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The Co- Operative Societies Act, 1912
Section 5 in The Co- Operative Societies Act, 1912
The Banking Regulation Act, 1949
The Companies Act, 1956
Article 246 in The Constitution Of India 1949
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Adarsh Ginning And Pressing ... vs The State Of Maharashtra And Ors. on 25 July, 2007

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Bombay High Court
Narendra Kantilal Shah vs Joint Registrar, Co-Operative ... on 12 December, 2003
Equivalent citations: AIR 2004 Bom 166, II (2004) BC 585, 2004 (1) BomCR 707
Author: D Deshmukh
Bench: C Thakker, D Deshmukh, S Vazifdar

JUDGMENT

D.K. Deshmukh, J.

1. A batch of writ petitions has been placed before this Bench. The principal question of law that arises for consideration is "Do the courts and authorities constituted under the Maharashtra Co-operative Societies Act 1960 (the 1960 Act) and the Multi-State Co-operative Societies Act, 2002 (the 2002 Act) continue to have jurisdiction to entertain applications/disputes submitted before them by the Co-operative Banks incorporated under the 1960 Act and the 2002 Act for an order for recovery of debts due to them, after establishment of a Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. (the 1993 Act)".

2. The events that led to the placing of all these petitions before us are that the Shamrao Vithal Co-operative Bank Ltd., a Scheduled Multi-State Cooperative Bank, filed an application before the Debts Recovery Tribunal constituted under the 1993 Act for recovery of certain amounts from M/s Star Glass Works. Before the Debts Recovery Tribunal an objection was raised to the jurisdiction of the Debts Recovery Tribunal to entertain the proceedings on the ground that the applicant/bank was a Co-operative Bank and not a company incorporated under the Companies Act, 1956. That objection was upheld by the Debts Recovery Tribunal. An appeal preferred against that order of the DRT before the Appellate Tribunal was also dismissed. Therefore, the Writ Petition No. 835 of 2002 was filed in this Court challenging those orders. That Writ Petition was decided by the Division Bench of this Court by judgment dated 17/18th December, 2002, 2003(2) Mh.L.J. 1 = 2003(2) All M R 583, The Shamrao Vithal Co-operative Bank Ltd. v. Star Glass Works and Ors. By that judgment this Court set aside the order passed by the DRT as also the Appellate Tribunal. This Court held that the Debts Recovery Tribunal constituted under 1993 Act possess the jurisdiction to entertain an application for recovery of debts due to it submitted by a Co-operative Bank. The Division Bench after referring to the provisions of Section 56 of the Banking Regulation Act, 1949, in detail, held that the Co-operative bank is a bank within the meaning of Section 2(d) of 1993 Act and therefore the only remedy available in terms of the provisions of the 1993 Act to a Co-operative bank after constitution of the tribunal under 1993 Act for recovery of dues due to it is to apply to such a tribunal for an order.

3. It appears that Shri Narendra Kantilal Shah filed Writ Petition No. 6029 of 2002 in this Court praying for an order setting aside the recovery certificate dated 6th September, 2000 issued by the Asst. Registrar, Co-operative Societies as also the warrant of attachment issued pursuant thereto. It appears that the recovery certificate has been issued by the Asst. Registrar in exercise of his power under Section 101 of the 1960 Act on the application made by the Jankalyan Sahakari Bank Ltd., which was joined as respondent No. 3 in that writ petition. When that petition came up for admission before the learned Single Judge of this Court, it appears that the judgment of the Division Bench in the case of Shamrao Vithal Bank referred to above was relied on by the petitioner. The learned Single Judge, however, it appears was of the opinion that the Division Bench in its judgment referred to above did not consider that the 1960 Act has been enacted under entry 32 of the List-II in the Seventh Schedule of the Constitution of India. The learned single Judge observed that considering the importance of the question it would be appropriate to place the papers before the Hon'ble the Chief Justice, so that the matter can be referred to the Full Bench. It appears that thereafter, papers were placed before the Hon'ble the Chief Justice, who decided to refer the matter to the Full Bench. It further appears that some writ petitions came up before the Division Bench of this Court, which also directed that the matter should be placed before the Full Bench. This is how all these petitions have been placed before us for deciding the above referred questions.

4. It is common ground before us that the writ petition which have been placed before us have been filed by persons against whom either an order has been made by the courts or authorities constituted under the two Co-operative Societies Act referred to above for payment of moneys or proceedings have been initiated by the Co-operative Banks before the Courts or authorities for such an order after constitutions of the tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the 1993 Act"), which are pending before the courts/authorities. It is also common ground before us that the Banks which are respondents in these petitions are either registered under the Maharashtra Co-operative Societies Act 1960 (hereinafter referred to as "the 1960 Act") or under the Multi-State Co-operative Societies Act, 2002 (hereinafter referred to as "the 2002 Act").

5. The parties have agreed that for the purpose of answering the question referred to above, we can take the following as the admitted position:

(i) That the 1960 Act was enacted by the Legislature of the State of Maharashtra in the year 1960 under Entry 32 of List II of the Seventh Schedule to the Constitution of India.

(ii) That the 2002 Act has been enacted by the Parliament under Entry 44 of List-I of the Seventh Schedule to the Constitution of India.

(iii) That the Co-operative Banks which are respondents in these petitions have all obtained licence for operating as a bank from the Reserve Bank of India in consonance with the provisions of the Banking Regulation Act, 1949 (hereinafter referred to as "the 1949 Act") as amended by Act 23 of 1965, which came into effect on 1-3-1966.

(iv) The recovery certificates/awards which are challenged in these petitions have been made by the authorities or courts constituted under 1960 Act or the 2002 Act after constitution of the Recovery Tribunal under the 1993 Act as also the proceedings which have been challenged are instituted after the date on which the tribunal was constituted or were pending on that date.

(v) That the Co-operative Banks incorporated under the 2002 Act are primary co-operative banks within the meaning of Section 56(ccv) of the 1949 Act.

(vi) That insofar as the provisions of Section 74 of Multi-State Cooperative Societies Act, 1984 are concerned, they were stayed by this Court and they were not in force till that Act was repealed by 2002 Act.

6. At the hearing of these matters on behalf of the petitioners Shri C.J. Sawant, Senior Advocate with Shri D.W. Bhosale with Shri B.G. Saraf made submissions and Shri G.E. Vahanvati, Advocate General with Mr. Y.D. Mulani AGP made submissions on behalf of the respondents Nos. 1 and 2, Shri Shailesh Shah with Ms. Mamta Sudh with Mr. P. Ganwani and Ms. Meenakshi Mhapankar instructed by V. Deshpande and Co. made submissions for respondents Nos. 3 and 4 to whom notices were issued by the learned single Judge.

