The Kerala High Court ruled that depositors in distressed cooperative societies may pursue recovery claims under the Consumer Protection Act, a decision lawyers called a landmark expansion of financial redress.
The bench held that members who placed savings with cooperatives occupy a consumer-like relationship when institutions fail to return principal despite repeated demand notices.
The ruling offers a parallel remedy beyond lengthy winding-up proceedings that often leave small depositors with pennies on the rupee after years of litigation.
Cooperative sector regulators cautioned that the judgment could increase litigation volume unless societies strengthen governance and deposit insurance mechanisms proactively.
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Sources:
https://www.livelaw.in/