Gujarat High Court Case Information System
Print
SCA/708320/2008 3/ 8 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 7083 of 2008
For
Approval and Signature:
HONOURABLE
THE CHIEF JUSTICE MR. K.S.RADHAKRISHNAN
HONOURABLE
MR.JUSTICE AKIL KURESHI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
NIRAV
LALITBHAI SHAH - Petitioner(s)
Versus
GOVERNMENT
OF GUJARAT THROUGH SECRETARY & 1 - Respondent(s)
=========================================
Appearance :
MR
YN OZA, SR ADVOCATE WITH MR TEJAS M BAROT for
Petitioner(s) : 1,
MR KB TRIVEDI, ADVOCATE GENERAL WITH MS
SANGEETA VISHEN for Respondent(s) :
1,2
=========================================
CORAM
:
HONOURABLE
THE CHIEF JUSTICE MR. K.S.RADHAKRISHNAN
and
HONOURABLE
MR.JUSTICE AKIL KURESHI
Date
: 28/11/2008
CAV
JUDGMENT
(Per
: HONOURABLE THE CHIEF JUSTICE MR. AKIL KURESHI)
This
petition styled as Public Interest Litigation has been filed by one
Shri Lalit Shah seeking prayer for a direction to the Agriculture
and Cooperation Department of the Government of Gujarat to formulate
an appropriate scheme for repayment of money of the depositors by
way of implementation of One Time Settlement(OTS for short) for the
borrowers of the banks in liquidation in conformity with the
guidelines of Reserve Bank of India(RBI for short).
The
case of the petitioner is that he has made deposits with one
Charotar Nagrik Sahkari Bank which is a cooperative bank which is
under liquidation. RBI has issued guidelines vide communication
dated 10.4.2006 to the Secretaries of the States for framing of
scheme for OTS to be granted to the borrowers of the various Urban
Cooperative Banks. It is also
the case of the petitioner that though the State Government
formulated a scheme for OTS, for cooperative banks operating in the
State of Gujarat, in disregard to the said guidelines issued by RBI
excluded from operation of such a scheme, those Cooperative Banks
which had gone under liquidation. It is not in dispute that
the State Government had issued a separate one time settlement
scheme specifically meant for those Cooperative Banks which were
under liquidation. Such scheme was framed vide resolution dated
18.5.2007.
The
case of the petitioner however, is that scheme framed under
resolution dated 18.5.2007 which is applicable for Cooperative Banks
under liquidation is different and the provisions for OTS are more
stringent than the earlier scheme framed by the Government under
resolution dated 8.6.2006 covering the Cooperative Banks which are
not in liquidation.
Appearing
for the petitioner, learned advocate Shri Y.N. Oza with Shri Tejas
Barot submitted that the State Government could not have
discriminated between the Cooperative Banks which are under
liquidation and those which are not in liquidation. He submitted
that RBI guidelines dated 10.4.2006 made no such distinction and
it was therefore, not open for the State Government to make a
separate and different scheme for Cooperative Banks under
liquidation from one covering those banks which were not in
liquidation. He contended that directions issued by RBI under
Section 21 and 35 A of the Banking Regulation Act are binding on the
State Government since the RBI under the Reserve Bank of India Act
as well as under the Banking Regulation Act has exclusive authority
to issue such directions and the subject matter was exclusively
within the legislative powers of the Union.
4.1 Reliance
was placed on the decision of the Apex Court in case of Joseph
Kuruvilla Vellukunnel v. Reserve bank of India and others
reported in 1962 Supp(3) SCR 632, wherein the Apex Court was pleased
to consider at length the nature of powers enjoyed and duties to be
perform by RBI under the Reserve Bank of India Act.
4.2 Reliance
was placed on the decision in case of Central Bank of India v.
Ravindra and others reported in (2002) 1 Supreme Court Cases
367, wherein in paragraph 55(5), the Apex Court observed that the
Reserve Bank of India is the prime banking institution of the
country entrusted with a supervisory role over banking and conferred
with the authority of issuing binding directions having statutory
force, in the interest of the pubic in general and preventing
banking affairs from deterioration and prejudice as also to secure
the proper management of any banking Company.
4.3 Reliance
was also placed on the decision in case of Corporate Bank v. D.S.
Gowda and another reported in (1994) 5 Supreme Court Cases 213,
wherein once again nature of powers of RBI to issue directions were
discussed.
4.4 Learned
counsel also relied on following decisions to contend that the State
Government had no authority to formulate its own scheme for one time
settlement for the Cooperative Banks under liquidation since it was
the subject matter exclusively within the domain of RBI considering
the legislative powers of the Union as per Entry No. 45 of List I.
1) Union
of India and another v. Delhi High Court Bar Association and others
reported in (2002) 4 Supreme Court Cases 275.
2) State
of Maharashtra v. Sant Dnyaneshwar Shikshan Shastra Mahavidyalaya
and others reported in (2006) 9 SCC 1
3) Prof.
Yashpal and another v. State of Chhatisgarh and others reported
in (2005) 5 Supreme Court Cases 420.
