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Khaja Industries Versus State Of Maharashtra And Anr.

2007 (7) TMI 686 - BOMBAY HIGH COURT

Writ Petition No. 2672 of 2007 - Dated:- 3-7-2007 - S Vazifdar And P Borkar, JJ. JUDGMENT S.J. Vazifdar, 1. The petitioners have challenged the action of the respondent banks under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Securitisation Act") on merits, the applicability of the said Act to co-operative banks including those constituted under the Maharashtra Cooperative Soc .....

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2004(2) Mh.L.J. (SC) 1090 the Supreme Court upheld the constitutional validity of the Securitisation Act including the very provisions which were challenged before us. The petitioners however contended that the judgment is per incuriam, having failed to notice the relevant provisions of the Constitution of India. 3. We have decided all the petitions by this common judgment though in some of them the constitutional validity of the Securitisation Act has not expressly been challenged as, a decisio .....

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ners the right to challenge the action of the bank under Section 13. III. By adopting proceedings under the Securitisation Act the borrower is deprived the right to have the claim adjudicated under the provisions of the MCS Act. IV. If the exact amount is not mentioned in the notice under Section 13, the same is bad and illegal. V. Unless there is first a final adjudication of the quantum of the claim, no action under Section 13 of the Securitisation Act can be taken. VI. Assuming that the Secur .....

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. Section 2(1)(c) of the Securitisation Act reads as under: 2. Definitions.- (1) In this Act unless the context otherwise requires,.- (a) ... (b) ... (c) "bank" means- (i) a banking company; or (ii) a corresponding new bank; or (iii) the State Bank of India; or (iv) a subsidiary bank; or (v) such other bank which the Central Government may, by notification, specify for the purposes of this Act; (B). In exercise of its powers conferred under Section 2(1)(c)(v), the Central Government is .....

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9 (10 of 1949) as 'bank' for the purpose of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002). 6. Section 5 of the Banking Regulation Act, 1949 (hereinafter referred to as "the B.R. Act") is the interpretation clause. By virtue of an amendment Section 56 of the B.R. Act reads as under: Part V APPLICATION OF THE ACT TO CO-OPERATIVE BANKS 56. Act to apply to co-operative societies subject to modifications. - The .....

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ection 2(1)(c)(v) of the Securitisation Act, the Notification dated 28-1-2003 and Section 56(c)(i) read with Section 5 of the B.R. Act, that the Securitisation Act also applies to cooperative banks. The learned Counsel appearing on behalf of the respondents were unable to indicate how on a plain reading of the aforesaid provisions, cooperative banks do not fall within the ambit of the said Act. They however relied upon the judgment of the Supreme Court in the case of Greater Bombay Cooperative B .....

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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 (hereinafter referred to as RDB Act). The Full Bench answered the question in the ne .....

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t, in fact, held that the Securitisation Act includes within its ambit co-operative banks. One of the submissions, which was accepted, was precisely to this effect and as follows: 45. ...It was next contended that significantly the Co-operative Banks have been brought in by the Parliament in Section 2(c)(v) of the Securitization Act by way of a Notification and enabling provisions and the purpose of Part III of the Securitization Act is also recovery of banks' dues, but the RDB Act employed .....

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n to the word 'banking company' as is assigned to it in Clause (e) of Section 5 of the BR Act. Again the definition of 'banking company' was lifted from the BR Act but while defining 'bank', Parliament gave five meanings to it under Section 2(c) and one of which is 'banking company'. The Central Government is authorized by Section 2(c)(v) of the Act to specify any other bank for the purpose of the Act. In exercise of this power, the Central Government by Notificat .....

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Act No. 23 of 1965, while amending the BR Act, it did not change the definition in Section 5(c) or even in 5(d) to include cooperative banks; on the other hand, it added a separate definition of 'cooperative bank' in Section 5(cci) and 'primary co-operative bank' in Section 5(ccv) of Section 56 of Part V of the BR Act. Parliament while enacting the Securitisation Act created a residuary power in Section 2(c)(v) to specify any other bank as a bank for the purpose of that Act and i .....