7. It is submitted on behalf of the petitioners that the learned single Judge has observed that the Division Bench while holding that it is the Debts Recovery Tribunal which has exclusive jurisdiction to entertain an application submitted by a co-operative Bank for recovery of a debt due to it did not consider that the 1960 Act has been enacted by the Legislature of the State of Maharashtra under Entry 32 of List II in the Seventh Schedule to the Constitution of India. While the 1993 Act has been enacted by the Parliament under Entry 45 of List I of the Seventh Schedule. A co-operative bank is basically a co-operative society, therefore, the legislation of a State is entitled to legislate in relation to all the aspects of the society. It is submitted that the 1960 Act permits registration of various classes of societies. One of the class which can be registered in societies doing banking business. The classes are described by the 1960 Act and the rules made thereunder, (as "Co-operative Bank".) It is submitted that the term "Co-operative Bank" is defined by Section 2(10) of the 1960 Act to mean a society which is doing business of banking as defined in Clause (b) of Sub-section (i) of Section 5 of the 1949 Act. It is further submitted that Section 91 of the Co-operative Societies Act found in Chapter 9 of the 1960 Act provides for settlement of any dispute touching the Constitution, conduct of general meetings, management or business of society of all classes by the Co-operative Court. Similarly, Section 101 of 1960 Act permits the Urban Co-operative Bank registered under the 1960 Act to obtain a recovery certificate against a person who owes moneys to it by making an application under that section. It is submitted that as the subject of banking is covered by Entry 45 of List-I in the Seventh Schedule of the Constitution and as the recovery of dues by the banks is an essential part of banking business, the State Legislature while enacting the law under the Entry 32 of List-II of the Seventh Schedule of the Constitution may be competent to make provisions for recovery of dues by banking societies also, till the Parliament makes a law on that specific subject namely recovery of dues by the Banks under Entry 45 of List-I. It is submitted that as soon as the Parliament legislates under Entry No. 45 of List-I and makes a law relating to recovery of dues by the banks including co-operative banks, the provisions contained in the Co-operative Societies Act relating to that subject will cease to operate in relation to the Cooperative Banks. It is submitted that till the 1993 Act was enacted by the Parliament under Entry No. 45 of List-1, there was no law made by the Parliament dealing with the subject of recovery of dues by the Banks. The Parliament enacted the 1993 Act under Entry 45 of List-1, which provided for constitution of tribunal for deciding applications by the banks and the financial institutions for recovery of debts due to such banks and financial institutions. It is submitted that Section 18 ousts the jurisdiction of all courts and authorities to exercise the jurisdiction in relation to matters specified in Section 17 of the 1993 Act namely applications by banks and financial institutions for recovery of debts due to them. It is further submitted that Sub-section (1) of Section 34 gives overriding effect to the provisions of the 1993 Act and therefore, as soon as the tribunal under the 1993 Act is constituted neither the Co-operative court under Section 91 nor the recovery officer under Section 101 of 1960 Act will have the jurisdiction to entertain an application from a co-operative bank for recovery of debts due to it.

8. It is further submitted that the 1993 Act defines the term "Bank" to mean a banking company. It also defines the term "the banking company" to mean a banking company as defined in Clause (c) of Section 5 of the 1949 Act. By referring to the provisions of Section 56 of the 1949 Act it is submitted that a Co-operative Bank is included in the definition of the term "banking company" and therefore the provisions of the 1993 Act are applicable to a Co-operative Bank also.

9. On behalf of the petitioners reliance is placed on a judgment of the Supreme Court in the case of Union of India and Anr. v. Delhi High Court Bar Association and Ors., (2002)4 SCC 275, a judgment of the Supreme Court in the case of Rustom Cavasjee Cooper v. Union of India, , a judgment of the Division Bench of this Court in the case of Nagpur District Central Co-operative Bank Ltd. Nagpur and Anr. v. Divisional Joint Registrar, Co-operative Societies, Nagpur and Anr., , a judgment of the Supreme Court in the case of Unique Butyle Tube Industries Pvt. Ltd. v. U.P. Financial Corporation and Ors., 2003(1) All M R 1196, a judgment of the Supreme Court in the case of Allhabad Bank v. Canara Bank and Anr., .

10. On behalf of the petitioners it was also contended by Shri Naphade that it is only Parliament which by virtue of Entry 45 of List-I is competent to make law in that regard, the Legislature of the State cannot make a law in that regard and therefore the Section 91 of the Maharashtra Co-operative Societies Act and Section 101 of the 1960 Act insofar as it permits the co-operative bank to apply to the Co-operative Court and the Recovery officer for recovery of the debts due to it is inoperative to that extent, whether or not the provisions of the 1993 Act make a forum available to that Co-operative Bank for recovery of its dues or not. It may be pointed out here that under the 1993 Act an application can be made to the tribunal only if the amount of debts due to the bank is in excess of Rs. 10,00,000/- (Rupees Ten lakh only), and therefore, in fact, there is no forum available except Section 91 of the Co-operative Societies Act and Section 101 of that Act to the Co-operative Bank incorporated under the 1960 Act for making applications for recovery of debts due to it, which are of an amount less than Rs. 10,00,000/- except, probably, filing civil suits for a decree against the borrower.

11. On behalf of the petitioners it was also contended relying on the judgment of the Supreme Court in the case of Pradip Chandra Parija and Ors., that the learned Single Judge was not justified in referring the mater to the Full Bench as the judgment in Shamrao Vithal Bank's case is that of a Division Bench. But at this juncture itself it may be pointed out that this contention need not be considered by us, because even the Division Bench has directed the matters to be placed before the Full Bench and therefore, even assuming that the learned single Judge has referred the matter to the Full Bench and that he was not justified in so referring, in view of the orders passed by the Division Bench for placing the matters before the Full Bench, in our opinion, this aspect of the matter loses significance.

12. On behalf of the respondents it is submitted that Section 2(d) of the Act 1993 defines the term "Bank" to mean a banking company amongst other things. Section 2(e) defines the term "banking company" and lays down that the term "banking company" shall have the meaning assigned to it is Clause (c) of Section 5 of the Banking Regulation Act, 1949. Clause (c) of Section 5 of the 1949 Act defines the term "banking company" to mean any company which transacts the business of banking is India. Section 5(d) of the 1949 Act defines the term "company" to mean a company as defined in Section 3 of the Companies Act 1956 and therefore, it is submitted that a co-operative bank is not included in the definition of the term "banking company" and therefore it is not a bank within the meaning of the 1993 Act. Insofar as the provisions of Section 56 of the 1949 Act are concerned, which lay down that throughout the 1949 Act unless the context otherwise requires reference to a banking company or to the company shall be construed as a reference to a co-operative bank, it is submitted that it introduces a fiction and it is only because of the fiction introduced by Section 56 of the 1949 Act that a co-operative bank gets included in the definition of banking company. Relying on the judgment of the Supreme Court in the case of State of Maharashtra v. Laljit Rajshi Shaj and Ors., , it is submitted that the fiction created by the 1949 Act is restricted to that Act only and it cannot be extended to the 1993 Act and therefore, so far the 1993 Act is concerned, a banking company mean a company incorporated under the Companies Act doing business of banking and not a cooperative bank. Reliance is also placed on a judgment of the Supreme Court in the case of State Bank of Travancore v. Mohammed Mohammed Khan, . It may be

pointed out here that in the case of State Bank of Travancore the Supreme Court was considering the question whether the State Bank of Travancore, which was the subsidiary bank of the State Bank of India can be termed as a banking company within the meaning of 1949 Act. On behalf of the respondents/banks reliance has also been placed on a judgment of the Division Bench of the Rajasthan High Court in the case of Phoneix Impex v. State of Rajasthan and Ors., .

