The Muvattupuzha Urban Cooperative Bank, which has been at the centre of a recent property attachment controversy, on Friday witnessed tense moments as the management refused to accept a cheque issued by Mathew Kuzhalnadan, MLA, to close the loan availed by a Dalit family.

The bank officials said they could not accept the cheque as the loan had already been closed. This led to a dispute between Ajesh Kumar, who had availed the loan, and the bank officials.

Ajesh and his wife Manju told the bank that they were not informed about the closure of the loan and the bank had to accept the cheque worth Rs 1,35,686. Later, the bank accepted the cheque but made it clear that the amount cannot be added to Ajesh's loan account.

The loan was earlier settled by the bank employees belonging to the CPM-backed CITU after Congress MLA Kuzhalnadan intervened in the matter.

However, Ajesh had taken a firm stance that he would not accept the help from the CITU as the bank employees had harassed him when he was helpless.

Kuzhalnadan had on April 2 broken the sealed door lock of Ajesh's house, attached by the bank for defaulting on a loan. The house was attached by the bank after evicting two minor girls when their parents were away for  medical treatment.

The MLA who smashed the sealed lock with a hammer said he was ready to face any legal action that might arise as a result of his action. He had also assured that he would take over the debt of the family.

Jose K Peter, Chief Executive Officer of the bank, submitted his resignation after the government suggested disciplinary action for the alleged lapse in the eviction process.