Paramount Corporations and Others vs Madhavpura Mercantile Co op. Bank Ltd.

K.S. Jhaveri, J.—The Petitioners have filed this petition under Articles 226 and 227 of the Constitution of India challenging the impugned order dated 4th August 2004 passed in Dispute Case No. H/03-315 before the learned Arbitral Tribunal, Ahmedabad.

The Respondent bank filed claim before the Arbitral Tribunal u/s 84 of the Multi State Cooperative Societies Act, 2002 against the Petitioners herein for an award of Rs. 3,51,35,168/-.

The Petitioners appeared before the Arbitral Tribunal and filed application contending that the Tribunal has no jurisdiction to entertain the claim as the claim being more than Rs. 10 lakhs. The learned advocate for the Petitioners has relied upon the full Bench Judgment of the Bombay High Court, in the case of Narendra Kantilal Shah Vs. Joint Registrar, Co-operative Societies (Appeal) and Others, The Full Bench of the Bombay High Court has held in that case, that Co-operative Societies Act being essentially a general statute as compared to the Recovery of Debts due to Banks and Financial Institutions Act, 1993 is a special Act. When the field is occupied by a special legislation enacted by a competent legislature and the same legislature subsequently enacts another law which is of general nature, the general legislation cannot be taken to have displaced the special law which is in operation unless there is a specific provision made in the subsequent general law to that effect. Thus on and from the date on which the Debts Recovery Tribunal was constituted under the 1993 Act, the Courts authorities under the 1960 Act as also the Multi State Co-operative Societies Act 2002 would cease to have jurisdiction to entertain the applications submitted by the co-operative banks for recovery of their dues.

That being aggrieved and dissatisfied with the aforesaid judgment, one Greater Bombay Co-operative Bank Ltd. filed SLP (C) No. 886 of 2004 before the Hon''ble Supreme Court and in the said matter of Greater Bombay Co-operative Bank Ltd. v. United Yarn Tex Pvt. Ltd.

The Hon''ble Apex Court has passed disposed of the said appeals by the judgment and order dated 6th October 2005, which is reported in Greater Bombay Co-op. Bank Ltd. Vs. United Yarn Tex. Pvt. Ltd. and Others, . In paragraph 88 and 89, the Honourable Supreme Court has observed as under:

For the reasons stated above and adopting pervasive and meaningful interpretation of the provisions of the relevant Statutes and Entries 43, 44 and 45 of List I and Entry 32 of List II of the Seventh Schedule of the Constitution, we answer the Reference as under:

"Co-operative banks" established under the Maharashtra Co-operative Societies Act, 1960 [MCS Act, 1960]; the Andhra Pradesh Co-operative Societies Act, 1964 [APCS Act, 1964]; and the Multi-State Co-operative Societies Act, 2002 [MSCS Act, 2002] transacting the business of banking, do not fall within the meaning of "banking company" as defined in Section 5(c) of the Banking Regulation Act, 1949 [BR Act]. Therefore, the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [RDB Act] by invoking the Doctrine of Incorporation are not applicable to the recovery of dues by the co-operatives from their members.

The field of co-operative societies cannot be said to have been covered by the Central Legislation by reference to Entry 45, List I of the Seventh Schedule of the Constitution. Co-operative Banks constituted under the Co-operative Societies Acts enacted by the respective States would be covered by co-operative societies by Entry 32 of List II of Seventh Schedule of the Constitution of India.

In view of the aforesaid facts and circumstances of the case, the present petition does not survive and the same is disposed of accordingly. Rule is discharged.