Bombay High Court
Babaji Date Mahila Co-Operative Bank ... vs Appellate Authority, Dept. Of ... on 29 November, 2023
Author: Avinash G. Gharote
Bench: Avinash G. Gharote
2023:BHC-NAG:16561
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
WRIT PETITION NO.3543/2023
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PETITIONERS 1. Babaji Date Mahila Co-operative Bank
Limited, "Annapurna" Mainde Square,
Tilakwadi, Yavatmal - 445001 through its
Chairman, Smt. Jyoti Ashok Yerawar,
R/o Datta Chowk, Yavatmal.
2. Smt. Jyoti Ashok Yerawar, Aged about
65 years, Occu. Housewife, R/o Datta
Chowk, Yavatmal.
3. Ms. Manisha Pradip Kulkarni,
Aged about 50 years Occu. Advocate,
District Court, Yavatmal, R/o Plot No.5,
Shraddha Nagar, Yavatmal.
...VERSUS...
RESPONDENTS 1. Appellate Authority, Department of Financial
Services, Ministry of Finance, Government
of India (AC Section) Jivandeep
building, Parliament Street, New Delhi.
2. The Reserve Bank of India,
Central Office Building, Shaheed Bhagat
Singh Marg, Fort, Mumbai.
3. The Commissioner of Cooperation
& Registrar, Cooperative Societies,
Maharashtra State, Pune.
Mr. M.G. Bhangde, Sr. Advocate a/b Mr. A.H. Lohiya, Advocate for petitioner
Mr. C.J. Dhumne, Advocate for respondent no.1
Mr. S.V. Manohar, Sr. Advocate a/b Mr. S.N. Kumar, Advocate for respdt. no.2
Mrs. S.S. Jachak, Add. G.P. for respondent no.3
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CORAM : AVINASH G. GHAROTE, J.
Date of reserving the judgment : 10/10/2023
Date of pronouncing the judgment : 29/11/2023
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JUDGMENT
1. Heard Mr. M.G. Bhangde, learned Senior Counsel for
the petitioners; Mr. C.J. Dhumne, learned Counsel for the
respondent no.1; Mr. S.V. Monohar, learned Senior Counsel for 10
the respondent no.2 and Mrs. S.S. Jachak, learned Additional
Government Pleader for the respondent no.3. Rule. Rule made
returnable forthwith. Heard finally with the consent of learned
Counsels for the rival parties.
2. The Banking licence issued by the respondent no.2/ 15
Reserve Bank of India to the petitioner no.1, was cancelled on
09/11/2022, which cancellation was challenged by the petitioner
nos.2 and 3, by filing an appeal under Section 22(5) of the
Banking Regulation Act, 1949. This appeal has been rejected by
the impugned order dated 20/03/2023, by the Appellate 20
Authority on the ground that the same being filed by the
petitioner nos.2 and 3 and not by the petitioner no.1/Bank, was
infirm and thus not maintainable.
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3. Mr. M. G. Bhangde, learned Senior Counsel, for the
petitioners, submits that the appeal has been filed by the
petitioner nos.2 and 3, who were the Chairman and Vice-
Chairman of the petitioner no.1/Bank and therefore could not
have been dismissed as infirm and not maintainable. He further 5
contends that the entire text of the memo of appeal would
indicate that there is no ventilation of the grievance of the
petitioner nos.2 and 3 in their personal capacity but what is being
canvassed is the cause of the petitioner no.1/Bank and therefore
the same cannot be held to be not maintainable. He contends that 10
it is the substance and not the form that is material and the
substance would indicate that the licence of the Bank which was
cancelled by the respondent no.2 is being sought to be restored.
The impugned order, therefore, in his contention is incorrect and
is required to be quashed and set aside and the matter be 15
remitted back to the Appellate Authority for deciding the appeal
on merits. Mr. M.G. Bhangde, learned Senior Counsel relies upon
Secretary, Ministry of Works and Housing Govt. of India and
others Vs. Mohinder Singh Jagdev and others (1996) 6 SCC 229
(paras 4 & 5) and Sub-Area Manager, Western Coalfields Ltd., 20
Kamptee and another Vs. General Manager, South Eastern
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Railways, Calcutta and others 2010 (2) Mh. L.J. 329 (para 8) in
support of his submissions.
