M/s. Pioneer Dyeing and Printing Works, v. Dy. Registrar of Co-operative Societies/Osd/Arbitrator
Case brief
What is this about?
A Full Bench of the High Court held that Co-operative Banks engaged in banking business constitute 'Banks' under the RBI Act and the RDBFIA 1993. Consequently, Tribunals have exclusive jurisdiction over debt recovery exceeding Rs. 10 lakhs. The Court declared that debt recovery is an essential attribute of the Union's exclusive 'banking' field. Provisions in the Andhra Pradesh Co-operative Societies Act, 1964, enabling the Registrar to adjudicate such debts were read down or struck down as ultra vires, and orders passed by the Registrar in such disputes were declared null and void.
What did the court decide?
Debt Recovery Tribunals have exclusive jurisdiction over claims by Co-operative Banks for debts exceeding Rs. 10 lakhs. Sections 61 and 71 of the AP Co-operative Societies Act, 1964, are read down to exclude banking debts. Words 'or financing bank' in Section 71(1) declared void. Orders/certificates by Registrar in banking debt disputes held null and void.