SPANISH FLU TOO SPARED KERALA

Its Duration in Malabar Was Long

We now know that Covid-19 has not been destructive in Kerala. Influenza epidemic of 1918-1919, better known as the Spanish flu of 1918, also almost spared Kerala. The census report of Travancore then is silent on the influenza deaths. But it took its toll in the neighbouring state of Madras. The 1921 census report of Travancore, South India, says:

“Influenza, to which about 6 millions of people succumbed in places outside Travancore, affected the state only ligfhtly and was not attended with high mortality”.

The report is silent on the death toll. The fever deaths during 1920-21 was 17,377 and 15,210 in 1921-22. The duration of the pandemic was very long in Malabar.The mortality rate there was 10-20% per annum, per 1000 people.

The Tirunelveli district of Madras, adjoining Travancore was devastated. It, which had a population of 19 lakh in 1921, had 12,798 fever deaths, mailnly due to the flu.

The highly infectious Spanish flu had swept through the ashram in Gujarat where 48-year-old Gandhi was living, four years after he had returned from South Africa. He rested, stuck to a liquid diet during “this protracted and first long illness” of his life. When news of his illness spread, a local newspaper wrote: “Gandhi’s life does not belong to him – it belongs to India”.

Outside, the deadly flu, which slunk in through a ship of returning soldiers that docked in Bombay (now Mumbai) in June 1918, ravaged India.

The influenza killed between 17 and 18 million Indians, (Close to 2 Crore) more than all the casualties in World War One.

India bore a considerable burden of death – it lost 6% of its people. More women – relatively undernourished, cooped up in unhygienic and ill-ventilated dwellings, and nursing the sick – died than men. The pandemic is believed to have infected a third of the world’s population and claimed between 50 and 100 million lives. To make matters worse, a failed monsoon led to a drought and famine-like conditions, leaving people underfed and weak, and pushed them into the cities, stoking the rapid spread of the disease.

A Spanish flu camp in India,1918

The outbreak in Bombay, an overcrowded city, was the source of the infection’s spread back then.

By early July in 1918, 230 people were dying of the disease every day, up nearly three times from the end of June. “The chief symptoms are high temperature and pains in the back and the complaint lasts three days,” The Times of India reported, adding that “nearly every house in Bombay has some of its inmates down with fever”. Workers stayed away from offices and factories. More Indian adults and children were infected than resident Europeans. The newspapers advised people to not spend time outside and stay at home. “The main remedy,” wrote The Times of India, “is to go to bed and not worry”. People were reminded the disease spread “mainly through human contact by means of infected secretions from the nose and mouths”.

“To avoid an attack one should keep away from all places where there is overcrowding and consequent risk of infection such as fairs, festivals, theatres, schools, public lecture halls, cinemas, entertainment parties, crowded railway carriages etc,” wrote the paper. People were advised to sleep in the open rather than in badly ventilated rooms, have nourishing food and get exercise.

“Above all,” The Times of India added, “do not worry too much about the disease”.

Colonial authorities differed over the source of infection. Health official Turner believed that the people on the docked ship had brought the fever to Bombay, but the government insisted that the crew had caught the flu in the city itself.. Hospital sweepers in Bombay, according to Laura Spinney, author of Pale Rider: The Spanish Flu of 1918 and How It Changed the World, stayed away from British soldiers recovering from the flu. “The sweepers had memories of the British response to the plague outbreak which killed eight million Indians between 1886 and 1914.”

“The colonial authorities also paid the price for the long indifference to indigenous health, since they were absolutely unequipped to deal with the disaster,” says Ms Spinney. “Also, there was a shortage of doctors as many were away on the war front.”

Eventually NGOs and volunteers joined the response. They set up dispensaries, removed corpses, arranged cremations, opened small hospitals, treated patients, raised money and ran centres to distribute clothes and medicine. Citizens formed anti-influenza committees. “Never before, perhaps, in the history of India, have the educated and more fortunately placed members of the community, come forward in large numbers to help their poorer brethren in time of distress,” a government report said.

IN 1918, misfortune befell the 22-year-old poet Suryakant Tripathi, better known as Nirala or “the strange one.” “I travelled to the riverbank in Dalmau and waited,” he wrote in his memoir, A Life Misspent. “The Ganga was swollen with dead bodies. At my in-laws’ house, I learned that my wife had passed away.” Many other members of Nirala’s family died too. There was not enough wood to cremate them. “This was the strangest time in my life,” he recalled later. “My family disappeared in the blink of an eye. All our sharecroppers and labourers died, the four who worked for my cousin, as well as the two who worked for me. My cousin’s eldest son was fifteen years old, my young daughter a year old. In whichever direction I turned, I saw darkness.” These deaths were not just a coincidence of personal tragedies visited upon the poet, they were connected: “The newspapers had informed usabout the ravages of the epidemic,” Nirala wrote.

Though other countries lost a higher fraction of their populations—Western Samoa (now Samoa) lost 22 percent, for example, compared to 6 percent in India—because of the larger size of the Indian population, that 6 percent translated into a staggering slew of death. Asia as a whole experienced some of the highest flu-related death rates in those years, but the story of how the disease ravaged the continent is relatively unknown. The 1918 flu pandemic has been called the “forgotten” pandemic, and ironically the continent that seems to have forgotten it most thoroughly is the one that bore the brunt of it.As Stalin is supposed to have observed, a single death is a tragedy, a million deaths is a statistic.

Then, India had the largest number of deaths in any single country (10-20 million) as well as highest percentage of excess deaths (4.39%) in the world The estimated total global death toll was 50-100 million. A modelling exercise later showed that if an influenza pandemic with a similar severity were to happen in 2004, the world is likely to have around 62 million deaths. And sadly, India again would top the countries with maximum deaths (approximately 14.8 million).It is from this destructive prophecy,India is recovering.

Report from Health Officer, Delhi, on outbreak in Calcutta

 When the first pandemic struck in 1918, our knowledge on influenza was a clean slate, in fact, some believed that the pandemic was caused by a bacteria - Bacillus influenza. There were no vaccines, no antivirals and no antibiotics to treat the superadded infections. Every year, on an average, 3-5 million cases of seasonal flu and 290,000-650,000 deaths are reported globally. In high-income countries, deaths occur in elderly (65 and older) while in the low and middle income countries like India, 99 per cent of deaths are in children under five with influenza-related lower respiratory tract infections. However, the low and middle income countries hardly use the vaccine. In 2015, of the 486 million doses distributed to 201 countries, 95 per cent were shared among the Americas, Europe and western Pacific WHO regions and only five per cent were distributed among South-east Asia, eastern Mediterranean and Africa WHO regions. When a country does not buy and use the vaccine in ‘peace time’, it gets a low priority even if it were to pay for the vaccine when a pandemic strikes as happened during the 2009 pandemic.

The pandemic came in three waves. The first two — in spring 1918 followed by threr second and deadliest wave from September 1918 to January 1919.-coincided with the final period of World War 1.The third wave ran from Februar 1919 till the end of the year with some countries witnessing a fourt wave too,in 1920.The pandemic ended after enough people developed immunity,what we call herd immunity.Vaccine took another 25 years;the first approved batches of flu vaccine were given to soldiers in 1945,as World War 2 was ending.

