SANDEEP S. GHANDAT Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) The present appeals concern the extent to which the constitutional mandate of democratic governance of co-operative societies limits the power of the Reserve Bank of India (RBI) to supersede the Board of a multi-State co-operative bank and continue such supersession under the Banking Regulation Act, 1949 (the 'BR Act').

(2.) The appeals assail the judgment and order dtd. 18/11/2024 rendered by the High Court[High Court of Judicature at Bombay] in two Writ Petitions[Writ Petition (L) Nos. 34124-34125 of 2023] whereby the order dtd. 24/11/2023 passed by the RBI superseding the Board of Directors ('BoD') of Abhyudaya Co-operative Bank Limited (the 'Bank') and appointing an Administrator in its place, was upheld and the said writ petitions came to be dismissed.

(3.) At the outset, the material facts, shorn of unnecessary details, may be noticed. The Bank was originally incorporated as a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960 which later was converted into a bank in the year 1965 with the permission of RBI and the Commissioner of Co-operation. In the year 1988, the Bank was declared as a Scheduled Bank by RBI under Sec. 42(6)(a) of the Reserve Bank of India Act, 1934 (the 'RBI Act'). Pursuant to a direction issued by RBI under Sec. 45 of the Banking Regulation Act, 1949 (the 'BR Act'), the Bank was amalgamated with two banks in Gujarat and one bank in Karnataka, in consequence whereof it became a multi-State co-operative society carrying on the business of banking, and is thus a 'Multi-State Co-operative Bank' within the meaning of the BR Act.