COMMITTEE OF THE PEOPLES CO OPERATIVE BANK LTD Vs. W JOINT REGISTRAR OF CO OPERATIVE SOCIETIES TIRUNELVELI REGION TIRUNELVELI

JUDGEMENT

(1.) THE Peoples Co-operative Bank Limited (hereinafter referred to as the Co-operative Bank) Nagercoil is a Society deemed to be registered under the provisions of the Tamil Nadu Co-operative Societies Act 1961, (for short the Act ). It is an insured Co-operative Bank within the meaning of section 73-T of the Act. It was registered as No. 82 under the deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act XLVII of 1961) as amended by Act LVI of 1968. In his proceedings Re. No. 62139/80, B-2 dated 4th November, 1980 the Joint Register of Co-operative Societies, tirunelveli Region (who is deemed to be the Registrar for the purpose of the act) issued a notice to the Co-operative Bank proposing to dissolve its committee under section 72 (1) of the Act and to appoint a special Officer to manage the affairs of the Co-operative Bank on the ground that the Committee of the Co-operative Bank is not functioning properly, that it has failed to discharge the legitimate duties cast upon it under the By-laws and that the committee has wilfully disobeyed the By-laws and instructions from the department and that it was necessary to take such an action with a view to safeguard the interests of the members and creditors and to develop the business of the Bank. THE members of the Committee were called upon to make their representations, if any, within 15 days of the date of receipt of the notice. Except the President the other six Committee members did not file any representation objecting to the dissolution. Of course, the President filed his representations objecting to the dissolution of the Committee. Before final orders could be made, W. P. No. 695 of 1981 was filed by the President of the co-operative Bank praying for the issue of writ of certiorari to quash the notice dated 4th November, 1980. THE only point that was raised against the validity of the notice was that since the Co-operative Bank is an insured co-operative Bank within the menaing of section 72-T of the Act no action for dissolution of the Committee is possible without prior sanction of the Reserve bank of India and since admittedly, there was not such prior sanction of the reserve Bank of India in this case, the whole proceedings initiated are without jurisdiction. THE respondent contended that action was taken under section 72 of the Act and that the section specifically enables the Registrar to take action for dissolving the Committee if it is not functioning properly or if it wilfully disobeys the order or wilfully fails to comply with the lawful order or direction issued by the Registrar and that power is not, in any way, affected by the provisions of section 73-T of the Act which contemplates a different situation and an additional jurisdiction to the Registrar. Following an earlier decision of this court in the Committee of Tirukoilur Co-operative urban Bank Ltd. , Tirukoilur by President N. Vadivelu v. Joint Registar co-operative Societies, South Arcot Region, Cuddalore ). W. P. No. 6505 of 1980 (judgment dated 9th December, 1980), the learned judge who heard the writ petition dismissed the same holding that the powers of the registrar under section 72 of the Act is independent of his power under section 73-T and that the notice issued does not suffer from want of any jurisdiction. In W. P. No. 6505 of 1980, which was a decision of a single judge it was held that section 73-T of the Act confers an additional power to the Registrar and that it does not in any way militate against or dilute the power available to the Registrar under section 72. This view of the learned judges is canvassed in this writ appeal.

(2.) IN order to understand the scope of section 72 and section 73-T of the Act it is necessary to trace the legislative history. Chapter IX-D in which section 73-T finds a place was introduced by Tamil Nadu act 37 of 1979. It may be mentioned that the Parliament enacted a Deposit insurance and Credit Guarantee Corporation Act, 1961 and that Act came into force on 1-1-1962. The Act was intended to insure all deposits in commercial banks including State Bank and its subsidiaries. Under Chapter II, a corporation by name the Deposit INsurance Corporation was established. Section 10 provides that the Corporation shall register every existing banking company as an insured bank. Banking Company was originally defined as meaning a bank which transacts the business of banking in INdia. This Act was further amended by Act 56 of 1968 in order to enable the Co-operative Banks also to get the benefits of the provisions of the Deposit INsurance and Credit Guarantee corporation Act 1961. It defined elegible Co-operative Bank as meaning a co-operative Bank the law for the time being governing which provides that: (iii) If so required by the Reserve Bank in public interest or for preventing the affairs of the bank being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of the bank, an order shall be made for the supersession of the committee of management or other managing body by whatever name called) of the bank and the appointment of an administrator therefor for such period or periods not exceeding 5 years in the aggregate as may from time to time be specified by the Reserve Bank. The rest of the definitions is not necessary for the purpose of this case and therefore, we are not extracting the same. Correspondingly the definition of an INsurance Bank was also amended including an eligible Co-operative Bank for the time being registered under the provisions of the Act as also an INsured Bank. Section 13-A, which was introduced by Act 56 of 1968 enabled an eligible co-operative Bank to register itself as one of the insured banks and get the benefits of those Acts. However, as may be seen from the provisions and the definition of eligible co-operative bank, which we have extracted above, if a co-operative bank is to get the benefit of insurance the law applicable to that bank shall contain a provision incorporating that portion which we have extracted above and also some other provisions which give certain powers to the reserve Bank over the insured banks. IN order to enable the Co-operative Banks which are registered under the Co-operative Societies Act of 1961 or deemed to have been registered under the Act, to come within the Act the Tamil Nadu legislature amended the said Act by inserting section 73-T in Act 37 of 1979. The relevant portions of: section 73-T read as follows: 73-T. Order for winding-up, division, amalgamation, supersession of committee, etc. of insured co-operative bank not to be made without sanction or requisition of Reserve Bank of INdia : Notwithstanding anything contained in this Act, in the case of an insured co-operative bank: (i) an order of the winding-up or division or amalgamation or transfer of assets and liabilities of the bank or an order sanctioning a scheme of compromise or arrangment or reconstruction (including reorganisation) of the bank may be made only with the previous santion in writing of the Reserve Bank of INdia; (iii) an order for the winding-up of the bank shall be made by the Registrar if so required by the Reserve Bank of INdia in the circumstances referred to in section 13-D of the Deposit INsurance and Credit guarantee Corporation Act, 1961 (Central Act 47 of 1961); (iii) if so required by the Reserve Bank of INdia in the public interest or for preventing the affairs of the bank being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of the bank, an order shall be made by the Registrar for the supersession of the committee and the appointment of an administrator therefor for such period or periods, not exceeding five years in the aggregate, as may, from time to time be specified by the Reserve Bank of INdia, and the administrator so appointed shall, after the expiry of his term of office, continue in office until the day immediately preceding the date of the first meeting of the new committee; (iv) No appeal, revision or review shall lie against an order referred to in clause (i), (ii) or (iii) made with the previous sanction in writing or on the requisition of the Reserve Bank of INdia and such order or sanction shall not be liable to be called in question in any manner. . " There were some minor further amendments by Tamil Nadu act 67 of 1979 which need not detain us.