D. P. S. Chauhan, J. - (1.) THE petitioner, who alleges himself to be one of the members of the Committee of Management of the District Cooperative Bank Limited, Basti (for brevity, hereinafter referred to as 'the Bank') has invoked the jurisdiction of this Court under Article 226 of the Constitution of India impeaching the Notification No. 386/XII-C-1-92 dated 4-4-1992, seeking relief for its quashing with a direction to the respondents for proceeding according to law.
(2.) THE Bank is a Central Cooperative Society deemed to have been registered under the U. P. Cooperative Societies Act, 1965 (for brevity, hereinafter referred to as 'the Act'). Its ordinary members is open to the Primary Cooperative Societies. Individuals are not its ordinary members. A Deposit Insurance Corporation was established under the Deposit Insurance Corporation Act, 1961 (Act No. 47 of 1961) for insuring all deposits in commercial banks including the State Bank of India and its subsidiary banks. The aforesaid Act was amended by the Deposit Insurance Corporation (Amendment) Act, 1968 (Act No. 56 of 1968) whereby the cooperative banks were also included in its fold. Under section 2 (dd), cooperative bank was defined as- "cooperative bank" means a State co-operative bank, a Central Cooperative bank and a Primary cooperative bank;" Cooperative Banks, as defined in the aforesaid Act, were also allowed to be registered under section 10/11 of the aforesaid Act and, on being registered, the same became insured bank. The insured bank is defined as- "insured bank" means a banking company or an eligible cooperative bank for the time being registered under the provisions of this Act and includes for the purposes of sections 116, 17, 18 and 21- (i) a banking company referred t:o in clause (a) of clause (b) of section 13, or (ii) a cooperative bank referred to in clause (a) or clause (b) of section 13-C, the registration whereof has been cancelled under section 13, or as the case may be under section 13-C;" Section 13-A of the aforesaid Act, which is as extracted below, lays down the condition that no cooperative bank shall be registered under the aforesaid Act unless it is an eligible cooperative bank :- "13. A Registration of cooperative banks.- (1) No cooperative bank shall be registered under this section unless It is an eligible cooperative bank (2) Subject as aforesaid- (a) the Corporation shall register every existing cooperative bank as an insured bank before the expiry of thirty days next following the commencement of the Deposit Insurance Corporation (Amendment) Act, 1968 ; (b) the Corporation shall register as an insured bank- (i) every new cooperative bank other than a primary credit society becoming a primary cooperative bank after the commencement of the Deposit Insurance Corporation (Amendment) Act, 1968 as soon as may be after it is granted a licence under section 22 of the Banking Regulation Act, 1949 ; (ii) a primary credit society becoming a primary cooperative bank after such commencement within three months of its having made an application for a licence under the said section : Provided that a bank referred to in clause (b) shall be not so registered If it has been informed by notice in writing by the Reserve Bank that such a licence cannot be granted to it "
(3.) "Eligible cooperative bank" is defined in section 2 (gg) of the aforesaid Aot as- "(2) (gg)." eligible co-operative bank" means a cooperative bank the law for the time being governing which provides that- (i) an order for the winding up or an order sanctioning a scheme of compromise or arrangement or of amalgamation or reconstruction of the bank may be made only with the previous sanction in writing of the Reserve Bank ; (ii) an order for the winding up of the bank shall be made if so required by the Reserve Bank in the circumstances referred to in section 13-D; (iii) if so required by the Reserve Bank in the public interest or for preventing the affairs of the bank being conducted in a manner detrimental to the interest of the depositors or for securing the proper management of the bank, an order shall be made for the supersession of the committee of management or other managing body (by whatever name called) of the bank and the appointment of an administrator therefore the such period or periods not exceeding five years in the aggregate as may from time to time be specified by the Reserve Bank ; (iv) an order for the winding up of the bank or an order sanctioning a scheme of compromise or arrangement or of amalgamation or of reconstruction or an order for the supersession of the committee of management or other managing body (by whatever name called) of the bank and the appointment of an administrator therefor made with the previous sanction in writing or on the requisition of the Reserve Bank shall not be liable to be called in question in any manner ; and (v) the liquidator or the Insured bank or the transferee bank, as the case may be, shall be under an obligation to repay the Corporation in the circumstances, to the extent and in the manner referred to in section 21;" In view of this, Chapter XI-A was added to the Act. Under section 90-A of the Act, "insured cooperative bank" was defined to mean a cooperative bank insured under the Deposit Insurance Corporation Act, 1961 (Act No. 47 of 1961), and section 90-B provided for special provisions applicable to insured cooperative banks. Section 90-B is as extracted below ;- "90-B. Special provisions applicable to insured cooperative banks.- Notwithstanding anything contained in this Act, the following provisions shall apply to every insured cooperative bank, namely.- (i) an order sanctioning a scheme or resolution for the amalgamation or merger or division or winding up of an insured cooperative bank may be made by the Registrar only with the previous sanction in writing of the Reserve Bank ; (ii) an order for the winding up of an insured cooperative bank shall be made under the provisions of this Act if so required by the Reserve Bank in the circumstances referred to in station 13-D of the said Act ; (iii) if the Reserve Bank is of opinion that it is necessary so to do in the public interest or for preventing the affairs of an insured cooperative bank being conducted in a manner detrimental to the interest of the depositors or for securing the proper management of such cooperative bank, is may require the Registrar to pass an order for supersession of the Committee of Management or other managing body (by whatever name called) of such cooperative bank and to appoint an administrator therefor for such period or periods not exceeding five years in the aggregate as may, from time to time, be specified by the Reserve Bank; and the Registrar shall pass an order accordingly and the remaining provisions of sections 35 and 36 shall apply in relation to such an order as if it were an order made under section 35, but the requirements of that section to afford the Committee of Management an opportunity of being heard and to obtain the opinion of the general body of the society shall not be applicable ; (iv) in the event of the Chairman and members of the Committee of Management of an insured cooperative bank vacating their respective offices under sub-section (1) or sub-section (2) of section 35-A, the Reserve Bank may require the Registrar to make such arrangements as it thinks proper for the management of the affairs of such bank and the Registrar shall pass an order accordingly and the remaining provisions of section 35- A shall apply In relation to such an order as if it were an order made under that section ; (v) an order sanctioning a scheme of or the resolution for amalgamation or merger or the division or winding up of an insured cooperative bank or of the supersession of the Committee of Management or other managing bodies (by whatever name called) of such bank and the appointment of an administrator thereof made with the previous sanction in writing or on the requisiti on of the Reserve Bank shall not be called in question in any manner ; and (vi) the liquidator or the insured cooperative bank or the transferee bank, at the case may be, shall be under an obligation to repay to the Deposit Insurance Corporation the sums mentioned in section 21 of the said Act in the circumstance and to the extent and in the manner referred to in that section." ;