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co-operative bank" means any company, which transacts the business of banking in India; thirdly, Section 56(c) does define "co-operative bank" separately by expressly deleting/inserting Clause (cci) in Section 5. The Parliament in its wisdom had not altered or modified the definition of 'banking company' in Section 5(c) of the BR Act by Act No. 23 of 1965. 34. Section 2(d) defines "banks" to mean (i) a banking company; (ii) a corresponding new bank; (iii) State B .....

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n Chapter III provides for Jurisdiction, Powers and Authority of Tribunals. Section 18 bars the jurisdiction of a Civil Court in relation to the matters specified in Section 17." "59. The RDB Act was passed in 1993 when Parliament had before it the provisions of the BR Act as amended by Act No. 23 of 1965 by addition of some more clauses in Section 56 of the Act. The Parliament was fully aware that the provisions of the BR Act apply to co-operative societies as they apply to banking co .....

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ven referring to the substantive provisions of the BR Act. The meaning of 'banking company' must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. It would have been the easiest thing for Parliament to say that 'banking company' shall mean 'banking company' as defined in Section 5(c) and shall include 'co-operative bank' as defined in Section 5(cci) and 'primary co-operative bank' as defined in Section 5(ccv). Ho .....

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Courts. 9. The judgment of the Supreme Court therefore, far from being of any assistance to the petitioners is, in fact, against them. While the Securitisation Act expressly includes within its ambit co-operative banks, the RDB Act does not. The RDB Act and the Securitisation Act by definition are applicable to "banks". Both Acts define banks to mean inter-alia "a banking company" (Section 2(c)(i) of the Securitisation Act and Section 2(d)(i) of the RDB Act). Both Acts provi .....

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of Article 14 of the Constitution of India as it deprives the borrowers such as the petitioners the right to challenge the action of the banks under Section 13. 10. It was contended on behalf of the petitioners that in cases where the claim is not admitted and therefore requires to be adjudicated, the Securitisation Act does not provide the borrower any mechanism for the adjudication thereof. It was further contended that Section 17 of the Securitisation Act only empowers the Debt Recovery Tribu .....

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v. Union of India and Ors. , the validity of the Securitisation Act and, in particular, the Constitutional vires of Sections 13, 15, 17 and 34 thereof had been challenged. It was contended that the Securitisation Act vested arbitrary powers in the banks, without any guidelines for the exercise thereof and also without providing any appropriate and adequate mechanism to decide the disputes relating to the correctness of the demand, its validity and the actual amount of dues, sought to be recover .....

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ised by a borrower against the recovery, particularly in view of bar to approach the Civil Court under Section 34 of the Act? iii) Whether the remedy available under Section 17 of the Act is illusory for the reason it is available only after the action is taken under Section 13(4) of the Act and the appeal would be entertainable only on deposit of 75% of the claim raised in the notice of demand? iv) ... v) ... vi) Whether the provisions under Sections 13 and 17(2) of the Act are unconstitutional .....

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d that it would be necessary for the banks to appraise the borrower the reasons for not accepting the objections or points raised in the reply to the notice under Section 13(2) and communicate the same to the borrower. (C). The Supreme Court proceeded to hold as under: 48. The next safeguard available to a secured borrower within the framework of the Act is to approach the Debts Recovery Tribunal under Section 17 of the Act. Such a right accrues only after measures are taken under Sub-section (4 .....

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ich required a deposit of 75% of the amount of the demand notice before an Appeal could be entertained by the tribunal. (E). The Supreme Court thereafter summarised the judgment as under: 79. Some submissions have been made pointing out that in certain circumstances it would not be clear as to in what manner the provisions of the Act would be workable. We feel the objections pointed out are not such which render the statute invalid or unconstitutional. Such problems about working of any particul .....

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rpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows: 1. Under Sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under Sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the se .....

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on 17 of the Act, at that stage. 2. As already discussed earlier, on measures having been taken under Sub-section (4) of Section 13 and before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before the Debts Recovery Tribunal. 3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose. 4. In view .....

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nds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the Court. 81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debts Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground t .....

