C. H. Mohammedali and others v. Registrar of Co-operative Societies, Thiruvananthapuram; Malappuram District Co-operative Bank Ltd. and its Concurrent Auditor

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR** **FRIDAY, THE 4TH NOVEMBER 2011 / 13TH KARTHIKA 1933** **WP(C).No. 26300 of 2010(J)** **---------------------------------------** ## **PETITIONER(S):** - **-------------------------** **1. C.H.MOHAMMEDALI ,S/O.SAIDALAVI,AGED 59 YEARS, MEHFIL,KADAMBODE P.O,MANJERI-VIA,MALAPPURAM DISTRICT,PIN -676 121.** **2. A.K.AHAMMEDKUTTY,THULLATH HOUSE,** - **P.O IRINGALLUR,VENGARA-VIA,MALAPPURAM .PIN-676 304.** **3. T.GOPALAKRISHNAN,ARCHANA,KULAKKATTUCHALI.P.O., CHELAMBRA-VIA,MALAPPURAM.PIN- 673 634.** **4. K.M.SETHUMADHAVAN,KRISHNANJALI, PO- ANAMANGAD,MALAPPURAM .PIN-679 357.** **BY ADV. SRI.GEORGE POONTHOTTAM** ## **RESPONDENT(S):** - **----------------------------** **1. THE REGISTRAR OF CO-OPERATIVE SOCIETIES,THIRUVANANTHAPURAM.PIN-695 001** **2. THE CONCURRENT AUDITOR,MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD., HEAD OFFICE, MALAPPURAM-PIN-676 505.** **3. THE MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD., MALAPPURAM- 676 505,REPRESENTED BY THE GENERAL MANAGER.** **R1 & R2 BY GOVERNMENT PLEADER SRI.SANEER.P.M R3 BY ADV. SRI.P.N.MOHANAN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **WP(C)NO.26300/2010** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **P1 COPY OF THE PROCEEDINGS NO.PG/A/2009-2010 DATED 25/7/2009. P2 COPY OF THE CIRCULAR NO.PG/AI/2010-2011 DATED 30/7/2010. P3 COPY OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31/03/2010. RESPONDENT'S EXHIBITS:** **R3(A): COPY OF THE RESOLUTION NO.10 OF THE MANAGING COMMITTEE.** **R3(B),(C),(D),(E),(F): COPY OF THE SUB RULES AND COPIES OF THE APPLICATION FORMS SIGNED BY THE FOUR PETITIONERS.** **R3(G): COPY OF THE CIRCULAR DATED 18/2009 DATED DATED 7/5/2009. R3(H),(I),(J),(K): COPY OF THE SAID CIRCULARS 1/2010 DATED 4/1/2010, 4/2010 DATED 4/2/2010, 21/2010 DATED 16/4/2010 AND 36/2010 DATED 24/7/2010.** **R3(L): COPY OF THE CIRCULAR 25/09 DATED 25/3/2009.** **R3(M): COPY OF THE CIRCULAR 51/2010 OF THE REGISTRAR.** **R3(N): COPY OF THE COMPARATIVE ANALYSIS OF PROFIT AND LOSS ACCOUNT OF THE YEAR ENDING 31/3/2009 AND 31/3/2010.** **/TRUE COPY/** **P.S.TO.JUDGE** **sts** ## **C.T.RAVIKUMAR, J.** ---------------------------- ## W.P.(C)No.26300 of 2010 ---------------------------Dated 4[th] November, 2011 ## **JUDGMENT** The petitioners who are retirees from the service of Malabar District Co-operative Bank (for short `MDC Bank') filed this writ petition with the following prayers:- - _“(i) issue a writ of certiorari calling for the records leading to objection raised by the 2[nd] respondent as regards the implementation of Ext.P1 scheme and to pass appropriate orders in the interest of justice._ - _(ii) issue a writ declaring that as the bylaws of the 3[rd] respondent Bank especially clause 2(j) having provided the introduction of schemes for the benefit of employees or ex-employees of the Banks a further permission is not required to be obtained from the Registrar as wrongly understood by the 2[nd] respondent._ - _(iii) Issue a writ, order or direction commanding the 1[st] respondent to issue necessary orders for the continuance of Ext.P1 scheme by the 3[rd] respondent in view of the requisition given by the Bank in that regard.”