Point of Law: Reserve Bank of India which is Banker’s Bank is a creature of statue. It is large contingent of expert advice relating to matters affecting the economy of the entire country and nobody can doubt the bona-fides of the Reserve Bank of India in issuing the directions which were issued under Sections 45-J and 45-K of the Reserve Bank of India Act by exercising powers enabling in it in that behalf under those provisions in the public interest. Its objective is to ensure monetary stability in India and to operate and regulate the credit system of the country. It has to maintain a delicate balance between the need to preserve and maintain the credit structure of the country by strengthening the rupee as well as apparent creditworthiness of the banks operating in the country and the interest of the depositors. The Reserve Bank of India occupies place of “pre-eminence” to ensure monetary discipline and to regulate the economy or the credit system of the country as an expert body.

JUDGMENT :

R. D. Dhanuka, J.

By Writ Petition (Stamp) No. 95405 of 2020 filed under Article 226 of the Constitution of India, the petitioners have impugned the order dated 28th April, 2020 passed by the respondent no.3 i.e. Reserve Bank of India thereby cancelling the licence of the CKP Co-operative Bank Limited to carry on the banking business in India under Section 22 read with Section 56 of the Banking Regulation Act, 1949 (hereinafter referred as ‘the said CKP Bank’). The petitioners in Writ Petition (L) No. 5797 of 2020 have impugned the order dated 22nd Separate, 2020 passed by the respondent no.2 i.e. Department of Cooperation Marketing and Textiles and order dated 4th May, 2020 appointing the Liquidator of the said CKP Bank.

2. The petitioners in Writ Petition (Stamp) No. 97828 of 2020 have challenged the order dated 28th April, 2020 passed by the respondent no.2 i.e. Reserve Bank of India thereby cancelling the licence of the said CKP Bank and have also impugned the order dated 4th May, 2020 passed by the Commissioner for Co-operation and Registrar of Cooperative Societies thereby appointing a Liquidator of the said CKP Bank. The petitioners in the said Writ Petition have also prayed for a writ of mandamus to issue directions to the Reserve Bank of India to prepare a scheme of reconstruction or amalgamation of CKP Bank with other Co-operative Bank/Banks having sound financial position in the interest of justice under the supervision and control of the Reserve Bank of India, State of Maharashtra and Union of India. In the alternate prayer clause (c), the petitioners have prayed for a writ of mandamus against the Reserve Bank of India and Union of India to provide sufficient financial aid to the said CKP Bank for its revival and to said CKP Bank to be run under the direct supervision and control of the Reserve Bank of India, State of Maharashtra and Union of India with new Management/Board of Directors as this Court may deem fit.

3. By consent of parties this batch of petitions were heard together finally and are being disposed of by a Common Order. Some of the relevant facts for the purpose of deciding these three petitions are as under :-

4. The petitioners in Writ Petition (Stamp) No. 95405 of 2020 are the share holders of the said CKP Bank. The petitioner nos. 1 to 3 are the members of the same family having joint deposits in the Saving Account opened with the said CKP Bank. The petitioners in Writ Petition (Stamp) No. 95405 of 2020 have also filed a separate Writ Petition bearing Writ Petition (Lodging) No. 5797 of 2020 for the reliefs already set out aforesaid. The petitioners in Writ Petition (Stamp) No. 97828 of 2020 are the depositors of various amounts with the said CKP Bank and holds shares in the said CKP Bank. It is the case of the petitioners in the said Writ Petition that the petitioners have deposits valued at approximately Rs.67,60,000/- with the said CKP Bank and also hold shares in the said CKP Bank.

Some of the facts which are identical in all three matters are as under :-

5. On or about 21st October, 1915, the said CKP Bank was registered as a Co-operative Society. On 10th November, 1986, the said CKP Bank was granted licence by the Reserve Bank of India to conduct banking business. On 30th November, 2009, the Reserve Bank of India addressed a letter to the said CKP Bank on the basis of an Inspection Report dated 31st March, 2009 thereby prohibiting the said CKP Bank from opening offsite ATMs/Extension Counters, as well as from extending the area of operation/opening of new branches. On 9th March, 2012, the Reserve Bank of India placed further restrictions on the said CKP Bank directing it to (i) reduce the exposure limit of single and group borrowers to 50% of the prescribed limits and (ii) arrest fresh slippage of loans to NPA and fix accountability for deterioration in the bank’s asset portfolio. The Reserve Bank of India further warned the said CKP Bank that if the directions were not strictly complied