4. Mr. S.V. Manohar, learned Senior Counsel for the
respondent no.2/RBI opposes the submission contending that
consequent to the cancellation of the licence on 09/11/2022, a 5
Liquidator has been appointed on 11/11/2022 and therefore the
appeal filed on 08/12/2022 ought to have been by the Bank and
not the petitioner nos.2 and 3. According to him, Section 22(5) of
the Banking Regulation Act, provides for an appeal only by the
Bank and not to anyone else. Since the Bank had been 10
superseded by appointment of a Liquidator, the petitioners had no
locus standi to file the appeal. Mr. S.V. Manohar, learned Senior
Counsel relies upon Arcot Textile Mills Limited Vs. Regional
Provident Fund Commissioner and others (2013) 16 SCC 1 (para
5. Mr. Dhumne, learned Counsel for the respondent
no.1 and Mrs. Jachak, learned Additional Government Pleader for
the respondent no.3 have supported the stand taken by the
learned Senior Counsel for the respondent no.2.
6. The limited question for consideration is the 20
maintainability of the appeal filed by the petitioner nos.2 and 3
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before the Appellate Authority, which has been filed not by the
petitioner no.1/Bank but by the petitioner nos.2 and 3. A perusal
of the memo of appeal, would indicate that though the appeal has
been filed by the petitioner nos.2 and 3, it is not in their personal
capacity, but as Chairman and Vice Chairman of the petitioner 5
no.1/ Bank and is for ventilation of the grievance of the petitioner
no.1/Bank. The mere fact that consequent to the cancellation of
the licence on 09/11/2022, a Liquidator has been appointed on
11/11/2022, that would not denude the petitioner nos.2 and 3,
who admittedly were the Chairman and Vice-Chairman of the 10
petitioner no.1/Bank, at that time, to file the appeal, as it is not
expected for the Liquidator to file an appeal challenging the
cancellation of the licence of the petitioner no.1/Bank, as he is
not a party aggrieved by the decision of cancellation of the licence
of the petitioner no.1/Bank and therefore would not have any 15
reason or cause to challenge the said decision.
7. The petitioner no.1, is a juristic entity and has to
function through the decisions of the Managing Committee/
Board of Directors. Merely because the banking licence of the
petitioner no.1/ Bank has been cancelled by the respondent no.2/ 20
RBI, that by itself would not mean that the Board of Directors of
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the petitioner no.1/Bank, stands superseded, vis-a-vis the
existence of the petitioner no.1. May be for some time, on
account of the cancellation of the licence, the banking business of
the petitioner no.1/Bank, is being stopped and the reins have
been given in the hands of the Liquidator, that however would 5
not mean that the Board of Directors of the petitioner no.1/ Bank,
have lost all its powers. The appointment of the Liquidator, is
under Section 22(5) of the Banking Regulation Act, and not
under the provisions of the Maharashtra Co-operative Societies
Act, 1960 and even if it had been so, the right and authority of 10
the petitioner nos.2 and 3 to challenge the order of liquidation,
cannot be said to have been taken away. It is only the office
bearers of the petitioner no.1/Bank, who, in addition to the
petitioner no.1/ Bank, can be said to be aggrieved persons giving
them a right to file an appeal challenging the order of 15
cancellation of license. The action on part of the petitioner nos.2
and 3, in filing an appeal thus cannot be said to be without any
authority in law.
8. Though Arcot Textiles Mills Limited (supra) has been
relied upon by Mr. Manohar learned Senior Counsel for the 20
respondent no.2, what it holds is that a right of appeal is a
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creature of statute and inheres in no one and therefore for
maintainability of an appeal there must be an authority in law. In
the facts of the present case as indicated above, it would be
apparent that the petitioner nos.2 and 3 being the office bearers
of the petitioner no.1, would definitely have the authority in law, 5
to question the action of the respondent no.2/RBI, in cancellation
of the banking licence of the petitioner no.1/Bank, in view of
which, in my considered opinion, Arcot Textiles Mills Limited
(supra) does not assist the argument canvassed by Mr. Manohar,
learned Senior Counsel for the respondent no.2. 10
9. Mr. Bhangde, learned Senior Counsel for the
petitioners is right in contending that it is the substance and not
the form, which is material and the nomenclature would not
matter, so far as the right and authority exists, relying on
Secretary, Ministry of Works and Housing Govt. of India and Sub- 15
Area Manager, Western Coalfields Ltd. (supra).
10. In view of what has been discussed above, the
impugned order dated 20/03/2023 passed by the respondent
no.1, is hereby quashed and set aside and the matter is remitted
back to the respondent no.1, to hear and decide the appeal on 20
merits. The parties are directed to appear before the respondent
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no.1 on 11/12/2023, who will decide the appeal within a
reasonable period. The writ petition is thus allowed in the above
terms.
11. Rule is made absolute in the aforesaid terms.
(AVINASH G. GHAROTE, J.)
Wadkar
Signed by: S.S. Wadkar (SSW)
Designation: PS To Honourable Judge
Date: 29/11/2023 17:47:16
