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TMI Blog2024 (6) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be said to have been excluded by implication from the ambit of the MPID Act, in view of the definition of Financial Establishment contained in Section 2(d) of the MPID Act. True it is that any co-operative bank registered under the Central or State legislature to which provisions of BR Act are applicable, would be under supervision of the RBI. However, one cannot lose site of the fact that the BR Act merely seeks to have a control over the functioning of all the banking companies or the co-operative banks, however, it does not contain any specific provision defining any act or provide for any punishment for the offences which are punishable under Section 409, 420, 467, 468 and 471 read with Section 34 of the Indian Penal Code. Only some acts have been made punishable by making the offences cognizable as mentioned in Section 47. Consequently, it cannot be said that the purpose for which MPID Act has been brought in the statute book stands served by bringing the co-operative banks registered under the State legislature within the sweep of the BR Act. Both these enactments operate in different spheres. The Criminal Writ Petition is dismissed. - Mangesh S. Patil And Shailesh P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or was directed by the EOW and conducted an inquiry. 6. The Administrator on inquiry concluded that irregularities were committed in respect of disbursement of loan in eight loan accounts holding one Dilip Gandhi, a borrower and guarantor as well as the valuer responsible for it. 7. Simultaneously, respondent No.3 filed a complaint with Kotwali Police Station in the year 2019, however, since nothing was transpiring, Criminal Writ Petition No.1224/2020 was filed in this Court and pursuant to the directions of the Court the present crime was registered at Kotwali Police Station and subsequently it was transferred to the EOW. 8. It is alleged in the FIR that respondent No.3 is the member and account holder of respondent No.2 - bank. He was also a director between 2008 and 2014 and having personal knowledge about the statutory audit that was being conducted every year. He alleges that after having gone through the audit reports for the period between 2015-2016 and 2020-2021 he realized that there was rampant mismanagement and even misappropriation committed in connivance by the directors, officers and the borrowers causing huge loss to the Bank. He has given several details in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. He would submit that by Sub-Clause (cci) of Clause (c) of Section 56, definition of Co-operative Bank and by a similar Sub-Clause (ccii-a) Cooperative Societies have been defined to be a Co-operative Bank or a Central Co-operative Bank and a society registered under Co-operative Societies Act. He would, therefore, submit that since by virtue of such amendment effected in the year 2021, Section 56 expressly declares that the provisions of the BR Act would have primacy over any Act in respect of a co-operative society, the whole purpose of promulgating MPID Act as declared in the objective stands subserved. He would submit that the very object which led the State legislature to bring into the statute book the MPID Act stands sub-served by implication since even a Co-operative Bank would have to be compliant with the provisions of the BR Act having perineal supervision of the RBI. 12. Mr. Thorat would then submit that Financial Establishment as defined under Section 2(d) of the MPID Act inter alia excludes the Banking Company as defined under Clause (c) of Section 5 of the BR Act. In its wisdom the State legislature had thought it appropriate to exclude the banking companies in al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of the investors. They would refer to the decisions in the following matters : i. K.K. Baskaran Vs. State; (2011) 3 SCC 793, ii. State Vs. K.S. Palanichamy ; (2017) 16 SCC 384 iii. PGF Ltd. Vs. Union of India; (2015) 13 SCC 50 16. On facts, they would argue that it is a matter of fraud exceeding Rs.100 crore and the offence being cognizable, the prosecution should be extended an opportunity to substantiate the charge. 17. It is necessary to reiterate that as has been submitted by the learned advocate Mr. Thorat, the petitioner has not been seriously objecting to invocation of the provisions under the Indian Penal Code and is merely interested in putting up a challenge to invocation of Section 3 of the MPID Act. Consequently, the inquiry before us is limited in ascertaining as to if a co-operative bank registered under the Maharashtra Co-operative Societies Act stands excluded from the net of the MPID Act, by virtue of implication, in view of amendment w.e.f. 01.04.2021 to Section 56 of the BR Act making it applicable to the co-operative banks registered under the Central or State legislation. 18. At the outset, it is necessary to bear in mind that as far as power of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld in Pandurang Ganpati Chaugule (supra), the definition of Financial Establishment contained in Section 2(d) of the MPID Act would be decisive. 22. The State Legislature in its wisdom, while defining Financial Establishment has consciously excluded only the Co-operative Societies owned and controlled by the State Government as a distinct and separate category, as distinguished from a Banking Company as defined under Section 5(c) of the BR Act. If this be so, harmonious interpretation will have to be resorted to in gathering the intention of the legislature. Had it really intended to exclude the provisions of MPID Act qua any establishment governed by the BR Act, it could have expressly stated so. 23. Bearing in mind the fact that Section 56(a) was inserted in BR Act on 01.03.1966 one will have to proceed on the premise that the State legislature was aware that even a co-operative bank registered under the Co-operative Societies Act would be governed by the BR Act. If, still, it has defined Financial Establishment by expressly making distinction between a co-operative society owned and controlled by the State Government and a Banking Company as defined under Section 5(c) of the BR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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