In a strong condemnation of the state of co-operative banks in Maharashtra, the Bombay High Court has said that government bodies should avoid depositing money with them to prevent "further loss".

"It is a matter of concern, particularly in the state of Maharashtra, that crores of rupees of public money have been lost due to fraud played in co-operative banks," the High Court said.

Therefore, the "directions issued by the state from time to time to invest or deposit the money with cooperative banks require a serious reconsideration and, in my opinion, recall thereof in order to avoid further loss of public money," Justice A B Chaudhari said.

The High Court, which is dealing with a petition filed by Municipal Commissioner of Akola regarding a case of corruption against him, also said that only a provision of life sentence could deter the "cancer of corruption".

Currently, the Prevention of Corruption Act provides for maximum punishment of 7 years and this was not "deterrent" enough, Justice Chaudhari said in the order last week.

Giridhar Kurve, Commissioner of Akola Municipal Corporation, had moved the Nagpur bench of High Court, seeking a quashing of criminal case against him.

According to the complaint filed by one Anand Balode, Kurve deposited Rs 1 crore-30 lakh belonging to the Corporation with Vidarbha Urban Cooperative Bank, though there was a branch of Dena Bank in the corporation premises.

Vidarbha bank went into liquidation one month after the deposit.

Holding that there was no reason for choosing this bank for depositing a huge amount of money, High Court held that prima facie Kurve seemed to have had a "clear nexus" with someone wanting to dupe the Corporation.

On corruption, the judge said "offences by public servants, bankers of various types of banks/financial institutions holding public money or those holding 'key posts' in important public organisations have increased in unimaginable proportion as there is hardly any deterrent punishment".

"Looking at the upsurge in the cancer of corruption in the country, the only way to have a deterrent is now to provide life imprisonment in the Prevention of Corruption Act," the High Court remarked.

Regarding Kurve's case, High Court ordered the police to file a complete investigation report by end of July 2010.