The court reinforced that cooperative banks must adhere to statutory schemes to refund fixed depositors while establishing a framework for recovering debts and ensuring compliance with financial regulations.

JUDGMENT :

Amit Rawal, J.

This order shall dispose of 42 writ appeals preferred by the writ petitioners/fixed depositors aggrieved of the inaction on the part of the Co-operative Societies, who have been taking the deposits in the shape of FD by levying an extra amount of interest than the Nationalized Bank and on failure to discharge the duty, resulted into the multifariousness of litigation and dismissal of the same by the learned Single Bench on the ground that as per Section 57E of the Kerala Co-operative Societies Act, 1969, the government has come out with a statutory deposit scheme, where the societies are required to contribute. The amount due to the writ petitioners is not a paltry amount but exponential.

2. Aggrieved by the judgment of the learned Single Bench relegating the writ petitioners to avail the remedy of the deposit scheme, writ appeals have come up for adjudication. Since numerous writ appeals had come up, W.A.No.185 of 2025 was kept as the lead case, though it is pertinent to mention here that the amount due to the writ petitioner in this case from the concerned Co-operative Society has already been discharged, but the matter as per the order dated 23.08.2025 was kept pending as having been treated as the lead case.

3. While issuing notice on 29.01.2025, we had restrained the Societies from creating the third-party rights over the properties. In other words, had attached the properties owned to the society, considering the plight of the depositors who are not only senior citizens and general depositors who have deposited their hard-earned money to earn a little more interest than the National Bank, particular when a few of them are cancer patients and suffering from other various serious ailments. Before issuing the notice, on 17.01.2025, we had appointed Adv.D.Kishore as an Amicus Curie to render assistance to us.

4. The pith and substance of the judgment under challenge disposing of the writ petition has been on account of the fact that the government had come out with two schemes. One is Kerala Co-operative Revival Fund Scheme, 2024 and the other is Kerala Co-operative Deposit Guarantee Scheme, 2018. Paragraphs 8 to 11 of the judgment noticing the aforementioned schemes and the directions contained in the judgment under challenge are extracted herein below;

8. Paragraph 4 of the Kerala Co-operative Revival Fund Scheme, 2024 reads as follows:

4. Terms and Conditions for providing financial assistance -

(1) A Co-operative Society registered under the Act shall be eligible to be considered for the benefits under this Scheme.

(2) When a Society’s operations has become sluggish due to operational inefficiencies, lack of working capital and short-term liquidity issues, it shall formulate a revival scheme.

(3) Only those Co-operative Societies that are weaker or remain dormant but viable and capable of gaining strength shall be considered for revival.

(4) In addition to the financial assistance that may be provided from the Scheme, societies facing crisis are also eligible to utilize any reserve funds they have accumulated, subject to conditions if any specified by the Registrar.

(5) The amount sanctioned under the Scheme shall be granted a moratorium on repayment for the first two years. The repayment period ranges from five to ten years. The State High Level Committee shall be competent to determine the instalment structure and interest r