_ 2. The circumstances that constrained the petitioners to approach this Court seeking for the aforesaid reliefs required a succinct narration. The MDC Bank has admittedly bye-laws approved and registered by the first respondent, the Registrar of Co-operative Societies. Clause 2(j) therein is relevant for the purpose of deciding the issues involved in this writ petition. It is contended that in tune with WP(C).No.26300/2010 2 clause 2(j) that provides for establishing and supporting or aiding in the establishment and support or associations, institutions, funds trusts and conveniences calculated to benefit the ex-employees of the MDC Bank or the dependents or connections of such persons, the third respondent introduced MDC Bank Employees Post Recruitment Welfare Scheme (for short `the Scheme'), as per Ext.P1. The relevant conditions pertaining deposit under the Scheme are as follows:- - “1) ജ�വനക�ര�ട� സ�വന വ�ര�മ�വ�രത�ല ലഭ�ക�ന ഗ��റ~]റ�, ല�വ� ��ലറ�, ടവലട�യര �ണ� എന�വ മ�ഗ!ടമ ഈ സ#മ ന�സ#പ പദ!�യ�ല സ&ര�ന!�ന� ഉപസയ���ക�ന അനOവദ�ക�കയ�ള-. - 2) ഇങടന ന�സ#പ�ക�വ�ന ഏറവ�3 & �ര�ങ�യ �3ഖ5 ഒര� ല#3 ര-പയ�3 അ!�ന� മ�കള�ല 50,000/- ര-പയ�ട� ��ണ�!ങള എന ഗകമത�ല പരമ�വധ� 8 ല#3 ര-പയ�മ�ണ�. 50,000/- ര-പയ�ട� ��ണ�!ങള�യ� സ#മ ന�സ#പ രശ�!�കള ഇഷC� ട&യ�ന!�ണ�. - 3) ഓസര� 50,000/- ര-പയ�ട� ന�സ#പത�ന�3 ലഭ�ക�ന പരമ�വധ� ആന�ക-ലC3 625/- ക. ആയ�ര�ക�3. - 4) ന�സ#പ ക�ല�വധ� 10 വരഷമ�യ�ര�ക�3. - 8) സ�വനത�ല ന�ന� പ�ര�ഞ !�യ!�യ�ട� ട!�ട��ത ദ�വ�3 മ�!ല 90 ദ�വ�ത�നക3 ഈ പദ!�യ�ല സ&സരണ!�ണ�. എന�ല പദ!� ന�പ�ല�ക�ന!�ന� മ�ന� സ�വനത�ല ന�ന� വ�രമ�ച�ട �ളവരക� പദ!�യ�ട� ഗപ�ര3ഭ !�യ!� മ�!ല 90 ദ�വ�3 വടര ഈ സ#മ പദ!�യ�ല സ&ര �ന!�ന� അവ� ര- മ�ണ�യ�ര�ക�3. �3ഖ5 ന�സ#പ�ക�ന!�ന� ഇ!�ന�യ� WP(C).No.26300/2010 3 ഗപസ!Cക3 !യ�റ�ക�യ�ട�ള അസപ#� സ��റ3 പ-ര�പ�ച� ടPസQ�����ല �മരപ�സകണ!�ണ�. - 10) അ!C�വശC �നരഭങള�ല ന�സ#പ !�യ!� മ�!ല 3 മ��ത�ന� സശഷ3 ന�സ#പകന� 50,000/- ര-പയ�ട� ��ണ�! �3ഖ5യ �ള ന�സ#പങള പ�നവല� - ക�വ�ന!�ണ�. - 13) ന�സ#പത�ല ന�ന� �3ഖ5 ക�ല�വധ�ക� മ�ന� പ�നവല�ക�ന!�ന� ഗപ��ഡന �ടനറ അന �മ!� വ�ങ�യ�ര�സകണ!�ണ�. ഇങ�ടന പ�നവല�ക �ന �3ഖ5യ�ട� പ �നര ന�സ#പ3 ന�ത�ന അന�വദ�ക�ന!ല.” 3. Ext.P1 would reveal that the Scheme was to commence its operation on 12.8.2009 and admittedly, it did commence its operation from that date. Lured by the lucrative conditions in Ext.P1 Scheme, the petitioners and certain other retired employees of the MDC Bank joined the Scheme on their retirement from its service and effected fixed deposits in terms of the Scheme. Later, the Concurrent Auditor of the MDC Bank objected the Scheme and transferred the entire amount deposited under the Scheme and interest accrued to the reserve account, it is contended. In the light of the said objection, the Board of Directors of the MDC Bank decided to discontinue the Scheme with effect from 26.7.2010 till approval is granted for the Scheme by the Registrar. Further it was decided to pay interest to the members of the Scheme WP(C).No.26300/2010 4 only up to 1.8.2010. It was also decided to inform the members of the Scheme to withdraw deposits under the Scheme before 15.8.2010 with a caution that in case of failure the amount in deposit would be kept in the suspense account that allows no interest to the depositors. In fact, in tune with the said decision Ext.P2 communication was given to each of the petitioners. As per Ext.P2, they were required either to withdraw the deposited amount in terms of the circular before 15.8.2010 or effect redeposit of the amount in terms of the circular. 4. Evidently, the objection of the Concurrent Auditor is founded on the fact that the Scheme was not approved by the Registrar and the interest payable to the depositors under the Scheme is higher than the interest fixed by the first respondent for deposits with Cooperative banks and thus became payable to such depositors. The contention of the petitioners is that there is no legal basis for the aforesaid objection raised by the 2[nd] respondent, the Concurrent Auditor, mainly for the reason that the bye-laws of the Bank was approved and registered by the Registrar and the Scheme is envisaged under Clause 2 (j) of the said