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section (2) of Section 17 of the Act, which is declared ultra vires Article 14 of the Constitution of India. 13. It is therefore clear that similar challenges to Sections 13 and 17 were rejected by the Supreme Court. Thus, on the basis of the judgment of the Supreme Court in Mardia Chemicals alone, the Petitioner's contentions ought to be rejected. 14. It is important to note two amendments to the Securitisation Act after the judgment of the Supreme Court in Mardia Chemicals. These amendment .....

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s to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower: Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 .....

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bunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in Sub-section (4) of Section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any on .....

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d out by the Supreme Court in Mardia Chemicals have been completely taken care of by the Legislature. This has been so held by a Division Bench of this Court in Ghanshamdas s/o Salchandra Ahuja v. The Jintur Urban Cooperative Bank Ltd. and Ors. 2005(11) LJ. Soft 117 : (2005) Marathwada Cases Reporter 688. The Division Bench held as follows: 23. The validity of the Securitisation Act was challenged before the Apex Court and the Apex Court has upheld the Constitutional validity except it declared .....

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ach the Tribunal by filing application before it. We may also refer to orders passed by the Division Bench in W.P. No. 4251/2003 decided on 5-3-2004 and W. P. No. 2166 of 2003 decided on 20-7-2004, wherein the question arose before the Division Bench regarding the availability of the alternate remedy to the parties against whom the action is taken by the Bank under Section 13(2) of Securitisation Act." "24. So far as the constitutional validity of the Act is concerned, it is no more re .....

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ions once again, in view of the law declared by the Apex Court in Mardia Chemicals (supra), Anil Kumar, Director Settlement and Suganthi Suresh Kumar (supra). Hence, we proceed to consider other contentions raised by the respective counsel. 18. In Trade Well and Anr. v. Indian Bank and Anr. Criminal Writ Petition No. 2767 of 2006 since reported in 2007(2) Mh.L.J. (Cri) 412 a Division Bench, by its judgment dated 2nd April, 2007 while considering the provisions of Section 13(4) of the Act held as .....

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ven to them. It is after measures under Section 13(4) are taken that an application under Section 17 can be filed by a borrower or any person and in that application, all grievances including the grievance that reasons were not communicated can be voiced. Prior to that, at no point of time any grievances can be raised. Section 17 offers an adequate remedy. We shall advert to Section 17 a little later. 19. The observations of the Supreme Court in Mardia Chemicals and of the Division Bench of this .....

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borrower is deprived the right to have the claim adjudicated under the provisions of the MCS Act. Re : IV. If the exact amount is not mentioned in the notice under Section 13 of the Securitisation Act, the same is bad and illegal. Re : V. Unless there is first a final adjudication of the quantum of the claim, no action under the Securitisation Act can be taken. 20. These submissions too, in our view, are not well founded both' on principle and on precedent. The Constitutional validity of Se .....

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r the challenge. 21. We are also of the view that the submissions are founded on a fundamental misconception regarding the scope of an adjudication under Section 17 and the ambit of Section 13 of the Securitisation Act. 22. It is necessary at the outset, in this regard, to reiterate the statement of objects and reasons for the Securitisation Act, which read as under: Statement of Objects and Reasons.- The financial sector has been one of the key drivers in India's efforts to achieve success .....

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and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for t .....

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, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. The provisions of the Ordinance of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. 23. The statement of objects and reasons theref .....

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ssets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal having jurisdiction or a competent Court, as the case may be, for recovery of the balance amount from the borrower. 24. In an application under Section 17, the tribunal is concerned only with the validity of the acts of the secured creditors of taking possession of the securities and dealing with the same under Section 13. While considering this, it is not necessary for .....

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e security, it would, in the absence of any other defence, justify a rejection of the borrower's application under Section 17. It would not be necessary for the Tribunal in such a case to adjudicate the exact amount due by the borrower to the secured creditor. This is for the obvious reason that in that event there would be no prejudice to the borrower because its liability would be greater than the security which is sought to be realised. The extent by which the liability is greater than th .....

