In a significant comment, the Supreme Court of India on Friday said that that funds deposited by temples belong exclusively to the presiding deity and cannot be diverted to save failing cooperative banks. A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi made the observations while dismissing special leave petitions filed by several Kerala-based cooperative societies, upholding a Kerala High Court order directing the immediate repayment of deposits by Thirunelly Temple Devaswom.
The ruling stems from a dispute involving the Sree Thirunelly Devaswom, a temple trust in Wayanad district, Kerala, which had placed fixed deposits (FDs) with local cooperative banks, including the Thirunelly Service Cooperative Bank Ltd and the Manathawady Co-operative Urban Society Ltd. After the deposits matured and the trust made repeated demands for repayment, the banks withheld the funds, citing financial distress.
After this, the temple approached the Kerala High Court, which in August 2025 ordered the banks to liquidate the FDs and return the principal along with interest to the temple Trust within two months.
Challenging this directive, the banks approached the Supreme Court. The petitioners argued that the High Court’s timeline imposed undue hardship on their operations. The petitions were filed by Manathnawady Co-operative Urban Society Ltd and Thirunelly Service Cooperative Bank Ltd.
However, the Supreme Court rejected the appeals, stating that the banks have to return the deposits to the temple. “Temple money, first of all, belongs to the deity. So therefore, this money has to be saved, protected and utilised only for the interests of the temple. It can’t become a source of income or survival for a cooperative bank,” CJI Kant remarked during the hearing.
The court also questioned what wrong with the High Court order challenged by the banks. The bench said, “You want to use the temple money to save the bank? What is wrong with directing that the temple money, instead of being in a cooperative bank which is breathing with great difficulty, should go to a healthy nationalised bank which can give maximum interest?”
When the bank counsel argued that “abrupt” direction issued by the High Court to return the deposits within two months was causing difficulties to the banks, Justice Bagchi rejected the argument saying that matured deposits must be released promptly upon request.
The counsel further argued that they are not opposing the closure of the deposits, but were objecting the ‘abrupt direction’ to close them. However, the apex court rejected the petition.
While upholding the High Court’s order, the Supreme Court granted the banks liberty to seek an extension from the High Court if needed.