approved bye-laws. When that be the position, there can be no legal requirement to obtain a further sanction for commencing a scheme as envisaged under Clause 2(j) of the bye-laws, it is contended. WP(C).No.26300/2010 5 It is also contended that the MDC Bank used to report such actions concerned with its business unfailingly to the Registrar, even if such action is in tune with the bye-laws and therefore, the sanction sought for the scheme is only procedural. Admittedly, the deposits were received from the petitioners under the Scheme for a period of 10 years. It was not mentioned in the Scheme that the amount in deposit would be returned prematurely in case of non-receipt of approval from the Registrar. The petitioners were not made known of any such requirement viz., sanction from the Registrar for the scheme. Therefore, it is contended that the MDC Bank is estopped from withdrawing the representation given as per Ext.P1 merely based on the unsustainable objection of the Concurrent Auditor as mentioned above. According to the petitioners, the MDC Bank is having a duty and obligation to take up the matter further with the Registrar or to prefer an appeal against the decision of the Concurrent Auditor without yielding to his objection discernible from Ext.P2. In short, the petitioners are aggrieved by the decision in Ext.P2. 5. Separate counter affidavits were filed by respondents 2 and 3. They contend that the writ petition is not maintainable. The specific contention of the third respondent MDC Bank is that the Scheme WP(C).No.26300/2010 6 framed by it cannot be enforced under Article 226 of the Constitution of India and as such this writ petition is not maintainable. 6. Admittedly, the Scheme is not yet approved by the Registrar of Co-operative Societies. Indisputably, the bye-laws of the MDC Bank approved and registered by the Registrar contains the following as Clause 2(j):- - _“2(j):- Establishing and supporting or aiding in the establishment and support or associations, institutions, funds trusts and conveniences calculated to benefit employees or ex-employees of the Co-operative Bank or the dependents or connections of such persons, granting pensions and allowances and making payments towards insurance; subscribing to or guaranteeing moneys for charitable or benevolent objects or for any exhibition or for any public, general or useful object.”_ The specific contention of the petitioners is that the Scheme framed as per Ext.P1 is one envisaged under Clause 2(j) of the bye-laws of the MDC Bank. The third respondent would admit that such a Scheme was prepared as per Ext.P1 and it was enforced, but without getting permission from the Registrar. At the same time, the tenor of the contention of the third respondent taken in the counter affidavit would suggest that the provision itself is vague, according to the Bank and, therefore, virtually the third respondent is not asserting that it is a Scheme that squarely falls and permissible under Clause 2(j) of the bye- WP(C).No.26300/2010 7 laws. It is also contended by the third respondent that in terms of Rule 180 of the Kerala Co-operative Societies Rules (for short `the Rules') the society cannot do anything which is expressly provided without the previous sanction of the Registrar. Rule 180 of the Rules reads thus:- _“180. Societies not to act without previous sanction of Registrar in certain matters:- No society shall do any act which is not expressly provided for by the bye-laws of such society without the previous express sanction of the Registrar for the same.”