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would have to file an application to the Debt Recovery Tribunal "or a competent Court, as the case may be, for recovery of the balance amount from the borrower". Thus, in the case of a co-operative bank, it may well be that it would, for the balance amount, have to file proceedings under the provisions of the Maharashtra Co-operative Societies Act. It is in such proceedings for the adjudication of the claim that the Debt Recovery Tribunal or the competent Court, as the case may be, wou .....

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only for the purpose of ascertaining the validity of the action of the seemed creditor in enforcing its security under Section 13 and not for the purpose of a final adjudication regarding the indebtedness of the borrower. 28. Thus, the scope of the two proceedings viz. an application under Section 17 and proceedings pursuant to the provisions of Section 13(10) are entirely different. This aspect is further clarified by a reference to Section 37 of the Act which reads as under: 37. Application of .....

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ests that a notice under Section 13(2) is bad if the amount stated therein as due is not the exact amount actually due. The learned Counsel for the petitioners were unable to substantiate this submission in any manner. In fact once the difference in the nature of proceedings under Section 17 and 13(10) are appreciated, the fallacy of this submission is evident. 30. The above submissions are therefore rejected. Re : VI. Assuming that the Securitisation Act applies only to Cooperative Banks it is .....

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dule 7 List 2. State List 32. Incorporation, regulation and winding up of corporations, other than those specified in List 1, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; cooperative societies. It was submitted that disputes between the members of the co-operative societies can be agitated only under Sections 91 and 101 of M.C.S. Act and not under any other Act including the Securitisation Act. 32. It is necessary to keep in mind .....

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, as observed by the Federal Court in Subramanavan Chettiyar v. Muttuswami Goundan . It must inevitably happen from time to time that legislation though purporting to deal with a subject in one list, touches also upon a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have .....

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Supreme Court in Mardia Chemicals is per incuriam as the Supreme Court had failed to consider the relevant provisions of law including of the Constitution of India and is therefore not binding on us. We are unable to agree. 34. (A). It is important in this regard to refer to Ghanshamdas's case. Two of the reliefs claimed in the Writ Petition in that case were for a writ striking down the Securitisation Act and in the alternative striking down Sections 9, 13, 15, 19, 34, 35, 41 and 42 of the .....

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earlier. The Division Bench held that once the Apex Court had decided the validity of the Securitisation Act in Mardia's case, it was not open to the High Court to reconsider the challenge on some different ground/point and for the High Court to consider the validity of the Securitisation Act once again. (C). We are bound by the judgment of the Division Bench. The contention must be rejected on this ground alone. 35. In Asha Oil Food Pvt. Ltd. v. Jalgaon Co-operative Bank Ltd. 2005 (7) L.J. .....

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on could be taken only under the M.C.S. Act and M.C.S. Rules and not under any other provisions of law. It is important to note the following contentions urged before the Division Bench: a) The MCS Act carves out a remedy under Section 101 as a special remedy in addition to the existing remedies under Sections 91, 93 and 98 thereof. Therefore, Section 101 has overriding effect on all other provisions in any law whatsoever. If recourse to Section 13 of the Securitisation Act is permitted, the sch .....

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16. Petitioner's submission that Section 37 of the Securitisation Act creates a non obstante clause only qua the provisions of Transfer of Property Act and not as against any other law, is not based on any foundation whatsoever. Section 37 is amply clear while it says that the provisions of this Act (Securitisation Act) or the Rules made therein shall be in addition and not in derogation to various laws named therein as well "any other law for the time being in force". The phraseo .....

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whatsoever contained therein. 19. The contention raised by the petitioner expressing that it ought to be held that the bank does not have the remedy available under Section 13 of the Securitisation Act since recourse will render the scheme of the recovery of dues under Section 101 of the Act redundant, is a submission which is based on total illusion. No question of such nature is now left open for any further adjudication in view of Manila Chemicals case. 36. Although the question raised before .....

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eliance was placed on Entry 32 List II of Schedule VII which covers the winding up of co-operative societies. In such a position, reliance was placed on Entry 43 of List I of the Seventh schedule wherein co-operative societies are specifically and distinctly excluded. It was therefore, submitted that the winding up of Co-operative Societies was covered by the M.C.S. Act and no entrenchment is permissible in the said field including of the Securitisation Act. It was further submitted that in case .....

