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TMI Blog2005 (7) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... . A Anasuya and Eranki Phani Kumar for the Petitioner. S. Ashok Anand Kumar, A.H. Rama Krishna Rao, Deepak Bhattacharjee, N. Ratna Reddy, C.B. Rammohan, E. Ajay Reddy, Kishore Rai, K.B. Ramanna Dora, A Kella Sreenivas Rao, A. Ananda Rao, P. Indra Prakash, Nuty Ram Mohan Rao, Maturi Aravindu, K. Gopala Krishna Murthy, Dr. P.B. Vijay Kumar, P. Uma Shankara Rao, V. Venkataramana, K. Ramanuja Chari, Venkata Rangadas Kanuri and V. Dyumani for the Respondent. JUDGMENT Goda Raghuram, J. - Heard Sri E. Manohar, Sri J. V. Suryanarayana, senior advocates, Sri D. V. Bhadram, Sri K. V. Satyanarayana, Sri Badri Premnath, advocates for the several petitioners/appellants; learned Advo-cate General for the State of Andhra Pradesh; Sri Nooti Ram Mohan Rao, Sri Ashok Anand Kumar, Sri K. Gopala Krishna Murthy, advocates for the several co-operative banks and Sri M. Ratna Reddy, advocate for the Union of India. 2. The several writ petitions were filed at various stages of proceedings before the authorities of the Registration Department of the State. All the writ petitioners had obtained loans; or overdraft facility from the respective co-operative banks in sums, exceeding rupee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Act"), fall for consideration. As competing claims as to the vitality of the Union and State legislations fall for determination in these writ petitions, notice was issued to the Union of India in the Ministry of Finance Department of Economic Affairs (Banking Division). Sri M. Ratna Reddy, learned counsel representing the Central Government, on instructions, has only submitted that the Union of India had not conveyed its views on the construction of the provisions of the several statutes and that it desires to await the decision of the courts on the issues. Why the Full Bench? 6. Aggrieved by the certificate dated June 14, 2004; issued by the Deputy Registrar of Co-operative Societies and Officer on Special Duty of the Vasavi Co-operative Urban Bank Limited, Hyderabad, ordering recovery of about Rs. 33 lakhs towards the debt due to the Vasavi Bank, W. P. No. 18535 of 2004 was filed. A learned Single Judge of this Court by the order, dated October 11, 2004, granted interim stay of all further proceedings pursuant to the certificate dated June 14, 2004, on condition that the writ petitioner should deposit half the amount due under the certificate. Aggrieved thereby, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act are arranged in XIV Chapters including Chapter XIII-A. Chapter II sets out provisions relating to registration of societies and matters connected and incidental thereto; Chapters III and IV deal with membership of the society, composition of managing committees of the societies, the rights and liabilities of the members and matters relating to management of societies including the powers and functions of the managing committee, respectively; Chapters V to VII deal with the rights and privileges, properties and funds and substantive and procedural provisions relating to audit, inquiry, inspection and surcharge in relation to a society; Chapter VIII includes provisions regarding settlement of disputes and section 61 in this chapter is one of the provisions which confers arbitral power for recovery of dues of a co-operative society; Chapters IX, XI and XII contain provisions relating to winding up and cancellation of registration of a society, to appeal, revision and review and offences and penalties, respectively; Chapter X includes provisions relating to execution of decisions and decrees and orders and in this chapter are included sections 70 and 71 relating to the power of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not; ( iii )a claim by a society against a member, past member, or the nominee, heir or legal representative of a deceased member for the delivery of possession to the society of land or other immovable property resumed by it for breach of the conditions of assignment or allotment of such land or other immovable property. 12. A co-operative bank provides loans and advances only to its members. On a true and fair construction of the provisions of section 61(1) considered in the invariable factual setting that loans and advances are provided by a co-operative bank only to its members and the broad definition in the Explanation to section 61(1) that a dispute includes "a claim by a society for any debt or other amount due to it from a member, past member, the nominee, heir or legal representative of a deceased member", a dispute regarding recovery of the loans, advances and any debt due to a co-operative bank from its members constitutes (on a textual construction of the provision), a dispute falling within the adjudicatory domain of the Registrar. 13. Chapter X includes provisions for execution of decisions, decrees and orders of the authorities under the Act; while sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Special Tribunals with special powers for adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sector reforms. An urgent need was, therefore, felt to work out a suitable mechanism through which the dues to the banks and financial institutions could be realized without delay. In 1981 a Committee under the Chairmanship of Shri T. Tiwari had examined the legal and other difficulties faced by banks and financial institutions and suggested remedial measures including changes in law. The Tiwari Committee had also suggested setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfil a long-felt need, but also will be an important step in the implementation of the Report of Narasimham Committee. Whereas on September 30, 1990, more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by the financial institutions were pending in various courts, recovery of debts involved more than Rs. 5,622 crores in dues of public sector banks and about Rs. 391 crores of dues of the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this Chapter are provisions relating to appeals to the Appellate Tribunal and other incidental matters. Chapter V sets out provisions relating to recovery of the debt determined by the Tribunal and appeals against the order of Recovery Officer. Chapter VI contains provisions relating to miscellaneous matters. Section 34 enacts overriding effect to the provisions of the Act. Including in this chapter are provisions relating to rule-making powers of the Central Government. The Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 [Act 30/95] ("the 1995 Act"): 16. Increased State s participation in financing and management of co-operative societies substantially eroded the autonomy of co-operative societies and even the co-operative societies for perceiving themselves as administrative arrangement of the State. These shared perceptions were inconsistent with the co-operative principles and the dynamic national goal of deregulation and liberalisation. The State Government therefore enacted this legislation to promote self-reliant, and autonomous co-operative societies and to ensure a vibrant co-operative moment in the State. Suffice to notice for the purposes of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to a co-operative bank [56( a )]. 