The central legal point established in the judgment is the obligation of a cooperative bank to transfer shares to the heirs of a deceased member and grant them membership, as per the provisions of the Maharashtra Cooperative Societies Act 1960 and the rules governing the transfer of shares to heirs.

Both these Writ Petitions can be decided by a common judgment since the parties to the petitions are identical and the questions involved are also identical.

2. Rule. Returnable forthwith. Heard finally with consent of parties.

3. The Writ Petition No. 4302 of 2008 has been preferred by the Gondia District Central Cooperative Bank against the order passed by the Joint Registrar Cooperative Societies on 10.09.2007. Petitioner is a District Central Cooperative Bank and a society registered under the Maharashtra Cooperative Societies Act 1960. The petitioner being a federal bank of all the primary cooperative societies in the district is also governed by the provisions of Banking Regulation Act 1949. In view of this the Reserve Bank of India has powers to issue directions in the public interest and in the interest of banking sector to the petitioner bank. The petitioner submits that those directions are binding on the bank. Reserve Bank of India in accordance with the recommendations of the Rural Credit Survey Report directed the Registrar of the Cooperative Societies to take a policy decision to discourage individual membership. It was also directed by the Reserve Bank of India that the membership of central financial agencies should be kept at minimum and no fresh individuals should be admitted or given membership of the bank. The said letter was circulated to all Chairmen of the District Central Cooperative Banks. Accordingly District Central Cooperative Bank i.e. the petitioner had made a provision in the byelaws

for redemption of the share capital held by the individuals. The petitioner submits that the petitioner is therefore bound to see that individual membership is discouraged and the individual membership is reduced to minimum. Petitioner contends that one Shankarlal Agrawal held 20 number of shares of the petitioner bank. He died on 05.09.2005. His heirs who are the respondents herein applied for transfer of the shares in their name and to give membership to them. The petitioner according to policy that no new members should be admitted and there should be redemption, informed the respondents that the respondents should take back their share money. Respondents felt aggrieved by that and they preferred an application before the Joint Registrar of the Cooperative Societies at Nagpur. Joint Registrar directed the cooperative bank, i. e. the petitioner to give membership to the respondents and being aggrieved by that the District Central Cooperative Bank Gondia has preferred Writ Petition No. 4302 of 2008 while the Writ Petition No. 3088 of 2008 is preferred by the heirs of Shankarlal Agrawal since there is no direction to transfer the shares. I have heard the learned counsel for the petitioners and the respondents.

4. Following few undisputed facts may be noted first. Shankarlal Agrawal held 20 shares of the petitioner bank. He died on 05.09.2005. Respondents No.4 to 15 applied for transfer of those 20 shares in their name in proportion as mentioned against their names. The petitioner bank passed a Resolution refusing to transfer the shares as instructed by the Commissioner of Cooperation by letter dated 05.07.2000. Respondents 4 to 15 then approached the Joint Registrar who passed the impugned order.

5. Shri Samartha learned counsel for the petitioner submits that the bank had taken decision not to transfer the shares as per the policy laid down by the Reserve Bank of India. He submits that the Reserve Bank of India had laid down the policy that individual membership should be discouraged and individual membership should be reduced to minimum. He submitted that in order to reduce the membership as instructed it is necessary to refund the amount to the respondents 4 to 15 and dismember them. Annexure ‘A’ is the letter written by the Registrar Cooperative Societies to the Chairman of the District Cooperative Bank. It would be necessary to reproduce here the contents of the letter dated 28.09.1960:

“You are already awar