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ding to us is therefore referable to Entry 42 list I in Schedule VII which entry covers "banking". The legislation in respect of the said entry is therefore the exclusive domain of Parliament. Insofar as the winding up of Co-operative Societies is concerned it is covered by Entry 33 of List II of the VII Schedule where the State legislature is competent to prescribe the mode provided for such winding up. Both the statutes therefore according to us operate in distinct and separate field .....

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on the Karkhana a overlap or conflict has arisen. In such a situation by virtue of the non-obstante clause in Article 246(1) the Central Act will predominate. Therefore in our view the Securitisation Act, 2002 has overriding effect over the MCS Act, 1960 and we are also fortified in our view by the Division Bench judgment of this Court reported in 2005 (7) LJSOFT 130 : 2005 (2) All.M.R. 721 (supra). 38. It was not disputed that the above judgments clearly answered the Petitioner's contention .....

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Bank Ltd. We have already noted that one aspect of the matter before the Supreme Court in Greater Bombay Co-operative Bank Ltd., was the applicability of the RBD Act to co-operative banks. The Full Bench of the Bombay High Court held that on and from the date on which the D.R.T. was constituted under the RBD Act, the Courts and the Authorities under the M.C.S. Act as also the Multi State Co-operative Societies Act, 2002, would cease to have jurisdiction to entertain applications submitted by th .....

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slative field of banking in Entry 43 List I of the Seventh Schedule; that it was therefore excluded to the State Legislature under Entry 32 List II of the Seventh Schedule and that recovery of moneys due to the co-operative banks is not a matter that falls within the incidental and ancillary areas of the State Legislative field in Entry 32 List II of the VII schedule. The learned Counsel appearing on behalf of the Petitioner relied upon the following observations of the Supreme Court while overr .....

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re, when there is an admittedly existing legal framework specifically dealing with issues pertaining to co-operatives and especially when the co-operative banks are, in any case, not covered by the provisions of the RDB Act specifically, there is no justification of covering the co- operative banks under the provisions of the RDB Act by invoking the Doctrine of Incorporation. 58. The distinction between peoples' co-operative banks serving their members and corporate banks doing commercial tr .....

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titutions was shifted to the Debt Recovery Tribunals. The disputes between co-operative banks and their members were being taken care of by the State Co-operative Acts and they were to remain where they were. If co-operative disputes are also to go to the Debt Recovery Tribunals, then those Tribunals will be over- burdened and the whole object of speedy recovery of debts due to banks and financial institutions would be defeated. The Co-operative Societies Acts on the one hand and RDB Act on the .....

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whether a legislation falls under an entry in one list or another entry in another list. Long ago in Prafulla Kumar Mukherjee and Ors. v. Bank of Commerce Ltd., the Privy Council was confronted with the question whether the Bengal Money-Lenders Act fell within Entry 27 in List II of the Seventh Schedule to the Government of India Act, 1935, which was 'money lending', in respect of which the Provincial Legislature was competent to legislate, or whether it fell within Entries 28 and 38 in .....

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stion must be asked what in pith and substance is the effect of the enactment of which complaint is made, and in what list is its true nature and character to be found. If these questions could not be asked, such beneficent legislation would be stifled at birth, and many of the subjects entrusted to provincial legislation could never effectively be dealt with. Examining the provisions of the U.P. Co-operative Societies Act in the light of the observations of the Privy Council we do not have the .....

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ot cease to be Co-operative Societies, when otherwise they are registered under the Co-operative Societies Act and are subject to the duties, liabilities and control of the provisions of the Co-operative Societies Act. We do not think that the question deserves any more consideration and, we, therefore, hold that the U.P. Co-operative Societies Act was within the competence of the State Legislature. This was also the view taken in Nagpur District Central Co-operative Bank Ltd. v. Divisional Join .....

