O.A No. 6 of 2005 · Andhra Pradesh High Court

Counsel for the Petitioner : SMT. BOBBA VIJAYALAKSHMI Counsel for the Respondents : GP FOR COOPERATION The Court made the following : THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION NO.13842 OF 2006 ORDER ; The present writ petition is filed by Narasapuram Co-operative Urban Bank Limited assailing the order passed by the A.P. Co-operative Tribunal, Vijayawada, dated 14.9.2005 in O.A.No.6 of 2005. The material on record shows that at the instance of the petitioner Bank, a Certificate dated 29.3.2004 was issued by the 1st respondent herein under Section 71 of the A.P. Co-operative Societies Act, 1964 for recovery of loan amounts allegedly due from the 2nd respondent herein. Challenging the same, the 2nd respondent herein preferred an Appeal being O.A.No.6 of 2005 before the A.P. Co-operative Tribunal Vijayawada. The said Appeal was allowed by order dated 14.9.2005 on two grounds. Firstly, it was held that the Deputy Registrar of Co-operative Societies failed to conduct fair and regular enquiry as contemplated under Section 71 (1) of the A.P. Co-operative Societies Act, 1964 and therefore the Certificate dated 29.3.2004 was in violation of the principles of natural justice.

That apart, following the decision of a Full Bench of this Court in M. BABU RAO v. DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES [1] , it was also held that the Certificate issued under Section 71 (1) of the A.P. Co- operative Societies Act, 1964, dated 29.3.2004 was without jurisdiction and void in view of the statutory bar under Sections 18 & 34 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, ‘RDB Act, 1993’). Accordingly, the Certificate issued under Section 71 of the A.P. Co- operative Societies Act, 1964 was set aside. The said order passed by the Tribunal is under challenge in this writ petition. I have heard the learned counsel for both the parties and perused the material on record. At the outset, it is to be noted that the view taken by the Full Bench of this Court in M. BABU RAO’S case (1 supra) was not accepted by the Supreme Court in GREATER BOMBAY CO.OP. BANK LTD. v.

UNITED YARN TEX (P) LTD. and it was held that “Co-operative Banks” [2] established under the A.P. Co-operative Societies Act, 1964 transacting the business of Bank, do not fall within the meaning of “Banking Company” as defined under Section 5 (c) of the Banking Regulation Act, 1949. Accordingly, it was concluded by the Apex Court that the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 are not applicable to the recovery of dues by the cooperatives from their members. Having regard to the ratio laid down by the Supreme Court in the above decision, the conclusion of the Tribunal that the Certificate issued by the 1st respondent under Section 71 (1) of the A.P. Co-operative Societies Act, 1964, was without jurisdiction and void is unsustainable. Hence, to that extent, the impugned order is liable to be set aside. However, it is to be noted that the Tribunal recorded a further finding that the 1st respondent herein failed to conduct fair and regular enquiry following the principles of natural justice while issuing the Certificate under Section 71 (1) of the A.P. Co-operative Societies Act, 1964.