fixed deposit
Recently, the Kerala High Court gave an important decision saying that it is the responsibility of the banks handling public money to return the money of the depositors on time. The court made this comment while hearing the plea of a Thrissur-based man whose fixed deposit (FD) of Rs 5 lakh had matured in 2015, but the bank did not make the payment citing technical reasons.
What was the whole matter?
Sethumadhavan, resident of Mullamkunnath Kavu, Thrissur, had made an FD of Rs 5 lakh in the bank, the maturity of which was on June 2, 2015. When he reached the bank at the appointed time to collect his money, the bank refused to make the payment citing technical difficulties.
Troubled by this, he lodged a complaint with the District Consumer Disputes Redressal Commission, Thrissur. On December 31, 2021, the Commission ordered the bank to return the FD amount of Rs 5 lakh with 12% annual interest and Rs 10,000 as compensation and expenses.
Bank challenged in High Court
Despite the order of the Consumer Commission, the bank did not make the payment and filed an appeal in the Kerala High Court with a delay of 825 days. The bank said that its management was under the Administrator from December 2014 to May 2022, hence the appeal was delayed. However, the single bench of the High Court rejected the bank’s argument and upheld the order of the Consumer Commission.
Even after this the bank did not return the amount and took the matter before the Larger Bench of the High Court. This time the bank argued that it is a co-operative bank, hence the Kerala Co-operative Societies Act, 1969 applies to this case and the Consumer Commission or the single bench of the High Court does not have the right to hear this case.
What did the High Court say?
On June 2, 2026, a larger bench of the Kerala High Court rejected all the arguments of the bank and said that the Consumer Protection Act is a special law made to protect the interests of consumers. Therefore, its system has priority over the law of cooperative societies.
The court said that just because there is a separate provision for resolving disputes in the Cooperative Act, it does not take away the right of consumers to approach the Consumer Commission.
Technical excuses not accepted
The High Court clearly said in its decision that the bank is an institution related to public money and it is its responsibility to return the deposits to the depositors on time. The court also said that when it is not disputed that the FD amount was due in 2015, then postponing the payment by taking the help of technical reasons is completely wrong.
Finally the court directed the bank to pay Rs 5 lakh, 12% interest and Rs 10,000 compensation as per the order of the Consumer Commission. However, on the request of the bank, 6 months time was also given for payment.