20. Section 5 of the Act is the definitions/interpretations clause, which defines various expressions set out therein. Section 56( c ) incorporates definition of certain expressions like "co-operative bank", "co-operative credit society" and "primary agricultural credit society" into section 5 of the Act. Accordingly "co-operative bank" means a State co-operative bank, a central co-operative bank and a primary co-operative bank. "Primary co-operative bank" means a co-operative society, other than a primary agricultural credit society, the primary object or principal business of which is transaction of banking business, the paid up share capital and reserves of which are not less than rupees one lakh and bye-laws of which do not permit admission of any other co-operative society as a member. The expressions "central co-operative bank", "co-operative society", "primary rural credit society" and "State co-operative bank" have meanings respectively assigned to these expressions in the National Bank for Agricultural and Rural Development Act, 1981 (Act 61 of 1981) [The 1981 Act]. 21. Section 56(7) prohibits the use of the words "bank", "banke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the 2002 Act) - brief analysis. 26. The slow pace of recovery of defaulting loans and mounting levels of non-performing assets, absence of legal provision for facilitating securitisation of financial assets of banks and financial institutions are some of the concerns that are addressed by this legislation by Parliament, which provides for securitisation and empowering banks and financial institutions to take possession of the Securities and to sell them without the intervention of the court. This legislation enables banks and financial institutions to realise long-term assets, manage problem of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. 27. Section 2( c ) defines the expression "bank" to mean, inter alia, "a banking company" and "a banking company" is defined with reference to the meaning assigned to it in clause ( c ) of section 5 of the Banking Regulation Act, 1949 [section 2( d )]. Section 2( f ) define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve/executive construction that is eminently persuasive an emulative, urge the respondent-banks. The case of the petitioners: A."Banking" is within the exclusive legislative field of the Union - article 246 read with entry 45, List I of the Seventh Schedule. B.Each of the respondent-banks is a "co-operative bank" and "banking company" within the meaning of the 1949 Act, including section 5( c ) of the said Act. C.The debt due from each of the petitioners is in excess of Rs. 10 lakhs. D.In view of the definition of the expressions "bank", "banking company" and "debt" in section 2( d ), ( e ) and ( g ) of the 1993 Act, every respondent-bank a co-operative bank, is a "banking company" and therefore a "bank" and the debt due from every petitioner is a debt recoverable only under the provisions of the 1993 Act. E.The substantive and procedural prescriptions for recovery of the debt due from each of the petitioners is confined to the exclusive jurisdiction, power and authority of the Tribunal constituted under the 1993 Act and the jurisdiction, power or authority of every other court or other authority (including the Registrar - exercising powers under the 1964 Act) is exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of debts due to a co-operative bank by recourse to the provisions of the 1964 Act. Under the 1993 Act "bank" means "banking company" and "banking company" is defined with reference to the meaning assigned to this expression in section 5( c ) of the 1949 Act. Since the 1949 Act does not exclude or eclipse the provisions of the 1964 Act and the provisions of the 1964 Act can operate alongside the provisions of the 1949 Act (section 2 of the 1949 Act) the impugned recovery proceedings, under the provisions of the 1964 Act are competent, valid and enforceable. D.Section 3 of the 1949 Act excludes application of the provisions of this Act to a Primary Agricultural Credit Society (PACS); a co-operative Land Mortgage Bank (LMB) and any other co-operative society, except in the manner and to the extent specified in Part V. By the amendment to the 1949 Act (by Act 23/65), Part V was incorporated. By section 56( c ) clause ( cci ) was inserted in section 5 of the Act; whereunder "co-operative bank" is defined to mean a State co-operative bank, a central co-operative bank and a primary co-operative bank. Clause ( ccvii ) of section 5 of the 1949 Act defines the expression "State co-operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the constitutional scheme of distribution of legislative powers. If the State Legislature is incompetent since the relevant field of legislation belongs exclusively to the Union, the discourse as to an earlier/later State enactment (prevailing over a Union legislation) is non-sequitor. F.Recovery of the debt due to a bank is not a matter that integrally falls within the scope of the legislative field "banking" in entry 45 of List I. It falls within the wider entry "...Regulation .... of co-operative societies" . . . entry 32 of List II. G.As the petitioners voluntarily submitted to the jurisdiction of the Registrar (exercising powers under section 61 or 71 of the 1964 Act), they are estopped from questioning such jurisdiction or the orders passed by in exercise of the jurisdiction. The issues for determination : A.Are the respondent banks, co-operative banks and banking companies within the meaning of these expressions as defined in the 1949 and 1993 Acts ? B.Do the debts due from the petitioners to the respondent-banks constitute "debt" within the meaning of the expression as defined in section 2(9) of the 1993 Act; are the respondent-banks "bank" within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat should be avoided if not paramount to decision in a lis . Frankfurtur J. in Youngstown Sheet and Tube Co. v. Sawyer [1952] 343 US 579; 96 L. Ed. 1153 stated this principle of judicial restraint in felicitous phrase "A basic rule is the duty of the court not to pass on a constitutional issue at all, however narrowly it may be confined, if the case may, as a matter of intellectual honesty be decided without even considering delicate problems of power under the Constitution. It ought to be, but apparently is not a matter of common understanding that clashes between the different branches of Government should be avoided if a legal ground of less explosive potentialities is properly available. Constitutional adjudications are apt by exposing differences to exacerbate them". In Basheshar Nath v. CIT [1959] 35 ITR 190 (SC); S.R. Das, CJ. in a majority opinion declined to pronounce upon the issue whether breach of fundamental rights, other than those flowing from article 14, could be waived. Das, CJ. held : "...For disposing of this appeal it is not necessary for us to consider whether any of the other fundamental rights enshrined in Part III of our Constitution can or canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysis of the provisions of section 3 and section 56, the Act applies to all co-operative banks the paid up share capital and reserves of which are of the value of Rs. 1 lakh above including State co-operative banks, central co-operative banks and primary non-agricultural credit societies including urban co-operative banks that have banking as a principal business and paid-up capital and reserves of a nominal value of Rs. 1 lakh or more. Excluded from the provisions of the Act are : ( a )Primary agricultural credit societies irrespective of the value of their paid up capital and reserves; ( b )Non-agricultural primary credit societies with paid up capital and reserves of the value of less than Rs. 1 lakh, even though their primary object or principal business is banking and they may be accepting deposits from non-members; ( c )Co-operative credit societies, the principal business of which is not banking but is providing financial help to its members and which do not accept deposits from non-members; and ( d )Co-operative societies that do not carry on any banking business. 