GREATER BOMBAY COOP. BANK LTD. vs UNITED YARN TEX (P) LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2005 Supreme(SC) 1546

SUPREME COURT OF INDIA
ARUN KUMAR AND R.V. RAVEENDRAN, JJ.
GREATER BOMBAY COOP. BANK LTD. APPELLANT;
VERSUS
UNITED YARN TEX (P) LTD. AND OTHERSRESPONDENTS.
CIVIL APPEALS NO. 432 OF 2004 WITH NOS. 433-36 OF 2004, 4131, 15649-52, 18534, 6069, 6071, 6073, 6072, 6086-87, 6074-77, 6080-81, 6083-85 OF 2005, SLPS (C) NOS. ... (CCS NOS. 9992-93 OF 2005), 21685-701, 22621 OF 2005, 5592, 5598, 5890 OF 2004,24213-14 OF 2005, DECIDED ON DECEMBER 1,2005

Headnote:
Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Sections 18, 17, 2(d) and (h) - Applicability of Act to Co-operative banks - After the enactment of the 1993 Act, question arose as to whether such cooperative banks would have the right of recovery under the respective Cooperative Societies Acts or they will have to proceed under the 1993 Act-These aspects and some other issues, came up for consideration before the Bombay High Court and the High Court of Andhra Pradesh at Hyderabad- Both the High Courts pronounced judgments and are under appeal in these- The matters directed to be placed before the Hon'ble the Chief Justice of India for constitution of an appropriate larger Bench for early disposal of these cases.. [Para 3]

ORDER

1. THIS BATCH OF APPEALS/SLPS INVOLVES AN IMPORTANT ISSUE REGARDING RIGHT OF RECOVERY OF DEBTS BY THE COOPERATIVE BANKS CONSTITUTED UNDER THE COOPERATIVE SOCIETIES ACTS OF THE STATES OF MAHARASHTRA AND ANDHRA PRADESH. THE ISSUE HAS ARISEN IN THE CONTEXT OF ENACTMENT OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993. UNDER THE COOPERATIVE SOCIETIES ACTS THERE IS A MECHANISM FOR RECOVERY OF DEBTS BY THE BANKS CONSTITUTED UNDER THOSE ACTS WHICH ARE ALSO CALLED COOPERATIVE BANKS. AFTER THE ENACTMENT OF THE 1993 ACT, QUESTION AROSE AS TO WHETHER SUCH COOPERATIVE BANKS WOULD HAVE THE RIGHT OF RECOVERY UNDER THE RESPECTIVE COOPERATIVE SOCIETIES ACTS OR THEY WILL HAVE TO PROCEED UNDER THE 1993 ACT. THESE ASPECTS AND SOME OTHER ISSUES, INCLUDING THE ISSUE OF LEGISLATIVE COMPETENCE OF THE STATES TO ENACT THE PROVISIONS RELATING TO COOPERATIVE BANKS, CAME UP FOR CONSIDERATION BEFORE THE BOMBAY HIGH COURT AND THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD. BOTH THE HIGH COURTS HAVE PRONOUNCED JUDGMENTS ON THE ISSUES AND THESE JUDGMENTS ARE UNDER APPEAL IN THESE CASES. A LOOKING TO THE ISSUES INVOLVED AND THE FAR-REACHING CONSEQUENCES WHICH SUCH A DECISION WILL LEAVE, WE ARE OF THE VIEW THAT THESE MATTERS BE DECIDED BY A LARGER BENCH.

2. IT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT AS A CONSEQUENCE OF THE IMPUGNED JUDGMENTS OF THE TWO HIGH COURTS, RECOVERIES WORTH THOUSANDS OF CRORES OF RUPEES ARE HELD UP AND FOR THAT REASON THESE MATTERS NEED TO BE B DECIDED AS EARLY AS POSSIBLE.

3. LET THESE MATTERS BE PLACED BEFORE THE HONBLE THE CHIEF JUSTICE OF INDIA FOR CONSTITUTION OF AN APPROPRIATE LARGER BENCH FOR EARLY DISPOSAL OF THESE CASES.

4. WE ARE INFORMED THAT SO FAR AS THE BATCH OF APPEALS/SLPS ARISING FROM THE JUDGMENT OF THE BOMBAY HIGH COURT IS CONCERNED, THE STAY APPLICATIONS HAVE ALREADY BEEN DISPOSED OF. THE STAY APPLICATIONS IN THE APPEALS/SLPS ARISING FROM THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT ARE YET TO BE FINALLY DISPOSED OF. LET THE STAY APPLICATIONS IN THE MATTERS ARISING FROM THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT BE PLACED BEFORE THIS COURT ON WEDNESDAY, 7-12-2005. IF ANY PARTY IS DESIROUS OF FILING ANY REPLY, THE SAME BE FILED BY MONDAY, 5-12-2005.

SLPS (C) NOS. ... CCS NOS. 9992-93 OF2005, SLPS (C) NOS. 21685-701 AND 22621 OF 2005

5. DELAY CONDONED.

6. ISSUE NOTICE.

7. DASTI SERVICE, IN ADDITION TO THE USUAL MODE OF SERVICE, IS ALSO PERMITTED.

COURT MASTERS

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