The Thiruvananthapuram District Co-operative Bank Limited vs T.K Sasidharan Chithralaya and The Kerala Co-operative Ombudsman

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY, THE 27TH DAY OF AUGUST 2019 / 5TH BHADRA, 1941** ## **WP(C).No.10310 OF 2016(K)** ## **PETITIONERS:** - **1 THE THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANKLTD AGED 52 YEARS REPRESENTED BY ITS GENERAL MANAGE,R HEAD OFFICE, EAST FORT, THIRUVANANTHAPURAM.** - **2 THE BRANCH MANAGER** **THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD., KILIMANOOR BRANCH, KILIMANOOR P.O., THIRUVANANTHAPURAM.** **BY ADVS. SRI.T.R.HARIKUMAR, SC, THIRUVANANTHAPURAM DIST.CO.OP.BANK SRI.THOMAS ABRAHAM, SC, THIRUVANANTHAPURAM DIST. CO.OP BANK** ## **RESPONDENTS:** - **1 T.K SASIDHARAN CHITHRALAYA, POYYAKADA, KOZHUVANTHOOR P.O., THIRUVANANTHAPURAM-695601.** - **2 THE KERALA CO-OPERATIVE OMBUDSMAN KAITHAMUKKU, THIRUVANANTHAPURAM-695023.** ## **R1 BY ADV. SRI.GOPAKUMAR R.THALIYAL** ## **SRI. BIMAL K NATH SR. GP. SRI. GOPAKUMAR R THALIYAL** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.10310 OF 2016(K)** **2** ## **JUDGMENT** The Thiruvananthapuram District Co-operative Bank Limited (hereinafter referred to ‘the Bank’ for short) has filed this writ petition impugning Ext.P3 order of the Kerala Cooperative Ombudsman, Thiruvananthapuram (‘the Ombudsman’ for short), as per which, they have been asked to pay 8% interest on certain amounts deposited with them by the 1[st] respondent. 2. According to the petitioner-Bank, the deposits in question, three in number, were made by the 1[st] respondent in the years 1992 and 1994 for a period of forty six months which matured for repayment, along with 12.5% interest, in the years 1996 and 1998 respectively. The Bank says that the 1[st] respondent, however, did not turn to accept these amounts and therefore, that these remained unpaid until 2014, when the 1[st] respondent approached them with the original Fixed Deposit Receipts and the Bank paid the said amounts with interest which is normally paid on a Savings Bank Account. **WP(C).No.10310 OF 2016(K)** **3** 3. The petitioner says that the 1[st] respondent, however, challenged this before the learned Ombudsman, who has now issued Ext.P3 asking the Bank to pay 8% interest on these amounts on the ground that they were also at fault in not intimating the 1[st] respondent at the relevant time, when the deposits matured for repayment. The petitioners, challenges Ext.P3 also on the legal ground that the learned Ombudsman has no right to issue orders in this matter, going by the provisions of the applicable Act and Rules. 4. I have considered the afore submissions of the parties and have also examined Ext.P3 order. 5. The learned Ombudsman has, in Ext.P3, order found that the Bank was solely in error in not having intimated the 1[st] respondent about the maturing of the deposits and has held therefore, that they are liable to pay higher rate of interest than what is eligible to a Savings Bank Account. The facts involved clearly indicate that after the deposits matured for repayment, neither had the Bank **WP(C).No.10310 OF 2016(K)** **4** transferred the proceeds into the Savings Bank Account of the 1[st] respondent nor had they intimated him that such amounts have become repayable. Obviously, therefore, these amounts remained with the Bank and was used by them. That said, it is indubitable that their contention that they are not liable to pay interest more than what is paid in a Savings Bank Account would be tenable only if they are able to establish that the amounts had been transferred into the Savings Bank Account of the 1[st] respondent as early as in 1996 or 1998, as the case may be. In fact, to a pointed question I made to the learned Standing Counsel for the Bank-Sri.Thomas Abraham on this issue, he fairly conceded that the amounts were transferred into the Savings Bank account of the 1[st] respondent only in the year 2014, when the original of the Fixed Deposit Receipts were produced by him. This clearly shows without any doubt that the Bank was in possession of the money and they were using the same and resultantly, their present assertion that they will only pay interest at the rate of 4%, which is the usual rate **WP(C).No.10310 OF 2016(K)** **5** applicable for Savings Bank Accounts, can never find favour with this Court. 6. As regards the jurisdiction of the learned Ombudsman is concerned, it has been now well settled by a catena of decisions, including _**Paravur S.N.V.Regional Cooperative Bank Ltd.