THE HON’BLE SRI JUSTICE D.S.R.VARMA AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT APPEAL Nos.1292 and 1459 of 2008 COMMON JUDGMENT: (per DSRV, J) Heard both sides. Since both the Writ Appeals had arisen out of a common order passed by the learned Single Judge in Writ Petition Nos.12100 and 14222 of 2004, they are taken up together and being disposed of by this common judgment. The backdrop that led to the filing of the present appeals, in brief, is as under: Writ Petition Nos.12100 and 14222 of 2004 were filed by the former Chairman and the Directors respectively of the fifth respondent - Guntur Cooperative Urban Bank Limited, Guntur (for short ‘the Bank’), which was superseded by the Registrar of Cooperative Societies, Hyderabad, the first respondent, vide his order bearing RC.No.13108/2003-UB-I, dated 07.07.2004, in exercise of his powers under Section 36-A of the Mutually Aided Cooperative Societies Act, 1995 (for short ‘the 1995 Act’). The Bank was initially registered under the Andhra Pradesh Cooperative Societies Act, 1964 (for short ‘the 1964 Act’). Subsequently, it was converted into a society under the 1995 Act. It appears that in 2003, the third respondent - Reserve Bank of India (for short ‘the RBI’) conducted inspection into the affairs of the Bank under Section 35 of the Banking Regulation Act, 1949 (for short ‘the 1949 Act’), and found several irregularities allegedly committed in the financial operations of the Bank and also violations under various provisions of the 1949 Act. It is not necessary to re-extract all the alleged irregularities that have been found out by the RBI during inspection, inasmuch as the same were referred to in detail in the judgment, dated 20.03.2007 passed by a Division Bench of this Court in Writ Appeal No.560 of 2006 and Batch. In W.P.Nos.12100 and 14222 of 2004, the learned Single Judge eventually, referred to the provisions of the 1964, 1995 and 1949 Acts and set aside the order dated 07.07.2004 passed by the first respondent on various grounds, particularly, on the ground of non- compliance of principles of natural justice, apart from the jurisdiction of the first and third respondents. The said decision has been carried in an appeal by the first and third respondents before a Division Bench of this Court vide Writ Appeal No.560 of 2006 and batch, which was disposed of by judgment, dated 20.03.2007, wherein and whereby the aspect of jurisdiction of the first and third respondents has been dealt with and eventually, the Division Bench held that mere absence of a specific provision under the 1995 Act does not debar the jurisdiction of the first respondent and also the intervention of the third respondent into the affairs of the Bank. It observed that a conjoint reading of the provisions of Section 36-A of the 1995 Act and Sections 115-A and 115-B of the 1964 Act would only reveal that the first respondent shall act upon the directions of the third respondent and take appropriate action including that of supersession of the Managing Committee of the Bank in the interests of public. It, however, perused the correspondence exchanged between the Bank and the third respondent, and recorded a finding that the RBI did give opportunity to the Bank to explain its position qua the deficiencies pointed out in the statutory inspection report. It pointed out that the learned Single Judge did not advert to the correspondence exchanged between the third respondent and the Bank. Ultimately, the Division Bench allowed the Writ Appeals, set aside the order passed by the learned Single Judge and remanded the matter to the learned Single Judge for consideration of the issue as regards the correspondence between the Bank and the third respondent and the deficiencies and the defects in the inspection report. In other words, the said aspect goes into the merits of the inspection conducted by the third respondent. After the matters have been remanded, the learned Single Judge heard the matter and formulated certain points for consideration. From a perusal of the enumeration of the points that were raised by the learned counsel, as recorded by the Court, we do not find any specific ground as having been taken, regarding the deficiencies and defects in the inspection report and the related correspondence. The learned Single Judge, however, again had gone into the jurisdictional aspect and arrived at the conclusion basing on a judgment rendered by a Division Bench of this Court in Writ Appeal No.1053 of 2005 and batch. For better appreciation, certain observations made by the learned Single Judge deserve to be extracted, which are as under: “Additionally, the petitioners contended that inasmuch as Section 115-B of the 1964 Act enumerates no authority entitled to exercise the power of supersession of the committee of management of a co-operative bank, the 1st respondent is incompetent to issue the impugned order. This contention does not commend acceptance by this Court. As already noticed, Section 115-B enables an order of supersession of a committee of management of a co-operative bank to be made “under the provisions