Case: Mehsana Distt.Cent.Coop Bank Ltd Vs. State Of Gujarat

2. The appellant-society was registered under the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as the Act). It was carrying on the banking activities. Section 71(1)(a) to (f) of the Act enumerates various institutions in which a co-operative bank is to make investments. Clause (g) of Section 71(1) empowers the State Government to permit any society to invest the funds in any institution other than those mentioned in clauses (a) to (f) of the Section, 71 of the Act is relevant for the purpose of disposal of the present appeal. We shall be dealing with this Section in detail at an appropriate time. The appellant-bank sought permission of the State government to invest funds in an institution outside those falling under clauses (a) to (f) of Section 71(1) of the Act. However, the Government declined the request. Inspite of the refusal, the appellant-bank invested the funds in Mutual Fund, which was outside the purview of clauses (a) to (f) of Section 71 of the Act. It is stated that for non-compliance of Section 71 of the Act, notices were issued to the appellants calling for an explanation as to why action should not be initiated against them as contemplated under the Act. It is also stated that the appellants have not filed their replies to those notices and the matter is still pending with which we are not concerned in this appeal.3. The appellant-bank undisputedly is a Cooperative Bank and is also a Central Co-operative Bank. The Banking Regulation Act, 1949 was amended by the Central Act No. 23 of 1965, which came into force with effect from 1st march, 1966. By the aforesaid amending Act, Part V was inserted in the Banking Regulation Act, 1949, providing for application of the Act to cooperative banks.

Reasoning: Therefore, it would not be opt to say that either the legislature or the President intended to create any repugnancy between these two Acts. The fact that the assent of the President was sought for, could only be in addition to and not in derogation of any other Law such as the Central Act. It is also clear from the language employed in Section 2 of the Banking Regulation Act that the provisions of the Act were in addition to and not in derogation of any other Law for the time being in force.11. Conjoint reading of Sections 2, 5 and 6 of the Banking Regulation Act and Section 71 of the Gujarat Co-operative Societies Act, in our view, there is no repugnancy or inconsistency between the State Act and the Central Act which satisfies the test set out by this Court in M. Karunanidhis case (supra). The contention of the learned counsel for the appellants is not wellsee no substance in thedo not see any infirmity in the impugned order. The Acts and Rules are made to be followed and not to be violated. When the Statute prescribes the norms to be followed, it has to be in that fashion. Converse would be contrary to law. If there is any allegation of violation of statutory rules which have been brought to the notice of the authorities and if the concerned authorities do not perform their statutory obligation, as in the present case, any aggrieved citizen can always bring to the notice of the High Court about the inaction of the statutory authorities and in such event it would always be open to the High Court to pass an appropriate order as deemed fit and proper in the facts and circumstances of the case. In the present case, the facts as alluded above, would clearly reveal that the High Court was clearly justified in issuing a writ of mandamus, which cannot be faulted.