A bank cannot be held liable for deficiency in service when its inability to perform a specific request (such as retrospective deposit) is due to statutory prohibitory orders issued by the Income Tax Department.

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD,

THIRUVANANTHAPURAM

APPEAL No.124/2026

ORDER DATED : 04.03.2026

(Against the order in C.C.No.1053/2024 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:

E.N. Chandrika, W/o V.K. Harikumar, 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.1053/2024 on the files of the District Consumer Disputes Redressal Commission, Malappuram (for short, ‘the District Commission’).

The complainant was an employee of the opposite party. The Income Tax Department issued a provisional order of attachment of the amount deposited by the complainant as fixed deposits in the opposite party bank, against which the complainant approached the High Court of Kerala. As per the interim direction of the High Court dated 23.11.2022, the complainant deposited Rs.14,68,675/- towards tax through three fixed deposit receipts. The complainant contended that the opposite party did not inform the complainant about the amount taken from the fixed deposits and the interest accrued thereon in time. It was further contended that the complainant requested the balance amount of Rs.83,062/- to be deposited as fixed deposit, which was also not done by the opposite party.

The opposite party filed a written version inter alia contending that on 26.03.2021 and 27.03.2021, the opposite party bank was raided by a team of the Income Tax Department, which led to the raid in the house of the complainant also. Thereafter, on 27.03.2021, the income tax officer, Tirur, issued a prohibitory order under Section 132(3) of the Income Tax Act, 1961 prohibiting all transactions of the bank, including the complainant’s, without the prior sanction of the income tax officer. As per the said order, the Deputy Director of the income tax prohibited alteration of properties/fixed deposits/customer ID/other type deposits of the complainant and transferring the same. There was also an attachment of the amount in the bank with effect from 25.05.2021. There was another order attaching the assets of the complainant and her husband with effect from 25.05.2021 by the Income Tax Department.

While so, the complainant approached the High Court of Kerala and, as per the interim order of the High Court, the complainant was allowed to pay 20% of the liability, which was permitted to be adjusted from the attached assets. As per the direction of the High Court, the Assistant Commissioner of Income Tax Central Circle issued another order to the opposite party allowing the opposite party to pay 20% of the amount towards the tax. Accordingly, the complainant allowed herself to consider the deposit receipts for Rs.4,50,000/-, Rs.4,63,000/- and Rs.4,63,000/- to pay the tax amount.

It was contended that the opposite party remitted Rs.14,68,675/- towards the income tax on 09.12.2022 from the amount deposited by the complainant. The balance amount of Rs.83,062/- was in suspense liability account of the complainant. The order of the High Court is dated 19.01.2024, and it was only thereafter that the proceedings against the complainant were closed.

The opposite party contended that all transactions were effected as per the direction of the complainant. The opposite party remitted the legal liability of the complainant as per the orders of the Income Tax Department with the consent of the complainant, which was beneficial to the complainant. The complainant and her husband were fully aware of the procedures to be followed by the opposite party. There is no deficiency in service on the part of the opposite party.

Before the District Commission, pro