_ It is stated in the counter affidavit by the 3[rd] respondent that 63 employees of the MDC Bank joined the Scheme on their retirement and the total deposit in the Scheme is Rs.333 lakhs and the interest paid to the depositors is Rs.14,00,625/-. The rate of interest payable under the Scheme is 15%. The MDC Bank is accepting deposits at 8.5% from the public. The third respondent also raised contentions thereunder relying on Clause 28(xiii) of the bye-laws that in terms of Clause 28 the Scheme was submitted to the Registrar of Co-operative Societies on 11.12.2009. It is the contention of the 3[rd] respondent that the Scheme in question is, in fact, a new deposit scheme providing payment of excess interest at the rate of 15% which is higher than the rates fixed by the Registrar for deposits. Clause 28(xiii) empowers the Board of Directors of the MDC Bank to frame regulations (which should be entered in the minutes book WP(C).No.26300/2010 8 of the Bank) for the conduct of the business of the Bank consistent with the Act, Rules and the bye-laws subject to the approval of the Registrar. A perusal of Ext.P1 would reveal that it is not possible to contend that the Scheme provided thereunder is absolutely unconnected with the business of the Bank. At any rate, it cannot be construed as a mere convenience calculated to benefit the ex-employees of the MDC Bank. Therefore, I am of the view that, in strict sense, though it is confined only to a particular group of persons, it is a regulation framed by the Board of Directors for the conduct of business of the Bank. Therefore, the question is whether it is consistent with the Act, Rules and the Byelaws ? Necessarily, such a matter has to be considered by the Registrar in the light of Clause 28(xiii) of the Bye-laws which reads thus:- _“_ _**28(xiii):** To frame regulations (which shall be entered in the minutes book of the Bank) for the conduct of the business of the Bank consistent with the Act, Rules and these Bye Laws subject to the approval of the Registrar)_ .” In the context of the contentions, it is apposite to refer to the very contention of the petitioners in paragraph 4 of the writ petition. It reads thus:- _“It was the duty and obligation of the 3[rd] respondent Bank to take up the matter further with the Registrar or preferred appeal as against the decision of the_ WP(C).No.26300/2010 9 _concurrent auditor without surrendering to the objection in the manner as reflected in Ext.P2.”_ The above extracted statement would reveal that even according to the petitioners, the matter is to be taken up before the Registrar by the third respondent Bank. In fact, the third respondent Bank has already approached the first respondent Registrar seeking approval for Ext.P1 Scheme. At the same time, they have not approached the first respondent challenging the decision in Ext.P2. However, there cannot be any doubt with respect to the fact that the whole issue could be resolved if the Registrar bestows serious consideration into the question as to whether the Scheme in question framed as per Ext.P1 is consistent with the Act, Rules and the Bye-laws and as such approvable. Needless to say that if the answer is in the positive, there cannot be any further impediment for the continuance of the Scheme. However, if the answer is in the negative, the aggrieved parties have to work out their remedies, in accordance with law. That does not mean that this writ petition should be left like that. Despite the fixation of a cut off date viz., 15.8.2010 for withdrawing deposits and a serious consequence sounded on its failure the petitioners prefer to approach this Court only on 18.8.2010. 