KARNATAKA RAJYA KAIGARIKA SAHAKARA BANK Vs. V KRISHNASWAMY

JUDGEMENT

(1.) The constitutional validity of item (v) of clause (c) of subsection (1) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as "the Act") is the subject-matter of W. P. No. 2755 of 2008. Further the petitioners in the said writ petition are also seeking for quashing of the notification bearing No. S. O. 105(E) issued by the Central Government, Ministry of Finance and Company Affairs (Department of Economic Affairs) (Banking Division) dated January 28, 2003 See [2003] 114 CC (St.) 95, where-under, the Central Government specifies "co-operative bank" as defined in clause (cci) of section 5 of the Banking Regulation Act, 1949, as "bank" for the purpose of the Act. The very same petitioners challenged the action of the authorised officer in issuing notice under section 13(2) of the Act, on the ground that the Act is not applicable to the loans advanced by co-operative banks in W. P. No. 23813 of 2005. The learned single judge of this Court allowed the writ petition by his order dated July 12, 2007, following the judgment of the apex court in Greater Bombay Co-operative Bank Ltd. v. United Yarn Tex P. Ltd., 2007 AIR(SC) 1584 and held that the banking company as defined under section 5(c) of the Banking Regulation Act, 1949, does not include or encompass the co-operative bank. Therefore, the Act, is not applicable to the loans advanced by co-operative banks. Aggrieved by the same, the bank has preferred Writ Appeal No. 2382 of 2007.

(2.) Following the judgment of the learned single judge, several writ petitions have been allowed and challenging those orders, writ appeals are preferred. Similarly, orders passed by the authorities under the Co-operative Societies Act, have been challenged in several writ petitions before this Court. As common question of law arise for consideration in all these matters, they are placed before this Court for decision. Hence, all these matters are taken up for consideration together and disposed of by this common order. However, for the purpose of convenience, the facts in W. P. No. 2755 of 2008 are set out to have a factual background.

(3.) The Karnataka Rajya Kaigarika Sahakara Bank Niyamita (for short hereinafter referred to as "the bank"), advanced loan to M/s. High Tech Industries, a registered partnership firm. The firm committed default in repayment of loan. A demand notice was forwarded to the first petitioner V. Krishnaswamy, on the assumption that he owned and possessed the dwelling house bearing No. 221, 2nd E Cross, 6th Main, 3rd Block, I Stage, Basaveshwara Nagar, Bangalore-86. In fact, the schedule property is owned and possessed by the second petitioner, the wife of the first petitioner. The second petitioner became the owner of the said property under a registered gift deed dated July 22, 2003, executed by the first petitioner in favour of the second petitioner. According to them, it is a Stree Dhana property.