Incidentally, it may be pointed out that this judgment has been considered by the Division Bench of this Court in its judgment in the case of Shamrao Vithal Bank. Reliance was also placed on behalf of the respondents/banks on a judgment of the learned single Judge of the Assam High Court in the case of Aman Metrograph (I) Pvt. Ltd. and Anr. v. Union of India and Ors., (2000)3 Gauhati Law Reports 143. It was also contended on behalf of the respondents/banks referring to the report of Narasimham Committee that the intention of the Parliament in enacting the 1993 Act was not to make the provisions of that Act applicable to the Co-operative Banks. Relying on the judgment of the Supreme Court in the case of Virendra Pal Singh and Ors. v. District Assistant Registrar, Co-operative Societies, Etah and Anr., it is contended that the legislature of the State

while legislating in relation to the Co-operative Societies also has competence to make provisions in relation to the Co-operative Societies who are doing business of banking. It is further submitted that by Section 2(c) of the Sec utilisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Securitisation Act) the term "bank" has been defined to mean a banking company as has been done by the provisions of Section 2(d) of the 1993 Act, but by Clause (c)(v) of Section 2 of the Securitisation Act, however, has been given to the Central Government to specify by notification other banks for the purpose of that Act and in exercise of that proper by notification dated 28-1-2003, "co-operative bank" as defined in Clause (cc)(i) of Section 5 of 1949 Act has been specified as a bank for the purpose of Securitisation Act and therefore it is submitted that it was not the intention of the legislature to include the cooperative banks within the definition of the term "banking company" for the purpose of the 1993 Act.

13. It is further submitted that the 2002 Act has been enacted by the Parliament under Entry 44 of List I of the Seventh Schedule. Section 84 of the 2002 Act provides a forum to all the co-operative societies registered under that Act for settlement of disputes. By that Act, the disputes between the employees of the societies incorporated under that Act and disputes within the meaning of Clause (k) of Section 2 of the Industrial Disputes Act have been specifically excluded. Section 84 starts with a non-obstante clause and therefore the 2002 Act being a subsequent Act to the 1993 Act, according to the respondents/banks the provisions of Section 84 will operate and not the provisions of the 1993 Act insofar as the societies registered under the 2002 Act are concerned. It is submitted that even assuming that 2002 Act to be a general legislation and the 1993 Act to be a special legislation, then also the 2002 Act being a later legislation will prevail and operate and not the 1993 Act.

14. The advocate appearing for the State Government as also the Advocate General supported the submissions made on behalf of the respondents/banks.

15. To our mind in order to appreciate the controversy it would be appropriate to refer to the provisions of Article 246 of the Constitution of India. Article 246 of the Constitution reads as under:

246. Subject-matter of laws made by Parliament and by the Legislature of States. -- (1) Notwithstanding anything in Clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List")

(2) Notwithstanding anything in Clause (3), Parliament and, subject to Clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List").

(3) Subject to Clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List").

(4) Parliament has power to make laws witb respect to any matter for any part of the territory of India not included (in a State) notwithstanding that such matter is a matter enumerated in the State List.

16. It is clear from the perusal of the above quoted Article that Clause (1) conferred exclusive powers on the Parliament to legislate in relation to matters enumerated in List I of the Seventh Schedule. Clause (1) begins with non-obstante clause and it lays down that the Parliament will have the exclusive powers to legislate in relation to the matters enumerated in List I notwithstanding anything contained in Clauses (2) and (3) of Article 246. Clause (3) of Article 246 confers exclusive powers on the Legislature of the State to legislate in relation to matters enumerated in List II of the Seventh Schedule. However, this power of the State Legislature is subject to what is contained in Clauses (1) and (2) of Article 246. For the present purpose Entries 43, 44 and 45 of List I are relevant. They read as under:--

43. Incorporation, regulation and winding up of trading corporation, including banking, insurance and financial corporations but not including co-operative societies.

44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities.

45. Banking.

Entry 43 confers power on the Parliament to legislate with respect to incorporation, regulation and winding up of trading corporation including banking corporation, but not the co-operative societies. Entry 44 empowers the Parliament to legislate in relation to incorporation, regulation and winding up of corporations, whether they are trading corporations or not, but the object of such a corporation should not be restricted to one State. It means that under Entry 44 the Parliament can legislate also in relation to the Co-operative Societies, the Object of which is not confined to one State and Entry 45 confers exclusive powers on the Parliament to legislate in relation to banking. It is an admitted position before us that the Multi State Co-operative Societies Act 1984 and Multi-State Co-operative Societies Act 2002 have been enacted by the Parliament in exercise of its powers under Entry 44. They provide for incorporation of co-operative societies, the object of which is not confined to one State. It is also an admitted position before us that the 1949 Act as also the 1993 Act have been enacted by the Parliament in exercise of its powers under Entry 45. It is also admitted position before us that 1960 Act has been enacted by the Legislature of the State of Maharashtra in exercise of its power under Entry 32 List II, which reads as under:--

32. Incorporation, regulation and winding up of corporation, other than those specified in List I, and universities; unincorporated trading, literacy, scientific, religious and other societies and associations; cooperative societies.

It is clear from the perusal of Entry 32 in List II that it confers power on the State Legislature to make law in relation to incorporation, regulation and winding up of Co-operative societies.

17. Now taking up 1960 Act, it is clear from the perusal of the provisions of Section 12 that the societies belonging to the classes defined in Section 2 can be registered under the 1960 Act. Section 12 also provides for sub-classification of the societies in accordance with the provisions of the rules framed under the 1960 Act. Perusal of Section 2 of the 1960 Act shows that so far as the banks are concerned, two classes in banks are specified in Section 2, (i) Central Bank and (ii) Cooperative Bank. Sub-section (6) of Section 2 defined "Central Bank" as follows:--

"Central Bank" means a co-operative bank, the objects of which include the creation of funds to be loaned to other societies; but does not include the primary urban co-operative bank.

It is clear from Sub-section (2) of Section 2 that a Central Bank is also a cooperative bank. Term "Co-operative Bank" has been defined by Sub-section (2) of Section 10 as under :--

"Co-operative bank" means a society which is doing the business of banking as defined in Clause (b) of Sub-section (1) of Section 5 of the Banking Companies Act, 1949 and includes any society which is functioning or is to function as (an Agricultural and Rural Development Bank) under Chapter XI;

It is clear that a co-operative society which is doing business of banking as defined in Clause (b) of Sub-section (1) of Section 5 is termed as a "co-operative bank". The term "banking" is defined by Section (b) of Section 5 of the 1949 Act as under:--

"banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise;

It is, thus, clear that a co-operative society doing business of banking can be registered under the provisions of the 1960 Act. So far as the aspect of recovery of dues of a co-operative bank is concerned, it is the provisions of Sub-section (1) of Section 91 and Sub-section (1) of Section 101 which are relevant. They read as under:--

91(1) Notwithstanding (anything contained) in any other law for the time being in force, any dispute touching the constitution, (elections of the committee or its officers other than elections of committees of the specified societies including its officer), conduct of general meetings, management or business of society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, (to the Co-operative Court) if both the parties thereto are one or other of the following :

(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or Liquidator of the society; (or the Official Assignee of a deregistered society);

(b) a member, past member or a person claiming through a member, past member or a deceased member of society, or a society which is a member of the society (or a person who claims to be a member of the society);

(c) a person other than a member of the society, with whom the society has any transactions in respect of which any restrictions or regulations have been imposed, made or prescribed under Section 43, 44 or 45 and any person claiming through such person;

(d) a surety of a member, past member or deceased member, or surety of a person other than a member with whom the society has any transactions in respect of which restrictions have been prescribed under Section 45, whether such surety or person is or is not a member of the society;)

(e) any other society, or the Liquidator of such a society (or de-registered society or the Official Assignee of such a de-registered society)