The outbreak in Bombay, an overcrowded city, was the source of the infection's spread back then too.A ship carrying Indian troops reached the shores of Bombay on the 29th day of May in 1918. It remained anchored to the city’s docks for about 48 hours. The world was on its last leg of the First World War, so the Bombay ports were usually busy with the movement of troops and goods back and forth from England. The ship, thus, remained an inconspicuous visitor on its waters among the humdrum of activity around it. However, the city was not prepared for some unusual cargo that had come unbeknown to anyone on the ship: lethal strains of the H1N1 influenza virus right from the trenches on the Western front.

On June 10, seven police sepoys, one of whom was posted at the docks, were hospitalised with what appeared to be influenza. They were India’s first cases of the highly infectious Spanish flu that was rapidly sweeping across the world at the time. Bombay was soon crippled by the virus and railway lines carried it to different corners of the country.From the hilltops of Shimla to the isolated villages of Bihar, no part of the country remained unaffected. The speed and extent of the fatalities were overwhelming. In Bombay, 768 people died in a single day on the 6th of October in 1918.

A 1918-1919 image of Spanish flu treatment

Even Gandhi, who was gaining recognition among intellectual circles as a future leader, came down with the flu in its second wave. “All interest in living had ceased,” he later wrote in his autobiography. For a variety of reasons, the second wave proved particularly fatal for India. While the mortality rate for the epidemic stood at 4.7 per 1,000 people in Britain, India’s mortality rate climbed to 20.6 per 1,000 people. The country’s poor healthcare infrastructure had a key role to play in creating the disparity. But the arrival of the flu also coincided with a drought in 1918, which led to a famine in large parts of the country. Since, hunger weakens the immune system of the body, it made large segments of the population vulnerable to the virus. The colonial regime made matters worse. Despite the famine and the epidemic, Indian-grown food continued to supply the war efforts on the British front lines. Doctors were also away for the war.

Over 61 lower caste Hindus died per 1,000 in the community while merely 18.9 caste Hindus (sic) per 1,000 from the community lost their lives. The same figure for Europeans living in India at the time stood at 8.3. Since the lower caste Hindus were mostly engaged as sweepers and scavengers, it made them highly vulnerable to the spread of the virus.

According to an article in Psychology Today, before the European Plague swept across the region, “the Jews most often took the blame for spreading the Bubonic Plague and were accused of poisoning wells or trying to infect others directly.”

“Many Jews were murdered based solely on rumour and innuendo. Entire villages were wiped out in retaliation,” the article adds.

Till today, ‘The Great Flu Pandemic of 1918-1919’ is still referred to as Spanish Flu even though it didn’t originate there.The Spanish got tagged with the killer flu because Spain was the first country to report the disease publicly, not because it originated there.

Even though swine flu does not transmit by pigs, "some countries banned pork imports or slaughtered pigs after the 2009 outbreak” all because the flu's name appeared to convey that it is spread by pigs.Once, such a country was Egypt, which ignored the UN's advice and ordered the slaughter of all its 3 to 4 lakh pigs. According to Reuters, the culling of pigs placed the already marginalised Christians at a disadvantage, fuelling sectarian tensions in the mainly Muslim country.

© Ramachandran 

RAMAN NAYAR LIQUIDATES PALAI CENTRAL BANK

He Upheld Land Reforms Act, Set Free Fr Benedict

While writing the Communist History of Kerala in 2013, I had to do a chapter on the Andhra rice scandal, which cropped up during the first EMS ministry in Kerala in 1957-1959. Justice P T Raman Nayar commission had enquired about it.I had to then write a personality sketch on him. He was the Judge who liquidated the Palai Central Bank in 1960, and ex0nerated Fr Benedict in the Mariyakutty murder case.

Justice P.T. Raman Nayar's seminal, trail-blazing judgments speak for him. The third Malayali Indian Civil Service officer,after M C B Koman and A S P Ayyar, to have become a Judge — and later Chief Justice — he won laurels for his erudition, and austere, if not manic, adherence to the rule of law.Koman was a Judge of the Madras High Court during 1945-1946.He belonged to the 1923 batch of the ICS. Raman Nayar was the only ICS Judge the Kerala Highcourt ever saw. He bacame a Judge in 1957 and was its Chief Justice from 1969-1971.

P T Raman Nair

I C S had a judicial branch-It is generally acknowledged that the ICS men in the Judicial Branch contributed significantly to both sustaining and enriching the Indian legal system, pre and post-1947. While only one, Kailas NathWanchoo (ICS, UP, 1926) headed the Supreme Court of India (1967– 68), several other ICS Judges have adorned that Court; the names of Justices SK Das, KC Dasgupta, Raghubar Dayal, V Ramaswami and Vashistha Bhargava come to mind. In Punjab, the first four Chief Justices, post-Independence, were from the ICS, namely Eric Weston, a European ICS, AN Bhandari, GD Khosla and Donald Falshaw, another European ICS, who left in 1966. In 1958, Justice H.K. Chainani (ICS, 1927) – approximately the same seniority as Justice KT Mangalmurti, ICS – succeeded MC Chagla as Chief Justice, Bombay High Court. Other ICS Chief Justices, RL Narasimhan in Cuttack, DE Reuben in Patna, MC Desai, VG Oak and Dhatri Saran Mathur (an engineering graduate from Roorkee) in Allahabad, NDK Rao in Hyderabad, Jagat Narain in Jodhpur, PT Raman Nair in Kochi and VB Raju in Ahmedabad have added lustre to the status and dignity of the judiciary in independent India.

M Anantanarayanan (ICS, Madras, 1929) retired as Chief Justice of the Madras High Court in 1969.Another contemporary, Justice V Ramaswami (ICS, Bihar & Orissa, 1929) was elevated to the Supreme Court in January, 1965.

Satyendranath Tagore, elder brother of the poet, the first Indian to win his way into the ICS, served in the judiciary in the then Bombay Presidency which covered parts of present-day Maharashtra, Gujarat and Sindh. The third Indian to join the ICS (in 1869), Behari Lal Gupta, became the first Indian Chief Presidency Magistrate of Calcutta, an appointment that sparked off a serious debate in regard to an Indian being appointed to this position in the colonial State, leading to the Ilbert Bill controversy of 1883; he retired as an Officiating Judge of the Calcutta High Court in 1907. The first two Indians to enter the ICS in the Madras Presidency became Judges – AC Dutt (District Judge, Cuddalore) and V Venugopal Chetti (District Judge, Nagapattinam).

In 1938-39, Ronald Francis Lodge (ICS, Bengal, 1910) was on a three-member Bench of the Calcutta High Court hearing the appeal in the sensational Bhawal Sanyasi case in which the majority view upheld the identity of the second Kumar, Romendra Narayan Roy; Lodge, who gave a dissenting judgment, went on to become Chief Justice of the Assam High Court in April, 1948 and, briefly, Acting Governor upon the demise of Sir Akbar Hydari.

