Co-Operative Societies Act Doesn’t Oust Right Of Creditors To Recover Amount By Invoking Consumer Protection Act: Kerala High Court
The Kerala High Court was considering an appeal challenging the judgment of the Single Judge.
Justice A.K. Jayasankaran Nambiar, Justice Preeta A.K., Kerala High Court
The Kerala High Court has held that even though the Cooperative Societies Act provide for a mechanism for the realisation of money by its creditors, the provisions in the Co-operative Societies Act do not oust the right of its creditors to recover the amount by invoking the provisions of the Consumer Protection Act.
The High Court was considering an appeal challenging the judgment of the Single Judge refusing to set aside the orders passed by the Kerala State Consumer Disputes Redressal Commission.
The Division Bench of Justice A. K. Jayasankaran Nambiar and Justice Preeta A.K. held, “Section 3 of the 1986 Act which corresponds to Section 100 of the 2019 Act provides that the provisions of the Consumer Protection Act is in addition to and not in derogation of the provisions of any other law for the time being in force. Therefore, even though the Cooperative Societies Act and the Rules framed thereunder provides for a mechanism for realisation of money by its creditors, the provisions in the Co-operative Societies Act do not oust the right of its creditors to recover the amount by invoking the provisions of the Consumer Protection Act.”
Advocate M.Sasindran represented the Appellant while Advocate K.P. Suresh Kumar represented the Respondent.
Factual Background
The appellant, a Co-operative Bank, which had accepted deposits from the first respondent to a total of Rs 5 lakh vide different fixed deposit receipts, had failed to return the amounts in the fixed deposit even though the deposit had attained maturity. The respondent approached the District Consumer Disputes Redressal Commission. After considering the materials on record, the Consumer Disputes Redressal Commission passed an order directing the appellant to pay a sum of Rs 5 lakh with 12% interest and also directed the appellant to pay Rs 10,000 as cost and compensation to the respondent/complainant. The appeal against this order was preferred by the appellant along with a petition seeking to condone the delay of 825 days in filing the appeal.
The Consumer Disputes Redressal Commission dismissed the petition seeking to condone the delay, and an order was passed dismissing the appeal. The writ petition was thus preferred, challenging these orders. The Single Judge held that the reasoning of the Commission was not illegal or perverse, and the impugned orders were upheld. It was in such circumstances that the appeal came to be filed.
Arguments
It was the case of the appellant that the remedy of the respondent was to prefer an appeal under Section 69 of the Kerala Co-operative Societies Act, 1969, and the Single Judge had failed to consider the issue regarding the inherent lack of jurisdiction of the Consumer Disputes Redressal Forum.
Reasoning
The Bench, at the outset, reiterated that the Consumer Protection Act, 1986 and its successor, the Act of 2019 is a Special law that has been enacted by the Parliament to protect the interest of consumers. “Therefore, the provisions of the Special legislation overrides notwithstanding the provisions of Section 69 and Section 100 of Kerala Co-operative Societies Act, 1969”, it added.
The Bench was of the view that merely because the rights and liabilities are created between the members and the management of the Society under the Act and Forums are provided, it cannot take away or exclude the jurisdiction conferred on the Forums under the Consumer Protection Act, which is provided intentionally to serve a definite cause in terms of the objects and reasons of the Act.
The Bench further stated, “That apart, the appellant, a banking institution dealing with public funds owes a duty to its depositors to make prompt payment of the funds deposited by them. In so much as the liability to return the fixed deposit amounts which became due as early as in the year 2015, is not disputed, harping on technicalities to thwart the claim is to be highly deprecated.”
Thus, concurring with the view taken by the Single Judge in the impugned judgment, the Bench dismissed the appeal. The Bench granted the appellant 6 months to comply with the order directing repayment with interest.
Cause Title: Puthur Service Co-operative Bank Ltd.no. 345 v. Sethumadhavan (Neutral Citation: 2026:KER:38148)
Appearance
Appellant: Advocates M.Sasindran, Sreehari Indukaladharan
Respondent: Advocate K.P. Suresh Kumar