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High Court of KeralaSingle JudgeWrit petition disposed with specific directions...

Shajahan v Poruvazhy Service Cooperative Bank Ltd and others

Case / Petition Number:WP(C).No.14624 of 2019

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Devan Ramachandran
Judgment Date
2019-07-10
Court Decision / Holding
The writ petition is ordered. The Administrator, in charge of the Bank, is directed to hear the petitioner and verify the documents (including the passbook) and decide, within a short period not exceeding one month, whether the petitioner can operate the savings account and to what extent. Regarding the Fixed Deposits, the Court, following Meenachil Rubber Marketing and Processing Cooperative Society Ltd. v. Choondachery Service Co-operative Bank Ltd. (2018 (2) KHC 180), does not issue specific orders but permits the petitioner to invoke remedies under Section 69 of the KCS Act against the respondents, without being hindered by these proceedings. The order directs a balance between protecting depositors’ rights and the ongoing investigations.
Final Disposition
Writ petition disposed with specific directions as stated: (i) Administrator to decide on SB account operation within one month; (ii) petitioner may pursue Section 69 remedies for Fixed Deposits; no mandatory orders on FD specifics beyond directing the remedy route.

Parties to the Case

Appellants / Petitioners

  • SHAJAHAN

Respondents

  • The Poruvazhy Service Cooperative Bank Ltd No.1132 represented by its Secretary, Poruvazhy North, Chathakulam P.O, Kollam District, PIN-690520
  • The Managing Committee, The Poruvazhy Service Co-operative Bank Ltd. No.1132, represented by its President, Poruvazhy North, Chathakulam P.O, Kollam District, PIN-690520
  • Senior Auditor, Poruvazhy SCB Group Concurrent, Office of the Assistant Director of Co Operation (Audit), Sasthamcotta, Kollam District, PIN-690521
  • Unit Inspector, Sasthamcotta, Office of the Assistant Registrar (General) of Co Operative Societies, Sasthamcotta, Kollam, PIN-690121
  • The Joint Registrar, Co Operative Societies (General), Kollam District, PIN-691001
  • The Assistant Registrar (General) of Co Operative Societies, Sasthamcotta, Kollam, PIN-690521
  • The Registrar of Co Operative Societies (General), Kerala, Thiruvananthapuram, PIN-695001
  • Secretary to Government, Department of Co operative Societies, Secretariat, Thiruvananthapuram, PIN-695001

Legal Representation & Advocates

Counsels for Respondents

  • • Sri A. Jani (Kollam)
  • • Sri G. Sivasankar

Case Synopsis & Summary

This writ petition concerns a depositor, Shajahan, who alleges that sums deposited in a savings account and fixed deposits with the Poruvazhy Service Cooperative Bank Ltd have matured or are otherwise due for payment, but the bank has allegedly refused to permit withdrawal or to operate the savings account. The bank contends that the fixed deposit receipts are not reflected in its deposit register and that discrepancies are under scrutiny; proceedings under Section 65 of the Kerala Co‑operative Societies Act have been initiated, and the matter may ultimately be resolved through the appropriate arbitrator under Section 69. The petitioner seeks immediate release of funds and restoration of account operation, claiming urgent need for liquidity. The bank’s administrator is urged to verify the documents (including passbook) and determine whether the petitioner can operate the SB account, with a decision within one month. The court acknowledges misappropriation concerns attributed to bank employees and emphasizes that, notwithstanding ongoing inquiries, the depositor’s legitimate rights should not be unduly obstructed. While the Fixed Deposits do not receive explicit judicial orders here, the Court relies on a prior Kerala High Court judgment (Meenachil Rubber Marketing) to permit the petitioner to pursue remedies under Section 69 without being hampered by these proceedings. The writ petition is ordered accordingly, balancing prompt relief to the depositor with ongoing investigations.

Provisions of Law Cited

Section 65 of the Kerala Co-operative Societies ActSection 66 of the Kerala Co-operative Societies ActSection 69 of the Kerala Co-operative Societies Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner submitted that he had bona fide deposits in the bank, including a Savings Bank account with a balance of Rs. 3,71,575 as of 06.02.2019, and several Fixed Deposit receipts. He contends that the bank has blocked operation of the SB account and refused to repay the maturing Fixed Deposits. He acknowledges that the bank has raised serious concerns about the authenticity of certain Fixed Deposit receipts and that an enquiry under Section 65 of the KCS Act is ongoing. He argued that, given the bank’s vicarious liability for misappropriation by its employees, the bank cannot delay remittance of rightful balances, and that the Administrator should verify genuineness of documents and allow withdrawal or operation of the SB account pending resolution. He also proposed to pursue remedies under Section 69 of the KCS Act for the Fixed Deposits and sought timely relief.