8. A perusal of the prayers made by the petitioners would WP(C).No.26300/2010 10 reveal that instead of challenging the decision in Ext.P2 what they have sought for is for a declaration that for the introduction of the Scheme in question for the benefit of ex-employees or for their dependents a further permission is not required to be obtained from the Registrar in view of clause 2(j) of the bye-laws and for a consequential issuance of a direction commanding the first respondent to issue necessary orders for the continuance of Ext.P1 Scheme by the third respondent in view of the requisition given by the Bank in that regard. As already noticed hereinbefore, in view of clause 28(xiii) and also Rule 180 of the KCS Rules the question whether Ext.P1 Scheme is one which is consistent with the Act, Rules and Bye-laws has to be looked into by the Registrar. No doubt, the Registrar is empowered to look into the said question. It is the common case that the third respondent Bank has already approached the first respondent with a request to approve the Scheme framed as per Ext.P1. It is true that before getting such an approval they have operated the Scheme and the petitioners and certain others have already effected deposits in terms of Ext.P1 Scheme. It was in the said circumstances that a decision was taken as is obvious from Ext.P2. A scanning of the decision in Ext.P2 would reveal that it is not a decision to stop the Scheme as such and, in fact, it is a decision to discontinue WP(C).No.26300/2010 11 with the Scheme for the time being and subject to the decision of the Registrar in the matter of its approval. Therefore, there can be no doubt that if permission is granted by the Registrar for Ext.P1 Scheme, the Scheme could go on. It is settled position of law that the bye-laws of a Bank is not having any statutory force and, in fact, it is in the nature of Articles of Association of a company. At the same time, there can be no doubt with respect to the position that the bye-laws of a society constitute a contract not only between the society and its members as also between the members inter se. But, the core question to be decided is, as already mentioned, whether the Scheme in question is consistent with the Act, Rules as also the Bye-laws. The contentions of the 3[rd] respondent in paragraph 7 of the counter affidavit would reveal that the Bank is not asserting that it is a Scheme falling squarely under Clause 2(j). That is why they seek for a look into the matter by the first respondent Registrar by seeking for approval of Ext.P1 Scheme. I cannot find any illegality in the said action on the part of the third respondent Bank in approaching the first respondent Registrar seeking for approval of the Scheme in question in the above mentioned circumstances. The third respondent is accepting deposits at 8.5% from the public. Obviously, the declared interest for the deposit under the WP(C).No.26300/2010 12 Scheme is 15% which is admittedly higher by 4% than the interest payable for the fixed deposits of senior citizens, even according to the petitioners. It is all these attending circumstances that persuaded me to come to the conclusion that the whole issue as to whether the Scheme framed as per Ext.P1 is consistent with the Act, Rules and Bye-laws requires a consideration by the Registrar. 