Till India’s Independence in 1947, around one-fourth of the ICS officers served in the judiciary becoming, in time, District and Sessions and High Court Judges. The rationale of transferring an ICS officer after about ten years of service to the judicial cadre was to ensure that those entrusted with the responsibility of resolving disputes and dispensing justice had direct knowledge (having been Assistant Collectors and Sub-Collectors) of the ground realities and of matters of tradition and custom. Post – 1947, a few Indian ICS officers like Kerala Christian A L Fletcher (Punjab, 1933) who had been the District Judge, Gujranwala (now in Pakistan) moved from the Judicial Branch to the Executive, worked as Commissioner, Jullundur Division and had a long stint as Financial Commissioner at Chandigarh.

A L Fletcher

Anthony Leocadia Fletcher, son of Peter Fletcher and Helen Fletcher, was born on 9 December 1909 in a Christian family of Kerala. He completed his school education from St. Joseph's Higher Secondary School, Trivandrum. He did his B.Sc. from University of Madras and M.Sc. from University of Nagpur. Then he went to School of Oriental Studies for further education and joined as Indian Civil Servant in London,in 1933.

Fletcher was appointed the first Vice-chancellor of Chaudhary Charan Singh Haryana Agricultural University on 29 March 1970 and served until his death on 14 December 1974. He was also the founder of Campus School CCS HAU, Hisar present inside the university premises, a school that caters to the children of university employees. The administrative block of the University is named after him as Fletcher Bhawan. Nomenee Robinson, Michelle Obama's uncle has worked under him in 1961.Fletcher was married to Patricia Fletcher and had one son and two daughters.

Of the small number of European ICS officers who opted to serve on the Indian side of the Radcliffe Line, a few were in the High Courts, such as Basil Reginald James (1954 – 60) and William Broome (1958 – 72), son-in-law of Sir Hari Singh Gour (eminent jurist and founder of Sagar University) at Allahabad. When a vacancy of Chief Justice occurred in the Nagpur High Court in the early fifties, a replacement was brought in from Patna, since the senior most puisne judge, CR Hemeon, a European ‘nominated’ to the ICS (in recognition of ‘war service’) was found to be “not good enough to be promoted as Chief Justice and not bad enough to be superseded in his own Court”.

The image of the ICS officer as ‘ruler’ runs through many accounts of British Raj in India. While the Executive and Judicial branches of the Service had a clear demarcation of functions, they maintained, in broad terms, a common identity; the ICS origins were always important. On the judicial side, there were distinguished personalities like Sir B N Rau (ICS, Bengal, 1910) who served in the Calcutta High Court and, later, as Constitutional Adviser to the Constituent Assembly, Prime Minister of Jammu and Kashmir State,as also Judge of the International Court of Justice at The Hague.

KVK (Kalyana) Sundaram (ICS, CP & Berar, 1927) displayed such legal ability at an early stage that the Judicial Commissioner, Sir Robert McNair, later commented that “Sundaram was one of the few junior legal officers whose recommendations he would take in disposing of a case without appraising it himself”. Sundaram was appointed as Union Law Secretary in 1948 and was, thereafter, the second Chief Election Commissioner of India.

The High Courts had an array of ICS officers. Among them were Justices Sir Barjor Jamshedjee Dalal (1925-31), Harish Chandra, S B Chandiramani, Atma Charan (he was the Special Judge in the Mahatma Gandhi murder trial), B N Nigam at Allahabad, Justices ASP Ayyar (Ayilam Subramania Panchapakesan Iyer-an eminent literary figure and father of former Foreign Secretary, AP Venkateswaran), K Srinivasan Iyer at Madras, HR Krishnan in Bihar (and Indore in Madhya Pradesh) and S S Dulat in Punjab. Justice AK Mukherjea (Judge, Supreme Court, 1972-73) who joined the ICS in 1937 and worked in the Ministry of Transport, Government of India, and as Secretary, Radcliffe Commission, opted for premature retirement in 1951; later, he returned to judicial service as a puisne judge of the Calcutta High Court.

While the ICS members of the higher judiciary in the subcontinent did not exactly set the Thames on fire, their integrity and sincerity were unchallengeable. Some of the very highly regarded personalities at the Supreme Court of India – Justices Patanjali Sastri, BK Mukherjea, Vivian Bose, Gajendra Gadkar, Hidayatullah, JR Mudholkar, SM Sikri and VR Krishna Iyer, illustratively speaking – had no links with the ICS.

One ICS District Judge (IM Lall) faced compulsory retirement; Justice SB Capoor of the Punjab & Haryana High Court was among the last ICS members to leave in the late sixties.

Like Fletcher,the legendary A S P Ayyar is never identified as a Malayali,but his son A P Venkateswaran,was referred to as a Malayali.A S P Ayyar ( 1899-1963 ) was born at Ayilam,a Palakkad hamlet.K P K Menon has written a biography of him.He himself wrote his service story-Twenty five Years as a Civilian.He presided over the Alavandar murder case.

A S P Ayyar

P T Raman Nayar's court was even a greenhorn's tutorial. “Regardless of seniority, he would patiently hear you out. For beginners like me, appearing before him was really an educative experience,” remembered K.A. Nayar, a former Judge of the High Court. 

“[He] did not make any distinction between senior and junior lawyers and he knew only about good and bad cases,” the former Kerala High Court Judge, V. Bhaskaran Nambiar, who had appeared before Raman Nayar as an advocate, writes in his memoirs, Life's Likes and Dislikes. 

Raman Nayar expected lawyers to be thorough with his or her case. Anyone caught wanting in facts or advocacy would face terse, but intelligent, comments from him. But he would not be incensed by a repartee. 

Whenever a question involving a section of the Civil Procedure Code or an Act came up, before hearing the lawyer on the interpretation he would reach out for the Act or Code and read the section over and over again before engaging the lawyer in a discourse and arriving at a conclusion. 

Remembered Senior Advocate T.P. Kelu Nambiar: “Even if on the same day the same question pertaining to the same section had come up, he would repeat the process. When I asked him about this, he explained: ‘When we interpret a section in the background of a case, we get a perspective, but the same section read in the backdrop of a new case may throw up a whole new perspective'.” 

Born on January 14, 1910, Raman Nayar hailed from Kumaranellur,Palakkad. He was the cson of Padinjarankunnath Thazhethayil Lakshmi Amma and Kinattinkara Krishnan Nayar.After schooling at Mangalore, Kakinada, Kozhikode and Madras, he graduated from the Madras Law College. He cleared the ICS in 1932 while an apprentice-at-law under O.T.G. Nambiar in the Madras High Court. 

After probation at Cambridge, he held the posts of Assistant Collector, Sub Collector, City Magistrate, Additional District Sessions Judge and District Sessions Judge in places like Chengsalpet and Tiruchirapally in Tamil Nadu, and in Mangalore. He became Registrar of the Madras High Court. He was Joint Secretary to the Law Ministry when Dr. B.R. Ambedkar was Law Minister. Later he was Special Secretary overseeing State reorganisation in Kerala. 

In 1957, Madras High Court Chief Justice P.V. Rajamannar nominated him a Judge of the Kerala High Court.After the states reorganisation,Nayar had opted for Kerala.

