Co-operative Bank Depositors Can Seek Relief Under Consumer Protection Act: Kerala HC [Read Judgment]

Kerala: The Kerala High Court has held that the existence of a dispute-resolution mechanism under the Kerala Co-operative Societies Act, 1969, does not oust the jurisdiction of Consumer Disputes Redressal Forums constituted under the Consumer Protection Act, and that depositors of a co-operative bank are entitled to invoke the Consumer Protection Act to recover matured fixed deposit amounts that the bank has failed to repay.

The judgment was delivered by a Division Bench of Dr. Justice A.K. Jayasankaran Nambiar and Justice Preeta A.K. while dismissing a writ appeal filed by Puthur Service Co-operative Bank Limited, Thrissur, against the judgment of a learned Single Judge of the same court dated March 25, 2026, which had declined to interfere with orders passed by the Kerala State Consumer Disputes Redressal Commission.

The first respondent, Sethumadhavan, had deposited a total of Rs. 5,00,000 with the co-operative bank in different fixed deposits, all of which matured on June 2, 2015. The bank failed to return the amounts despite maturity. The first respondent filed a complaint before the District Consumer Disputes Redressal Commission, Thrissur, and the Commission directed the bank to repay the deposit amount of Rs. 5,00,000 with interest at 12% per annum, together with Rs. 10,000 as costs and compensation.

The bank did not challenge the District Commission’s order for nearly three years. It filed an appeal before the Kerala State Consumer Disputes Redressal Commission only in October 2024, accompanied by a petition seeking condonation of a delay of 825 days. The State Commission dismissed the condonation petition and, consequently, dismissed the appeal as well. The bank then challenged both orders before the High Court by way of a writ petition, which was dismissed by the Single Judge on the ground that the reasoning of the State Commission was neither illegal nor perverse and warranted no interference.

Before the Division Bench, the bank raised for the first time a contention that the Consumer Forum lacked inherent jurisdiction, arguing that the first respondent’s remedy lay exclusively under Section 69 of the Kerala Co-operative Societies Act, 1969, and that the Single Judge had failed to address this jurisdictional question.

The Division Bench rejected this contention. The Court held that the Consumer Protection Act, enacted by Parliament to protect the interests of consumers, is a special legislation whose provisions override those of the Kerala Co-operative Societies Act. Even if the Consumer Protection Act were treated as a general law, the Court observed, it is a well-settled principle that a later law overrides an earlier special law in the event of inconsistency.

The Court further relied on Section 3 of the Consumer Protection Act, 1986, corresponding to Section 100 of the Consumer Protection Act, 2019, which expressly provides that the Act operates in addition to, and not in derogation of, any other law for the time being in force. The Court further noted that the existence of a recovery mechanism under the Co-operative Societies Act does not extinguish the depositor’s right to approach Consumer Forums.

The Court also took strong exception to the conduct of the bank in resisting a claim that had been legally undeniable since 2015. A banking institution dealing with public funds, the Bench observed, owes a duty to its depositors to make prompt payment of amounts upon maturity, and resorting to technicalities to thwart an undisputed liability is highly deplorable.

Dismissing the writ appeal without costs and affirming the judgment of the Single Judge, the Division Bench granted six months’ time to the bank to comply with the District Commission’s order directing repayment with interest, in view of a submission made by counsel for the bank seeking time for compliance.

Case Title: Puthur Service Co-operative Bank Ltd. No. 345 v. Sethumadhavan and Another, WA No. 1152 of 2026.

[Read Judgment]