9. Evidently, the apprehension of the petitioners is that the entire deposit made by them would be kept in the suspense account and thereby they would be deprived of the benefit of interest. In this context, it is relevant to refer to the statement made by the 2[nd] respondent in paragraph 5 of the counter affidavit filed by the 2[nd] respondent. It is stated thus:- _“The contention of the petitioner that the Concurrent Auditor of the Bank as subjected to the said scheme and transferred the entire deposits and interest to reserve account and the same will not be taken for the purpose of accounting which in turn will result in loss for the bank as per the audited balance sheet is false. The auditor has objected the deposit outstanding as on 31.3.2010 Rs.2,89,00,000/- and transferred the amount to suspense liability account and no reserve was created for the amount which results loss of the Bank. Only interest - paid on this deposit Rs.12,04,373/ was objected and kept under suspense asset account and reserve created for the same amount. Being interest payment is an expenditure, the reserves made for the amount kept_ WP(C).No.26300/2010 13 _under suspense assets account does not result further loss to Bank.”_ _(emphasis supplied)_ Thus, it is obvious that going by the contentions of the second respondent, only the interest paid on the deposits in question viz., 12,04,375/- was objected and kept under suspense account and reserve created for the same amount. One cannot consider the apprehension of the petitioners as stated above as one without any substance or basis even after perusing the said statement. It is admitted in the counter affidavit filed by the 3[rd] respondent that the petitioners and certain other retired employees of the Bank have effected deposits under the Scheme and an amount of Rs.333 lakhs have been deposited altogether under the Scheme. The huge deposit thus made itself would justify the contention of the petitioners that they have been lured by the lucrative conditions in Ext.P1 Scheme. Whatever be the stand of the 2[nd] respondent Ext.P2 would reveal that it sounded a caution as hereunder:- “ 15.08.2010 ക-��യ ക�ലയളവ�ല മ�ഗ!ടമ ഈ ന�സ#പ പദ!�യ�ല �-&ന 2 ഗപക�ര3 ന�ശയ�ച�ര�ന ന�രക�ല അധ�ക പല�ശ (15%) അന�വദ�സകണ!�ള�. ഈ ക�രCത�ല ��ന�യ¡ /ശ�ഖ� മ�സനജരമ�ര അ!�വ ഗശദ പ�ലരസതണ!�3 ഏട !Ë]ല�3 വ�ധത�ല�ള വ�ഴ�& വര�ത�ന പ#3 ആയ!�ന� ��ന�യര� /ശ�ഖ� മ�സനജര മ�ഗ!3 ഉതരവ�ദ�കള�യ�ര�ക �ന!�മ�ണ�. 15.08.2010 ന�ള�ല ഇ! � �3ബന�ച ന�പ��കള പ-രത�കര�സകണ!�ടണന�3 അ!�ന � സശഷ3 WP(C).No.26300/2010 14 ന�സ#പങള �3ഖ5 ബ�ക� ന�ലക�ന�ടണË]ല അ!� 15.08.2010 ന� !ടന suspense A/c സലക� മസറണ!�ടണന�3 അ!�ന� പല�ശ നലസകണ!�ടലന�3 അറ�യ�ക�ന�. ന�സ#പ പദ!� ഗപക�രമ �ള മറ � വCവസകള മ�റമ�ല�ട! !��ര�ന!�ണ�. 16.08.2010 ന� ഈ പദ!� ഗപക�ര3 ശ�ഖകള�ല�ള ന�സ#പങള�ട� വ�വര3 ��ന�യര /ശ�ഖ� മ�സനജരമ�ര ടPസQ�����സലക� അറ�യ�ടകണ!�ണ�. ” True that in Ext.P1 Clause 14 has been incorporated as hereunder:- “ഈ സ#മ ന�സ#പ പദ!�യ�ട� വCവസകള�ല മ�റ3 വര�ത�ന!�സന� പദ!� അവ��ന�പ�ക �ന!�സന� ഭരണ�മ�!�ക� പ-ര]മ�യ അധ�ക�ര3 ഉണ�യ�ര�ക�ന!�ണ�.” A perusal of Ext.P2 would undoubtedly show that the 3[rd] respondent has not actually stopped or abandoned the Scheme for ever whilst it was only decided to discontinue the same on 26.7.2010 temporarily till the approval from the Registrar is obtained for the Scheme. It is pertinent to note that even thereafter it was decided to grant interest at the rate of 15% up to 15.8.2010. In Ext.P2 after taking the decision to discontinue the Scheme temporarily from 26.7.2010 it was further decided thus:- “mLË]ടല റ�ടസയരഡ� ജ�വനക�ര�യ! � ടക�ണ� ഒര � ഗപസ!Cക പര��ണന നലക� ന�ലവ�ല�ള ജ�വനക�ര�ട� ന�സ#പങളക� നലക�ന പല�ശ ന�രക�സനക�ള ഒര� ശ!മ�ന3 അധ�ക പല�ശ ഈ പദ!� ഗപക�ര3 �^�കര�ച ന�സ#പങളക� 01/08/2010 മ�!ല നലക �ന!�ന�3 !�ര�മ�ന�ച!�യ� അറ�യ�ച� ടക�ള�ന�.” WP(C).No.26300/2010 15 At the same time, the last paragraph in Ext.P2 would reveal that directions have been given to complete the steps in pursuance of the decision in Ext.P2 before 15.8.2010 and thereafter, to transfer the amount remaining in deposit to the suspense account on 15.8.2010 itself and not to pay interest thereafter, for such deposits made under the Scheme. 