New Delhi, December 5, 2025 – In a landmark ruling reaffirming the sanctity of temple funds, the Supreme Court on Friday declared that money belonging to a deity cannot be used to prop up financially struggling cooperative banks. The apex court’s observations were made during the hearing of appeals filed by a few cooperative banks challenging a Kerala High Court directive to return deposits held by the banks to the Thirunelly Temple Devaswom.

The bench, comprising Chief Justice Surya Kant and Justice Joymalya Bagchi, expressed sharp disapproval of the banks’ attempt to use religious funds as a financial lifeline. “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?” Chief Justice Kant asked. The court’s remarks underscored the principle that funds entrusted to a deity must be preserved, protected, and utilised solely for the interests of the temple and its associated religious activities.

The Supreme Court emphasized that temple funds cannot be treated as collateral or a source of survival for banks, no matter how financially distressed they may be. The ruling is expected to have far-reaching implications for cooperative banks across India, many of which have in the past relied on deposits from religious institutions or trusts to bolster their liquidity.

Background of the Case

The case before the Supreme Court arose from a petition filed by the Thirunelly Devaswom, a prominent temple in Kerala, after several cooperative banks repeatedly refused to return the temple’s fixed deposits despite multiple requests. The Kerala High Court had intervened, directing five cooperative banks to close the Devaswom’s fixed deposits and refund the total amount within two months. The banks that were directed to comply included:

1. Thirunelly Service Cooperative Bank Ltd
2. Susheela Gopalan Smaraka Vanitha Cooperative Society Ltd
3. Mananthawady Cooperative Rural Society Ltd
4. Mananthawady Co-operative Urban Society Ltd
5. Wayanad Temple Employees Cooperative Society Ltd

Despite the clear high court order, the cooperative banks approached the Supreme Court, seeking relief on the grounds that the abrupt directive was causing operational difficulties and financial strain.

Supreme Court’s Observations

Rejecting the banks’ pleas, the Supreme Court stressed that credibility and financial stability are the responsibility of the banks themselves. “If you are unable to attract customers and deposits, that is your problem,” the bench observed. The court clarified that cooperative banks cannot rely on temple funds for liquidity support or financial survival. The money entrusted to a temple, the bench noted, is sacred and cannot be diverted for purposes that do not serve the temple or its devotees.

Chief Justice Kant reiterated that temple funds are to be saved, protected, and utilised exclusively for the interests of the temple, including its upkeep, rituals, charitable activities, and other religious purposes. Any attempt to divert such funds for commercial or banking purposes violates the fundamental principle of trust placed by devotees and the community in the temple administration.

The bench also noted that cooperative banks should instead focus on sound banking practices, including attracting legitimate deposits and maintaining financial discipline, rather than relying on religious institutions for survival. The apex court’s ruling is a stern reminder to financial institutions that sacred and religious funds carry legal and moral obligations, which cannot be subordinated to commercial interests.

Legal and Ethical Implications

This ruling reinforces long-standing legal principles in India regarding temple property and religious trusts. According to Indian law, funds and property belonging to a deity are held in trust for religious purposes, and trustees or custodians are legally bound to manage such assets in accordance with the interests of the temple and the devotees. The Supreme Court’s decision adds further clarity, emphasizing that these funds cannot be used as security or leverage for financial operations unrelated to religious purposes.

The ruling also signals a broader caution to cooperative banks and financial institutions: public trust, transparency, and financial discipline are non-negotiable. Reliance on deposits from temples or religious bodies cannot be a substitute for sound banking practices or regulatory compliance.

Allowance for Procedural Relief

While the Supreme Court refused to entertain the pleas seeking exemption from the high court order, it did provide a limited procedural relief. The bench allowed the banks to approach the Kerala High Court for an extension of time to comply with the directive, recognizing that logistical or administrative challenges may require additional time for the orderly transfer of funds. This ensures that the refund process can be carried out efficiently, without compromising the safety or sanctity of the temple deposits.

Wider Context

Kerala has a large network of cooperative banks, many of which have historically maintained deposits from temples, religious institutions, and charitable trusts. This case underscores the legal boundaries around the use of such deposits. Financial institutions are expected to maintain independent viability without relying on funds that are dedicated for religious purposes.

Experts believe that the Supreme Court’s ruling will serve as a precedent for similar cases across India, ensuring that temple and deity funds are insulated from commercial risks. Banks and cooperative societies will now need to strengthen internal financial management, diversify their deposit base, and adopt more sustainable practices to avoid dependence on funds that legally and morally belong to religious institutions.

Key Takeaways

1. Temple Funds Are Sacred: Deposits belonging to temples or deities cannot be used to support or rescue financially distressed banks.
2. Legal Obligation: Banks are legally obliged to respect the trust placed in them by religious institutions and their devotees.
3. Financial Discipline: Cooperative banks must maintain credibility and financial stability independently, without relying on sacred deposits.
4. Procedural Relief: While the Supreme Court upheld the high court order, banks may request time extensions for practical compliance.
5. Precedent-Setting: This ruling reinforces the principle that religious funds are protected assets under Indian law and cannot be misappropriated for commercial purposes.

Conclusion

The Supreme Court’s judgment in the Thirunelly Devaswom case is a definitive statement on the sanctity of temple funds in India. By refusing to allow cooperative banks to use religious deposits to bail themselves out, the apex court has drawn a clear boundary between sacred and commercial interests. This landmark decision not only protects the interests of temples and devotees but also serves as a stern reminder to financial institutions about the legal and ethical responsibilities they carry when handling funds entrusted to them.

As cooperative banks navigate financial challenges, they must now prioritize internal management, sound banking practices, and legal compliance, ensuring that public trust and sacred deposits are never compromised. For temples and religious institutions, the ruling provides reassurance that their funds are safeguarded by the highest judicial authority in the country, reaffirming the principle that deity-owned money exists solely for the welfare, rituals, and preservation of the temple.