Contentions of Respondents

The bank’s counsel contended that the Fixed Deposits claimed by the petitioner do not appear in the bank’s deposit register and are subject to verification. The bank has initiated investigations under Section 65 of the KCS Act for record discrepancies and alleged misappropriation by employees, and argued that the administration must complete its inquiry before releasing funds. The bank pledged to cooperate with the Administrator’s verification but emphasized that any relief would be contingent on the authenticity of the FD receipts. It urged that the petitioner approach the competent Arbitrator under Section 69, as the matter involves disputed deposits and formal remedy rather than direct judicial direction at this stage.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
Meenachil Rubber Marketing and Processing Cooperative Society Ltd.No.K.118 and Another v. Choondachery Service Co-operative Bank Ltd. No.167 and Another2018 (2) KHC 180PositiveCited as a controlling authority to permit Section 69 remedies and to refrain from issuing specific orders on fixed deposits in light of ongoing inquiries.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** ## **WEDNESDAY, THE 10TH DAY OF JULY 2019 / 19TH ASHADHA, 1941** ## **WP(C).No.14624 of 2019** ## **PETITIONER:** **SHAJAHAN, AGED 51 YEARS, S/O.SULAMAN RAWTHER, RESIDING AT SUADHA HOUSE, THEKKEMURI, SOORANADU NORTH, SOORANADU NORTH.P.O, KOLLAM DISTRICT,PIN-690522.** ## **SRI.A.JANI(KOLLAM) SRI.G.SIVASANKAR** ## **RESPONDENTS:** - **1 THE PORUVAZHY SERVICE COOPERATIVE BANK LTD NO.1132 REPRESENTED BY ITS SECRETARY, PORUVAZHY NORTH, CHATHAKULAM.P.O, KOLLAM DISTRICT, PIN-690520.** - **2 THE MANAGING COMMITTEE,THE PORUVAZHY SERVICE CO OPERATIVE BANK LTD.NO.1132,REPRESENTED BY ITS PRESIDENT, PORUVAZHY NORTH, CHATHAKULAM.P.O, KOLLAM DISTRICT,PIN-690520.** - **3 SENIOR AUDITOR, PORUVAZHY SCB GROUP CONCURRENT, OFFICE OF THE ASSISTANT DIRECTOR OF CO OPERATION (AUDIT), SASTHAMCOTTA, KOLLAM DISTRICT,PIN-690521.** - **4 UNIT INSPECTOR, SASTHAMCOTTA, OFFICE OF THE ASSISTANT REGISTRAR(GENERAL) OF CO OPERATIVE SOCIETIES, SASTHAMCOTTA, KOLLAM, PIN-690121.** - **5 THE JOINT REGISTRAR, CO OPERATIVE SOCIETIES (GENERAL), KOLLAM DISTRICT,PIN-691001.** - **6 THE ASSISTANT REGISTRAR(GENERAL)OF CO OPERATIVE SOCIETIES, SASTHAMCOTTA, KOLLAM,PIN-690521.** - **7 THE REGISTRAR OF CO OPERATIVE SOCIETIES(GENERAL), KERALA, THIRUVANANTHAPURAM,PIN-695001.** WPC 14624/19 2 **8 THE SECRETARY TO GOVERNMENT, DEPARTMENT OF CO OPERATIVE SOCIETIES, SECRETARIAT, THIRUVANANTHAPURAM,PIN-695001.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WPC 14624/19 3 ## **JUDGMENT** The petitioner says that he had deposited certain amounts with the respondent-Bank in the Savings Bank Account as also in Fixed Deposits and alleges that even though the fixed deposits have long matured for payment, the Bank is illegally retaining the proceeds thereof, without paying it to him and is also refusing to let him operate the Savings Bank account. He therefore, prays that the respondent-Bank be directed to pay him the amounts in the Savings Bank account and the proceeds of the Fixed Deposits without any further delay. 2. The learned Standing Counsel for the Administrator in charge of the Bank, in response, submitted that the Fixed Deposits claimed by the petitioner does not appear to be included in the register of deposits maintained by the Bank and that even after due verification it is so. He added that proceedings under Section 65 of the Kerala Co-operative Societies Act ('the KCS Act' for short) have already been initiated against the Bank in view of these kinds of discrepancies in their records and also to enquire into various other WPC 14624/19 4 allegations. He, therefore, asserts that the petitioner must now approach the competent Arbitrator for return of the money claimed by him since the authenticity of the Fixed Deposit receipts are severely disputed. 3. The learned counsel for the petitioner, on hearing the learned Senior Government Pleader as afore, submitted that the petitioner has approached this Court under the bonafide impression that the respondent-Bank will not dispute the validity and veracity of the Fixed Deposits. He says that since the Part-time Administrator is now appearing to dispute the said receipts, the petitioner will certainly approach the competent Arbitrator under Section 69 of the KCS Act and obtain suitable orders. 