10. Admittedly, the deposits under the Scheme were received for a period of 10 years. Thus, it is a fixed deposit for a specific tenure. It is also admitted that the petitioners effected the deposits under the Scheme in terms of Ext.P1. Ext.P2 would reveal that based on the objection by the 2[nd] respondent, it was unilaterally decided to transfer the deposits made by the petitioners and others to suspense account by the third respondent. True that, the petitioners and the other depositors were given an option to withdraw the deposits or to effect redeposit in terms of the decision in Ext.P2. Ext.P2 would reveal that, in fact, no final decision to stop the Scheme was taken by the 3[rd] respondent and the decision is only to discontinue, pro tempore, subject to the decision of the first respondent on the question of approval of Ext.P1 Scheme. As already noticed, the contention of the respondents is that this writ petition is not maintainable. I have already found that the WP(C).No.26300/2010 16 issue whether Ext.P1 Scheme is approvable or not is a matter to be decided by the first respondent. The apprehension of the petitioners, in fact, the grievances of the petitioners, is whether the decision in Ext.P2 to transfer the deposits to the suspense account would deprive them interest on the deposited amount. Evidently, that was done based on a decision unilaterally taken by the 3[rd] respondent. The respondents may contend that Clause 14 permits for taking such decisions. At the same time, it is evident that no decision to stop the Scheme as such has been taken so far by the 3[rd] respondent and, at the same time, they have sought for granting approval for the Scheme. That apart, it is evident from Ext.P2 that the 3[rd] respondent has also decided to grant interest to the deposits, at a rate which is higher by 1% which is payable to the deposits made by its staff. Though reference has been made regarding such a decision in the first part of Ext.P2 the last part of the said circular would reveal that a further decision was taken to transfer the deposits which were not withdrawn based on Ext.P2 to the suspense account and thereafter not to grant interest. In the light of the decision of the Hon'ble Apex Court in _**Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust and others**_ v. _**V.R.Rudani and others**_ (AIR 1989 SC 1607) the respondents WP(C).No.26300/2010 17 cannot contend that no directions could be issued to the respondents in regard to the issues involved in this case. The 3[rd] respondent cannot say that the issue involves is not pertaining to its public duty. The issue is connected with the banking activities of the 3[rd] respondent. The depositors were offered with a higher rate of interest in terms of Ext.P1 and lured by the same the huge deposit to the tune of Rs.333 lakhs have been made by the petitioners and others similarly situated. In _**M/s. Hyderabad Commercials**_ v. _**Indian Bank**_ (AIR 1991 S.C. 247) it was held by the Hon'ble Apex Court that a direction to recredit could be given in writ proceedings in case of an unauthorized transfer of huge amount from one account to another, of course, by Nationalised Bank. In fact, I need not go into that question any further in view of the decision of the 3[rd] respondent discernible from Ext.P2. Going by the admitted facts, the Scheme in Ext.P1 was enforced on 12.8.2009 and it was in force till the specific date mentioned in Ext.P2 viz., 26.7.2010. Even thereafter, the 3[rd] respondent took a decision to grant interest at the rate fixed as per Ext.P1 till 15.8.2010 and thereafter, to pay the interest at a lesser rate which is higher by 1% than the rate permissible for deposits made by the staff of MDC Bank. In terms of the decision