101(1) Notwithstanding anything contained in Sections 91, 93 and 98, on an application made by a resource society undertaking the financing of crop and seasonal finance as defined under the Bombay Agricultural Debtors Relief Act, 1947 (or advancing loans for other agricultural purposes repayable during a period of not less than eighteen months and not more than five years) for the recovery of arrears of any sum advanced by it to any of its members on account of the financing of crop or seasonal finance (or for other agricultural purposes as aforesaid) or by a crop-protection society for the recovery of the arrears of the initial cost or of any contribution for obtaining services required for crop-protection which may be due from its members or other owners of lands included in the proposal (who may have refused to become members) or by a lift irrigation society for the recovery of arrears of any subscription due from its members for obtaining services required for providing water supply to them, (or by a Taluka or Block level village artisans multi-purpose society advancing loans and arranging for cash credit facilities for artisans for the recovery of arrears of its dues,) (or by a co-operative housing society for the recovery of arrears of its dues, or by a cooperative dairy society advancing loans for the recovery of arrears of any sum advanced by it to any of its members or by the urban co-operative bank for the recovery of arrears of its dues, or by salary-earners cooperative society for the recovery of arrears of its dues, or by a fisheries co-operative society for the recovery of arrears of its dues), (or by any such society or class of societies, as the State Government may, from time to time, notify in the Official Gazette, for the recovery of any sum advanced to, or any subscription or any other amount due from, the members of the society or class of societies so notified;) and on the society concerned furnishing a statement of accounts in respect of the arrears, the Registrar may, after making such inquiries as he deems fit, grant a certificate for the recovery of the amount stated therein, to be due as arrears;)

Perusal of the above quoted provisions shows that a dispute touching the business of the co-operative societies can be submitted to the co-operative court. Thus, a claim of a bank for recovery of its dues will be a dispute touching the business of the bank and therefore, it can be submitted under Section 91. Perusal of Sub-section (1) of Section 101 of the 1960 Act shows that an urban co-operative bank can file an application before the authority under Section 101 for a recovery certificate for the recovery of its arrears. Perusal of Section 101 shows that it is only the urban co-operative bank which can obtain recovery certificate under Section 101 of the 1960 Act.

18. It appears that though a co-operative bank could be registered under the provisions of the 1960 Act, the business of that bank was not controlled or regulated by the Reserve Bank of India. The 1949 Act is a pre-constitutional legislation. The object of that Act was to regulate the business of banking carried on by the banking companies. The parliament, thereafter, enacted Act 23 of 1965, which came into force with effect from 1-3-1966. The statement of objects and reasons for the amending Act i.e. Act No. 23 of 1965 reads as under:--

"The provisions of the Banking Companies Act, 1949, are not now applicable to or in relation to Co-operative Banks. The deposits and working funds of Co-operative banks are now so large that the extension of more important provisions of the Banking Companies Act, 1949 (and of certain other allied provisions of Reserve Bank of India, 1934) to these banks will be in the public interest. The Bill seeks accordingly to extend to the State Co-operative Banks, the Central Co-operative Banks and the more important primary non-agricultural co-operative banks certain provisions of the existing Central Laws which are relatable to 'banking'."

By that Act the present Section 3 was incorporated in the 1949 Act. Section 3 of the 1949 Act reads as under:--

3. Act to apply to co-operative societies in certain cases. -- Nothing in this Act shall apply to --

(a) a primary agricultural credit society;

(b) a co-operative land mortgage bank; and

(c) any other co-operative society, except in the manner and to the extent specified in part V.

Part V was incorporated, which contains Section 56. Heading of Section 56 incorporated by Act 23 of 1965 is "Act to apply to co-operative societies subject to modifications". It further lays down as under :--

The provisions of this Act, as in force for the time being, shall apply to, or in relation to, co-operative societies as they apply to, or in relation to banking companies subject to the following modifications.....

Thus, by Act 23 of 1965 the provisions of the 1949 Act were made applicable to the Co-operative banks subject to certain modifications which were specified in Part V. By virtue of the provisions of Section 56(o), it was provided that no cooperative society shall carry on banking business unless it is a primary credit society or it is a co-operative bank and holds a licence issued in that behalf by the Reserve Bank of India. In other words, with effect from 1-3-1966 the banking business carried on by the co-operative banks was regulated by the provisions of the 1949 Act. Perusal of the provisions of the 1949 Act shows that almost all the aspects of banking business were regulated by that Act, but there was no provision made in relation to recovery of dues of the banks. However, as noted above, so far as the co-operative banks are concerned, Section 91 of the Maharashtra Co-operative Societies Act and Section 101 of the 1960 Act were available and the banks were approaching those forum for recovery of their dues. Insofar as Multi-state co-operative societies are concerned, though the Parliament enacted Multi-State Co-operative Societies Act in 1984 and Section 74 of that Act made provision for settlement of disputes which provided for recovery of dues by the co-operative societies including the co-operative bank registered under the Multi-State Co-operative Societies Act, because the provisions of Section 74 of the 1984 Act were stayed by this Court, the forum provided by the Act was not really available to the co-operative societies registered under the 1984 Act. So far as other Banks are concerned, they had to file civil suits for the recovery of their dues. It appears that the Multi-state Co-operative Societies were also applying for recovery certificates under Section 101 of the 1960 Act and those certificates were granted in their favour because those societies were also registered under the 1960 Act. In this background, the Parliament in the year 1993 enacted the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993, that Act came into force from 24-6-1993. Provisions of Sub-section (4) of Section 1 of that Act is relevant. It reads as under:--

The provisions of this Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.

It is clear that the provisions of the Act are applicable only if the debt due to the bank or financial institution is in excess of Rs. 10,00,000/- or a sum in excess or Rs. 1,00,000/- which is notified by the Central Government. The preamble of that Act provides that the Act has been enacted to establish tribunals for expeditious adjudication of recovery of debts due to banks and financial institutions. The term "bank" is defined by Section 2(d), which reads as under:--

"bank" means -

(i) a banking company;

(ii) a corresponding new bank;

(iii) State Bank of India;

(iv) a subsidiary bank; or

(v) a Regional Rural Bank;

The term "banking company" is defined by Section 2(e), which reads as under:--

"banking company" shall have the meaning assigned to it in Clause (c) of Section 5 of the Banking Regulation Act, 1949 (10 of 1949) Section 17 found in Chapter III of the Act deals with the jurisdiction of the tribunal constituted under the 1993 Act and Section 18 confers exclusive jurisdiction on the tribunal. Section 17 and 18 reads as under:--

17. Jurisdiction, powers and authority of Tribunals. -- (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.

(2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act.

(17A. Power of Chairperson of Appellate Tribunal. -- (1) The Chairperson of an Appellate Tribunal shall exercise general power of superintendence and control over the Tribunals under his jurisdiction including the power of appraising the work and recording the annual confidential reports of Presiding Officer.

(2) The Chairperson of an Appellate Tribunal having jurisdiction over the Tribunal may, on the application of any of the parties or on his own motion after notice to the parties and after hearing them, transfer any case from one Tribunal for disposal to any other Tribunal.)

18. Bar of Jurisdiction.-- On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17.

It is clear that Section 17 operates from the appointed day. The term "appointed day" is defined by Section 2(c) to mean the date on which the tribunal is constituted. Insofar as the present case is concerned, the tribunal was constituted on 16th July, 1999. Thus, the provisions of Section 17 and 18 became operative from that date. Combined reading of Section 17 and Section 18 shows that now an exclusive jurisdiction has been conferred on a tribunal constituted under the 1993 Act to entertain and decide the applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions and no court or other authority can exercise any jurisdiction in that regard. Next provision which is relevant of the 1993 Act is Section 34, which read as under:--

Act to have overriding effect.-- (1) Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

(2) The provisions of this Act or the rules made thereunder shall be a addition to, and nor in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporation Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984) (the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and the Small Industries Development Bank of India Act, 1989 (39 of 1989).