38. At this stage of analysis, we may dispose of a contention projected by Sri Ashok Anand Kumar, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses ( f ), ( d ), ( n ), ( u ) of section 2. The expressions "co-operative society", "central co-operative bank", "primary rural credit society", "State co-operative bank" are, in the 1949 Act assigned the same meanings as respectively assigned to them in the 1981 Act [ vide section 5( ccvii ) of the 1949 Act]. It is not the case of the respondent-banks that these banks are "central co-operative bank" or "State co-operative bank" or even "primary rural credit society" as defined in the 1949 Act. 42. Section 5( cciv ) of the 1949 Act defines a "primary agricultural credit society" to mean a co-operative society, the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities including marketing of crops and the, bye-laws of which do not permit admission of any other co-operative society as a member except that admission of a co-operative bank as a member is permitted where such co-operative bank subscribes to the share capital of such co-operative society out of the funds provided by the State Government for the purpose. 43. The respondent-banks are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k shall use as part of its name or in connection with its business any of the words "bank", "banker" or "banking" and that no co-operative society shall carry on the business of banking in India unless it uses as part of its name at least one of such words. Sub-section (2) of section 7 provides that the aforesaid requirement and prohibition [in section 7(1)] does not apply to certain classes of co-operative societies such as primary credit society, a co-operative society formed for the protection of the mutual interest of co-operative banks or co-operative land mortgage banks, or any co-operative society not being a primary credit society, formed by the employees of a banking company or the State Bank of India or a corresponding new bank or a subsidiary bank of such banking company, State Bank of India or a corresponding new bank, or a co-operative bank or a primary credit society or a co-operative land mortgage bank. The respondent-banks do not come within the exceptions to the operation of the substituted section 7(1) of the 1949 Act. Such is not their case either. Admittedly, they are a co-operative society carrying on banking business and also use of the word "bank" as part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d power of every court or other authority including the Registrar under the 1964 Act to entertain and decide applications from the respondent-banks for recovery of debts due to them from the petitioners, is wholly and comprehensively excluded. 49. On behalf of the respondent-banks it is contended, tentatively by some of the representing counsel but emphatically by others that inasmuch as section 2( e ) of the 1993 Act defines the expression "banking company" with reference to its definition in section 5( c ) of the 1949 Act and without clearly enacting that the said expression shall have the meaning assigned to it in section 5( c ) of the 1949 Act as amended by Act 23 of 1965 or read with section 56, the provisions of the 1993 Act should properly be construed as confined to a banking company which is a "company" as defined in section 5( d ) of the 1949 Act, meaning a company as defined in section 3 of the Companies Act, 1956 ( the 1956 Act ) and including a foreign company within the meaning of section 591 of the 1956 Act. Put differently, the contention of the respondent-banks is that as "bank" and "banking company" are not defined in the 1993 Act with reference to the amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of legislation by incorporation, thus: "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the Act as if they had been actually written in it with the pen, or printed in it." (p. 615) 53. Ordinarily if an Act is incorporated into a later Act the intention is to incorporate the earlier Act with all the amendments made to it up to the date of incorporation. Sikri, J. speaking for a Constitution Bench in State of Maharashtra v. Madhav Rao Damodar Patil AIR 1968 SC 1395, applied this principle and concluded that by including the Maharashtra State Agricultural Lands (Ceiling on Holdings) Act, 1961 in the Ninth Schedule to the Constitution, the said Act as amended by Maharashtra Act XIII of 1962 must be deemed to have been included and not merely the original unamended Act of 1961. In Mayor of Portsmouth v. Smith [1885] 10 AC 364 (HL) Lord Blackburn spelt out the principle of construction when only particular sections of an earlier enactment are incorporated into a later enactment, thus : "Where a single section of an Act of Parliament is introduced int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebts are invalid are issues which are not within the adjudicative domain of the Registrar, a creature of the 1964 Act. These issues go to the root of the Registrar s jurisdiction and also involve pure questions of law and jurisdiction. No decision of the Registrar could be conclusive on such issues nor can a decision of the Registrar be declared final and irreviewable by this Court on the jejune grounds of waiver or estoppel Chief Justice of Andhra Pradesh v. L.V.A. Dixitulu [1979] 2 SCC 34; L.Chandra Kumar v. Union of India [1997] 228 ITR 725. 59. It is also a settled principle of law that a writ of prohibition or certiorari would issue if a court or Tribunal proceeds to act under a law which is ultra vires or unconstitutional, acts in excess of its jurisdiction or even on an erroneous assumption of jurisdictional facts. If the jurisdiction, power or authority of the Registrar is non-existent either on account of an exclusive jurisdiction conferred on a Tribunal under the 1993 Act or as the provi- sions of the 1964 Act insofar as they provide for adjudicatory mechanisms for recovery of debts due to co-operative banks are incompetent (on the grounds of legislative c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said expressions in the 1993 Act also is the case of the respondent-banks. 63. One of the recognised aids to statutory construction is known as the "doctrine of executive construction". The principle underlying this doctrine is that a uniform and consistent departmental practise arising out of the construction placed upon an ambiguous statute by the highest executive officers at a time contemporaneous to the enactment and continuing over a considerable period of time is an admissible aid to the proper construction of the statute by the court and such construction should not be disregarded except for cogent reasons. This aid to construction of statutes is a relatively unreliable aid to construction of statutes. The appropriateness of its application depends on variable and plural factors, including the duration of time for which the executive construction is followed, the nature and magnitude of rights affected by the construction, the injustice or public mischief resulting from its departure and the approval of such construction as received in precedents or subsequent legislations. This aid to construction of statute has been applied in a few cases - State of Nagaland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reasons elaborately considered and recorded earlier in this judgment we have concluded that co-operative bank falls within the expression "bank" in the 1993 Act. In the circumstances we are not inclined to treat the Central Government notification dated January 28, 2003, as a compelling guide to the construction of the provisions of the 1993 Act or to hold that the expression "bank" in the said Act excludes a "co-operative bank". 