IN THE HIGH COURT OF CALCUTTA
DEBANGSU BASAK, JAY SENGUPTA, JJ.
Andaman and Nicobar State Cooperative Bank Limited - Appellant
Versus
The Andaman and Nicobar Administration and Others - Respondent
MA/33/2020 IA NO: CAN/1/2021 With WPA/6067/2020 IA NO: CAN/1/2021
Decided on : 20-12-2021
Andaman & Nicobar Islands Cooperative Societies Regulations, 1973 - Banking Regulation Act, 1949 - Section 22(1) read with Section 56(o)- Show cause notice – Banking business – Licence - Lack of jurisdiction of the Registrar of Cooperative Societies in issuing the show cause notice.
Finding of the Court:
It is trite law that, Courts are slow to interfere with a show cause notice as no issues can be said to have been decided at that stage. The rule that Courts are slow to interfere with a show cause notice however, has several exceptions. The Court can and should interfere with a show cause notice if it is substantiated that the show cause notice has been issued without jurisdiction or that the show cause notice is not explicit or clear or does not disclose the basis for the formation of the prima facie opinion thereby preventing the addressee to submit a meaningful reply thereto or where the allegations levelled are vague and/or obscure or when the authorities are proceeding with a closed and prejudiced mind - impugned show cause notice has several charges which if proved to be correct will affect the financial health of the appellant. Therefore, the allegations if substantiated can come within the clause that committee “commits any act which is prejudicial to the interest of the society or its members” of Regulation 27(1) of the Regulation of 1973. Therefore, if cannot be said that the Registrar of Co-operative Societies had acted without jurisdiction in issuing the impugned show cause notice.
Result: Disposed of
JUDGMENT :
Debangsu Basak, J.
1. An appeal and a writ petition have been heard analogously. Learned counsel of the appearing parties have submitted that the issues involved in WPA/6067/2020 which is the writ petition and the present appeal are similar and that such writ petition be heard by the Appeal Court. They have invited the Appeal Court to hear and dispose of such writ petition along with the appeal.
2. Learned Single Judge by the impugned judgment and order dated March 2, 2020 had disposed of two writ petitions being WP No. 140 of 2019 and WP No. 325 of 2017 along with the connected applications therein. The appellant has, however, preferred the instant appeal against the impugned judgment and order dated March 2, 2020 passed in WP No. 140 of 2019 only.
3. Learned senior advocate appearing on behalf of the appellant has submitted that the appellant is a cooperative society registered under the Andaman & Nicobar Islands Cooperative Societies Regulations, 1973. The appellant has been granted licence by the Reserve Bank of India under Section 22(1) read with Section 56(o) of the Banking Regulation Act, 1949 to commence and carry on banking business. The appellant has faced numerous proceedings from time to time at the behest of the authorities. He has referred to the number of proceedings that the appellant was subjected to from time to time. He has submitted that, in all of such proceedings, the authorities did not find any fault in the functioning of the appellant. He has pointed out that, the Registrar of Co-operative Societies had issued a show cause notice dated February 25, 2019 under Regulation 27 of the Regulations of 1973. The appellant had challenged such show cause notice by way of a writ petition being WP No. 79 of 2019. Such writ petition had been disposed of by an order dated March 8, 2019 holding that such show cause notice was issued with closed and prejudiced mind. However, on the submission of the respondent authorities that the show cause notice dated February 25, 2019 would be withdrawn and if necessary, a fresh show cause notice would be issued, the writ petition was disposed by directing that no further proceeding be taken on the basis of the show cause notice dated February 25, 2019 with liberty being granted to the respondents to issue a fresh show cause notice in accordance with law. The Registrar of Co-operative Societies had thereafter issued the show cause notice dated April 12, 2019 which is the subject matter of the writ petition being WP No. 140 of 2019. In the writ petition, the High Court had passed interim orders restraining the respondents from giving effect to such show cause notice. Such interim order had been extended from time to time till the disposal of the writ petition by the impugned judgment and order.
4. Learned senior advocate appearing for the appellant has submitted that, the language of the first show cause notice dated February 25, 2019 and the second show cause notice dated April 12, 2019 are same excepting the word “alleged” being introduced at numerous places. He had submitted that user of the word “alleged” does not alter the factual situation that the Registrar of Co-operative Societies was continuing to act with a closed and prejudiced mind. In fact the second show cause notice and the words used therein only establishes that the Registrar of Cooperative Societies was acting with a closed and prejudiced mind. Learned senior advocate appearing for the appellant has submitted that, mere change in the language of the show cause notice does not take away or cure the closed and prejudiced mind of the Register of the Co-operative Societies. He has relied upon (2010) 13 SCC 427 (Oryx Fisheries Private Limited vs. Union of India and others) in support of his contention.
5. Learned senior advocate appearing for the appellants has highlighted the multiple proceedings launched by the authorities against the appellant. He has submitted that, not a single complaint has been filed by an
Oryx Fisheries Private Limited vs. Union of India and others
Pandurang Ganapati Chaugule vs. Vishwasrao Patil MurgudSahakari Bank Limited
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