Section 34, thus, gives over-riding effect to the provisions of the 1993 Act on any other law for the time being in force. Section 31 deals with transfer of pending cases. Though the provisions of Section 31 are not that relevant for deciding the question, still, because an argument was advanced before us on the basis of wordings of Sub-section (1) of Section 31, we reproduce provisions of sub-section (1) of Section 31.

31(1) Every suit or other proceeding pending before any Court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action where on it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal.

Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court.

It is, thus, clear that Section 31 provides for transfer of suit and other proceedings pending before the court to the tribunal constituted under the 1993 Act.

19. It is contended on behalf of the respondents/banks that to understand the meaning of the term "banking company" we can refer only to Clause (c) of Section 5 of the Banking Regulation Act and not to the provisions of Section 56 of the 1949 Act. Because, according to the respondents Section 56 does not really operate to amend the definition of the term "banking company", but the effect of Section 56 is merely to include a co-operative bank in the definition of the term banking company only for the purpose of 1949 Act. In support of this submission, reliance was placed on the judgment of the Supreme Court in the case of Laljit Rajshi Shah referred to above. Perusal of that judgment shows that all that is stated by the Supreme Court in that judgment is that when a legal fiction is created that legal fiction is created by the legislature for the purpose of that Act and therefore that fiction is restricted to that Act and therefore automatically that fiction does not get extended to another enactment. Now, assuming that Section 56 creates a fiction, which has the effect of including a cooperative bank within the definition of the term "banking company", then also we have to find out what is the purpose for which that legal fiction has been created by the Parliament in Section 56 of the 1949 Act. The purpose of enacting Section 56 as is clear from the very heading of that part is to make the provisions of Banking Regulation Act with certain modifications applicable to the cooperative banks so that the banking business carried on by the co-operative societies can be regulated. Therefore, the purpose of creating the fiction is to regulate and control the banking business carried on by the co-operative banks. The Supreme Court in its judgment in the case of Laljit Rajshi Shah (supra) in paragraph 6 has observed thus :--

....It is a well-known principle of construction that in interpreting a provision creating a legal fiction, the court is to ascertain for what purpose the fiction is created, and after ascertaining this, the court is to assume all those facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction. But in so construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the section by which it is created. A legal fiction in terms enacted for the purposes of one Act is normally restricted to that Act and cannot be extended to cover another Act.

It is thus clear that the Court has to ascertain the purpose for which the fiction is created and has to restrict the operation of that fiction only for that purpose. As observed above, the purpose of creating the fiction in the present case is to regulate and control the banking business carried on by the co-operative banks. So far as the 1993 Act is concerned, it makes provision for adjudication and recovery of dues of the banks. The Supreme Court in its judgment in the case of Delhi High Court Bar Association (supra) in paragraph 14 has held that recovery of dues is an essential aspect of any banking business. Thus, the provisions made for recovery of debts of a bank is an essential aspect of the banking business. Therefore, the purpose of the 1949 Act and the 1993 Act is the same, namely regulation and control of the banking business and therefore, assuming that it is only by virtue of fiction created by Section 56 of the 1949 Act that a Co-operative bank becomes a banking company, then also, in our opinion, a co-operative bank will have to be included within the meaning of definition of the term "banking company".

20. Perusal of the provisions of Section 56, however, do not indicate that it merely creates a fiction and by creating a fiction a co-operative bank is included in the definition of the term banking company. The result of Section 56 is in effect to amend the definition of the term "banking company", so as to include a co-operative bank in the definition of banking company. It is Clause (a) of Section 56 of the 1949 Act which is relevant for this purpose. It reads as under :--

56(a) Throughout this Act, unless the context otherwise requires,--

(i) references to a "banking company" or "the company" or "such company" shall be construed as references to a co-operative bank;

(ii) references to "commencement of this Act" shall be construed as references to commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965);

Perusal of Clause (a) of Section 56 shows that it lays down that throughout this Act wherever the word "banking company" or the word "bank" appears, it shall be construed as reference to a co-operative bank. Therefore, while reading Section 5(c) of the 1949 Act one cannot ignore the provisions of Section 56(a). It is further to be seen here that according to Section 5(c) "banking company" means a bank and Section 56(a) lays down that wherever in the Act the word "company" appears, it will be construed as a reference to the co-operative bank. Therefore, reading the provisions of Section 5(c) together with Section 56(a) of the 1949 Act leads one to the conclusion that the term "banking company" also means a "co-operative bank", which transacts the business of banking. It is thus clear that a co-operative bank would be a bank within the meaning of Section 2(d) of the 1993 Act.

21. The Division Bench in its judgment in the case of Shamrao Vithal Cooperative Bank Ltd. has referred to a judgment of the learned single Judge of this court in the case of Co-operative Bank Employees Union v. Saraswat Cooperative Bank Ltd., 1983(47) F.L.R. 348, which judgment, it appears, was following by the Division Bench of this Court in a judgment reported in 1962 N.L.J. 71 = 1962 (1) LLJ 61, Bipat Beni v. Sawarkar (P.D.). The Division Bench in its judgment in Shamrao Vithal Co-operative Bank has observed thus:--

In Co-operative Bank Employees Union v. Saraswat Co-operative Bank Ltd., the learned Single Judge of this Court was dealing with question whether inclusion of part V in Banking Regulation Act, 1949 with effect from March 1, 1966 by Amending Act 23 of 1965 would enable Saraswat Co-operative Bank Ltd. to claim that the provisions of B.I.R. Act were no longer applicable to them. The learned Single Judge in order to decide that issue referred to the relevant provisions of B.I.R. Act and Banking Regulation Act, 1949 and observed that the effect of the amendment of the Banking Regulation Act, 1949 is to include the "co-operative Bank" in the expression "banking company" in Section 5 of the Act, and as such the provisions of the B.I.R. Act would no longer be applicable to the cooperative banks. Paragraph 8 of the reports read thus:

"Now, if the expression "banking company" throughout the Act which includes Section 5 defining the expression "banking company" and the Company" is to be construed as reference to a co-operative bank, then is it possible to claim that for the purpose of construing proviso to Sub-section (3) of Section 2 of the B. I. R. Act the expression "banking company" should be restricted and co-operative banks should be excluded? In my judgment, such a construction would not be appropriate. As held by the Division Bench in the case of Majdoor Sahakari Bank (supra) expression "banking company" in the notification issued under the 1938 Act was given wider meaning so as to include the co-operative banks. The Legislature by 1966 amendment specifically provided that reference to a banking company shall be construed as a reference to the co-operative bank, and therefore, while construing the expression "banking company" in the proviso to Sub-section (3) of Section 5 of the B.I.R. Act it must be held that the co-operative banks in more than one State shall be excluded from the application of the Act. Dr. Kulkarni submitted that it is not permissible to take into account the prior history of the legislation and it is necessary to interpret the words of the proviso literally. It is not possible to accept this submission. In this connection it would be appropriate to make reference to a celebrated passage in the decision of the Supreme Court reported in R.M.D. Chamarbaugwalla v. Union of India (2) Mr. Justice Venkatarama Ayyar, speaking for the Bench, while considering the submission that it is not open to read a limitation in an enactment by reference to extraneous consideration when the language of the enactment is clear and unambiguous, observed :

"Now, when a question arises as to the interpretation to be put on an enactment, what the court has to do is to ascertain "the intent of them that make it", and that must of course be gathered from the words actually used in the statute. That, however, does not mean that the decision should rest on a literal interpretation of the words used in disregard of all other material. "The literal construction then," says Maxwell on Interpretation of Statutes, 10th Edn. P. 19 has it is always necessary to get an exact conception of the aim, scope and object of the whole Act; to consider, according to Lord Coke; 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided; 3. What remedy Parliament has appointed; and 4. The reason of the remedy. "The reference here is to Heydon's case (1584)3 W. Rep. 16, these are principles well settled, and were applied by this Court in The Bengal Immunity Company Ltd. v. The State of Bihar and Ors. (3)."

