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IN THE HIGH COURT OF ALLAHABAD
Anjani Kumar Mishra, Jayant Banerji,JJ.
Mechanical Department Primary – Appellant
Versus
Union of India – Respondent
What are the requirements for a cooperative society to demonstrate multi-state operations for registration under the Multi-State Cooperative Societies Act, 2002? What is the legal validity of a Reserve Bank of India circular mandating prior permission for revision of by-laws by a cooperative bank?
Key Points: - A cooperative society must demonstrate that its objects are not confined to one state to qualify for registration under the Multi-State Cooperative Societies Act, 2002 (!) (!) (!) . - The petitioner failed to provide conclusive evidence, such as certified by-laws or a list of members from multiple states, to prove multi-state operations (!) (!) . - The Reserve Bank of India's circular requiring prior permission for by-law amendments is legally valid as it falls under the Union List entry for banking regulation (!) . - The Central Registrar was justified in rejecting the registration application due to the lack of prior permission from the Reserve Bank of India (!) . - Cooperative banks are governed by the Banking Regulation Act, 1949, and must comply with RBI directives regarding licensing and operational permissions (!) (!) . - The High Court dismissed the writ petition as the petitioners did not meet the statutory requirements for multi-state registration (!) (!) . - Previous court orders granting directions were set aside or found inapplicable because the core issue of registration was not conclusively established (!) (!) . - The petitioner's claim of having branches in Bihar and Uttarakhand was not supported by sufficient documentary evidence of licensed operations (!) (!) . - The court held that the petitioner must operate as a Uni-State Cooperative Bank until it obtains the necessary approvals from the Reserve Bank of India (!) . - The judgment emphasizes that the aspect of registration is distinct from the aspect of amending by-laws, both requiring strict compliance with applicable laws (!) .
JUDGMENT :
Jayant Banerji, J.
1. The array of parties in this petition is as follows:-
“1. The Mechanical Department Primary Co-operative Bank Limited, North Eastern Railway, Gorakhpur through its Secretary Mr. Balwant Kumar Shahi.
2. Mr. Balwant Kumar Shahi son of Late Prasiddh Narain Shahi Secretary, The Mechanical Department Primary Co-operative Bank Ltd., North Eastern Railway, Gorakhpur.……………..PETITIONERS
VERSUS
1. Union of India through Secretary, Ministry of Agriculture & Co-operative, Government of India, New Delhi.
2. Central Registrar, Co-operative New Delhi/Joint Secretary, Government of India Krishi Bhawan New Delhi.
3. Reserve Bank of India through its Manager, 8-9 Vipin Khand, Gomti Nagar, Lucknow...………..RESPONDENTS.”
2. This writ petition has been filed seeking the following reliefs:-
“I. Issue a writ, order or direction in the nature of certiorari quashing impugned order dated 26.12.2018 passed by Central Registrar, Co-operative New Delhi/Joint Secretary Government of India Krishi Bhawan, New Delhi/respondent no.2 (Annexure no.20 to the writ petition).
II. Issue a writ, order or direction in the nature of mandamus commanding Central Registrar, Co-operative New Delhi/Joint Secr
A cooperative society must demonstrate its multi-state operations to be registered under the Multi-State Cooperative Societies Act, 2002, as per legal requirements and Reserve Bank directives.
Cooperative banks operate under state law for incorporation and management, while banking activities are regulated by central law, establishing a division of legislative competence.
The court established that State legislation under the Maharashtra Co-operative Societies Act can apply to banking cooperatives without infringing on Central jurisdiction, affirming the dual regulato....
(1) Multi-State cooperative society – Domicile or residence of members is irrelevant for determining whether a society attains status of a multi-State cooperative society – A cooperative society whos....
Point of Law : Section 74A of 1969 Act was incorporated to ensure that benefits of DICGC Act, 1969 were extended to Co-operative Banks as well.
Merger of cooperative banks does not violate statutory regulations when properly sanctioned; the petitioner acted out of self-interest and lacking standing.
Cooperative banks are categorized under the Banking Regulations Act, 1949, thereby requiring debt recovery through federal legislation and not state mechanisms.
The court ruled that cooperative banks fall within the definition of 'Financial Establishment' under the MPID Act, thereby affirming the Act's applicability to such entities despite their regulation ....
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