Sema, J. - (1.) This appeal is against the judgment and order dated 16-4-1998 passed by the Division Bench of the High Court. The facts of this case may be briefly recited:-
(2.) The appellant-society was registered under the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as the Act). It was carrying on the banking activities. Section 71(1)(a) to (f) of the Act enumerates various institutions in which a co-operative bank is to make investments. Clause (g) of Section 71(1) empowers the State Government to permit any society to invest the funds in any institution other than those mentioned in clauses (a) to (f) of the Section. Section 71 of the Act is relevant for the purpose of disposal of the present appeal. We shall be dealing with this Section in detail at an appropriate time. The appellant-bank sought permission of the State Government to invest funds in an institution outside those falling under clauses (a) to (f) of Section 71(1) of the Act. However, the Government declined the request. In spite of the refusal, the appellant-bank invested the funds in Mutual Fund, which was outside the purview of clauses (a) to (f) of Section 71 of the Act. It is stated that for non-compliance of Section 71 of the Act, notices were issued to the appellants calling for an explanation as to why action should not be initiated against them as contemplated under the Act. It is also stated that the appellants have not filed their replies to those notices and the matter is still pending with which we are not concerned in this appeal.
(3.) The appellant-bank undisputedly is a Co-operative Bank and is also a Central Co-operative Bank. The Banking Regulation Act, 1949 was amended by the Central Act No. 23 of 1965, which came into force with effect from 1st March, 1966. By the aforesaid amending Act, Part V was inserted in the Banking Regulation Act, 1949, providing for application of the Act to co-operative banks.;