This decision was followed by a Division Bench of this Court in the decision reported in 7962 (I) Labour Law Journal page 61 between Bipa Beni and Sawarkar (P.D.). A reference can be usefully made to the observation of the Supreme Court in the case reported in 1976(1) Labour Law Journal page 463 between Workmen of National and Grindlays Bank Ltd., and the National and Grindlays Bank Ltd. Mr. Justice Bhagwati, (as His Lordship then was) speaking for the Bench observed :

"It is well settled rule of interpretation that when the Legislature uses certain words which has acquired a definite meaning over a period of time, it must be assumed that those words have been used by the Legislature in the same sense."

Relying upon the principles laid down by the Supreme Court, it is obvious that it would be proper to give a literal interpretation to the expression contained in the proviso to Sub-section (3) of Section 2 and the proper interpretation should be made with reference to the legislative history and the decision of the Division Bench of this Court. It will have to be borne in mind that legislature was conscious of the interpretation put by the High Court to apply the provisions of B.I.R. Act to cooperative banks. The statement of objects and reasons also indicate that intention was to confer power of referring disputes between banks having branches in more than one State and its employees, on the Central Government and not left to the State Governments. The intention was to cover all banks and not only banking companies as defined under Section 5 of the Banking Companies Act. It is necessary, therefore, to place such interpretation which would advance the intention of the legislature. In my judgment, the effect of amendment of the Banking Regulation Act, 1949 is, to include the co-operative Bank in the expression "banking company" in Section 5 of the Act and as such the provisions of the B.I.R. Act would no longer be applicable to the cooperative banks."

22. It was also contended on behalf of the respondents that if the intention of the Legislature in enacting the 1993 Act was to include even the co-operative banks within the definition of the term "banking company", it would have expressly said so.

23. This submission has been dealt with in detail by the Division Bench in the judgment of Shamrao Vithal Co-operative Bank's case and, in our opinion, the reasons that have been given by the Division Bench for rejecting this submission are valid reasons. In our opinion, it would be enough to just refer the observations of the Division Bench in the case of Shamrao Vithal Co-operative Bank found in paragraph 17, which read as under:--

"17. Yet another submission of learned counsel for the respondents that if the intention of the Legislature was to give expanded meaning to expression "banks" under Section 2(d) or to expression "banking company" under Section 2(e) of the Act of 1993 to include co-operative banks, the legislature would have said so expressly, also does not merit acceptance since when the legislature stated that "banking company" shall have same meaning as assigned under Section 5(c) of Banking Regulation Act, 1949, the legislature was aware that Section 5(c) has already been expanded by insertion of Part V, particularly Section 56(a)(i) and it was not necessary, therefore, to expressly provide for cooperative banks. There are different ways of drafting legislation. Sometimes draftsmen think that is implicit need not be said expressly. In Bolani Ores Ltd, (supra) upon which strong reliance was placed by Mr. Samdani also the Apex Court while considering the expression "has the same meaning as in the Motor Vehicles Act, 1939" observed that when the "Motor Vehicle" is defined under Section 2(c) of Taxation Act as having the same meaning as in the Motor Vehicles Act, 1939 then the intention of the Legislature was to incorporate the definition in the Motor Vehicles Act as then existing. Obviously any change in the definition in earlier Act after incorporation could not be read in the later Act. Insofar as the definition of "banking company" in Section 5(c) of banking Regulation is concerned, it cannot be read in isolation and exclusion of 56(a)(i) which was existing at the time of incorporation and provided that reference to the "banking company" or "the company" in the Banking Regulation Act shall be construed to refer to the co-operative bank as well. We find ourselves unable to agree with the submission of Mr. Samdani that Section 56(a)(i) is provision of exception and/or deeming fiction and by reason of deeming fiction under Section 56(a)(i) of Banking Regulation Act, 1949, the meaning which is assigned to "banking company" in Section 5(c) is not altered or intended to be altered. Firstly, Section 56(a)(i) is not the provision of exception as was sought to be contended, it is only provision of legal fiction whereby references to "banking company" or "the company" in Banking Regulation Act, 1949 are deemed to be references to the co-operative bank also unless the context requires otherwise. Secondly by the expression "throughout this Act" used in Section 56(a)(i) of Banking Regulation Act, Section 5(c) thereof cannot remain untouched and has to be read having reference to Co-operative bank. Even otherwise the statement by Lord Blackburn as noted above when applied to Section 2(e) of the Act of 1993 leaves no manner of doubt that though Section 5(c) of the Banking Regulation Act alone is incorporated, Section 56(a)(i) of that Act must be read and referred to ascertain the meaning assigned to "banking company" in Section 5(c). This, in our considered view is the correct approach in construction of Section 2(e) of the Act of 1993 and, accordingly, we hold that co-operative banks are covered under the provisions of Act of 1993."

24. On behalf of the respondents reliance was also placed on a judgment of the Rajasthan High Court, referred to above, in the case of M/s Pheonix Impex. That judgment was also relied on before the Division Bench. The Division Bench has not agreed with the view taken by the Rajasthan High Court in that judgment. Perusal of the judgment of the Rajasthan High Court shows that it has held that by Act 23 of 1965 insertion of Section 56 of the Banking Regulations Act definition of the "banking company" under Section 5(c) of the 1949 Act did not change.

25. In our opinion, the approach of the Rajasthan High Court cannot be said to be proper. In our opinion, the real question is, Can the provisions of Section 56 which were in force when the 1993 Act was enacted be ignored while considering the question as to what is the meaning to be assigned to the term "banking company" under Section 5(c). The Rajasthan High Court has observed that a co-operative bank is called as a "banking company" by fiction as it is engaged in banking business, yet it does not become a company formed and registered under the Companies Act and as such under Section 2(d) of the 1949 Act a co-operative bank shall not come within the definition of the bank. Apart from the fact that the Parliament while enacting the 1993 Act was aware that as a result of amendments in the 1949 Act effected in the year 1966, a co-operative bank has been included in the definition of the term "banking company". In our opinion, once the Parliament by enacting amended Act 23 of 1965 includes a cooperative bank in the same class as a company doing the business of banking for the purpose of regulation of the banking business would not have intended to treat the banking companies and the co-operative banks differently in relation to one aspect of the banking business namely recovery of dues. As is clear from the perusal of the provisions of the 1949 Act as also the statement of objects and reasons of the Act 23 of 1965, that the purpose of enacting the Act 23 of 1965 was to extend the provisions of the Banking Regulations Act with certain modifications to the business of banking done by the co-operative banks. Thus, so far as the business of banking is concerned, effect of the Act 23 of 1965 was to include the companies doing business of banking and the co-operative banks in one class. Therefore, so far as the aspect of business of banking is concerned, the co-operative banks and the companies doing business of banking are in one class. The Supreme Court in its judgment in the case of Delhi High Court Bar Association (supra) has held that recovery of dues is an essential aspect of the business of banking and therefore, so far as the aspect of recovery of dues of the banks are concerned, the co-operative banks and the companies doing business of banking would be in one class and therefore, they will have to be similarly treated. In other words, they cannot be treated differently, and therefore, we are unable to agree with the view taken by the Rajasthan High Court that the provisions of the 1993 Act are not applicable to the co-operative banks.

