2017 (7) TMI 1403 - HC - Indian Laws

Seeking release of Fixed Deposits since such deposits have attained maturity - writ petition is maintainable against a Co-operative Society or not - HELD THAT - There are clear statutory requirements and prescriptions in the Act which mandate that if a society fails to honour its financial commitments, the competent statutory authorities are enjoined and obligated to to take such action as is mandated under the Act. When a depositor complains that a society has not honoured its financial commitment which it was legally bound to do, it would be open to the concerned statutory authorities to take such action, as is warranted and mandated under the provisions of the Act and the Rules, to ensure that the society either honours such commitments or that resources are created through due procedure, either by liquidation of the assets of the society or through such other methods, for the purpose of clearing and honouring such liabilities. When such a duty is cast upon the statutory authorities and since such authorities are also in the party array of the respondents in this writ petition, it cannot be concluded how the Society can maintain that this writ petition cannot lie, especially since this Court can always modulate the reliefs to be granted, including by issuing directions to the competent statutory authorities to take action against the Society if they fail in their statutory and legal duties. The submissions of the learned Standing Counsel for the Society that this writ petition is not maintainable, cannot be agreed upon - the Society are directed to pay to the petitioner the entire amount along with applicable interest within a period of four months from the date of receipt of a copy of this judgment - petition allowed.

Summary

Issues:
1. Writ petition maintainability against a Co-operative Society.
2. Liability of a Co-operative Society to repay fixed deposits.
3. Jurisdictional question regarding repayment of fixed deposits.
4. Statutory obligations of Co-operative Societies in honoring financial commitments.

Issue 1: Writ petition maintainability against a Co-operative Society

The petitioner sought the return of fixed deposits from a Co-operative Society, which admitted liability but raised technical defenses regarding the maintainability of the writ petition against it. The Society argued that a writ petition is not competent against a Co-operative Society, citing legal precedents. However, the court found that since there was no dispute regarding the liability in repayment and the Society had expressly admitted its liability, the writ petition was upheld.

Issue 2: Liability of a Co-operative Society to repay fixed deposits

The petitioner, also a Co-operative Society, deposited a significant amount with another Co-operative Society as fixed deposits. When the fixed deposit matured for repayment, the respondent Society acknowledged its liability but cited financial constraints due to market conditions as the reason for non-payment. The court noted the unequivocal admission of liability by the respondent Society and ordered repayment of the fixed deposits along with applicable interest.

Issue 3: Jurisdictional question regarding repayment of fixed deposits

The respondent Society contended that a writ petition was not maintainable against it and suggested invoking statutory remedies under the Act for contractual disputes. However, the court emphasized that since there was no dispute raised by the Society regarding repayment and the liability was admitted, the statutory remedies were not necessary. The court highlighted the statutory obligations on authorities to ensure the repayment of financial commitments by Co-operative Societies.

Issue 4: Statutory obligations of Co-operative Societies in honoring financial commitments

The court emphasized the statutory requirements under the Act, stating that if a Co-operative Society fails to honor its financial commitments, competent statutory authorities are obligated to take necessary actions. The court noted that since the statutory authorities were also respondents in the case, they could be directed to ensure the Co-operative Society's compliance with its financial obligations. The judgment directed the Society to repay the fixed deposits within a specified time frame, failing which additional interest and legal actions were mandated to ensure timely repayment.