Fr Benedict Onamkulam

In the Mariyakutty murder case — Raman Nayar later termed it the most difficult in his career —he acquitted the accused, Fr. Benedict Onamkulam, a Catholic priest who had been convicted by a District Court. The District Court had reservations about the investigation, but took a ‘serious view' as the accused was a priest. Raman Nayar upheld the principle of equality before the law and exonerated him.Nayar was proved right when in 2001,wife of the real ciulprit confessed to Fr Benedict.The culprit had died and Fr Benedict,who was in his 80s had returned from the US.It seems the priest had kept the confession of the culprit as a secret.

Mariyakutty case or Madatharuvi case involved the 1966 murder of a widow named Mariyakutty. A priest, Fr. Benedict Onamkulam, was convicted of the crime. Sessions court sentenced the priest to death but the Church approached the high court and freed him. His supporters claim that he knew the culprit, but he didn't break the seal of confession.The prosecution alleged that the Syro-Malabar Catholic priest Fr. Benedict Onamkulam had killed Mariyakutty at the stream of Madatharuvi, near Ranni with the motive of ending their affair. Onamkulam was sentenced to death by the session court, however, the High court of Kerala acquitted and freed him purely based on technical grounds dismissing circumstantial evidence in 1967. 

The case has been so sensational in Kerala that it inspired a number films. It came into prominence in local media again in 2010 when the Changanassery Bishop opened Fr. Benedict's tomb for prayers at Athirampuzha,Kottayam. 

Raman Nayar's commission of inquiry report into the Andhra rice deal provided fodder to the ‘liberation struggle' that led to the dismissal of the first elected Communist government. EMS had apologised in a contempt of court case in 1958.Nayar penalised E.M.S. Namboodiripad in, who was Chief Minister for a second term, in a contempt of court case in 1968,for his statement that the judiciary was “guided and dominated by class hatred, class interests and class prejudices and where the evidence is balanced between a well-dressed, pot-bellied rich man and a poor, ill-dressed and illiterate person, the judge instinctively favours the former.” 

The first state government led by E. M. S. Namboodiripad was rocked by the infamous Rice Scandal that pertained to alleged corruption in the purchase of rice from Andhra Pradesh. During the summer of 1956,the government imported 5000 tonnes of rice from a wholesale dealer,M/s T Sriramulu,P Suryanarayana & Co.It was done without tenders.This deal was suggested by the then Lok Sabha member A K Gopalan and it is said that the kick back in the deal was diverted to the Andhra elections where the Communist Party expected to win; P Sundarayya had gone to Andhra from Delhi to lead the campaign,expecting to win and becoming the CM.

T. O. Bava of the Congress raised the allegation that the purchase made without floating tenders caused a loss of Rs 16.50 lakh to the exchequer. K. C. George was the then food minister. A probe was ordered under the Commission of Inquires Act, 1952 and Justice P. T. Raman Nayar was the inquiry commission. Though the commission’s report confirmed the monetary loss, it also suggested that no one in the ministry made any personal gains. The government tabled the report in the Assembly, but with a dissent note and rejected the demand for K. C. George’s resignation.EMS government rejected the Raman Nayar commission report.

K C George

Though branded an anti-Communist, he upheld certain vital provisions of the Kerala Land Reforms Act as “it passed the test of law.” Amid opposition from lawyers, he instituted the list system under which cases pending hearing would be posted for a particular day and no adjournment would be allowed. 

Among his judgments were the one liquidating the Pala Central Bank in 1960. Said Senior Advocate C.M. Devan, who represented the Reserve Bank of India in the case: “Justice Raman Nayar … did everything to protect the interest of investors. His legal acumen stood out.” The incisive, lucid judgment was dictated soon after arguments ended. Raman Nair rarely reserved judgments. 

From the time of its founding in 1927, Palai Central Bank had an eventful history.Although it was started in a small remote city, the bank grew up to become not only the biggest bank but the biggest institution in Kerala, after the state government, and the 17th largest among the 94 scheduled banks in India. 

Joseph Augusti Kayalackakom founded The Central Bank Limited in (Pala), a small town in the central part of the then native state of Travancore, which later became part of Kerala. His uncle, Augusti Mathai Kayalackakom, provided the start up capital. Joseph Augusti, who belonged to a family of agriculturists and traders, had carried on some other businesses before going into banking. He had run textile business initially in Pala, and later on in Thiruvananthapuram (Trivandrum) in 1908; he also established a bus service in Thiruvananthapuram from 1910 onwards.
The bank was incorporated under the Travancore Companies Regulation (1092) with the following persons as the initial Promoter-Directors:

• Chairman: Augusti Mathai Kayalackakom
• Mg. Director: Joseph Augusti Kayalackakom
• Directors: Outha Ouseph Thottumkal, Varkey Ouseph Vellookunnel, Cheriyathu Thommen Menamparambil, George Joseph Kottukappallil and Jacob Cherian Maruthukunnel

In 1929, when the Great Depression struck and Travancore's plantation sector was badly hit, the bank gave liberal assistance to the plantations. The bank, which later changed its name to Palai Central Bank, started expanding its activities by opening branches at several places. When the Bank opened a branch in New Delhi, India's new capital city in 1932, it was the very first bank to do so, ahead of even the established north-Indian banks. The Bank also discovered the potential of Aluva (Alwaye) by opening a branch there.

In 1935, the bank introduced electricity in its head office building in Pala by installing oil-powered generator, years before Government's first power project was commissioned at Pallivasal.The bank's managers, KM Joseph and later KM Augustine in Thiruvananthapuram, George Joseph in Chennai (Madras), KM Chacko in Nagercoil, C J Thomas in Delhi and others enjoyed exceptional popularity and influence.

Joseph Augusti

In 1935, George Thomas Kottukapally, the brother of Director George Joseph Kottukappally, became a Director of Palai Central Bank. As the Travancore Debt Relief Act was coming into existence in 1937, one of the first directors of the bank, Jacob Cherian Maruthukunnel, was nominated to the Sree Chitra State Council to pilot the relative Debt Relief Bill, as it was expected that banks would be affected by the Act.

In 1937, two of the major banks of Travancore – Travancore National Bank and Quilon Bank merged to form Travancore National and Quilon (TNQ) Bank. However, in the very next year it was liquidated . This led to the collapse of more than 60 small banks. However, Palai Central Bank, which was the leading bank then, remained unaffected. 

With India's independence in 1947, the first popular government assumed power in Travancore in 1948 with Pattom Thanu Pillai as Chief Minister. The new Chief Minister told the bank's management that the bank could make a major contribution in nation building. The bank subscribed to government bonds for large amounts.The bank financed the construction of the Trivandrum-Nagercoil Cement Concrete Road, which now forms part of NH-47. 

In the 1940s the Bank enjoyed an unprecedented financial position and influence. I took the chief editor of Malayala Manorama Daily, K M Mathew to the Surya TV studio in 1998 for an interview in which he spoke on the Palai Central Bank management helping their founder Mammen Mappilai – who was struggling to revive the newspaper – by offering to take over the paper as a whole or to invest in its shares, as a friendly gesture of Joseph Augusti towards a close family friend. Eventually, an investment of 20% in shares was made. 

