The winding up of a cooperative bank, governed by specific provisions, does not violate constitutional rights, ensuring the interests of depositors are prioritized.

1. This is a petition for issue of writ of mandamus declaring that liquidation proceedings against Kollur Parvathi Co - operative Bank Limited, is illegal and void by holding that provisions of S.64 of the A.P. Co - operative Societies Act, 1964 are not applicable to a Co - operative Bank as the same is a banking Company within the purview of the Banking Regulation Act, 1949 and that the High Court alone has jurisdiction or in the alternative direct the Reserve Bank of India to take steps under sub-cl.(iii) of S.115 - B of the A.P. Co - operative Societies Act,1964 and by declaring that the Deputy Registrar, Tenali and the Registrar of Co - operative Societies, Hyderabad have no jurisdiction to order liquidation of the Kollur Parvathi Co - operative Bank Ltd.

2. The averments in the affidavit filed in support of the writ petition are as follows: The petitioners are members and depositors of Kollur Parvathi Co - op. Bank Ltd., Kolluru, 1st respondent herein. The petitioners 1 to 8 hold the deposits of Rs.69,000/-, Rs.49,000/- Rupees 90,000/-, Rs.75,000/-, Rs.37,155/-, Rupees 28,000/-, Rs.35,000/- and Rs.20,000/- respectively. The 1st respondent bank is an Urban Co - operative Bank established in the year 1915 at Kollur, Tenali Taluk. As on 31-7-1976 there were 1001 members in the society with paid up share capital of Rs.4,22,537/-. The bank accepts current, savings, fixed, recurring, daily deposits and Kalpataruvul deposits both from members and non - members. The deposits in the society were to the tune of Rs.31,70,158/- as on 31-7-1976. The loans outstanding as on 31-7-1976 are Rs.28,25,000/-. The State Government holds share capital of two lakhs rupees. The 2nd respondent by proceedings dated 1-8-1976 ordered an enquiry under S.51 of the Co - operative Societies Act and after the enquiry report was submitted on 24-7-1977 and 26-9-1977 the 2nd respondent by his proceedings dated 26-6-1978 initiated surcharge proceedings under S.60 of the Act. As a result of the surcharge proceedings and enquiry reports it was found that there was defalcation of Rs.6,74,433-85. Subsequent to the receipt of the report the 2nd respondent issued a show cause notice to the 1st respondent bank as to why it should not be wound up. Thereupon the 1st respondent called for a general body meeting of the members on 25-3-1980. The general body decided against the winding up and communicated the decision to the 2nd respondent however, the 2nd respondent by his order dated 16-4-1980 ordered winding up of 1st respondent and appointed the Taluk Co - operative Sub-Registrar as Liquidator of the 1st respondent. On 14-8-1976 the then President of the 1st respondent Bank addressed a letter to the Reserve Bank of India, 4th respondent herein that he suspects misappropriation to the tune of Rs.3,44,200/-due to wilful acts and omissions of the employees with a request that the 4th respondent may appoint a Senior Officer to rectify the matter. The 4th respondent did not take any action in this regard. In every audit either by the 3rd respondent or by the 4th respondent the audit report certified that the 1st respondent bank is an 'A' Class Bank.

3. The second respondent filed counter - affidavit as follows: -
The General Body of the first respondent - Bank passed a resolution objecting to the proposed liquidation and the resolution was passed at a meeting attended by only 40 members as against 993 members eligible to participate in the meeting. After giving due consideration to the said resolution, this respondent decided that the affairs of the Bank should be wound up in the interests of the bulk of the members of th