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NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.........OF 2016

(@ SPECIAL LEAVE PETITION (CIVIL) NO. 30412 OF 2010)

GENERAL MANAGER.R.B.I                              ...APPELLANT(S)                                 VERSUS N.VENKATESHAIAH & ORS.                            ...RESPONDENT(S) WITH

CIVIL APPEAL NO.........OF 2016 (@ SPECIAL LEAVE PETITION (CIVIL) NO. 32134-32142 OF 2010)

CIVIL APPEAL NO.........OF 2016 (@ SPECIAL LEAVE PETITION (CIVIL) NO. 32143-32144 OF 2010)

JUDGMENT

KURIAN, J. 1. Leave granted. 2. The  dispute  in  these  appeals  arose  in  the  background of the supersession of two Co-operative Banks  in  the  State  of  Karnataka,  one  Grain  Merchants  Co- operative  Bank  and  the  other  Kannika  Parameshwari  Co- operative  Bank.  The  supersession  of  the  Board  of  the  Managing Committee was pursuant to a written requisition  made by the Reserve Bank of India, under Section 30(5) of  the Karnataka Co-operative Societies Act, 1959 which reads  as follows:

(5) Notwithstanding anything contained in this

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Act, the Registrar shall, in the case of a co- operative bank, if so required in writing by the  Reserve Bank of India in public interest or for  preventing the affairs of the co-operative bank  being conducted in a manner detrimental to the  interest of the depositors or for securing the  proper management of the co-operative bank, by  order in writing, remove the committee of that  co-operative bank and appoint an administrator  to manage the affairs of the co-operative bank  for such period as may, from time to time, be  specified by the Reserve Bank of India.

Thus in terms of the above provision, the Registrar of the  Cooperative  Societies  is  bound  to  supersede  the  Managing  Committee of the Co-operative Bank when a requisition is  made by the Reserve Bank of India in writing. 3. Supersession was subject matter of challenge before  the High Court. In the impugned judgment dated 20th April,  2010 at paragraph 17,   the High Court has taken the view  that a pre-decisional hearing by the Reserve Bank of India  is mandatory. 4. Learned  counsel  appearing  for  the  respondents  submits that during the pendency of the appeals before this  Court, elections to the Managing Committee have been held  twice and, therefore, is not necessary for this Court to go  into  the  question  of  law.   Shri  Jaideep  Gupta,  learned  senior counsel for the Reserve Bank of India also submitted  that in view of the intervening developments reported above,  the appeals can be disposed of leaving the question of law  open.  Therefore,  the  question  whether  a  pre-decisional  hearing is required before the Reserve Bank of India before

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making a requisition in writing to the Registrar of the Co- operative  Societies  for  supersession  of  the  Managing  Committee of a Cooperative Bank under Section 30(5) of the  Karnataka Co-operative Societies Act, 1959 is left open to  be decided in an appropriate case where the situation so  warrants. Needless also to say that the impugned judgment  will not be treated as a precedent.  5. The appeals are disposed of in the above terms.

….................J. [KURIAN JOSEPH]

NEW DELHI   ….….................J. 2nd  FEBRUARY, 2016  [ROHINTON FALI NARIMAN]