4. As regards the Savings Bank account is concerned, learned counsel for the petitioner says that, as is clear from Exhibit P1, the petitioner had a credit of Rs.3,71,575/- as on 06.02.2019, but that the Bank is not allowing him to withdraw it. 5. The learned Standing Counsel for the respondent Bank submits that the Bank is unable to allow operation of the account because large scale misappropriation of amounts in the Savings Bank WPC 14624/19 5 accounts have also been noticed by them at the instance of a particular employee. Even if this is true and if amounts have been so misappropriated by their employee, the Bank is certainly vicariously liable for the same. Therefore, the Bank cannot leisurely wait until the enquiry against them, be that under Section 65 or 66 of the Kerala Co-operative Societies Act, is completed and it is certainly enjoined upon them to make every effort to ensure that amounts owned by the customers, specially in the Savings Bank accounts, are allowed to be withdrawn without any further delay. Of course, the only precaution which is required for this is that the petitioner must establish that the documents are genuine and that the amounts have not been withdrawn by her. This certainly requires an enquiry to be done by the Administrator, who is now in charge of the affairs of the Bank and he must do so within a very short period, since the petitioner says that he requires funds urgently. In fact, my views as afore have been endorsed by the Senior Government Pleader, who confirms that an enquiry under Section 65 of the KCS Act is going on against the Bank and that some employees WPC 14624/19 6 have been found guilty of large scale misappropriation, to the tune of Rs.2.5 Crores, for which criminal cases are also registered against them. He says that, however, there is no impediment in the Administrator, in charge of the Bank, in considering the validity of the petitioner's documents and issuing appropriate orders thereon, if this Court so directs him. Taking note of the afore submissions and since I am of the view that it will be very unfair to allow a person who has made bonafide deposits in the savings account to wait ad infinitum until an enquiry against the Bank is completed, I direct the Administrator to hear the petitioner and verify the documents, including the Passbook and then take a decision as to whether he can be allowed to operate the savings account and to what extent. This order shall be issued by the Administrator, either permitting the petitioner to operate the account in terms of Exhibit P1 Passbook or declining it for valid reasons, as expeditiously as possible, but not later than one month from the date of receipt of a copy of this judgment. As regards the Fixed Deposits are concerned, for the reasons already recorded above and being guided by the judgment of this WPC 14624/19 7 Court in **Meenachil Rubber Marketing and Processing Cooperative Society Ltd.No.K.118 and Another v. Choondachery Service Co-operative Bank Ltd. No.167 and Another** (2018 (2) KHC 180), I deem it appropriate not to issue any specific orders in this case but to permit the petitioner to invoke his remedies under Section 69 of the Kerala Co-operative Societies Act against the respondents, without being in any manner trammeled by these proceedings or by any of the observations in this judgment. This writ petition is thus ordered. Sd/Devan Ramachandran, Judge tkv WPC 14624/19 8 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** |**EXHIBIT P1**|**TRUE COPY OF PASSSBOOK OF SB ACCOUNT OF**| |---|---| ||**WRIT PETITIONER.**| |**EXHIBIT P2**|**TRUE COPY OF FIXED DEPOSIT OF WRIT**| ||**PETITIONER WITH FIRST RESPONDENT DATED**| ||**20.06.2017.**| |**EXHIBIT P3**|**TRUE COPY OF FIXED DEPOSIT OF WRIT**| ||**PETITIONER WITH FIRST RESPONDENT DATED**| ||**31.10.2014.**| |**EXHIBIT P4**|**TRUE COPY OF FIXED DEPOSIT OF WRIT**| ||**PETITIONER WITH FIRST RESPONDENT DATED**| ||**30.10.2014.**| |**EXHIBIT P5**|**TRUE COPY OF FIXED DEPOSIT OF WRIT**| ||**PETITIONER WITH FIRST RESPONDENT DATED**| ||**30.10.2014.**| |**EXHIBIT P6**|**TRUE COPY OF FIXED DEPOSIT OF WRIT**| ||**PETITIONER WITH FIRST RESPONDENT DATED**| ||**30.10.2014.**| |**EXHIBIT P7**|**TRUE COPY OF LETTER ISSUED BY 6TH**| ||**RESPONDENT TO WRIT PETITIONER DATED**| ||**02.04.2019.**| ## **/TRUE COPY/** **P.S. TO JUDGE**