64. We accordingly hold issue-H against the respondent-banks. Analysis of issues E and F: 65. In the analysis of issues A to D supra, we have considered whether the provisions of the 1993 Act exclude the adjudicative jurisdiction and domain of the Registrar under the 1964 Act. We have concluded that a Tribunal constituted under the 1993 Act has exclusive jurisdiction to entertain and decide applications from a co-operative bank for recovery of debts due wherever the amount of debt due is Rs. 10 lakhs or above. We have also concluded that claim of a co-operative bank and the proceedings consequent on the determination of such a claim, which falls within the jurisdiction and authority of a Tribunal under the 1993 Act cannot be entertained o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporation, regulation and winding up of multi-State corporations, excluding universities. The legislative field "banking" enumerated in entry 45 of List I must therefore be construed as one in relation to trading or non-trading corporations including banking, insurance and financial corporations but excluding banking corporations which are co-operative societies that are not multi-State in character, contend the petitioners. 69. The provisions set out in Part XI, Chapter I of the Constitution, principally govern the allocation and distribution of legislative powers between the Union and the States under the Indian Constitution. Articles 249 to 252 confer on Parliament, the power to legislate with respect to a matter in the State list (list II, Seventh Schedule) and set out principles for resolving inconsistency between laws made by Parliament under articles 249 and 250 and laws made by the Legislature of a State (within the State legislative powers). With respect to any matters not enumerated in the Concurrent or the State list, residuary, legislative power is conferred on Parliament (article 248). Power to make a law for implementing or giving effect to international agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature. The inherent corollary of such exclusivity is that if Parliament or the Legislature of a State fails to legislate, at all or to the full limit of its power, such failure does not have the effect of augmenting the powers of the other level of Government. This is the true meaning and effect of exclusivity in the distribution of legislative powers enumerated in Lists I and II. The Constitution does not countenance the delegation of legislative powers, either expressly or by abstinence in the exercise of legislative powers by the appropriate Legislature. 72. In respect of matters enumerated in the Concurrent list however it is possible that laws made by the Union and the State could co-exist. Resolution of conflicts in this area is by application of the doctrines of "the occupied field" and "repugnancy" and such disputes are to be resolved by recourse to the principles set out in article 254. 73. The elaborate constitutional plan of distribution of legislative powers between the Union and the States enumerated in the exclusive lists (Lists I and II) and the Concurrent list (List III) does not however avoid potential disputes as to the legitimacy of a law on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1960 Punj 462; in Banarsi Dass v. WTO [1965] 56 ITR 224 (SC); section 3 of the Wealth-tax Act, 1957 which makes the Act applicable to a Hindu undivided family was upheld on the construction that the word "individual" in entry 86, List I was wide enough to cover to a group of individuals such as a Hindu undivided family; in Orient Paper Mills Ltd. v. State of Orissa AIR 1961 SC 1438, section 14A of the Orissa Sales Tax Act, 1947, which deprives assessees of a right to obtain a refund of tax paid under an error of law and which provides that a refund could be claimed only by the person from whom the tax was realised, was upheld on the view that the granting of refund of a tax improperly or illegally collected and the restriction on the exercise of that right were both ancillary or subsidiary matters relating to the primary head of tax on sale of goods. This decision and the principle of ancillary and subsidiary powers spelt out in the above judgment were specifically approved by the Bench of seven (7) judges in R. S. Joshi v. Ajit Mills Ltd. AIR 1977 SC 2279. 74. To resolve legislative conflicts, the doctrine of pith and substance was evolved. The Privy Council wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers under section 51 of the Australian Constitution, Dixon. J in Bank of N.S.W. v. Commonwealth [1948] 76 CLR 1 pointed out this principle of expansive construction: "The purpose of the enumeration of powers in section 51 is not to define or delimit the description of law that Parliament may make upon any of the subjects assigned to it. Speaking generally, the legislative power so given is plenary in its quality. The purpose of the enumeration is to name a subject for the purpose of assigning it to that power. The names of descriptions employed are usually of the briefest kind. It is true that certain powers do involve a description amounting almost to a formal definition;. . . But more often they are the most general names of general topics. . . . To borrow the words of Gray J. delivering the opinion of the Sup. Ct. in Juilliard v. Greenman [1883] 110 U.S. 421. The Constitution. .. by apt words of designation or general description marks the outlines of the powers granted to the National Legislature; but it does not undertake, with the precision and detail of a code of laws, to enumerate the sub-divisions of those powers, or to specify all the means by which they m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though normatively the matter was considered of a provincial interest. Such treatments in the allocation of powers provide operational flexibility entry 23 of the State List and entry 54 of the Union List; entry 24 of the State List and entry 52 of the Union List illustrate the above constitutional arrangement. 81. The first step towards resolution of conflicts as to allocation of legislative powers in the exclusive lists is to identify the matter of the legislation or what is known as the "pith and substance" of the challenged law. The second step is to assign the matter or the substance of the impugned legislation to one of the heads/fields of legislation distributed in the lists in the Seventh Schedule. Often, as pointed out by Laskin (in relation to the allocation of legislative powers under the British North America Act, 1867), these two steps "are in the nature of interlocking processes in which the constitutional provisions and the challenged legislation react on one another and fix each one s meaning". Nevertheless, for the purposes of analysis and resolution of the conflicts, the essential steps involved are : ( a ) characterisation of the challenged law; and ( b ) int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another for the States) and the catalogue of concurrent fields of legislation, the Indian Constitutional architecture of distribution of powers nevertheless invites application of the doctrine of pith and substance (as an aid to classify legislation for its allocation to a specific field of enumerated legislative powers) and the doctrine of ancillary and incidental powers, to accord and enable flexibility and pragmatism to the structure of the division of exclusive powers while providing a check against clear usurpation of power to an extent that disturbs the carefully constructed constitutional plan of federal balance. Under this arrangement, incidental trenching in exercise of ancillary powers, into a forbidden legislative territory is permitted as a matter of privileged encroachment not amounting to usurpation. 