MANOJ CHAKRABORTY Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner No. 1 before this Court is a Shareholder/Member and petitioner No. 2, a depositor of the Silchar Co-operative Urban Bank (hereinafter referred to as the 'Bank') assailed the legality and validity of the communication dated 15.2.2000 and one 23.3.2000 pertaining to winding up thereof as directed by the Reserve Bank of India (hereinafter referred to as the 'RBI'). This court issued rule on 27.3.2000 but no interim order was passed.

(2.) Heard Mr. N. Dhar, learned counsel for the petitioners, Mr. M. Bhuyan, learned counsel for the RBI and Mr. A. Thakur, learned State counsel for respondent Nos. 2, 4 and 5.

(3.) The primary facts in short as can be gathered from the writ petition are that the bank is a registered Society under the Assam Co-operative Societies Act, 1949 (hereinafter referred to as the Act) and has been functioning for the last about a century but had become financial sick due to non-payment of loans by the borrowers. According to the petitioners, the Registrar, Co-operative Society, Assam in such circumstances ought to have made an endeavour to recover the outstanding loan amounts through Bakijai proceedings as contemplated in law. Instead, pursuant to the communication dated 15.2.2000 of the RBI, the impugned notification dated 25.3.2000 has been issued to initiate necessary action for winding up the Bank. A representation was submitted before the Government against the proposed action in the interest of the depositors which however did not evoke any response. It has been contended by the petitioners that the impugned action is not inconformity with the provisions of the Act, more particularly those contained in Sections 60, 61, 65, 66, 70 and 83 thereof inasmuch as winding up of a registered society is not permissible unless its registration is first cancelled after an enquiry contemplated under Sections 60, 61 of the Act. In the alternative, it has been contended, that as in taking the decision contained in the communication dated 15.2.2000 the power under Section 15Aof the Assam Co-operative Bank (Amendment Act, 1989) (hereinafter referred to as the Amendment 'Act') has been exercised purportedly on the circumstances comprehended under Section 13(D) of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (hereinafter referred to as the Deposit 'Act'), the procedure prescribed for an inspection before winding up of the Bank as envisaged under Section 35 of the Banking Regulation Act, 1949 (hereinafter referred to as the 1949 Act) was indispensable and therefore in absence of such an enquiry, the communications dated 15.2.2000 and 23.2.2000 are not sustainable in law. The further contention is that the impugned action is also legally not tenable as no endeavour was made to recover the outstanding loan amounts of the Bank to revive the same before taking a decision for winding it up.