SCA/112120/2003 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 1121 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================= = 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================= = SURVAPUR COOPERATIVE BANK LTD. & ANOTHER Versus RESERVE BANK OF INDIA & OTHERS ========================================= = Appearance : MR TUSHAR MEHTA with MR SHAH for the Petitioners MR HV CHHATRAPATI for Respondent Nos.1 and 2 MR OZA, AGP for Respondent Nos.3 to 6 ========================================= = CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 12/11/2008 ORAL JUDGMENT 1. The short fact in the case appears to be that the petitioner is a Cooperative Bank governed by the provisions of SCA/112120/2003 2/6 JUDGMENT Gujarat Cooperative Societies Act (hereinafter referred to as “the Act”) read with provisions of the Banking Regulation Act (hereinafter referred to as “the BIR Act”). On 5th February, 2003, the Registrar, Cooperative Societies passed the order, Annexure A upon the direction issued by the Reserve Bank of India for supersession of the Managing Committee of the petitioner bank and for appointment of the Administrator in place of the Managing Committee of the petitioner bank. The petitioner in the present petitioner has challenged the said order passed by the Registrar, Cooperative Societies in exercise of the power under section 115A of the Act. 2. Heard Mr. Mehta with Mr. K.D. Shah for the petitioner, Mr. Chhatrapati for the respondent Nos.1 and 2 and Mr. Oza, learned AGP for the respondent Nos.3 to 6. 3. It is an admitted position that the exercise of the power by the Registrar is under section 115A of the Act, the same reads as under: “115A. Notwithstanding anything contained in this Act, in the case of an insured co-operative bank,-- (1) an order for winding up or an order sanctioning a scheme of compromise or arrangement or of amalgamation or reconstruction (including division or reorganization) of the bank may; be made only with the previous sanction in writing of the Reserve Bank of India; (2) 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 13D of the Deposit Insurance Corporation Act,1961; (3) 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 SCA/112120/2003 3/6 JUDGMENT depositors or for securing the proper management of the bank, an order shall be made by the Registrar for supersession of the committee and the appointment of an administrator in place thereof 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 of such bank; (4) an order for winding up of the bank or an order sanctioning a scheme of compromise or arrangement or of amalgamation or reconstruction (including division or reorganization) or an order for the supersession of the committee of the bank and the appointment of an administrator in place there of made with the previous sanction in writing or on the requisition of the Reserve Bank of India shall be final and shall not be liable to be called in question in any manner in any court; and (5) the liquidator or such bank or the transferee bank, as the case may be, shall be under an obligation to pay the Deposit Insurance Corporation established under the Deposit Insurance Corporation Act, 1961, in the circumstances, to the extent and in the manner referred to in section 21 of that Act.” The aforesaid provision did exist on the statute book when the power was exercised by the Registrar vide the impugned order. 4. The principal contention raised on behalf of the petitioner is that no opportunity of hearing was given by the Registrar to the members of the Managing Committee or the then office bearers of the petitioner bank before exercise of the power and therefore, the order is in breach of the principles of natural justice. It was submitted that though there is no express provision under the statute for giving opportunity of hearing, such provision deserves to be read and if read, it would require pre-decisional hearing which has not been given in the present SCA/112120/2003 4/6 JUDGMENT case and therefore, the order would be bad in law. 5. Consideration of the aforesaid submission would not further detain the Court in view of the recent decision of the Apex Court in case of Reserve Bank of India V. H. Hanumaiah and others reported at AIR 2008 Supreme Court 994 equivalent (2008) 1 SCC 770. The Apex Court had an occasion to consider the very question as to whether the principles of natural justice have any application at the stage when the Registrar, Cooperative Societies, on being so required in writing by the Reserve Bank of India passes the order removing the committee of the management of a cooperative bank and appointing the Administrator to manage its affairs for such period, as may be specified by the Reserve Bank of India. The said question is ultimately held in negative as per the conclusion recorded by the Apex Court in the above referred decision at para 17. 6. It is true that in the case before the Apex Court, the matter was considered in light of the provisions of section 30(5) of the Karnataka State Cooperative Societies Act, which also provides that the similar scheme for exercise of the power for supersession of the committee, if it is so requisitioned by the Reserve Bank of India. Further, the pertinent aspect is that while examining the scope and ambit of the provisions of section 30(5) of the Karnataka State Cooperative Societies Act, the Apex Court had taken into consideration the statutory provisions of section 110A of the Maharashtra Cooperative Societies Act, which is more or less the same as per section 115A of the Act, which has been invoked by the Registrar in the present case for exercise of the power. Under these SCA/112120/2003 5/6 JUDGMENT circumstances, as the issue is covered by the above-referred decision of the Apex Court, no further discussion may be required and the contention of the learned counsel for the petitioner cannot be accepted since the principles of natural justice has no role to play and the Registrar is to exercise the power for appointment of Administrator by superseding the Committee upon the requisition made by the Reserve Bank of India. 7. Mr. Chhatrapati, learned counsel appearing for the Reserve Bank of India further submitted that pending the petition, there are following developments. (1)Banking licence of the petitioner bank has been cancelled on August 17, 2004. (2)The bank in capacity as the Cooperative Society under the Act is ordered to be liquidated vide order dated August 19, 2004 and therefore, the liquidator is holding the affairs of the petitioner bank. (3)The claim was fixed for getting the amount of insured deposit with Deposit Insurance Credit Guarantee Corporation and the claims were to be lodged on or before 23rd December, 2004 and the release of such claim has been undertaken by the aforesaid Corporation from December 24, 2005 onwards. It was therefore, submitted that in view of the aforesaid subsequent development, the cause to the petitioner would not survive. 8. It does appear that if the Society is ordered to be liquidated and the liquidator is holding the charge until the SCA/112120/2003 6/6 JUDGMENT proceedings of the liquidation are concluded, the member of the Managing Committee will have no say in the matter or in any case, there will not be any question of re-induction of the members of the Managing Committee after the Society is liquidated and in any case, until the proceedings of liquidation are concluded. Therefore, Mr. Chhatrapati is right in submitting that the cause for the members of the Managing Committee or the then office bearers of the Society for re- induction in power may not survive. 9. Apart from non-existence of the cause on account of the subsequent development, even if the contention of the petitioner on the basis of which the petition is founded, is considered, the same also in view of the reasons recorded hereinabove does not deserve to be accepted. 10. Hence, the petition is dismissed. Rule discharged. Interim relief, if any is vacated. No order as to costs. (JAYANT PATEL, J.) shekhar/-