THIRUVANANTHAPURAM: Primary Agricultural Credit Societies (PACS) cannot deny timely refund of fixed deposits (FDs), the State Consumer Disputes Redressal Commission (SCDRC) has said in a landmark ruling. Depositors have every right to get the money upon maturity, irrespective of the society’s financial position, said the SCDRC order, bringing relief to thousands of depositors of cash-strapped societies that unilaterally extend FDs to avoid a potential collapse
The order came on complaints filed by depositors in Kuzhalmannam Block Rural Credit Cooperative Society, Palakkad. They were Sobha, who deposited Rs 2.90 lakh, Rajasree Vijayan, who deposited Rs 2.25 lakh, Saraswathy C P, who deposited Rs 2.92 lakh and Rs 3.12 lakh, and K Vijayan, who deposited Rs 5.03 lakh. All were one-year deposits at 8.5% interest rate which matured on April 1, 2021. The complainants alleged that they did not get the maturity amount on the promised date and the society kept renewing them every year.
Though the complainants had approached the Palakkad District Consumer Disputes Redressal Commission, it had dismissed their grievances saying they were ‘barred by limitation’ - meaning the complaints were filed late. Under the Consumer Protection Act, 2019, complaints must be filed within two years from the date the cause of action arises.
According to the district commission, the cause of action was 1 April, 2022. The appeals were considered by the SCDRC bench comprising president Justice B Sudheendra Kumar, judicial member Ajith Kumar D and member Radhakrishnan K R.
The Kuzhalmannam society contended that it faced stringent financial crisis as many loan beneficiaries failed to repay. It said it was not in a position to return the deposits. The cooperation department has constituted a monitoring committee to prioritise the return of FDs.
The SCDRC rejected the Palakkad commission’s finding, saying the FDs were renewed year to year and hence the complaints were not barred by limitation. It also criticised the society for not taking coercive steps to recover the loan amounts. Instead, a committee was constituted to disburse FD amounts on a priority basis.
“The depositors have every right to get their money after maturity period. If at all there had been any such financial crisis, the complainants were not responsible for it. They are entitled to get the deposited amount with interest,” the commission said, as it directed the society to release the FDs with an annual interest of 8.25% till the payment date. It also said Rs 2,000 should be given to each complainant as costs.