86. Normatively "trenching" connotes in the context of legislations by different levels of Government and within the scheme of the exclusive Union and State fields (Lists I and II), an unconstitutional encroachment by one Legislature on the exclusively authorised field of another. In practice however, following the employment of this device and terminol-ogy by the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter is ancillary or incidental to the enumerated field of the other level of Government. Where such is not the situation then perhaps the provisions of the impugned legislation could be said to fall within the penumbral area of the authorised fields of both levels of Government, i.e., within the area of ancillary and incidental powers of both levels of Government. In classifying the law for the purpose of identification as to whether it appropriately belongs to the core or penumbral areas of a legislative field, regard must be had to the provisions of the Act as a whole in which the impugned provisions occur, the enumerated fields of legislation in the exclusive Lists (I and II) and the constitutional values and purposes underlying the distribution of legislative powers to the two levels of Government - the federal and provincial. Consideration of these aspects would, in most cases provide a satisfactory resolution to legislative conflicts. 90. The difficulty in identifying the "matter" the "dominant feature" or the "pith and substance" of a law is that many statutes have features which fall within one level of Government and others falling within the other level of Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a mere collection of sections. This is so since on examination of the character of legislation applying the pith and substance doctrine, if the legislation substantially falls within the power expressly conferred by the Constitu-tion upon the Legislature which enacted it, it should not be held invalid, merely because it incidentally trenches on matters assigned to another Legislature - Firm Ram Krishna Ramnath Agarwal, Kamptee v. Secretary, Municipal Committee, Kamptee AIR 1950 SC 11, State of Karnataka v. Ranganatha Reddy AIR 1978 SC 215, Kerala State Electricity Board v. Indian Aluminium Co. Ltd. AIR 1976 SC 1031, Tripura Goods Transport Association v. Commisioner of Taxes [1999] 2 SCC 253/1999 AIR SC 719. 93. The question of invasion into the territory of another Legislature must be determined not by the degree but by substance; the extent of invasion though is not altogether irrelevant; the extent of invasion into the forbidden sphere may some times determine the "pith and substance" of the impugned legislation - Thakur Amar Singhji v. State of Rajasthan AIR 1955 SC 504. 94. In identifying the dominant characteristic or the "pith and substance" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nflicts on federal grounds. 95. Another principle for reconciliation of legislative powers under exclu-sive catalogue of legislative powers is that a State law of general applica-tion is not necessarily valid in its application to undertakings or matters within the federal jurisdiction. It is possible that a State law of general application, which is in substance in relation to a State matter, may validly affect Federal matters as well. The courts have however carved out an important exception to this general principle. If the effect of the State law would impair the status, the essential powers or the intrinsic efficacy of regulation of a matter eminently falling within the Federal field or would effect a vital area of a federally regulated enterprise, then the State law although valid in the generality of its application will be held not to apply to the federally incorporated or regulated enterprise. Peter W. Hogg refers to principle as the principle of Interjurisdictional Immunity (Constitutional Law of Canada - 2001). An illustration of the application of this principle is in the decision of the Canadian Supreme Court in Bell Canada v. Quebec [1988] 1 SCR 749. The que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lourable legislation means that though apparently the Legislature enacted the statute purporting to act within the limits of its power, had in substance and reality transgressed the limits of its constitutional powers, the transgression being a camouflage, by what appears on appropriate examination, to be a mere pretence and disguise - S.A. Venkataraman v. State of Orissa AIR 1954 SC 375, B. R. Shankarnarayana v. State of Mysore AIR 1966 SC 1571, JalanTrading Co. (P.) Ltd. v. Mill Mazdoor Sabha [1966] 36 Comp. Cas. 901 AIR 1967 SC 691. The doctrine against colourable legislation is not concerned with the motive of legislation; it is in essence a question of vires or the power of the Legislature to enact the law in question. 97. In the limited area of ancillary and incidental powers of the two levels of Legislature, there is thus a concurrency of legislative power even in respect of the exclusive lists. In this area the apparently conflicting legislative provisions must be reconciled. When reconciliation is not however possible, the Union s exercise of legislative power in areas that are incidental and ancillary to its authorised field of legislation commands dominan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... content and reduce it to useless lumber ( see Calcutta Gas Company (Proprietary) Ltd. v. State of West Bengal AIR 1962 SC 1044). The use of the word exclusive in clause (3) denotes that within the legislative fields contained in List II, the State Legislatures exercise authority as plenary and ample as Parliament 276. The fact that under the scheme of our Constitution, greater power is conferred upon the Centre vis-a-vis the States does not mean that States are mere appendages of the Centre. Within the sphere allotted to them, States are supreme. The Centre cannot tamper with their powers. More particularly, the courts should not adopt an approach, an interpretation, which has the effect of or tends to have the effect of whittling down the powers reserved to the States ( see S. R. Bommai v. Union of India [1994] 3 SCC 1). 