In 1948, K M Joseph Kayalackakom – who had become a Director of the bank in 1940 following the death of his father and the first Chairman of the Bank, Augusty Mathai – moved from Trivandrum to the bank's head office at Pala. He became the virtual General Manager of the institution. 

In 1947, at a time when there were no management schools anywhere in the British Empire, Joseph Augusti sent his cousin KM George to the United States for management studies. KM George took his MBA degree from New York University in 1948, thus becoming the first MBA degree holder in Travancore. In 1949, he joined the bank as an executive. He was to later become the Secretary and chief executive officer of the bank. 

In the late forties it was found that during the previous few years, the institution had drifted and slowed down from its previous spectacular growth rate. Officials, who had the charge of advances, had not been successful in controlling subordinates sufficiently to ensure discipline over making of advances. Several advances had proved to be doubtful, although their percentage in total advances was not high. 

In 1949, the Reserve Bank of India (RBI) was nationalised and the Banking Companies Act came into existence (later renamed as Banking Regulation Act). This legislation gave RBI complete control over commercial banks. As RBI entered the picture, it continuously pursued the question of the old doubtful advances of the bank. 

Like the TNQ bank,Palai Central Bank too had a Christian agenda. In 1950, when a new Diocese of the Catholic Church was formed in Pala, it was an open secret that the bank was the prime mover in bringing the Diocese to Pala. Joseph Augusti led a delegation that accompanied the new Bishop Mar Sebastian Vayalil to Rome for the investiture ceremony. The bank also took keen interest in extending assistance to the initial ventures of the new Diocese of Palai.It  financed the St Thomas College, Alphonsa College and the Bishop's palace, without collateral. In 1953, the Bank accorded a grand reception to Eugene Tisserant, Dean of Vatican's Sacred College of Cardinals, at the residence of the managing director in Palai during the Cardinal's visit to Kerala.These were not banking,but were communal activities.

Palai Central Bank was a pioneer in modern ads

In 1953, George Thomas Kottukapally, who was still a Director of the bank, became a member of parliament. Even after that, he continued to be a director. In the same year, when A. J. John (who had become Chief Minister of the integrated Travancore-Cochin State) resigned, he accepted the bank's invitation to join its board of directors. 

In January 1955, the ruling Indian National Congress party, at their national conference held at Avadi in Tamil Nadu, passed the resolution to establish socialism in India "where the principal means of production are under social ownership or control". As the implementation of this began and the nation started moving along the socialist path, in that year itself Government of India nationalised the Imperial Bank of India and formed State Bank of India. In January 1956, life insurance was nationalised and Life Insurance Corporation of India was formed. 

Palai Central Bank had by then emerged not only as the biggest enterprise in Kerala – bigger than all the private and public undertakings and banks in the State – but also as the 17th largest bank in the country, bigger than even some of the State banks. From 1956 onwards RBI started turning down the Bank's repeated requests for opening new branches. In 1956, when RBI asked for the communal break-up of the Bank's depositors.

In March 1957, H V R Iyengar became Governor of RBI. He had succeeded B Rama Rau who had resigned due to differences with the Finance Minister after a long period of nearly eight years in office. In Delhi, Jawaharlal Nehru's two finance ministers had resigned in quick succession and Morarji Desai became the new Finance Minister in March 1958. 

In 1959, seven banks controlled by the erstwhile native states – including State Bank of Travancore – were nationalised by Government of India and made subsidiaries of State Bank of India. Towards the end of that year RBI, initiated a series of steps in Palai Central Bank. It asked Joseph Augusti to retire from the board of directors of the Bank. K M George was asked to step down from the post of chief executive officer and to continue as Secretary of the Bank. An official of the State Bank of India was appointed as the bank's new chief executive officer. Following these moves, some of the bank's depositors lost confidence in the institution. 

In 1960 February, a new ministry assumed office in Kerala with Pattom Thanu Pillai as Chief Minister. In August that year, the Governor of RBI succeeded in persuading Desai for the closure of Palai Central Bank which, he told him, had too much of doubtful advances.RBI moved the application in Kerala High Court for the winding up of the Bank under Section 38(3) (b) (iii) of the Banking Regulation Act, 1949. The Banking Regulation Act does not allow the High Court to go into the merits of RBI's application but specifies that the Court "shall order the winding up" if an application is made by RBI. Also, RBI can move an application if in the opinion of the RBI "the continuance of the banking company is prejudicial to the interests of its depositors". Justice P T Raman Nair, the presiding Judge of the Kerala High Court ordered the winding up on 8 August 1960.

When a group of Kerala MPs met Nehru requesting that the bank be revived, he told them that he would like to, but his insistence will lead to the resignation of Desai. He said there is a feeling that Finance Ministers did not thrive under him and so he did not want another resignation. In the larger interests of the nation, he asked the Kerala MPs to put up with the whole thing. When Chief Minister Pattom Thanu Pillai met Desai to make a personal appeal, he cut him out by asking as to how much money he had lost. A furious Pattom Thanu Pillai told him that like Desai he was also a true Gandhian and he has never had a bank account in his life. He then angrily walked out. With that, all doors for a revival from Government side were closed. 

A legal battle was then fought. But the delay of the legal process made a revival impossible. In the Supreme Court, the Bank's case was argued among others by Gopal Swarup Pathak, who later became Vice-President of India. The Court ruled in a 3–2 judgement that with the delay, a revival has been rendered infructuous.

The Finance Minister of the country stated in Parliament that the bank's deposits had hardly 15% asset backing,;the people had no reason to disbelieve.The depositors got more than 90% of their money – but in petty instalments.Desai said that,after the collapse of the bank,withdrawls increased steadily from Rs 12 lakh during the week ending 1 July 1960 to 17 lakh a week later,20 lakh during the week ending 15 July,23 lakh,29 lakh,35 lakh during the weeks ending 22 July,29 July and 5 August. 

In the early 1990s when banks in India faced a crisis of mounting losses and high levels of non-performing assets, an interviewer asked a now-retired Justice P T Raman Nair about his thoughts on the winding-up order of Palai Central Bank three decades ago. He then remarked that today's banks were in much worse condition and that if the current yard stick were applied Palai Central Bank would not have been ordered to be closed.That doesn't mean Palai bank fared better or Ramn Nair's ruling was wrong.Infact,he did right-In 1964, barely 3 years after the closure of Palai Central Bank, a major upheaval occurred in the Congress Party in Kerala. Fifteen of its MLAs – mainly those from central Kerala – split and formed a new party, Kerala Congress.The closure of Palai Central Bank is considered by many to be one of the root causes that led to the new chain of political events.

Panicky depositors at Delhi Palai Central Bank

Former Chief Secretary V. Ramachandran recalled how Raman Nayar shielded and mentored him when he was Fort Cochin Sub Collector. “It's he who made it clear to me that government notifications and orders should be so drafted that they are simple but comprehensive and are clear to the reader who doesn't have the benefit of all the background.” 

Raman Nayar led a simple life and steered clear of any inappropriate social engagement. “An able administrator and a highly-regarded jurist, he was really generous when praise was due,” recalled M.C. Madhavan, former Registrar of the Kerala High Court. He was personal assistant to Raman Nayar as Chief Justice. 

