Supreme Court Rules Temple Funds Belong to Deity, Cannot Support Struggling Banks

The Supreme Court has declined to interfere with Kerala High Court's directives regarding temple funds.

New Delhi:

The Supreme Court made a significant pronouncement on Friday, stating that temple funds "belong to the deity" and cannot be utilized to support struggling cooperative banks.

This observation came from a Bench comprising Chief Justice of India (CJI) Surya Kant and Justice Joymalya Bagchi while dismissing special leave petitions (SLPs) filed by Kerala-based cooperative banks. These banks had challenged the Kerala High Court's direction ordering the immediate return of fixed deposits belonging to the Thirunelly Temple Devaswom.

The CJI Kant-led Bench refused to overturn the Kerala High Court's orders, emphasizing that money collected from devotees must be "saved, protected and utilized only for the interests of the temple" and cannot serve as a "source of income or survival" for any cooperative bank.

"You want to use the temple money to save the bank?... Temple money, first of all, belongs to the deity," the top court remarked while dismissing the cooperative bank's SLP against the Kerala High Court's mandate to repay matured deposits and transfer the funds to nationalized banks.

Before the Supreme Court, the cooperative banks argued that the Kerala High Court's "abrupt" two-month deadline made compliance challenging.

"You should establish your credibility among the people. If you are unable to attract the customers and deposits, that is your problem," responded the CJI Kant-led Bench, emphasizing that deposits must be released immediately upon maturation.

While dismissing the petitions, the top court granted the banks liberty to approach the Kerala High Court seeking an extension of time for repayment.

The SLPs were filed by Mananthawady Co-operative Urban Society Ltd and Thirunelly Service Co-operative Bank Ltd after the Kerala High Court ruled that temples under the Malabar Devaswom Board cannot maintain deposits with cooperative societies in violation of binding circulars.

In its detailed judgment, the Kerala High Court noted that the Malabar Devaswom Board's circulars explicitly prohibited temples from keeping deposits in cooperative banks. After reviewing audit findings, it determined that the banks had "no right whatsoever" to deny closure of the deposits.

"If any of the temples under the control of the Malabar Devaswom Board have deposited funds in any Co-operative Society, such deposits shall be withdrawn upon maturity and re-deposited in the banks and financial institutions authorised," stated a Bench of Justices Raja Vijayaraghavan V and KV Jayakumar.