94. Although Parliament cannot legislate on any of the entries in the State List, it may do so incidentally while essentially legislating within the entries under the Union List. Conversely, the State Legislatures may encroach on the Union List when such an encroachment is merelyancillary to an exercise of power intrinsically under the State List ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate to extract these principles as have been elegantly and comprehensively summarised in the judgment: "... the basic assumption on which the argument of the appellants rests is that the heads of legislation set out in the several Lists are so precisely drawn as to be mutually exclusive. But then it must be remembered that we are construing a federal Constitution. It is of the essence of such a Constitution that there should be a distribution of the legislative powers of the Federation between the Centre and the Provinces. The scheme of distribution has varied with different Constitutions, but even when the Constitution enumerates elaborately the topics on which the Centre and the States could legislate, some overlapping of the fields of legislation is inevitable. The British North America Act, 1867, which established a Federal Constitution for Canada, enumerated in sections 91 and 92 the topics on which the Dominion and the Provinces could respectively legislate. Notwithstanding that the lists were framed so as to be fairly full and comprehensive, it was not long before it was found that the topics enumerated in the two sections overlapped, and the Privy Council had time and ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms : it must inevitably happen from time-to-time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its "pith and substance" or its "true nature and character" for the purpose of determining whether it is legislation in respect of matters in this list or in that . . .' This point arose directly for decision before the Privy Council in Prafulla Kumar Mukherjee v. Bank of Commerce Ltd. AIR 1947 PC 60; 74 Ind. App. 23. There, the question was whether the Bengal Money Lenders Act, 1940 which limited the amount recoverable by a money-lender for principal and interest on his loans, was valid insofar as it related to promissory notes. Money-lending is within the exclusive competence of the Provincial Legislature un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side of the line and can be seen as valid or invalid according to its true content . Then, there is the decision of the Federal Court in Lakhi Narayan Das v. Province of Bihar AIR 1950 FC 59. There, the question related to the validity of Ordinance No. IV of 1949, promulgated by the Governor of Bihar. It was attacked on the ground that as a legislation in terms of the Ordinance would have been void, under section 107(1) of the Government of India Act, the Ordinance itself was void. The object of the Ordinance was the maintenance of public order, and under entry 1 of List II, that is a topic within the exclusive competence of the Province. Then the Ordinance provided for preventive detention, imposition of collective fines, control of processions and public meetings, and there were special provisions for arrest and trial for offences under the Act. The contention was that though the sections of the Ordinance relating to maintenance of public order might be covered by entry 1 in List II, the sections constituting the offences and providing for search and trial fell within items 1 and 2 of the Concurrent List, and they were void as being repugnant to the provisions of the Crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council upheld a Canadian provincial law that imposed a tax on banks as it was characterised as a law in relation to taxation (a matter within the provincial field), though the law was a significant exercise of legislative power over banks (an exclusive federal subject). The taxing statute in this case though it applied to several corporations as well as banks, did impose special rate of tax on banks alone. Nevertheless, the Privy Council characterised the law as one in relation to the taxation and not banking. In contrast, in another case arising from Canada, the Privy Council struck down an Alberta (a Canadian province) law. The law imposed a special tax only on banks. The Privy Council held that the pith and substance of the law was to discourage the operation of banks in the Alberta province. The high rate of tax imposed by the law and the fact that the law was part of package of social credit policies inimical to bank credit were among the factors which led to the characterisation of the law as one in relation to banking and thus a prohibited field for provincial legislation - Attorney-General for Alberta v. Attorney-General for Canada [1939] AC 117. 101. In the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct notwithstanding the entry in List II. This is also on the principle that the special excludes the general and the general entry in List II is subject to the special entry in List I .... Furthermore, the word notwithstanding in clause (1) also means that if it is not possible to reconcile the two entries the entry in List I will prevail. But before that happens attempt should be made to decide in which list a particular legislation falls". (p. 1036) 103. The validity of the Punjab Co-operative Societies (Amendment) Ordinance, 1969 and the Punjab Co-operative Societies (Amendment) Act, 1969 were challenged in Sant Sadhu Singh v. State of Punjab AIR 1970 P H. 528, the petitioners contended that the Punjab Legislature was incompetent to make a law pertaining to banking corporations; co-operative societies doing banking business are banking corporations and, therefore the amendment Ordinance and Act are beyond the competence of the Punjab Legislature and that the State legislation was a colourable exercise of power insofar as banking co-operative societies are concerned. A Division Bench of the Punjab and Haryana High Court held that in order to give a harmonious constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of any other business not incidental to banking in which such bank was engaged. In the context of such challenge, the scope of the legislative field banking in entry 45 of List I fell for the consideration of the Supreme Court. On behalf of the Union, it was contended that the expression banking in entry 45 of List I means all forms of business, which since the introduction of western methods of banking, banking institutions have been carrying on in addition to banking as defined in section 5( b ) of the 1949 Act and on that account all forms of business described in section 6(1) of the said Act are, if carried on in addition to the hard-core of banking business, Parliament is competent to legislate within its exclusively allocated field under entry 45 of List I. The Union further contended that apart from the business of acceptance of money from the public for lending or investment, withdrawable by cheque, draft or otherwise, banking includes any allied business activities, which banks engage in and all such businesses fall within the legislative field of banking in entry 45. Shah, J. speaking for the majority, rejecting such expansive construction of entry 45, held: "In mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC 318, held that the word "import" in entry 19, List I, the Government of India Act, 1935, must be given a restricted meaning in order to preserve and effectuate the legislative field expressed by the very general words "intoxicating liquors and narcotic drugs" in entry 31 of the State List. 107. In Waverly Jute Mills Co. Ltd. v. Raymon and Co. (India) Pvt. Ltd. AIR 1963 SC 90, the legislative field "market" (entry 48, List I) was construed as a specific entry which abstracts from the general entry relating to "trade and commerce within the State" (entry 26 of State List), the legislative field of "future markets". Consequently, it was held that the Forward Contracts (Regulation) Act, 1952 was a law within the exclusive field enumerated in entry 48 of the Union List, even though (on a broader construction) it could be a law with reference to "trade and commerce" (entry 26 of List II). 