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List I and the express inclusion of co-operative societies in Entry 32 of List II separately and apart from but along with corporations other than those specified in List I and universities, clearly indicated that the constitutional scheme was designed to treat co-operative societies as institutions distinct from Corporations. Co-operative Societies, incorporation, regulation and winding up are State subjects in the ambit of Entry 32 of List II of Seventh Schedule to the Constitution of India. .....

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tted that their submissions are a logical consequence of the aforesaid observations. Apart from the fact that we do not agree with this contention, such an approach is not even permissible. It is well established that a judgment is a precedent for what it decides and not what may appear to logically flow from it. 41. The Legislative competence of the Parliament to enact the Securitisation Act was not and indeed cannot be challenged. The only question is whether Parliament has entrenched on the S .....

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sation Act and in particular Section 13 thereof does not create a mechanism for the secured creditors instituting proceedings for adjudication or recovery of their dues. It is in fact quite the contrary. The Securitisation Act permits and enables the secured creditors to realize their security without the intervention of the Courts or Tribunal or any other Authorities. In the event of the amounts realized by enforcing the securities being inadequate, Section 13(10) clarifies that the secured cre .....

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mportant to note that there is a difference between the right of a creditor to file recovery proceedings and the right of a borrower to file an application under the RBD Act to challenge the action of a secured creditor to enforce/realise its security without the intervention of the Court under Section 13. Section 17(3) reads as under: 17. Right to appeal. (1) ... (2) ... (3) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the appeal in acc .....

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e RBD Act is made available for the adjudication, not of recovery proceedings per se, but for determining the validity of the act of the secured creditor under Section 13 which is without the intervention of the Court. The procedure under the RBD Act is made applicable for the determination of such an application and the machinery under the Act for recovery of dues per se, is not made applicable. In the case of co-operative banks, the right to institute necessary proceedings would be under the r .....

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y aware of its legislative limitations regarding both these aspects. This is apparent from the fact that whereas for the former purpose the Securitisation Act is made applicable to the various banks stipulated in Section 2, by Section 13(10) Parliament provided that recovery proceedings would have to be instituted before the DRT or the competent Court. Parliament was thus conscious of the fact that under the constitutional scheme recovery proceedings per se could not be provided under a Central .....

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the co-operative banks also to realize their security without the intervention of the Court cannot lead to a conclusion that it trenches upon the State subject of co-operative societies under Entry 32 of List II. At the highest it could be said that this is merely a case of incidental entrenchment which would not render the Act constitutionally invalid. 47. It was submitted that while enacting the Securitisation Act, Parliament had no intention to extend it to co-operative societies and that the .....

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, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force. It was submitted that only Central legislations are referred to in Section 37 and, therefore, the words "or under any other law..." must be read as limited only to Central enactments and not to State enactments .....

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he restricted meaning based on the said principle has to be given to words of general import only where the context of the whole scheme of legislation requires it and that where the context and the object of the enactment do not require a restricted meaning to be attached to words of general import, it becomes the duty of the Court to give these words their plain and ordinary meaning. 49. We have already discussed the scheme of the enactment and the statement of objects and reasons for the same. .....

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he Securitisation Act, which reads as under: 17. Right to appeal.(1) ... (2) ... (3) ... (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under Sub-section (4) of Section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under Sub-section (4) of .....

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ithstanding anything contained in any other law for the time being in force e.g., for the sake of argument, if in the given case the measures undertaken by the secured creditor under Section 13(4) comes in conflict with, let us say the provision under the State Land Revenue Law, then notwithstanding such conflict, the provision of Section 13(4) shall override the local law. This provision also stands clarified by Section 35 of the NPA Act which states that the provisions of NPA Act shall overrid .....

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he preliminary objection raised by the respondent regarding the maintainability of the Petition. It was contended that the Writ Petition is not maintainable as the respondent banks are neither State nor an instrumentality of the State within the meaning of Article 12 of the Constitution of India, as held inter-alia by the Full Bench of this High Court in Shyamrao Vitthal Co-operative Bank Ltd. and Anr. v. Padubidri Pattadhiran Bhatt and Anr. . This point must be answered in favour of the petitio .....

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