The main legal point established is that disputes concerning loans granted to non-members by Co-operative Banks fall within the scope of Section 69(1)(f) of the Kerala Co-operative Societies Act and should be decided by the Arbitration Court.

DAMA SESHADRI NAIDU, J.

1. The petitioner, a Co-operative Bank, through Ext. P1, sanctioned a loan of Rs. 6,00,000/- to the second respondent in 2006 to be repaid in ten years. While sanctioning the loan, the petitioner bank entered into Ext. P2 agreement with the second respondent, the borrower. Exhibit P1 sanction order, inter alia, provides for resolution of disputes through arbitration proceedings as have been contemplated in Section 69 of the Kerala Co-operative Societies Act (the 'Act').

2. Complaining that the petitioner Bank has periodically raised the rate of interest and has been charging exorbitant interest, the second respondent approached the learned Ombudsman, the first respondent, and invited Exhibit P7 order, which is assailed in the present writ petition.

3. Since the facts are not in dispute, I confine my discussion to the issue of the first respondent's jurisdiction, which is questioned by the petitioner. My discussion, therefore, obviates any reference to the merits of the matter.

4. Initially, at the time when the loan was granted, the rate of interest was fixed at 7.25%. In the course of time, it had been periodically raised to 13% by 2011. The petitioner Bank may have its justifications in that regard, but it is not germane to our purpose.

5. Aggrieved by the periodic upward revision of interest, the second respondent submitted Exhibit P5 complaint before the first respondent. The first respondent eventually, after taking into account petitioner's Exhibit P6 objections, allowed the petition through Exhibit P7 order holding that the charging of interest by the petitioner-Bank over and above the initially agreed rate is illegal and unjustifiable.

6. In the above factual background, the learned Standing Counsel has submitted that in terms of Clause 7 of Kerala Co-operative Ombudsman Scheme (for short the 'Scheme') the first respondent has no jurisdiction to entertain any monetary dispute between the Bank and the debtor who is not a member. He has laid specific emphasis on Clause 7(2)(e) of the Scheme.

7. In elaboration, the learned counsel has submitted that if a remedial mechanism is provided under Section 69 of the Act, there can be no recourse to the procedure stipulated under the Scheme.

8. The learned counsel has further drawn my attention to Section 69(1)(f) of the Act to contend that the issue raised by the second respondent in Exhibit P5 complaint squarely falls within the ambit of the said provision. He has, therefore, urged this Court to set aside Exhibit P7 order of the first respondent as being ultra vires of the said authority.

9. Per contra, the learned counsel for the second respondent has submitted that the second respondent is a retired Government employee. According to him, Section 69 of the Act has no application; on the contrary, Clause 7(d) of the Scheme does apply.

10. The learned counsel has also placed before me a hard copy of an extract taken from the website of the petitioner Bank. It concerns the customer policy of the Bank. In the 'Customers' Rights Policy' published on its website, the petitioner Bank has assured the customers that all their complaints will be taken care of. It has, further, provided that if the complaint has not been attended to within thirty days, the aggrieved person can approach the Banking Ombudsman for the redressal of their grievance.

11. According to the learned counsel, Clause 7(d) read with Customer Rights Policy published by the petitioner Bank, the first respondent is eminently entitled to entertain the petitioner's complaint.

12. The learned counsel has also further submitted that since the second respondent has still been paying the EMIs and the loan has so far not been closed, at this juncture he cannot approach any competent consumer forum. In other words, the learned counsel seems to suggest that unless the entire loan transaction has come to an end, he will not have the necessary cause of action to approach the consumer forum for the alleged defi