Mr.K.Bharathveer Kothuru Hydand Anr. v. Coop Societies Arbitrator Hydandanr
Case brief
What is this about?
The Supreme Court held that debt recovery from cooperative banks in the course of banking business falls under the exclusive legislative field of 'Banking' (Union List Entry 45). Consequently, the State Legislature lacks competence to confer adjudicatory jurisdiction on the Registrar under the Andhra Pradesh Cooperative Societies Act, 1964 for such debts. The Court declared that the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has exclusive jurisdiction. Section 71(1) of the State Act was read down to exclude banking disputes, and the High Court's supervisory powers under Article 227 were affirmed regarding the legality of the Registrar's decision.
What did the court decide?
Section 71(1) of the Andhra Pradesh Co-operative Societies Act, 1964, is read down to exclude the power of the Registrar to adjudicate claims for recovery of debts due to a cooperative bank in the course of banking business. Such claims are directed to the Debts Recovery Tribunal. The Rule Nisi has been made absolute.