He was not elevated to the Supreme Court. ‘Social justice' had become the buzzword in the late-1960s. Around this time, he gave a speech at Tiruchi in which he remarked that although everyone was so obsessed with socialism, the word did not find a mention in the Constitution. That speech, it is believed, cost him dear. (The word ‘socialist' was later added to the Constitution through the 42 Amendment,during the Emergency.) 

K.S. Paripoornan, former Judge of the Supreme Court, said: “Justice never suffered at the impartial hands of Raman Nayar. By not promoting him to the Supreme Court, the country became the loser.” 

Raman Nayar ‘retired hurt', on September 1, 1971 — four months before completing his term. H.R. Gokhale, Law Minister in the Indira Gandhi-led government, reportedly conveyed to him Chief Minister C Achutha Menon's displeasure at not being consulted while nominating judges for appointment in the High Court.Obviously,Menon had conveyed his displeasure to Indira Gandhi. The constitutional provision for appointment of judges to the High Court stipulated that the Chief Justices send their recommendations to the President through the Governor. Raman Nayar proceeded on leave.It should be noted that Menon,Member in Rajya Sabha was imported to Kerala as Chief Minister of a Congress led government.It was back door politics at the behest of the Soviet Union.Menon,who belonged to the Soviet led CPI was a stooge of Indira Gandhi by enjoying her generosity.He paid by the excesses committed by the police during his term in Emergency. 

It is also said Menon was irked by the suggestion of Indira Gandhi and Gokhale in a meet of Chief Justices that the Juduciary should have a social face.His motto was,"I am not a law maker.My duty is to interpret the written law.I should not fail in it."

When once he was invited by the Nair Service Society to be the chief guest at their meet,Nayar refused feeling that the invitation came because he was a Nair.He asked the NSS office bearers to invite Justice K T Koshy.

He was a Gandhian even during the British rule and wore khadi always,except in court.He said about communism in Kerala:"There is communism both in Punjab and Kerala ( Harkishan Singh Surjeet,a Punjabi was CPI ( M ) General Secretary ).While a man in the street in Punjab aspires to be a car owner by hard work,here the tendency is to get the car owner into the street".

He drove his own car to the market,never exploiting public exchequer.When his car was once blocked by a traffic police man,Nayar stared at him."You are behaving as if you are a judge",the police man freacted.Nayar was the  Chief Justice.

Until his death in 2003, Nayar kept himself updated with all that was happening around him. “Our regret is that he did not pen anything for posterity…,” said his son, Major General (retd) I. Krishnan. But posterity will remember him.

© Ramachandran 

THE FAMILY FEUD BEHIND THE TNQ BANK FALL

Mammen Mappillai Freed After Confession and Apology

Post Covid period,we will see many banks in the world in crisis,and many bank mergers. In 1938, the Travancore National & Quilon Bank was liquidated. It had been the fourth largest bank after a merger of two banks in 1937-Travancore National Bank (TNB) and Quilon Bank. TNB was established in 1912 by K.C. Mammen Mappillai in Thiruvalla. Mappillai was a member of the prominent Kandathil Christian family which founded around 15 banks. His family also founded the Malayala Manorama group and the MRF. One of the founders was a priest who had some experience with running chits. 

People in the family blame Sir C P Ramaswamy Iyer, Dewan of Travancvore for the liquidation. But a closer look will reveal that the two families that ran the two banks, were in a rivalry inside the merged entity. The family feud gave Sir C P the chance to settle political scores. Obviously, it was because Mammen Mappilai had his own political ambitions. There was no need for Sir C P to learn politics from him-Sir C P was Secretary of the Indian National Congress in 1917. But Mappillai with few like minded Christians like T M Varghese, Barrister George Joseph and M M Varkey, had thwarted a move by the Travancore Government to merge Thangassery near Kollam into the State. Thangassery, like Anchu Thengu near Attingal, was part of British India and the ones who took part in the Abstention movement led by Christians then were hiding safely in these two places. Sir C P was then the Constitutional Advisor of the King; not the Dewan.

Let us go to the brasstacks.

TNB’s paid-up capital rose from Rs13,000 in 1912 to over Rs11.6 lakh in 1936. The reserve fund in 1936 was as high as 30% of the paid-up capital. Deposits rose from Rs3.75 lakh in 1922 to Rs177.65 lakh, a 60-fold increase in a 24-year period.

Quilon Bank was established by another Syrian Christian, C. P Mathen in 1919 with a paid-up capital of Rs 56,000. It rose to Rs 11.79 lakh in 1936. Deposits rose from Rs 54,000 in 1919 to Rs 102.57 lakh in 1936, about 190-fold increase in 17 years. In 1936, the reserve fund was nearly 17%of the paid-up capital, and there were 36 branches including three in what was then Ceylon.

Both Mappillai's and Mathen's fathers had earlier partnered in a bank named Thayyil Bank.Both Mappilai and Mathen had started the New Guardian of India Life Insurance Company  in 1934.

In 1937 both these banks merged to form TNQ. The merged TNQ Bank became the fourth largest Indian bank at that time after Imperial Bank, Central Bank of India and Bank of India. It had 75 branches spread over the country with the Central Office at Madras and the Registered Office in Travancore.

The honeymoon lasted barely a year as the bank wound up under court order in August 1938. Charged with breach of trust and misappropriation, the directors were arrested. In a trial where the defence was impeded at every step, the Directors were found guilty and sent to prison.Both Mappillai, Mathen, Mappilai's brother K V Varghese and Mappilai's son K M Eapen were sent to prison in 1939. Mappilai familywas released in 1941 and Mathen in 1942. Mappillai had tendered a written apology to facilitate the release. Mammen Mappilai didn't go to the jail as a freedom fighter; he went there as a fraudster. Mammen Mappillai’s brother K  C  Eapen died in prison.

Matthen,unlike Mappilai,refused to apologize.He had been extradited from Madras and imprisoned in Trivandrum, allegedly for balance sheet irregularities. He was sentenced to rigorous imprisonment but offered many chances to walk free if he would acknowledge guilt. He was released on January 22nd 1942 without condition or explanation and returned to Madras.

Chalakuzhy Paulose Mathen and his family moved to Madras. In 1952 he was elected to the Lok Sabha from Mavelikara constituency and in 1957 was appointed Indian Ambassador to Sudan. He died in 1960.

Matthen was born into a landed Christian family in central Travancore, in Kavumbhagom, Thiruvalla. He went to Madras after high school and did his Bachelor of History degree at Madras Christian College. He completed his education with a Bachelor of Law. He founded the Bank at 29.

K C Mammen Mappilai, after passing B A. from Madrsa Christian College, wanted to enter the Mysore Civil Service like some of his college-mates. But his uncle Kandathil Varghese Mappillai, founder of Malayala Manorama, persuaded him to come back to Kerala and become a school teacher.He joined M D Seminary High School and become its Headmaster. Varghese Mappillai persuaded his nephew to help him in the working of Malayala Manorama. He had an interest in chitty and lottery from the beginning. Varghese Mappillai passed away in July 1904, And the mantle of publishing the newspaper fell on the shoulders of Mammen Mappillai who was just 31 years old.

