Depositors Can Approach Consumer Forums Despite Remedies Under Co-Operative Societies Act: Kerala High Court

The Kerala High Court has held that the availability of remedies under the Co-operative Societies Act does not prevent depositors and other creditors from seeking relief under the Consumer Protection Act. The Court observed that consumer remedies are additional in nature and remain available even when another statutory mechanism exists for recovery.

The ruling came in a dispute involving a co-operative bank that failed to repay fixed deposits worth ₹5 lakh to a depositor despite the deposits maturing in 2015. The depositor approached the Consumer Commission, which directed the bank to refund the amount with 12% interest along with compensation and costs. The bank challenged the order after a delay of 825 days, but its appeal was dismissed by the State Consumer Commission as well as by a Single Judge of the High Court.

Before the Division Bench, the bank argued that disputes between a co-operative society and its members should be resolved under Section 69 of the Kerala Co-operative Societies Act and that the Consumer Forum lacked jurisdiction.

Rejecting the contention, the Court held that the Consumer Protection Act creates an independent and additional remedy for consumers. It noted that the existence of forums under the Co-operative Societies Act does not exclude the jurisdiction of consumer fora, particularly when a depositor complains of deficiency in banking services.

The Bench also criticised the bank for withholding repayment of deposits that had become due more than a decade earlier, observing that financial institutions handling public money have a duty to promptly return depositors’ funds. The appeal was dismissed, though the bank was granted six months to comply with the repayment order.

Case: Puthur Service Co-operative Bank Ltd. No. 345 v. Sethumadhavan (2026:KER:38148)