108. In Agricultural Produce Market Committee s case ( supra ) a Constitution Bench of the Supreme Court had to consider whether its earlier judgment in ITC Ltd. v. State of Karnataka [1985] Suppl. SCC 476, was correct. In the Karnataka ITC case, the majority had held that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject covered by entry 53 of List I and the Union has exclusive legislative competence to enact laws on natural gas? 2.Whether States have legislative competence to make laws on the subject of natural gas and liquefied natural gas under entry 25 of List II of the Seventh Schedule to the Constitution ? 3.Whether the State of Gujarat had legislative competence to enact the Gujarat Gas (Regulation of Transmission, Supply and Distribution) Act, 2001 ? 110. The relevant scope and meaning of entry 53, of List I and entry 25 of List II (of the Seventh Schedule) had to be determined. In considering whether the expression "Petroleum and Petroleum products or "mineral oil resources" in entry 53 of List I includes "natural gas or its derivative forms", the Supreme Court (Per K. G. Balakrishnan, J.) went into the chemical and other characteristics of natural gas as defined in encyclo- paedias and texts on science, the dictionary meanings of "natural gas" and definitions of "petroleum" in legislations of other countries such as the United Kingdom and Australia. The Supreme Court opined that entry 25 of List II (Gas and Gas-works) means "any work" or "industry" relating to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g all aspects of banking including ancillary or subsidiary matters relating to banking. Setting up of an adjudicatory body like the Banking Tribunal relating to transactions in which banks and financial institutions are concerned would clearly fall under entry 45 of List I giving Parliament specific power to legislate in relation thereto". [Emphasis supplied] 113. From the above decision the principle should be considered as beyond disputation that providing an institutional mechanism for resolution of disputes relating to the banking business and constitution of Special Tribunals to entertain and determine the claims of banks for recovery of the debts due to them, are matters eminently and exclusively within the spectrum of the legislative field "banking" in entry 45 of List I. Having regard to the exclusivity of the enumerated fields of legislation of the Union List and the paramountcy accorded to the Union legislative power, [article 246(1)], the Legislatures of the States must be considered and declared as denuded of any legislative power to regulate the business of banking, regardless of the existence or otherwise of a Union legislation covering the field. Consequently the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0; AIR 2004 Bom. 166. D. K. Deshmukh (as his Lordship then was) approving the decision of the Division Bench in Shamrao Vithal Co-operative Bank Ltd. s case ( supra ). "In our opinion, once Parliament by enacting amending Act 23 of 1965 includes a co-operative bank in the same class as a company doing the business of banking for the purpose of regulation of the banking business would not have intended to treat the banking companies and the co-operative banks differently in relation to one aspect of the banking business namely recovery of dues.... Therefore, so far as the aspect of business of banking is concerned, the co-operative banks and the companies doing the business of banking are in one class". The Bombay Full Bench further observed (para. 26); "There can be little doubt that under entry 45 of List I, it is Parliament alone which can enact a law with regard to the conduct of business by the banks. Recovery of dues is an essential function of any banking institution. In exercise of its legislative power relating to banking, Parliament can provide the mechanism by which monies due to the banks and financial institutions can be recovered.... As none of the items in the lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Therefore, the constitution of the societies and their working would have fallen within the ambit of entry No. 43 but for the fact that co-operative societies are excluded from its purview. The very fact that in entry No. 43, corporations engaged in the business of banking are specifically mentioned, it clearly follows that co-operative societies doing that business were taken out of entry No. 43, List I, and deliberately put in entry No. 32, List II; in view of the clear wording of the two entries, I am unable to agree with the contention of learned counsel for the petitioners, that the State Legislature has no jurisdiction to regulate the functioning of the co-operative societies engaged in the business of banking". It is apparent that in a limited sphere, entries 43, 44 and 45 of List I and 32 of List II have a measure of overlapping potency. In view of the established principles of construction and interpretation of Legislative fields, ancillary, incidental and subsidiary aspects of an authorised legislative field also fall within the enumerated field of legislative power. There is therefore inherent in such a scheme of power distribution a measure of concurrency of legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of service of employees of co-operative societies which are engaged in the business of banking since the said subject-matter is governed exclusively by the 1949 Act. Balakrishna Eradi, J. (as his Lordship then was) speaking for the Kerala Division Bench held (para. 6) (page 38) : "The power to make laws in respect of co-operative societies registered under the Act is within the exclusive domain of the State Legislature since it is a subject covered by entry 32 of List II in the Seventh Schedule to the Constitution. It was therefore fully open to the State Legislature to enact the provision contained in section 80 of the Act empowering the State Government to classify co-operative societies according to their type and financial position to specify the staff pattern to be adopted by the different classes of co-operative societies and also to make rules relating to the qualifications, remuneration, allowances and other conditions of service of the officers and servants of the different classes of co-operative societies". Another contention of the petitioners that the rule-making power conferred by section 80 encroaches into the field occupied by the provisions relating to the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the principles spelt out by the Supreme Court in M. Karunanidhi v. Union of India [1979] 3 SCC 431 (a case dealing with entries in the concurrent field and applying the doctrine of repugnancy applicable to resolution of legislative conflicts in the concurrent field) and on the provisions of section 2 of the 1949 Act (the provisions of the said Act are in addition to and not in derogation of any other law for the time being in force), the Supreme Court held that the impugned provisions of the State Act are the dominant legislation [having received the assent of the President under article 254 (2)], not repugnant to the provisions of the 1949 Act and that the intendment of the provisions were benign and socially relevant as well. 123. We now consider the decisions rendered by this Court on the very issue whether a co-operative bank is a banking company within the meaning of the expression in the 1993 Act. 124. A learned Single Judge of this Court in Hyderabad Co-operative Urban Bank Ltd. v. S.M. Hussain Rasheed [2003] 6 ALT 608 held that the Arbitrator or the Co-operative Tribunal (exercising powers under the provisions of the 1964 Act) had no jurisdiction and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstood as having laid down that a co-operative bank registered under the 1964 Act is not a banking company within the meaning of the expression in the 1949 Act and therefore the 1993 Act as well). We declare accordingly. 