Co-operative Societies functioning as banks are subject to the Banking Regulation Act, 1949, and their legislative framework is valid.

JUDGMENT :

N. NAGARESH, J.

1. The appellant, party-in-person, filed W.P.(C)No.16450/2025 seeking to declare that “the Kerala State Co- operative Societies Act, 1969” and “the Kerala State Co- operative Agricultural Development Banks Act, 1984” are unconstitutional and illegal. The appellant also sought to issue a writ of mandamus and to declare that the “Co-operative Arbitration Court” and the jurisdiction made under “the Kerala State Co-operative Societies Act 1969” and “the Kerala State Co-operative Agricultural Development Banks Act, 1984” misused for banking are unconstitutional and illegal and so void from the commencement and enactment of the Acts.

2. Before the learned Single Judge, the appellant urged that the functioning of the Co-operative Bank outside the regulatory framework of the Banking Regulation Act, 1949 is illegal and unconstitutional. Relying on Article 246 of the Constitution of India, the appellant submitted that ‘Banking’ is a subject in List-I of the 7^th Schedule of the and that the enactment of the Kerala Co-operative Societies Act, 1969 and the Kerala State Co-operative Agricultural Development Banks Act, 1984 enabling banking activity in the co-operative sector, is beyond the legislative competence of the State Legislature.

3. The appellant urged that by virtue of sub-clause (2) of Article 13 of the Constitution of India, any law that takes away or abridges the rights conferred by Part-III of the Constitution shall be void to the extent of contravention. The appellant also relied on Article 254 of the and submitted that where the State law is inconsistent with any Central law, the State law shall be void to the extent of inconsistency. On these grounds, the appellant contended that the Kerala State Co-operative Societies Act, 1969 and the Kerala State Co-operative Agricultural Development Banks Act, 1984 are illegal and unconstitutional.

4. The learned Single Judge considered the arguments raised by the appellant and held that this Court has considered the issue in Lathif U.A. MLA and another v. State of Kerala and others, ILR 2023 (4) Kerala 673 and that contention of the petitioner that Co-operative Banks and the Kerala State Co-operative Agricultural and Rural Development (CARD) Bank are functioning without licence and without being regulated in any manner by the Bank Regulation Act, 1949, does not appear to be tenable.

5. The learned Judge further found that the Act contains provisions either excluding the jurisdiction of Civil Courts or granting the power of Civil Court to adjudicating authorities under the Act, cannot be a ground to hold that the provisions are unconstitutional. The exclusion of jurisdiction of Civil Courts is permissible in law. On these premises, the learned Single Judge found that the writ petition is liable to be dismissed in limine and it was ordered accordingly.

6. Aggrieved by the judgment dated 29.10.2025, the appellant has preferred this Appeal. The appellant contends that the banking business comes under the Union List and any Bank can function only as per the law framed by the Union relating to Banking. A Co-operative Society, which comes under a different Entry in the State List cannot be banking business, that may be ultra vires.

7. The appellant would further urge that under the provisions of the Kerala State Co-operative Societies Act, 1969 and the Kerala State Co-operative Agricultural Development Banks Act, 1984 the ordinary remedy of citizen for approaching Civil Court stands excluded. Adjudication has been entrusted with the arbitrators thereby denying the citizens basic right of adjudication by competent Civil Courts. Exclusion of jurisdiction of the Civil Court is also highly