26. So far as the aspect of the legislative competence is concerned, in our opinion, now as a result of the judgment of the Supreme Court in the case of Delhi High Court Bar Association (supra), it is clear beyond doubt that the 1993 Act has been enacted by the Parliament under Entry 45 List I. The relevant observations are found in paragraph 14 of that judgment, which reads as under:--

The Delhi High Court and the Guwahati High Court have held that the source of the power of Parliament to enact a law relating to the establishment of the Debts Recovery Tribunal is Entry 11-A of List III which pertains to "administration of justice; constitution and organisation of all courts, except the Supreme Court and the High Courts". In our opinion, Entry 45 of List I would cover the types of legislation now enacted. Entry 45 of List I relates to "banking". Banking operations would, inter alia, include accepting of loans and deposits, granting of loans and recovery of the debts due to the bank. There can be little doubt that under Entry 45 of List I, it is Parliament alone which can enact a law with regard to the conduct of business by the banks. Recovery of dues is an essential function of any banking institution. In exercise of its legislative power relating to banking, Parliament can provide the mechanism by which monies due to the banks and financial institutions can be recovered. The Tribunals have been set up in regard to the debts due to the banks. The special machinery of a Tribunal which has been constituted as per the preamble of the Act, "for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto" would squarely fall within the ambit of Entry 45 of List I. As none of the items in the lists are to be read in a narrow or restricted sense, the term "banking" in Entry 45 would mean legislation regarding all aspects of banking including ancillary or subsidiary matters relating to banking. Setting up of an adjudicatory body like Banking Tribunal relating to transactions in which banks and financial institutions are concerned would clearly fall under Entry 45 of List I giving Parliament specific power to legislate in relation thereto.

It is thus obvious that the Parliament has the competence to make law relating to recovery of dues by the banks is an essential function of banking institution. Therefore, it is the Parliament which has the power to legislate in relation to recovery of dues by the banks. It is clear from the judgment of the Division Bench of this Court in the case of Nagpur District Central Co-operative Bank Ltd., referred to above, specially paragraph 13 that the State Legislature by virtue of Entry 32 in List II has the power to make a law with respect to co-operative societies including societies doing business exclusively in banking and that law may also make provisions in relation to the banking business incidentally. But the moment, the Parliament makes a law in exercise of its exclusive power by virtue of Entry 45 in List I, covering the particular aspect of the banking, it is that law which will operate to the exclusion of the law made by the State Legislature. Firstly because the law made by the State Legislature being a law of general nature relating to the co-operative societies and law made by the Parliament being a special law relating to only the aspect of banking business carried on by a class of co-operative societies. The Supreme Court has considered this aspect of the matter in its judgment in the case of Allahabad Bank, referred to above, where the court was considering the provisions of the 1993 Act vis-a-vis the provisions of the Companies Act. The observations of the Supreme Court in paragraphs 38, 39 and 40 are relevant and material. They read as under :--

38. At the same time, some High Courts have rightly held that the Companies Act is a general Act and does not prevail under the RDB Act. They have relied upon Union of India v. India Fisheries (P) Ltd.

39. There can be a situation in law where the same statute is treated as a special statute vis-a-vis one legislation and again as a general statute visa-vis yet another legislation. Such situations do arise as held in LIC of India v. D.J. Bahadur. It was there observed :

"....for certain cases, an Act may be general and for certain other purposes, it may be special and the court cannot blur a distinction when dealing with the finer points of law". For example, a Rent Control Act may be a special statute as compared to the Code of Civil Procedure. But vis-a-vis an Act permitting eviction from public premises or some special class of buildings, the Rent Control Act may be a general statute. In fact in Damji Valji Shah v. LIC of India (already referred to), this Court has observed that vis-a-vis the LIC Act, 1956, the Companies Act, 1956 can be treated as a general statute. This is clear from para 19 of that judgment. It was observed :

"Further, the provisions of the special Act, i.e. the LIC Act, will override the provisions of the general Act, viz., the Companies Act which is an Act relating to companies in general."

Thus, some High Courts rightly treated the Companies Act as a general statute, and the RDB Act as a special statute overriding the general statute.

Special law v. special law.

40. Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provisions in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely, Section 34. A similar situation arose in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. where there was inconsistency between two special laws, the Finance Corporation Act, 1951 and the Sick Industries Companies (Special Provisions) Act, 1985. The latter contained Section 32 which gave overriding effect to its provisions and was held to prevail over the former. It was pointed out by Ahmadi, J. that both special statutes contained non obstante clauses but that the

"1985 Act being a subsequent enactment, the non obstante clause therein would ordinarily prevail over the non obstante clause in Section 46-B of the 1951 Act unless it is found that the 1985 Act is a general statute and the 1951 Act is a special one". (SCC p. 157, para 9)

Therefore, in view of Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts. Other rulings of the Supreme Court and High Courts cited by counsel.

27. Therefore, in our opinion, as the provisions in the 1960 Act are of general nature which are available to all the claims of co-operative societies, the forums created by the 1960 Act would be available to the co-operative banks till 1993 Act becomes operative, but once that Act becomes operative and remedies provided by that Act are available to the Co-operative banks, remedies provided by the 1960 Act will become unavailable and the court and authority under the 1960 Act will lose their jurisdiction to entertain applications from the cooperative banks in view of the provisions of Section 18 and Section 34 of the 1993 Act.

It is to be seen that the 1993 Act is a special legislation which provides remedy only to the Banks for recovery of their dues.

28. As observed above, under Entry 32 of List II of the Seventh Schedule of the Constitution, the Legislature of the State has powers to legislate in relation to incorporation, regulation and winding up of co-operative societies. Obviously, therefore, the Legislature of the State has powers to legislate in relation in incorporation, regulation and winding up of a co-operative society doing banking business. The Legislature of a State, therefore, while making a general law in relation to the co-operative societies obviously can make a law making provision for the co-operative societies to recover their dues from their members and that provision made in the general law by the State Legislature would also be available to a co-operative society which is doing banking business. No doubt, the general provision made in the Co-operative Societies Act in its application to the co-operative societies doing banking business would overlap and may be relatable to the law that can be made by the Parliament under Entry 45 relating to the business of banking. But merely because of such overlapping the law made by the State Legislature cannot be said to be beyond its legislative competence. This may happen in relation to the Entries also in List I, because it is now a settled law that the legislative heads which are given in the three Lists must receive large and liberal meaning. But when the Legislature of a State has competence to legislate in relation to Co-operative societies, incidentally, it will have the powers to legislate in relation to the co-operative societies, which are being doing banking business and make a provision which may relate to the aspect of banking business and such incidental provision which is made by the State Legislature cannot be said to be beyond its legislative competence, and will continue to operate till the Parliament intervenes and makes a specific law covering that field. The Supreme Court in its judgment in the case of Fatehchand Himmatlal and Ors. v. State of Maharashtra, has considered this

situation in relation to the law made by the Parliament and in paragraph 56 of that judgment the Supreme Court has observed thus :--

