The office of the Cooperative Ombudsman is emerging as a lifeline for depositors trapped in failing or non-responsive cooperative credit societies, with a growing list of decisive interventions. In one of the latest actions, the Ombudsman has ordered Shri Swami Vivekanand Multi State Cooperative Credit Society Ltd., headquartered in Aurangabad, Maharashtra, to refund the money of depositors who were denied their dues despite repeated pleas.
The order followed a collective complaint by Manoj Verma, Chandra Prakash Verma, Afrin N. Shaikh, Amina M. Shaikh, Satappa J. Kamate and others, who had invested in the society’s fixed deposit schemes. Several complainants had sought premature withdrawal or maturity refunds, but their representations were ignored. Speed Post notices from the Ombudsman’s office were returned with remarks like “Left without instruction” or “Addressee moved,” further confirming that the society had abandoned its responsibilities.
Finding that the management was incommunicado and absconding, the Ombudsman ruled that the society had ceased to function in the spirit of cooperative principles. The order directs the promoters and current management to refund the complainants’ deposits with up-to-date interest within 30 days. All similar claims, existing and pending, must also be settled within one month of receipt, and a compliance report is to be submitted to the Ombudsman’s office.
The Central Registrar of Cooperative Societies (CRCS) had already initiated winding-up proceedings against the society for violating provisions of the MSCS Act, 2002. The society reportedly changed its registered address and opened 129 branches across Madhya Pradesh without approval. Although a show-cause notice was served in August 2020 and a reply followed in October that year, the response was deemed unsatisfactory. CRCS barred it from mobilising deposits in Madhya Pradesh on November 16, 2020.
This is not an isolated intervention. The Ombudsman has recently cracked down on multiple non-compliant cooperatives:
Sahakari Shikshan Prasarak Mandal, Pune – After dozens of complaints from teachers and retired employees about unpaid dues, the Ombudsman intervened and ordered phased repayment along with interest. The society was also directed to submit verified accounts for audit.
Adarsh Mahila Multistate Cooperative, Rajasthan – Following allegations that women depositors were being denied maturity payments, the Ombudsman summoned the board and instructed immediate settlement of claims. In several cases, cheques were released within two weeks of the order.
Greenfield Urban Credit Cooperative, Delhi – When recurring deposit holders were stonewalled by the society’s management, the Ombudsman sent a notice and warned of prosecution. The society was compelled to release refunds and furnish a payment schedule for remaining depositors.
Gurukrupa Urban Cooperative in Gujarat – After multiple senior citizens filed complaints for non-refund of fixed deposits, the Ombudsman clubbed the cases and directed the society to liquidate non-performing assets to repay members. The compliance report showed that over 70 percent of claims were cleared within the mandated period.
Officials privy to these actions say the Ombudsman’s role—often underestimated earlier—is becoming a crucial accountability tool for members of multistate cooperatives. With rising instances of mismanagement, address changes without intimation, and branch expansions beyond jurisdiction, swift enforcement is key to protecting vulnerable depositors.
The Shri Swami Vivekanand case is expected to set a precedent. By aligning with the CRCS’s efforts and pushing for immediate refunds, the Ombudsman has reinforced that depositors are not without recourse, even when societies try to disappear or dodge communication.
