka High Court Limits Pension Deductions for Loan Repayment

The Karnataka High Court ruled that Canara Bank cannot deduct more than 50% of a retired employee's pension for loan repayments. The court stressed that pensions provide essential financial security and should not be fully used for debt unless in cases involving fraud or misconduct.

The Karnataka High Court has imposed a limit on how much Canara Bank can deduct from a retired employee's pension to recover loan dues, capping it at 50%.

The court underscored that pensions are crucial for retirees' financial security and should remain protected except in special cases involving fraud or misconduct.

Justice S G Pandit emphasized that the bank must adhere to rules protecting pensioners, aligning with Article 21 of the Indian Constitution, which secures the right to life and personal liberty.

The case involved Murugan O K, a retired Canara Bank worker, who challenged the bank's deduction of his entire pension.

The court recommended other legal avenues for dues recovery and noted that similar principles limit salary deductions for those still in employment.

(With inputs from agencies.)