"Let us look at the basics of the legal situation before us, before examining the wealth of learning counsel has accumulated. Article 246 vests exclusive power in Parliament over matters enumerated in List I (Seventh Schedule) and the State Legislature enjoys like power over topics in List II, subject to Clauses (1) and (2) of the Article. Plainly, therefore, the State can legislate upon any Entry in the State List. We may visualize situations where Parliamentary occupation may exclude the State Legislature. Where, for instance, Parliament, while enacting on a matter in the Union List, makes as it is entitled to make, necessary incidental provisions to effectuate the principal legislation, such ancillary expansions may trench upon the State field in List II. In such a case, if the State makes a law on an Entry in its exclusive List, and such law covers and runs counter to what has already been occupied by Parliament, through incidental provisions, it may be argued that the State law stands pushed out on account of the superior potency of Parliament's power in our constitutional scheme. Again, there are certain tell-tale heads of legislation in the Lists where one may plausibly invoke the doctrine of occupied field. Examples may, perhaps, be furnished by Entries 52 and 54 of List I, Entries 23 and 24 of List II and Entry 33 of List III. Without fear of contradiction, we may assert that Article 246(3) read with Entry 30 in List n, empowers the State to make the impugned law. Why then is it incompetent? Because, says Mr. Nariman, the field of gold industry is already occupied by Parliament and the State Legislature therefore stands excluded. Entry 52 in List I reads:

"Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest".

Parliament, in the Industries (Development and Regulation) Act, 1951 (Act 65 of 1951) has made the necessary declaration contemplated in Entry 52 and has occupied the field of Entry 52 and has occupied the field of 'gold industry', as is evident from reading Section 2 and item 1. B(2) of the First Schedule therein. This expression of Parliamentary intent to legislate upon the gold industry is enough to expel from that field the State Legislature. This is Shri Nariman's contention. But what is the sequitur? Assuming the appropriation by Parliament of the power to legislate on gold, what follows? It can make laws directly on that industry and ancillarily on every allied area where effective exercise of the parliamentary power necessitates it. So much so "business in gold", licensing of gold merchants, regulation of making or pledging of gold ornaments, keeping of jewellery, disclosure of gold possessions and the like are incidental to the parliamentary power and purpose and the Gold Control Act, 1968 and the Rules made thereunder are valid (vide, for example, Banthia's case . Several sections of the

Act, some rules and a few rulings were read before us to drive home the point that gold loans are already within the ken of the law made under Entry 52, List I. If so, what? Does it spell death sentence on the Debt Act? Or maim it? Or leave it intact?

29. At this juncture, it may be noted that Clause (1) of Article 246 gives powers to the Parliament to legislate in relation to the subject in List I, notwithstanding what is contained in Clauses (2) and (3) of that Article, whereas Clause (3) of Article 246 gives powers to the State Legislature to legislate on the subject in List II subject to what is contained in Clause (1). In our opinion, following observations of the Supreme Court found in paragraphs 61, 62 and 63 of its judgment in the case of Fatehchand are pertinent. They read as under:--

61. In the Canadian Constitution, the question of conflict and coincidence in the domain in which provincial and Dominion legislation overlap has been considered. If both may overlap and co-exist without conflict, neither legislation is ultra vires. But if there is confrontation and conflict the question of paramountcy and occupied field may crop up. It has been held that the rule as to predominance of Dominion legislation can only be invoked in case of absolutely conflicting legislation in pan materia when it will be an impossibility to give effect to both the Dominion and provincial enactments. There must be a real conflict between the two Acts i.e. the two enactments must come into collision. The doctrine of Dominion paramountcy does not operate merely because the Dominion has legislated on the same subject-matter. The doctrine of "occupied field" applies only where there is a clash between Dominion Legislation and Provincial Legislation within an area common to both. Where both can coexist peacefully, both reap there respective harvests (Please see : Canadian Constitutional Law by Laskin - pp. 52-54, 1951 Edn.)

62. We may sum up the legal position to the extent necessary for our case. Where Parliament has made a law under Entry 52 of List I and in the course of it framed incidental provisions affecting gold loans and money-lending business involving gold ornaments, the State, making a law on a different topic but covering in part the same area of 'gold loans' must not go into irreconciliable conflicts. Of course, if Article 254(2) can be invoked - we will presently examine it - then the State law may still prevail since the assent of the President has been obtained for the Debt Act. Thirdly, the doctrine of 'occupied field' does not totally deprive the State Legislature from making any law incidentally referable to gold. In the event of a plain conflict, the State law must step down unless, as pointed out earlier in the previous passage, Article 254(2) comes to the rescue.

63. Many more decisions were brought to our notice bearing on paramountcy, 'occupied field', repugnancy and inconsistency. They were elaborated by counsel sufficiently to convince us that lawyer's law is divorced from play in semantics and common understanding of Constitutional provisions becomes a casualty when doctrinal complexities are injected. May be every profession has a vested interest in the learned art of incomprehensibility for the laity. Law, in the administration of which the Bench and the Bar are partners, probably lives up to this reputation.

30. Thus to our mind even leaving aside the aspect that the 1960 Act being a general law and the 1993 Act being a special law couple with the provisions of sections 18 and 34 in the 1993 Act, even in terms of the provisions contained in Clause (1) of Article 246 and Clause (3) of Article 246, the moment the Parliament enacted the 1993 Act covering specifically the field of recoveries to be made by the banks, the provisions in 1960 Act on that aspect insofar as they relate to banks will get displaced.

31. Now, so far as the provisions of Section 84 of the 2002 Act are concerned, it is clear from what has been observed above that when the 1993 Act was enacted as also in 1999 when that Act became operative in the region with which we are concerned, though 1984 Multi-State Co-operative Societies Act was in force, Section 74 of that Act which provided remedy was inoperative having been stayed by this Court, therefore the provisions of the 1993 Act will occupy the field and therefore when the 2002 Act was enacted by the Parliament. The 2002 Act being essentially a general statute as compared to the 1993 Act, unless the 2002 Act makes a special exception, the provisions of Section 84 of the 2002 Act will not operate to oust the 1993 Act from the field which is occupied by it. It may be, incidentally, mentioned here that so far Sub-section (1) of Section 84 of the 2002 Act is concerned, it is identical to Sub-section (1) of Section 74 of the 1984 Act. Had Section 74 of the 1984 Act been in force in 1999, it is 1993 Act which would have operated being a special law. In our opinion, therefore, the enactment of Section 84 in the 2002 Act will not make any material difference. 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. In such a situation, the special law which occupies the field does not get displaced merely by implication. The legislature being the same would be aware, while enacting the subsequent general legislation that it has already enacted a special law and it is that law which occupies the field, therefore, if it is its intention to displace that special law it would specifically say so. In these circumstances, therefore, in our opinion, in the absence of any specific provision in the 2002 Act, excluding the operation of the 1993 Act which was in operation, in relation to Bank registered under the 2002 Act, it is the 1993 Act and not the 2002 Act which would operate.

32. For all these reasons, therefore, we hold that on and from the date on which the Debts Recovery Tribunal was constituted under the 1993 Act, the courts and authorities under the 1960 Act as also the 2002 Act would cease to have jurisdiction to entertain the applications submitted by the Co-operative Banks for recovery of their dues.

33. Registry to place all the Writ Petitions, that have been placed before us, before the appropriate Benches for disposal in accordance with law and in the light of this judgment.