127. That the 1949 Act is a Union legislation referable to entry 45, List I is not in contention. That the 1993 Act is equally a Union legislation referable to the exclusive Union field (entry 45 of List I) cannot be disputed - Delhi High Court Bar Association v. Union of India [2002] 110 Comp. Cas. 141 (SC); [2002] 2 Supreme 435, where the Supreme Court has held that recovery of dues is an essential function of any banking institution and that the provision of a mechanism for recovery of such dues is eminently a matter intrinsic to the legislative field "banking". Since recovery of dues is an essential function of banking institutions, it would logically follow that the subject-recovery of dues to banking institutions is a core area, a basic and integral component of the legislative field "banking" [a field exclusively authorised to the Union and fortified by a non obstante clause-article 246(1)]. In our considered view, in our constitutional scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try 32, List II) with due regard to the federal architecture of the Constitution, the appropriate view is that out of the broad and generally enumerated field "incorporation, regulation and winding up of ... cooperative societies", the subject/aspect of "banking" is subtracted and allocated to the Union. 129. Alternatively, even if ex-hypothesis, the area of recovery of debts due to banks is considered ancillary and incidental both to the legislative field of banking and to the legislative field of regulation of co-operative societies, even so in the extant context there is a clear operational incompatibility between specific provisions of the 1964 Act and the provisions of the 1993 Act. Even if in the area of ancillary and incidental powers of two levels of Government, there is a permitted concurrency of legislative powers, the Union legislation is entitled to dominant treatment on the paramountcy principle [article 246(1)]. Consequently, the provisions of the 1993 Act would prevail and comprehensively eclipse those provisions of the 1964 Act that enable entertainment, adjudication and execution of claims of a co-operative bank with respect to the debts due to it from its memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransgress the limits of its constitutional powers. For this reason, the general language in a law which appears to transgress these limits must be read down so that the law is confined within the authorized territory of the Legislature. The application of this principle is richly illustrated by a number of precedents: In re, Hindu Women s Rights to Property Act, AIR 1949 FC 72, Kedar Nath Singh v. State of Bihar AIR 1962 SC 955, New India Sugar Mills Ltd. v. CST AIR 1963 SC 1207, Ms. Githa Hariharan v. Reserve Bank of India [1999] 95 Comp. Cas. 913 and B.R. Enterprises v. State of U.P. AIR 1999 SC 1867. 132. Does the phraseology employed in sections 61 and 71 of the 1964 Act permit application of the principles of "reading down", is an essential enquiry. The language of section 61 is in broad terms and expansively construed would include the conferral of power on Registrar to adjudicate upon a dispute between a co-operative bank and its members in respect of recovery of a debt due to it from such members. The provisions of section 61 could however be restrictively construed (read down) as to exclude the conferral of such a power on the Registrar which leads to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this area is that if a law cannot be saved by construing it consistent with its constitutionality, it must be considered whether it could be partly salvaged. When a part of the law is held to be inconsistent with a higher law such as the Constitution, it could be saved to the extent of its conformity with the higher law by applying the doctrine of severability. The principles for applying the doctrine of severability were succinctly stated by Venkatrama Aiyyar, J. in R.M.D. Chamarbaugwalla v. Union of India AIR 1957 SC 628. The Supreme Court on an analysis of the authorities and precedents on the aspect culled out seven principles that guide the application and method of employing the doctrine of severability: "1. In determining whether the valid parts of a statute are separable from the invalid parts thereof, it is the intention of the Legislature that is the determining factor. The test to be applied is whether the Legislature would have enacted the valid part if it had known that the rest of the statute was invalid. 2. If the valid and invalid provisions are so inextricably mixed up that they cannot be separated from one another, then the invalidity of a portion must re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of abundant caution and to avoid any misconception, we clarify and declare that it is only those adjudications, arbitrations or determinations, pursuant to claims by a co-operative bank for recovery of amounts due to it [lent or advanced during the course of or in pursuance of the banking business of such co-operative bank-banking business as restrictively construed in Rustom Cavasjee Cooper v. Union of India [1970] 40 Comp. Cas. 325, that are beyond the determination or adjudicative domain of the Registrar under the provisions of the 1964 Act (State) Act. Other disputes pertaining to transactions to which a co-operative bank is a party and which are not part of such banking business of a co-operative bank could be adjudicated or determined by the Registrar under the provisions of sections 64 and 71 or any other applicable provision of the 1964 Act. Conclusions 137. On the analysis above, we conclude, declare and hold : ( a )That recovery of monies (whether called a debt, arrears or by any other name) due to a banking institution including a co-operative bank is a matter that integrally falls within the core and substantative area of the legislative field banking in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim or application of a co-operative bank, is patently and inherently without jurisdiction, null, void and inoperative. ( j )During the pendency of these writ petitions, by virtue of various court orders certain amounts have been deposited by some of the writ petitioners. At no point of time have these writ petitioners disputed the liability or the amount already deposited with the banks in pursuance of the orders of the court. Therefore, we direct that the amounts deposited shall be retained by the concerned banks and adjusted against the liabilities, if any, that remain to be determined pursuant to proceedings initiated by the respective banks in accordance with this judgment. ( k )In view of the declaration in this judgment, the respondent-banks are at liberty to proceed with the recovery of debts due to them, before the appropriate forum and under the appropriate law, in accordance with this judgment. ( l )As the proceedings initiated before the Registrar or any other authority under the 1964 Act were bona fide and as considerable time had been consumed in the litigation in this case also, the respondent-banks shall be entitled to set off the period spent in pursuing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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