4) Bharti
Vidyapeeth(Deemed University) and others v. State of Maharashtra and
another reported in 2004 11 Supreme Court Cases 755
On
the other hand, learned Advocate General Shri Kamal Trivedi
appearing for the State Government opposed the petition and
submitted that the petitioner has not disclosed any public interest.
He also submitted that the State Government after careful
consideration formulated a suitable scheme for the Cooperative Banks
under liquidation to suit the special requirements of such banks.
There was no rigid directives from the RBI to formulate OTS Scheme
and it was therefore, within the discretion of the State Government
to formulate a scheme for those Cooperative Banks which were under
liquidation. In any case, OTS Scheme formulated by resolution dated
8.6.2006 under the guidelines issued by RBI was time bound and the
scheme is no longer operational as the period for which the scheme
was framed is over.
5.1 He
relied on decision of the Apex Court in case of Oriental Bank of
Commerce v. Sunder Lal Jain and another reported in (2008) 2
Supreme Court Cases 280, wherein the order of the High Court issuing
mandamus directing the concerned banks for applying the guidelines
of the RBI for declaring the account of the petitioner as Non
Performing Asset was set aside, observing that in order that a writ
of mandamus may be issued there must be a legal right with the party
asking for the writ to compel the performance of some statutory duty
cast upon the authorities.
5.2 He
further submitted that guidelines issued by RBI cannot be termed as
directives or statutory guidelines under Section 21 or 35A of the
Banking Regulation Act
Having
thus heard learned advocates appearing for the parties at
considerable length, we find that in facts of the present case, it
is not necessary to go into the question of legislative powers of
the Union or the State with respect to the subject matter under
consideration for the reasons recorded here-in-after.
We
find that RBI guidelines issued under communication dated 19.4.2006
did not provide for a rigid straitjacket formula for preparing OTS
Scheme. In paragraph-2 of the said communication, it is clearly
stated that the guidelines for one OTS Scheme is forwarded which
could be modified to be in the line with the legal position
obtaining as per the provisions of the Cooperative Societies
Act/Rules. In the later portion of paragraph-2, it is again
stated that the State Government may consider the same and
issue necessary notification/administrative orders to primary
Cooperative Banks under their jurisdiction on the lines indicated.
It
can thus be seen that the communication itself left sufficient
discretion to the State Government to suitably adopt and when need
be, modify the terms of the scheme. The State Government after due
consideration in its wisdom at the first instance, formulated a OTS
Scheme under resolution dated 8.6.2006 covering all the Cooperative
Banks which were not in liquidation. Subsequently, a slightly
modified scheme was prepared under resolution dated 18.5.2007
covering those Cooperative Banks which were under liquidation. We do
not find that by doing so, the State Government committed any
discrimination. Cooperative Banks which are under liquidation and
those which are not do not form a homogeneous class and action of
the State Government treating the two sets of Banks differently
would not offend Article 14 of the Constitution.
We
further find that while adopting resolution dated 18.5.2007 for
formulation of OTS Scheme applicable to the Cooperative Banks under
liquidation, Government has carefully considered all the aspects. It
is recorded inter-alia that it is necessary that faith of the public
should be reestablished in the cooperative activities and a suitable
atmosphere be created. It is noted that work of recovery of dues of
Banks under liquidation is very slow and negligible.
Additionally,
in the affidavit in reply filed by the State, it is stated
inter-alia that there are 65 Cooperative Banks under liquidation.
Deposit, Insurance and Credit Guarantee Corporation (‘DICGC’ for
short) is the major stake holder as it stood as guarantor with
respect to small deposit holders upto Rupees One Lakh in almost all
the banks and therefore without hearing DICGC, no orders can be
passed.
It
can thus be seen that formulation of one time scheme vide resolution
dated 18.5.2007 for covering Cooperative Banks under liquidation was
a decision of the Government after careful consideration of all
relevant aspects. It would not be appropriate on part of this Court
to interfere with such exercise of discretion in policy matters
which is not shown to be irrational, arbitrary or based on
extraneous considerations.
Additionally,
we also find that the initial scheme framed by resolution dated
8.10.2006 covering Cooperative banks which are not in liquidation
has come to an end by afflux of time. It is therefore, not possible
to give any directions to the State Government to bring the cases of
Cooperative Banks under liquidation on par with the said scheme. It
would amount to direction of implementation of the scheme which is
no longer in existence. From the affidavit filed by the Government
it can be seen that even the Scheme covering Cooperative Banks under
liquidations as amended by Resolution dated 10.10.2007, provided for
last date for making application upto 18.11.2007 and the last date
for disposal of such applications of 18.2.2008. Thus even this
scheme at present is not in existence.
Significantly,
we also find that though the petition is titled as public interest
litigation, the petitioner has not disclosed any public interest in
the petition. The petitioner claims to be a depositor in a
Cooperative bank which is under liquidation. The nature and amount
of deposit is also not disclosed.
For
all these reasons, the petition cannot be accepted. Same is
dismissed. Notice is discharged.
(K.S.RADHAKRISHNAN,C.J.)
(AKIL
KURESHI,J.)
(raghu)
Top