He resigned his Headmastership in 1908 and took over the publishing of Manorama as full time job. Along with publishing he went into a number of business projects some of which never saw the light of Day. Shipping, Road Transport, Retail Shop, Book Publications etc. were some of them. However, he gave Kerala's economy a new bounce. He used Malayala Manorama to popularise cultivation, particularly rubber, the MONEY TREE from Brazil. Rubber eventually became backbone of Kerala midlands and continues to be so.

He was a member of the Modern Legislative Assembly of the erstwhile State of Travancore.

Most of the banks then, including TNB, mobilized most of their deposits and earned profits via chit funds. The bank’s financials were vulnerable to certain shocks. Which is the case for most bank failures.This happened in the case of TNQ Bank too.

Mammen and Matthen's success in insurance company together led them to amalgamate their respective banks in 1937. The registered office remained at the Quilon Bank headquarters in Travancore but the main business of the bank was conducted from its central office in Madras where its primary shareholders were based. Sir CP Ramaswami Iyer encouraged this arrangement by offering to place Rs 7,000,000 of Travancore treasury money with the merged bank but this offer was never fulfilled. He made the offer to keep the bank in the Travancore soil,since Mappilai and Mathen had planned to register it at Madras.

K M Eapen,Bank Secretary with C P Mathen,London,1936

TN&Q Bank was established in 1937 with a new Quilon headquarters building which Matthen built at a cost of Rs. 140,000 (a very large sum of money at that time). To retain the business and deposits of the Travancore State, Matthen and Mammen had not only agreed to the headquarters in Travancore but that two of the bank’s directors were the Dewan’s appointees and also that the Bank’s General Manager, a confidant of the Dewan named K. S. Ramanujam, was appointed at the specific recommendation of Sir CP.All this was done,when the duo had a cordial relationship with the Dewan.

The bank’s financial run concluded with 88% of the public’s deposits being returned by the bank, and the bank becoming insolvent. At this point,Travancore administration demanded the extradition of Matthen and Mammen from Madras Presidency to Travancore State to stand trial for defrauding the public. Sir CP  convinced the British Government in Madras that the bank and its directors had been financing the Congress party so appeals to the Madras High Court and the Privy Council in London to stay the extradition orders were rejected and 3 directors of the bank including Matthen, Mammen and Mammen’s elder brother K V Varghese and Mammen’s son K M Eapen, were transported in chains from Madras to Quilon to stand trial.

At the trial in Trivandrum, the erstwhile General Manager of the bank - K. S. Ramanujam,  testified that Mammen and Matthen had defrauded the bank and four directors (including Mammen’s brother and son) were then awarded 8 years imprisonment. The bank’s remaining assets were liquidated by the State, and the bank’s assets were sold.The bank headquarters’ building in Quilon was auctioned  for Rs 15,600.It was bought by Kollam Municipal Chairman K G Parameswaran Pillai,for the Ophthalmic department of the district hospital. Pillai,who had a loan liability of Rs 86,249 got a waiver of Rs 56,249.K C Karunakaran,a prosecution witness,got a waiver of 2 lakh on his loan of 4 lakh.TNQ Banks,property just opposite to the secretariat in Trivandrum was auctioned off for Rs 16001 to Chattanatha Karayalar,Chairman of State Credit Bank.

U P Kukkiliya, advisor to the liquidators,became a judge of the Highcourt;he also got the 225 acre cashew estate of P V Swaminathan, which was pledged with the bank as collateral. He got it free.

K. S. Ramanujam vanished abroad after the trial. Sir C P sent word to Mammen and Matthen that if they admitted their accused guilt and sought the Maharaja’s mercy they could be pardoned. Mammen and his son agreed to sign the declaration but Matthen continued to refuse. Sir CP initially declined to agree to the release without all of three of them admitting guilt, but finally released Mammen and his son on receiving their written confessions.They confessed that only they are responsible for the fall of the bank.

Matthen continued to hold out on his refusal to sign the confession, despite heavy pressure brought on him through the Inspector General of Police, Mr Abdul Karim, visiting him regularly in jail and suggesting that he sign a letter – which the IG had drafted, requesting the Maharaja to pardon and release him.Mrs Mathen approached the British advovate general B L Mirett with all the records,and he wrote a report absolving Mathen. It was sent to the Viceroy Linlithgow ( 1936-1943).

In these circumstances,finally, on 22nd January 1942,  C. P. Matthen was unconditionally released by the Maharaja's Government without any written or verbal admission of guilt. The IG, Abdul Karim, took Matthen in his official car from Travancore jail to his house where his family had waited patiently for his release from jail. Thus,Matthen's position remained opposite to that of Mammen and family,exposing the separation and betrayal.He wrote his memoirs in 1951, called I Have Borne Much.

He died on 2 June 1960 in Paris, Île-de-France, France and buried at Thiruvalla.

Records prove the bank’s financials were vulnerable to certain shocks. Secondly,the Bank promoters alleged that the entity was brought to a grinding halt by C.P. Ramaswami Iyer, the powerful Dewan of the State of Travancore.

What turned Sir C P against the Bank was Mappilai's political ambitions. Sir C P's job was to serve the interests of the Travancore royal family, by destroying financiers of rival political agitations. Mappilai and the Bank were such financiers. K.G. Vijayalekshmy in the book Educational Development in South India (1993) highlights how the relationship between the bank and the government were strained. The emblem of the bank was similar to that of the Travancore coat-of-arms and despite requests to change the same, the bank insisted on the status quo. The Abstention movement in Kerala was started to secure adequate representation for the Ezhavas, Christians and Muslims in the state legislature. In 1938,when the Travancore State Congress was formed, it allied with the movement. The Dewan found TNQ Bank supporting the State Congress.The Indian National Congress was not there in Travancore.

Till today the Congress in Kerala is dominated by the christians-years later Malayala Manorama sided with the A K Antony-Oommen Chandy faction in the Congress to oust the Hindu Chief Minister, K Karunakaran.

Directors of Travancore National and Quilon bank with Sir CP  -C.P. Mathen (MD), K. C. Mammen Mappillai, M. O. Thomas Vakkel Modisseril(Director)

The argument of Mammen Mappillai in his autobiography, is echoed by his son, K M Mathew, in his autobiography, The Eighth Ring:

Sir C P managed to force a run on TNQ Bank branches in Madras. In March 1938, pamphlets were distributed in Madras revealing that TNQ bank was run by thieves and plunders. Most of these were printed at the Trivandrum Government Press.The Mylapore branch of the bank was chosen to orchestrate the run as it had the most deposits and most depositors lived locally.  The run soon spread to other parts of Madras city and then to other regions in the Madras Presidency. K.S. Ramanujam, who was the general manager of the bank, was planted by the Dewan to destroy it.K M Mathew noted how the promoters of the bank tried to save the bank by appealing to different set of authorities including C. Rajagopalachari. Rajaji told them to appeal to the Dewan instead! 

Both KM Mathew and CP Mathen,in their own respective accounts of the incident,allege that the liquidator, a former Imperial Bank and Reserve Bank official, was also planted with the connivance of the Dewan of Travancore, and that he disposed of the bank’s assets at throwaway prices far below their market value.

