3.wp.7383.08 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7383 OF 2008 The Ratandeep Urban Co-operative Credit Society Ltd, at Kurundwad. ..Petitioner. Versus The Reserve Bank of India and 3 others. ..Respondents. .... Mr.Uday Warunjikar, Advocate for the Petitioner. Mrs.M.P. Thakur, A.G.P., for respondent Nos.2 & 4 - State. Mr.Atul Rajadhyaksh, Sr. Advocate i/b. Udwadia & Udeshi, for respondent No.1. Mr.S.M. Savagave, Advocate for respondent No.3. .... CORAM : D.K. DESHMUKH, AND K.K. TATED, JJ. DATED : 9TH DECEMBER, 2009 P.C.:- 1. Heard. 2. By this petition, the petitioner challenges the action of the Reserve Bank of India of canceling the banking licence of respondent No.3 Co-operative Bank. The bank started its banking operation on 8.8.1996. The petitioner which is a co-operative credit society, it appears, had deposited certain 3.wp.7383.08 2 amounts with the bank. There were problems in the working of the bank. Therefore, it appears that, on 22nd October, 2008, the R.B.I. made an order under Section 22 of the Banking Regulation Act, 1949. By that order, the bank was also advised to explore the possibility of merger with another strong bank and they were directed to step up recovery efforts and they were asked to draw a time bound programme for that. But, there was no improvement in the working of the bank. Therefore, liquidator is appointed. Thereafter, R.B.I. issued show cause notice asking to show cause as to why the banking licence should not be cancelled. The liquidator filed reply stating that in the present condition, it is not possible to run the bank therefore the banking licence should be withdrawn. The liquidator has also stated that he has made efforts for recovering the amount due to the bank. What is further to be noted is that it appears from the material placed on record that the RBI is also acting promptly. It appears that an amount of Rs.13,25,89,528.43/- has already been paid to small depositors under the Deposit Insurance and Credit 3.wp.7383.08 3 Guarantee Scheme. So far as the other depositors and creditors of the bank are concerned, the liquidator is making efforts to make the recovery. From the affidavit of the liquidator, it appears that the awards have already been passed in favour of the bank. 3. Considering the material placed on record, in our opinion, no fault can be found either with the order appointing the liquidator on the bank or with the order of the R.B.I. cancelling the banking licence. In our opinion, had the banking licence not been cancelled, it would not have enured to the benefit of the depositors because that would have enabled the Board of Directors who were incharge of the bank to further siphon off the money of the bank. 4. Taking overall view of the matter, in our opinion, it cannot be said that the actions taken by the authorities under the Co-operative Societies Act as also by the Reserve Bank of India are in any way injurious to the creditors. What is rather surprising is that the the learned Counsel appearing for the liquidator has stated before us that the petitioner has not even lodged its claim with the liquidator. In our 3.wp.7383.08 4 opinion, instead of fighting such litigation, it will be in the interest of the petitioner to lodge their claim with the liquidator and help the liquidator in making recovery so that the claim of the petitioner is paid. In this view of the matter, Petition is rejected. (D.K.DESHMUKH,J) (K.K. TATED,J)