**_ v. _**Kerala Co-operative Ombudsman**_ [2013 (4) KLT 520], that the jurisdiction of the said Authority is governed exclusively by the Cooperative Ombudsman Scheme 2010 (Kerala) and it has been declared by a learned Division Bench that the Ombudsman certainly obtain jurisdiction in these matters, as is clear from the observations in paragraph 6 of the said judgment which reads as under: “6. Clause 2(c) of the Kerala Co-operative Ombudsman Scheme, 2010, reads thus: **“2. Definitions:-** (1) In this Scheme, unless the context otherwise requires,- (a) xx xx xx (b) xx xx xx (c) “Complaint” means a representation in writing or through Electronic means containing a grievance alleging deficiency in Co-operative Banking **WP(C).No.10310 OF 2016(K)** **6** Service as mentioned in paragraph 5 of the scheme. xx xx xx” Clause 7(e) reads thus: “7. Grounds of complaint:- (1) Any person may file a complaint before the Ombudsman or Ombudsmen having jurisdiction on anyone or more of the following grounds, namely:- (a) xx xx xx (b) xx xx xx (c) xx xx xx (d) xx xx xx (e) non-observance of the rate of interest/penal interest on loans and advances and rate of interest on deposits as fixed by the Registrar or Reserve Bank of India, as the case may be. xx xx xx” The contention of the appellant is that the Ombudsman have power to consider complaints regarding non-observance of the rate of interest/penal interest on loans and advances and rate of interest on deposits as fixed by the Registrar or the Reserve Bank of India as the case may be. Here, the interest rate now offered to the 2[nd] respondent is the rate fixed by the Registrar, is the contention. Insofar as such a complaint will not come under clause 7(e), the Ombudsman does not have power to entertain a complaint, is the contention raised. We are not inclined to accept the **WP(C).No.10310 OF 2016(K)** **7** said contention. According to us, the rate of interest on deposits as fixed by the Registrar in clause 7(e) is the rate of interest prevailing at the time when the scheme was proclaimed and a contract was entered into between the appellant and the second respondent regarding the deposit and the rate of interest thereof. Once that contract is concluded, then the deposit has been accepted only at the rate of interest fixed by the Registrar. Thereafter, the appellant cannot unilaterally change the terms of the contract. If the appellant does so, the complaint would squarely come within Clause 7(e) of the Scheme. Apart from that, even the question as to whether the rate of interest as fixed by the Registrar has been paid or not itself is a complaint, which can be considered by the Ombudsman. As such, the Ombudsman have the power to consider the complaint of the 2[nd] respondent under the Kerala Cooperative Ombudsman Scheme, 2010. “ 7. I am fully bound by this judgment and in any event, I do not find any reason to deviate from the same. In the afore circumstances and since the Bank has concededly dealt with the money until 2014 without transferring it into the 1[st] respondent's Savings Bank Account, the contention of the petitioner, hinged on the **WP(C).No.10310 OF 2016(K)** **8** guidelines issued by the Reserve Bank of India and such other are completely irrelevant because, unless the Bank is able to establish that they had transferred the funds at the time when the Fixed Deposits matured for payment, they cannot, even in equity-much less in law, take a stand that they will not pay interest except what is payable in a Savings Bank Account. In the afore circumstances, I see no reason to interfere in any manner with Ext.P3 and therefore, dismiss this writ petition, however, without making any order as to costs. **Sd/-** nak **DEVAN RAMACHANDRAN JUDGE** **WP(C).No.10310 OF 2016(K)** **9** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE COMPLAINT (COM NO.218/2014) FILED BY THE IST RESPONDENT DATED 22.5.2014 ALONG WITH ENGLISH TRANSLATION. EXHIBIT P2 A TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE BANK IN COM NO.218/2014 DATED 5.7.2014 ALONG WITH ENGLISH TRANSLATION. EXHIBIT P3 A TRUE COPY OF THE ORDER OF THE 2ND RESPONDENT DATED 14.7.2014 IN COM NO.218/2014. EXHIBIT P4 A TRUE COPY OF THE PETITION FILED BY THE BANK IN COM NO.218 /2014 DATED 31.10.2014. EXHIBIT P5 A TRUE COPY OF THE ORDER IN COM NO.218/2014 DATED 9.3.2015 OF THE 2ND RESPONDENT. ANNEXURE-1 A TRUE COPY OF THE FIXED DEPOSIT RECEIPT NO.69594/419/92-93 DATED 30.12.1992 ANNEXURE-II A TRUE COPY OF THE FIXED DEPOSIT RECEIPT NO.83920/449/93-94 DATED 08.02.1994. ANNEXURE-III A TRUE COPY OF THE FIXED DEPOSIT RECEIPT NO.83988/208/94-95 DATED 25.10.1994. ANNEXURE-IV A TRUE COPY OF THE RELEASE NOTICE DATED 23.11.2013 ISSUED FROM THE SUB REGISTRAR'S OFFICE, KILIMANOOR. ANNEXURE-V A TRUE COPY OF THE RELEASE NOTICE DATED 06.01.2014 ISSUED FROM THE SUB REGISTRAR'S OFFICE, KILIMANOOR.** //TRUE COPY// P.A TO JUDGE