C.P. Mathen’s wife, Eliamma Mathen, On 26 August 1938, wrote in her diary: "Grave troubles in Travancore. Civil disobedience begins today. Lord be Thou with the leaders. Let thy will be done in everything. Perfect Thou the leaders in everything. Let them not be found wanting in anything. Psalm 73 is very apt for today. It foretells C.P.’s fall." 

Mathen's grand daughter Mariam is married to N Ram of The Hindu.

Mammen Mappilai

 Those were the colonial times and one should remember that with all his power and influence,Sir C P was only the Dewan of a princely state; he had no jurisdiction over the Reserve Bank, that assessed the financial position of the TNQ Bank and decided on the liquidation.

The central bank was established amidst multiple failures and was supposed to stabilise the banking system.The central bank facilitated the merger by giving it a large credit line at the start. In its first History Volume (1935-51), RBI discusses the events:

• First week of June, 1938: TNQ Bank approached RBI to provide financial assistance to the bank. RBI agreed on the conditions that assistance will be provided only after detailed investigation of the bank’s financial position. 

• 20 June: RBI asksed TNQ Bank’s auditors to investigate the books as per RBI norms. On the same day TNQ Bank asked the auditors to stop investigation as RBI was not providing any help.
• 21 June: TNQ Bank suspended payment. 
• 22 June: Court proceedings to wind up start in Quilon and Bombay. 
• 23 June: Winding up request presented at Madras.
• 27 -29 June: Madras Government meets RBI officials to address the continued unrest. TNQ Bank agreed to the Government suggestion that it gets its books investigated by RBI (again) to understand how much depositors could be paid etc. RBI estimates auditing expenses worth Rs10,000. 
• 2 July: TNQ Bank approached the Madras high court to release Rs10,000 against the assets of the bank. The court refused the request citing it had no such approval powers. It asked RBI to take up the investigation assuring costs will be paid later. 
• 8 July: RBI special officer investigated the books and finds that the bank was in a worse position than reported. It had exhausted all the realisable securities during the run, its balance sheet was incorrect, the bank was buying its own shares presumably with a view to keeping up their market value; and had loaned to directors and other interested parties on inadequate security, etc. 
• 18-20 July: RBI Deputy governor Manilal Nanavati in Madras 
• 28 July: The Deputy governor wrote to the government saying best option was to let liquidation continue. 
• 9 August: This letter published in local press.The bank is ordered to be liquidated by the district court of Quilon. 
• 5 September: The Madras high court could not take the orders of Travancore district court. Thus, it issued its own winding-up order. 
• 21 March 1955: The above jurisdictional tangle led to a dragging on of liquidation proceedings. The bulk of the deposits were in British India, but loans in Indian princely states leading to further complications. The liquidation finally completed 17 years later in 1955.

The Mappillai group still argues that the RBI did not provide urgent financial help to the bank.RBI's official histories defend its actions, saying this would imply “investing good money after bad". RBI governor C.D. Deshmukh in a speech in 1948, reflecting on the crisis, said that the financial position of the bank was not sound as is perceived. Its depositors could be paid 12-14 annas to a rupee largely due to calling up unpaid capital and war conditions leading to higher valuation for the estates on which loans were made. 

C P Mathen

As regards financial help from the Reserve Bank, one should realize that these were pre-BR Act days (the Banking Regulation Act came in 1949) and, therefore, any prudent central banker who has read his Lombard Street (By Bagehot) would have had to ensure that the bank is solvent before coming forward with assistance. The bank did not initially cooperate, for reasons best known to itself, and later did so only on court orders. BR Act, incidentally, was occasioned more by the failure of around 700 banks during the Second World War (on which, see a mention in a speech by Sir Benegal Rama Rau, the second Indian and longest serving Governor of the Reserve Bank) and after, and the interesting case of “missing banks” in West Bengal, rather than by that of TNQB.

What has not been much discussed in the context of the bank failure is the rivalry between the two groups which controlled the two banks which merged to form the TNQB. In KM Mathew’s Eighth Ring, there is  a hint that all was not well.

In his biography of Sir CP, A Raghu, however, takes another view of the TNQB affair, different from that of the Mammen-Mathen group. According to Raghu, it is worthy of  “a Hollywood thriller”.

K M Eapen, later

Puthupally Raghavan in the second volume of his five volume Viplava Smaranakal (Revolutionary Memoirs) remembers the jail days with Mappilai family and Mathen.Raghavan too has asserted that the TNQ Bank had financed the political agitations.He has said that the run happened because the depositors believed the Travancore government was going to withdraw its 75 lakh deposit,whereas the givernment had no deposit there.S Chattanatha Karayalar,a rich politician resigned as director of the Bank;  V N Narayana Pillai  resigned as director and legal advisor of the Bank.Another director Khaderboi too resigned.Karayalar became Chairman of the State Credit Bank,and Pillai government Pleader.

Raghavan was imprisoned on 7 February 1939, after a political murder.

Death in Jail:K C Eapen with wife Kunjumdamma

According to him, Mappilai, Mathen and others were brought to the jail on 5 April, 1039.They were arrested in Madras on 20 October 1938.Their journey to the Central jail in Poojapura got delayed because of the case they fought against extradition.On 4 April,1039 a British army Sergeant escorted them in the Trivandrum Express.At Shenkottai, theTravancore police waited to take and parade them to Trivandrum.But the British Sergeant refused to hand them over.He escorted them to the jail.They arrived by 8 pm and were sent to a segregated cell.Mappilai was 66.

Within days of their arrival, Bank's deputy Chairman and Mappilai's younger brother K C Eapen alongwith K S Ramanujam surrendered in jail.Though very sick,K C Eapen wanted to spent his days with the family in jail.

The trial began in the second week of August.The trial was completed within two weeks and the case committed to the Sessions court. Sessions trial began on 18 September and it was over in four months time. The verdict came on 4 January 1940. Mappillai, Mathen,K C Eapen and K M Eapen were sentenced to eight years rigorous imprisonment. Ramanujam, who turned approver, was exonerated and given a reward of Rs 30,000.

The Higcourt dismissed the appeal filed by the convicts.Mappilai and the group were shifted from the segregation cell to the common jail. Mappilai and younger brother K C Eapen were in separate cells in the civil ward close to the main gate;Mathen in the fourth cell, K M Eapen and Varghese in another one. All of them had fetters on the left leg.

Within a short span of time,the condition of the asthmatic K C Eapen became worse.His end came on a night and dead body was removed only after six hours,when the lock up got opened in the morning. Mappillai in the adjoining cell,listened to hapless moans in the adjoining cell. A book on him, Jayilile Valyappan ( The Grandpa in Jail ), mentions the inner squabbles within the families.Son of Thayyil Appan and Thayyil Kandathil Mariyamma, K C Eapen died a broken man.

While the blame for the TNQ Bank's fall was put by the Christian lobby on the shoulders of Sir CP, another Christian bank,Palai Central Bank got liquidated without him-it is another story. Stories of the two banks should be read together for the complete picture.

© Ramachandran