E.N. Krishnankutty v. Kerala Co-operative Ombudsman, Kuruppampady Service Co-operative Bank Ltd. and Secretary, Kuruppampady Service Co-operative Bank Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 19[TH] DAY OF JULY 2024 / 28TH ASHADHA, 1946** **WP(C) NO. 19091 OF 2022** ## **PETITIONER:** **E.N. KRISHNANKUTTY, AGED 63 YEARS, SON OF NARAYANAN KOODAPPAATTU VEEDU, MANNOOR, KEEZHILLAM P.O. PERUMBAVUR, ERNAKULAM DISTRICT, PIN – 683541** **BY ADVS. P.K.SREEVALSAKRISHNAN S.UNNIKRISHNAN (NELLAD) K.R.PRATHISH** ## **RESPONDENTS:** - **1 KERALA COOPERATIVE OMBUDSMAN, T.C. 28/995(2), 1ST FLOOR, KAITHAMUKKU, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY, PIN - 695001** - **2 KURUPPAMPADY SERVICE CO-OPERATIVE BANK LTD. REG.E-257, KURUPPAMPADY P.O, ERNAKULAM, REPRESENTED BY ITS SECRETARY, PIN - 683545** - **3 THE SECRETARY, KURUPPAMPADY SERVICE CO-OPERATIVE BANK LTD. REG.E/257, KURUPPAMPADY, P.O ERNAKULAM, PIN – 683545** **BY ADVS. P.K.VIJAYAMOHANAN AISWARYA V.S.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.19091/2022 : 2 : ## **JUDGMENT** Dated this the 19[th] day of July, 2024 The petitioner is aggrieved by Ext.P7 order passed by the 1[st] respondent-Kerala Co-operative Ombudsman. 2. The petitioner states that the 2[nd] respondentKuruppampady Service Co-operative Bank Ltd. introduced 20 years-Vardhini Scheme in the year 1999. The Scheme offered compound interest for One Time Fixed Deposit. The petitioner joined the Scheme for her two daughter and deposited ₹10,000/- each. As per the Scheme, the petitioner has to get ₹2,08,000/- each in two deposits, in March, 2019. 3. The petitioner states that when the petitioner approached the 2[nd] respondent-Bank after the maturity period and demanded the maturity amount, the petitioner W.P.(C) No.19091/2022 : 3 : was informed that the Scheme was actually stopped in the year 2006 and hence the petitioner is entitled to get only 8% interest for the Fixed Deposit. The petitioner filed a complaint before the Ombudsman. The Ombudsman refused the complaint finding that the petitioner is entitled to get only 8% interest for the said deposit. It is being aggrieved by the order of the Ombudsman that the petitioner has filed this writ petition. 4. The counsel for the petitioner stated that the 1[st] respondent has passed Ext.P7 order without considering the fact that the respondents have no right to change the Scheme offered to the petitioner. Ext.P7 order was passed stating that the High Court has already passed a similar order as per Ext.P8 to release amount to the petitioner at the agreed rate for the period till 30.09.2006 and thereafter at 8% interest. The counsel for the petitioner pointed out that the petitioner in the said writ petition has agreed for the said judgment and Ext.P8 judgment was passed on consensus. W.P.(C) No.19091/2022 : 4 : 5. Standing Counsel entered appearance on behalf of the 2[nd] respondent-Bank and resisted the writ petition. The Standing Counsel pointed out that in the year 2006, the Government issued Circulars and orders prohibiting conducting of such long term Deposit Schemes at a higher rate of interest/compound rate of interest. Consequent to the decision taken by the Government, the 2[nd] respondent has passed Ext.R2(a) resolution amending the Scheme. As per Ext.R2(a) amended Scheme, the depositors of Fixed Deposit are entitled to only reduced rate of interest. The amendment to the Scheme was notified to all deposit holders including the petitioner. Therefore, the petitioner cannot be heard to contend that he is entitled to the higher rate of interest. 6. Standing Counsel for the respondents further relied on the judgment of this Court in W.P.