of this Act” namely; the 1964 Act. This is again a drafting technique whereby for brevity and avoidance of prolixity, the draftsman employed the existing body of the legislation (the 1964 Act) and avoided repetition. Section 34 of the 1964 Act, as already noticed, specifically empowers the Registrar to issue an order of supersession of a committee of management of any cooperative society on satisfaction of the circumstances enumerated in Section 34 of the 1964 Act. It is this authority, which is the competent authority for exercise of the powers under Section 115-B as well, but subject to this distinction viz., that while exercising powers under Section 34 of the 1964 Act, a statutory discretion inheres on the 1st respondent to arrive at a judgment and satisfaction as to the malfunctioning or willful disobedience by a committee of management of a cooperative society, but no such discretion inheres when a Registrar exercised power under Section 115-B, since he is to be guided by the directive of the pre-eminent regulatory agency-the Reserve Bank of India. But for this distinction and therefore as a natural corollary, the exclusion of the opportunity provision of Section 34, the authority competent under Section 34 of the 1964 Act is also the authority competent to exercise power under Section 115-B of the 1964 Act.” The above observations are complete answer to the jurisdictional question. We are of the view that by virtue of the directions given by the Division Bench, the learned Single Judge in fact need not go into any other aspect except the issue that was pointed for adjudication. The Division Bench, while remanding the matter to the learned Single Judge, pointed out as under: “The question which remains to be considered is whether order dated 7-7-2004 issued by the Registrar, Cooperative Societies could have been annulled on the ground that the RBI did not afford opportunity to the bank to explain the allegations. A reading of the correspondence exchanged between the officers of the RBI and the bank shows that after receipt of the report of statutory inspection conducted under Section 35 of the 1949 Act, the RBI sent more than one communication to the bank highlighting the defects pointed out in the report and called upon the bank to send compliance report. The reply communications sent by the bank were scrutinized and were found to be unsatisfactory. It is thus, evident that the RBI did give opportunity to the bank to explain its position qua the deficiencies pointed out in the statutory inspection report. The learned Single Judge did not advert to the correspondence exchanged between the RBI and the bank. Therefore, the observation made by her that the order impugned in the writ petition is vitiated due to violation of the rules of natural justice cannot be sustained.” Therefore, as a matter of fact, the learned Single Judge after the matter has been remanded, need not go into the question of jurisdiction inasmuch as the said question had already been decided by the Division Bench. But, however, as could be seen from the order of the learned Single Judge, again, the same question of jurisdiction with reference to the provisions of the 1995, 1964 and 1949 Acts was dealt with before holding that the first and third respondents can exercise their jurisdiction and supersede the managing committee of the society registered under the 1995 Act. The learned Single Judge had again recorded eventually, as under: “The order of the Reserve Bank of India directing supersession of the management committee of the 5th respondent bank in public interest, is not challenged on merits and therefore, does not fall for consideration here. No other point is argued. ” (emphasis supplied) The above categorical statement would only indicate that even though different questions have been formulated, the learned counsel argued the matter only on the question of jurisdiction of the first and third respondents, but not on the merits of the matter as pointed out by the Division Bench. When no other point was argued except the jurisdictional point, there was no occasion or need for the learned Single Judge to go into the issue as was pointed out by the Division Bench. In other words, the opportunity afforded by the Division Bench to the parties was not availed of. That being the case, we essentially have to put our view on the point that was formulated by the Division Bench for consideration was not argued and, therefore, was not answered by the learned Single Judge. Hence, the impugned conclusion cannot be faulted. That apart, when the first and third respondents have jurisdiction to enquire into the affairs of the Bank in public interest and when they felt that it was imperative to supersede the managing committee of the Bank, we need not go into that aspect, unless there is an apparent mistake on the face of the record, which goes into the very root of the matter. For the foregoing reasons, we do not find any merit in the appeals and are accordingly, dismissed. No costs. ________________ D.S.R.VARMA, J 5th FEBRUARY, 2009. __________________ G.CHANDRAIAH, J kvni