Judgment · High Court

This writ petition has been filed on the sole ground that the first respondent has no jurisdiction to entertain ARC No.255 of 1998 dated 28-11-1998 and the award passed by the said first respondent is illegal and violate of fundamental rights guaranteed under the Constitution of India. Learned counsel for the respondents drew the attention of this Court to a judgment of the Supreme Court in Greater Bombay Co- op. Bank Ltd., v. M/s.United Yarn Tex. Pvt. Ltd. and others [1] , wherein it was held as follows: “The dues of co-operatives and recovery proceedings in connection therewith are covered by specific Acts, such as the MCS Act, 1960 and the APCS Act, 1964, which are comprehensive and self-contained legislations. Similarly, for Multi-State Co-operatives there is a specific enactment in the form of the MSCS Act, 2002 comprehensively providing the legal framework in respect to issues pertaining to such co-operatives.

Therefore, when there is an admittedly existing legal framework specifically dealing with issues pertaining to co- operatives and especially when the co-operative banks are, in any case, not covered by the provisions of the RDB Act specifically, there is no justification of covering the co-operative banks under the provisions of the RDB Act by invoking the Doctrine of Incorporation. The distinction between peoples’ co- operative banks serving their members and corporate banks doing commercial transactions is fundamental to the constitutional dispensation and understanding co-operative banking generally and in the context of cooperative banking not coming under the ambit of the BR Act. Thus, even if the co- operatives are involved in the activity of banking which involves lending and borrowing, this is purely incidental to their main co-operative activity which is a function in public domain.

There was thus a conscious exclusion and deliberate commission of co-operative banks from the purview of the RDB Act. The reason for excluding co-operative banks seems to be that co- operative banks have comprehensive, self- contained and less expensive remedies available to them under the State Co-operative Societies Acts of the States concerned, while other banks and financial institutions did not have such speedy remedies and they had to file suits in civil courts. The RDB Act was, therefore, designed to deal with other banks and financial institutions which had to have recourse to the time-consuming process of the Civil Courts. The Co-operative Societies Act on the one hand and RDB Act on the other cannot be regarded as supplemental to each other viz., the provisions of the said Acts cannot be said to be pari materia. Section 31 of the RDB Act clearly refers to transfer of ‘every suit or other proceeding pending before any court’. The word ‘court’ in the context of the RDB Act, signifies ‘civil court’. It is clear that the Registrar, or an officer designated by him or an arbitrator under Sections 61, 62, 70 and 71 of the APCS Act, 1964 and under Section 91 and other provisions of Chapter IX of the MCS Act, 1960 are not ‘civil courts’. Finally, it could not be said that Amendments in Chapter V, Section 56 of the RDB Act by Act No.23 of 1965 inserting “co-operative bank” in Clause (cci) and “primary co-operative bank” in Clause (ccv) either expressly or by necessary intentment apply the co-operative banks transacting business of banking.