GENERAL MANAGER.R.B.I Vs. N.VENKATESHAIAH & ORS.

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 30412 of 2016, Judgment Date: Feb 02, 2016

                                                              NON-REPORTABLE

                 IN THE SUPREME COURT OF INDIA
                 CIVIL APPELLATE JURISDICTION

                 CIVIL APPEAL NO.........OF 2016
      (@ SPECIAL LEAVE PETITION (CIVIL) NO. 30412 OF 2010)


GENERAL MANAGER.R.B.I                                        ...APPELLANT(S)

                                VERSUS

N.VENKATESHAIAH & ORS.                                      ...RESPONDENT(S)

WITH

                 CIVIL APPEAL NO.........OF 2016
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 32134-32142 OF 2010)

                 CIVIL APPEAL NO.........OF 2016
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 32143-32144 OF 2010)


                            JUDGMENT


      KURIAN, J.

1.          Leave granted.
2.          The dispute in these appeals arose  in  the  background  of  the
supersession of two Co-operative Banks in the State of Karnataka, one  Grain
Merchants Co-operative Bank and the other Kannika Parameshwari  Co-operative
Bank. The supersession of the Board of the Managing Committee  was  pursuant
to a written requisition made by the Reserve Bank of  India,  under  Section
30(5) of the Karnataka Co-operative  Societies  Act,  1959  which  reads  as
follows:
(5) Notwithstanding anything contained in this Act, the Registrar shall,  in
the case of a co-operative bank, if so required in writing  by  the  Reserve
Bank of India in public interest or for preventing the affairs  of  the  co-
operative bank being conducted in a manner detrimental to  the  interest  of
the depositors or for securing the proper  management  of  the  co-operative
bank, by order in writing, remove the committee of  that  co-operative  bank
and appoint an administrator to manage the affairs of the co-operative  bank
for such period as may, from time to time, be specified by the Reserve  Bank
of India.

Thus in terms of the above  provision,  the  Registrar  of  the  Cooperative
Societies is bound to supersede the Managing Committee of  the  Co-operative
Bank when a requisition is made by the Reserve Bank of India in writing.
3.          Supersession was subject matter of  challenge  before  the  High
Court. In the impugned judgment dated 20th  April,  2010  at  paragraph  17,
the High Court has taken the view  that  a  pre-decisional  hearing  by  the
Reserve Bank of India is mandatory.
4.          Learned counsel  appearing  for  the  respondents  submits  that
during the pendency of the appeals  before  this  Court,  elections  to  the
Managing Committee have been held twice and,  therefore,  is  not  necessary
for this Court to go into the question of law.  Shri Jaideep Gupta,  learned
senior counsel for the Reserve Bank of India also submitted that in view  of
the intervening developments reported above, the appeals can be disposed  of
leaving the question of law open. Therefore, the  question  whether  a  pre-
decisional hearing is required before  the  Reserve  Bank  of  India  before
making a requisition  in  writing  to  the  Registrar  of  the  Co-operative
Societies for supersession of the Managing Committee of a  Cooperative  Bank
under Section 30(5) of the Karnataka Co-operative  Societies  Act,  1959  is
left open to be decided in  an  appropriate  case  where  the  situation  so
warrants. Needless also to say  that  the  impugned  judgment  will  not  be
treated as a precedent.
5.          The appeals are disposed of in the above terms.


                                                  ….................J.
                                                  [KURIAN JOSEPH]


NEW DELHI                                      ….….................J.
2nd  FEBRUARY, 2016                           [ROHINTON FALI NARIMAN]