taken by the 3[rd] respondent, as is revealed from paragraph 3 of Ext.P2, I am of the considered view WP(C).No.26300/2010 18 that there is absolutely no justification for transferring the deposits made by the petitioners to the suspense account so as to render the deposits incapable of accruing interest. Admittedly, in respect of the deposits made by the petitioners the date of maturity is yet to be reached. No provision has been brought to my notice by the respondents to show that they could legally deprive the petitioners herein, interest for their deposits which they made under Ext.P1 Scheme, be it at a rate as offered as per Ext.P1 or at a lesser rate based on the decision discernible from Ext.P2. Even according to the respondents, apart from the decision to reduce the interest, in all other respects, all the other conditions in Ext.P1 Scheme would continue. It is stated in Ext.P2 as hereunder:- |“5.08.2010 ന�ള�ല ഇ!<br>� �3ബന�ച<br>ന�പ��കള| |---| |പ-രത�കര�സകണ!�ടണന�3<br>അ!�ന<br>� സശഷ3| |ന�സ#പങള �3ഖ5 ബ�ക� ന�ലക�ന�ടണ<br>Ë]<br>ല അ!�| |15.08.2010 ന�!ടന<br>suspense A/c<br>സലക�| |മസറണ!�ടണന�3 അ!�ന�പല�ശ നലസകണ!�ടലന�3| |അറ�യ�ക�ന�. <br>ന�സ#പ പദ!�<br>ഗപക�രമ<br>�ള മറ<br>�| |വCവസകള മ�റമ�ല�ട! !��ര�ന!�ണ�<br>. ”| ## (emphasis supplied) If all other conditions of Ext.P1 Scheme would continue, how can the 3[rd] respondent transfer the deposits to suspense account to deprive the petitioners interest on the deposit. The dispute could only be with WP(C).No.26300/2010 19 respect to the right of interest, rather, the rate of interest. Going by paragraph 3 of Ext.P2, the decision of the Bank is to grant interest for the deposits effected by the petitioners at a rate which is higher by 1% than the interest payable to the deposits made by the staff of MDC Bank. Therefore, the dispute would precipitate into one as to whether the 3[rd] respondent is liable to grant interest at the rate offered as per Ext.P1 in respect of the deposits made under Ext.P1 or only at the rate fixed as per the decision discernible from paragraph 3 of Ext.P2. When such a decision was taken by the 3[rd] respondent Bank, even without any interference by the authorities or by this Court, they are bound to recredit the transferred amount as fixed deposits and to grant interest to the fixed deposits made by the petitioners in terms of Ext.P1, based on the decision evident from paragraph 3 of Ext.P2. In the said circumstances, respondents 1 and 2 shall ensure that the deposits made by the petitioners in terms of Ext.P1 Scheme are re-credited to fixed deposits in such a manner to enable the petitioners to receive interest as offered by the 3[rd] respondent as per its decision evident from paragraph 3 of Ext.P2. Proper directions in that regard shall be issued by respondents 1 and 2 expeditiously, at any rate, within a period of three weeks from the date of receipt of a copy of this judgment. Needless to say that, the entitlement of the petitioners to WP(C).No.26300/2010 20 receive interest at the rate offered as per Ext.P1 would necessarily depend upon the decision of the first respondent on the question of approval of Ext.P1 Scheme. The 3[rd] respondent has already approached before the said authority . Therefore, there will be a further direction to the first respondent to consider whether Ext.P1 Scheme to the extent it pertains to the offer of a higher rate of interest viz., 15% is approvable or not, in terms of the Act, Rules and the Bye-laws or any other related enactments. A decision thereon shall be taken within a period of three months from the date of receipt of a copy of this judgment. Subject to the above, this writ petition is disposed of. Sd/- C.T.RAVIKUMAR Judge TKS