(C) No.33842 of 2019. It is pointed out that the said judgment is related to the very same Bank. This Court directed to pay the deposit amount to the petitioner therein calculating interest at the W.P.(C) No.19091/2022 : 5 : admissible rate as per the Scheme and interest for the period subsequent to 30.09.2006 till the date of payment, at 8% per annum. The petitioner cannot opt for a higher rate of interest. 7. I have heard the learned counsel for the petitioner and the learned Standing Counsel appearing for respondents 2 and 3. 8. It is not in dispute that the petitioner had deposited ₹20,000/- in two separate deposits for a period of 20 years. The rate of interest was reduced by the Bank purportedly in pursuance of certain directions of the Government of Kerala. Ext.R2(a) is the amendment effected to the Scheme. It is the case of respondents 2 and 3 that the petitioner can acquire for maturity value only taking note of Ext.R2(a) amendment. 9. From the pleadings in the writ petition, I find that a Division Bench of this Court has considered the power of the Registrar to regulate the Schemes run by the Co-operative Banks. In identical situation, the Division W.P.(C) No.19091/2022 : 6 : Bench of this Court in _**Paravur S.N.V. Regional Co-operative Bank Ltd. v. Kerala Co-operative Ombudsman** [2013 (4) KLT 520]_ held that the Bank is bound by the resolutions of the General Body. The depositors can be members or non-members. Nonmembers are anyway bound by the resolution of the General Body of which they are not members. If the Bank treat members and non-members differently in the matter of deposits that would amount to discrimination as well. 10. The Division Bench held that reduction of rate of interest of a Fixed Deposit unilaterally by a Co-operative Bank after the contract entered into between the Bank and a depositor would be illegal. 11. In view of the law laid down by the Division Bench of this Court in _**Paravur S.N.V. Regional Cooperative Bank Ltd.**_ (supra), the petitioner is entitled to succeed. The writ petition is accordingly allowed. Ext.P7 order of the Ombudsman is set aside. The 2[nd] and 3[rd] W.P.(C) No.19091/2022 : 7 : respondents are directed to release the actual matured amount of ₹4,16,000/- along with delayed interest at the rate of 6% to the petitioner. Disbursement of the amount shall be made within a period of one month. Sd/- **N. NAGARESH JUDGE** SR W.P.(C) No.19091/2022 : 8 : ## **APPENDIX OF WP(C) 19091/2022** ## **PETITIONER'S EXHIBITS:** - **Exhibit P1 TRUE COPY OF THE RECEIPT DATED 27-032019 OF RS.10,000/- DEPOSITED IN THE NAME OF ATHIRA, ISSUED BY THE 2ND RESPONDENT** - **Exhibit P2 TRUE COPY OF THE RECEIPT DATED 27-032019 OF RS.10,000/- DEPOSITED IN THE NAME OF AKHILA, ISSUED BY THE 2ND RESPONDENT** - **Exhibit P3 TRUE COPY OF THE LETTER OF REQUEST BY THE PETITIONER DATED 12-04-2019** - **Exhibit P4 TRUE COPY OF THE REPLY LETTER DATED 08-05-2019 ISSUED BY THE 3RD RESPONDENT** - **Exhibit P5 TRUE COPY OF THE COMPLAINT NO. 187 OF 2020 DATED 23-10-2020 FILED BEFORE THE 1ST RESPONDENT** - **Exhibit P6 TRUE COPY OF OBJECTION DATED 12.01.2021 FILED BY 2ND AND 3RD RESPONDENT** - **Exhibit P7 TRUE COPY OF THE FINAL ORDER OF 1ST RESPONDENT OMBUDSMAN DATED 08.04.2022** - **Exhibit P8 TRUE COPY OF THE JUDGMENT IN W.P(C) 33842/2019 OF THE HON'BLE HIGH COURT** - **Exhibit P9 TRUE COPY OF THE JUDGMENT IN W.A. NO. 1039/2013 OF HON'BLE HIGH COURT OF KERALA** ## **RESPONDENTS' EXHIBITS:** - **Exhibit R2 (a) THE TRUE COPY OF THE RESOLUTION NO. 173 DATED 29.08.2006 OF THE MANAGING COMMITTEE OF THE BANK, MODIFYING THE SCHEME** **Exhibit R2 (b) THE TRUE COPY OF THE NOTICE DATED 25.07.2006 ISSUED TO THE PETITIONER.**