A bank cannot be held liable for deficiency in service for refusing to create a fixed deposit with retrospective effect or for complying with prohibitory orders issued by tax authorities.

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No.125/2026

ORDER DATED : 04.03.2026

(Against the order in C.C.No.959/2024 on the files of DCDRC, Malappuram)

PRESENT:

HON’BLE JUSTICE SRI. B. SUDHEENDRA KUMAR : PRESIDENT

SRI. AJITH KUMAR D. : JUDICIAL MEMBER

SRI. K.R. RADHAKRISHNAN : MEMBER

APPELLANT:

V.K. Harikumar, S/o K.Velayudhanpilla, Jyothyis, Abdurahiman Nagar, A.R. Nagar P.O., Malappuram – 676 305

(by Adv. Dinesh Sajan K. & Adv. Darsana Viswanath L.)

Vs.

RESPONDENT:

P. Vijay, Secretary, Service Co-operative Bank Limited F 583, Abdurahiman Nagar P.O., Malappuram – 676 305

ORDER

HON’BLE JUSTICE SRI. B. SUDHEENDRA KUMAR : PRESIDENT

The appellant is the complainant in C.C.No.959/2024 on the files of the District Consumer Disputes Redressal Commission, Malappuram (for short, ‘the District Commission’).

2. The complainant was the secretary of the opposite party. He was also the administrator of the opposite party after his retirement from the service of the opposite party. On 27.03.2010, the Income Tax Department conducted a raid in the opposite party bank and the house of the complainant and provisionally attached the entire deposits in the bank. The Income Tax authorities directed the complainant to remit Rs.27,59,942/-. The Income Tax authorities directed the opposite party bank to remit Rs.17,95,131/- and the balance amount was Rs.9,59,811/-. The said amount was remitted by another co-operative society wherein the complainant had a fixed deposit account. As per the instructions of the opposite party, the complainant entrusted F.D. receipts of Rs.10,00,000/- and Rs.9,90,806/- with the opposite party. The opposite party did not inform the complainant about the amount accrued in his deposit, including the interest thereon.

3. It was contended that the opposite party did not deposit the balance amount, after remitting the income tax liability, to the account of the complainant. The opposite party also did not inform the complainant about the transaction and withdrawal of the amount from the account of the complainant. Out of the amount deposited by the complainant, an amount of Rs.4,12,315/- was the excess amount, which was the amount ordered to be refunded by the High Court. The complainant had submitted a letter dated 18.09.2024, demanding the opposite party to treat the balance amount as a fixed deposit with effect from 09.12.2022. However, that was not done.

4. The opposite party would contend that the opposite party had remitted the amount, as per the direction of the Income Tax Department, towards the tax arrears of the complainant. The said remittance was made with the consent and knowledge of the complainant. The source of money of the complainant was undisclosed. Therefore, a prohibitory order dated 27.03.2021 was issued by the Income Tax Department. Eventually, the High Court, as per order dated 19.01.2024, lifted the attachment as the complainant had already deposited 20% of the demanded amount. The prohibitory order issued by the Income Tax Department was in force from 27.03.2021 to 19.01.2024. On 19.01.2024, as per the direction of the High Court, an amount of Rs.4,12,315/- had to be refunded to the complainant. Therefore, the said amount was kept in the suspense account. The complainant submitted a letter dated 18.09.2024, demanding the opposite party to treat that balance amount as a fixed deposit with effect from 09.12.2022, which the opposite party declined, as there was no request to treat the said amount as a fixed deposit from the date of request.

5. Before the District Commission, both s