U.A. Lathif MLA Vs State of Kerala (Kerala High Court)
Kerala High Court held that the provisions i.e. Sections 14A & 74H of the Kerala Co-operative Societies Act, 1969 not relating to any aspect of banking are within the legislative competence of the State Legislature.
Facts- The present writ petition has been filed by the former President and Vice President of the erstwhile Malappuram District Co-operative Bank and other 93 individuals stated to be Presidents of Primary Agricultural Credit Societies and Urban Cooperative Banks which were members of the Malappuram District Co-operative Bank. They challenge the constitutional validity of Section 14A of the Kerala Co-operative Societies Act, 1969 as also the provisions of Section 74H of the 1969 Act as amended by the Kerala Co-operative Societies (Amendment) Act, 2021.
Consequently, there is also a challenge to the order passed by the Registrar of Co-operative Societies in terms of the provisions contained in Section 74H of the 1969 Act amalgamating the Malappuram District Co-operative Bank with the Kerala State Co-operative Bank.
Conclusion- Held that when Co-operative Societies are engaged in the business of banking, they should be subjected to the control of the Reserve Bank of India under the Banking Regulation Act, 1949. As already noticed, the amended provisions of Section 3 of the Banking Regulation Act, 1949, 1949 read with the provisions of Section 56 of the said Act, make it clear that most of the provisions of the Banking Regulation Act, 1949 will apply to Co-operative Banks subject to the modifications specified in Section 56.
The provisions in Part IIA and other enabling provisions of the Banking Regulation Act, 1949 providing for control over management and all other powers of the Banking Regulation Act, 1949 permitting the Reserve Bank to intervene the affairs of a banking company would extend to Co-operative Banks and this was a sufficient safeguard to ensure that Co-operative Banks engaged in banking activity are subject to the overall control of the Reserve Bank of India.
Held that the impugned provisions, namely Sections 14A & 74H of the 1969 Act, do not relate to any aspect of banking, and, therefore, the impugned provisions are within the legislative competence of the State Legislature. Thus, a declaration that Sections 14A and 74-H of the Kerala Co-operative Societies Act, 1969, are unconstitutional and beyond the legislative competence of the State Legislature cannot be granted. These writ petitions fail, and they are accordingly dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
W.P.(C) N0s.28650/2021, 173/2023 and 4215/2023 have been filed by the former President and Vice President of the erstwhile Malappuram District Co-operative Bank while W.P.(C)No.12/2023 has been filed by 93 individuals stated to be Presidents of Primary Agricultural Credit Societies and Urban Cooperative Banks which were members of the Malappuram District Cooperative Bank. They challenge the constitutional validity of Section 14A of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as the 1969 Act), which was incorporated by the Kerala Co-operative Societies Amendment Act, 2019 (Act 1 of 2019) as also the provisions of Section 74H of the 1969 Act as amended by the Kerala Co-operative Societies (Amendment) Act, 2021. Consequently, there is also a challenge to the order passed by the Registrar of Co-operative Societies in terms of the provisions contained in Section 74H of the 1969 Act amalgamating the Malappuram District Cooperative Bank with the Kerala State Co-operative Bank. The grounds taken and the reliefs sought in all these writ petitions are almost identical, and they can be conveniently disposed of by common judgment. It is submitted at the Bar that W.P.(C)No.4215/2023 can be taken as the lead case. The exhibits referred to in this judgment are as they are marked in W.P.(C)No.4215/2023 unless indicated otherwise.
2. The petitioners contend that the impugned provisions are unconstitutional and beyond the legislative competence of the State Legislature. It is submitted that the provisions of the Banking Regulation Act, 1949, which apply in entirety to Co-operative Banks, after the amendment of the Banking Regulation Act, 1949, with effect from 26.6.2020, have brought Co-operative Banks under the umbrella of the Reserve Bank of India and the provisions of the Banking Regulation Act, 1949. Therefore, it is submitted that any provision providing for the amalgamation of a Co-operative Bank with another Co-operative Bank should be in tune with the provisions for amalgamation of banking companies under the provisions of the Banking Regulation Act, 1949. In other words, it is the case of the petitioners that ‘banking’ is exclusively a subject in List-1 of the Seventh Schedule of the Constitution of India, and therefore, the State Legislature was denuded of the power to make any provision for amalgamation of a Co-operative Bank with another Co-operative Bank by providing for a procedure distinct from the procedure contemplated by the Banking Regulation Act, 1949.
3. George Poonthottam, the learned senior counsel appearing for the petitioners in all these cases on the instructions of Smt.Nisha George would, with reference to the provisions of the 1969 Act and the Kerala Cooperative Societies Rules, 1969 (hereinafter referred to as the 1969 Rules), submit that the provision for merger/amalgamation of a Co-operative Society registered under the provisions of the 1969 Act was provided for under Section 14 of the 1969 Act and Rule 13 of the 1969 Rules. It is submitted that to overcome the procedure contemplated by Section 14 of the 1969 Act and Rule 13 of the 1969 Rules, the 1969 Act was amended in 2019 by incorporating Section 14A, which provided for a procedure distinct from the procedure contemplated by Section 14 in as much as Section 14A only required a simple majority of the concerned District Co-operative Bank which would take forward its process of amalgamation with the Kerala State Cooperative Bank. It is pointed out that the provisions of Section 14 contemplated a two-thirds majority. It is submitted that in the case of the Malappuram District Co-operative Bank, two general body meetings were held after the incorporation of Section 14A of the 1969 Act, as above. However, the proposal for amalgamation was defeated by a two-thirds majority, and therefore, even a simple majority contemplated by the provisions of Section 14A could not be achieved. It is submitted that Chapter XC was also incorporated in the 1969 Act by the very same amendment Act, and Section 74H (which is the only provision in Chapter XC) provided for a different procedure for the merger of District Co-operative Banks with the Kerala State Co-operative Bank. It is submitted that Section 74H, as originally incorporated, contemplated that the merger of a District Cooperative Bank with the Kerala State Co-operative Bank will take place after resolution is passed as provided for in Section 14A. It is submitted that the Malappuram District Co-operative Bank is covered under the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (hereinafter referred to as the DICGC Act) and thus guaranteed to its depositors protection as contemplated by the provisions of the said Act in respect of deposits maintained by customers. It is submitted that the DICGC Act contains a specific provision that protection under the provisions of the Act will extend to a bank only if the incorporating law includes a provision where the merger/amalgamation of a bank to which such protection is extended will be made only with the sanction in writing of the Reserve Bank of India. It is submitted that to extend the benefit of the provisions of the DICGC Act to Co-operative Banks incorporated under the 1969 Act, Section 74A was incorporated in the 1969 Act with effect from 13.3.1974 making it clear that notwithstanding any other provision contained in the 1969 Act, an order for merger/amalgamation, winding up or re-construction or order sanctioning scheme of compromise or arrangement of an insured Cooperative Bank shall be made only with the previous sanction in writing of the Reserve Bank of India. It is submitted that, after the incorporation of Section 74H, the provisions of Section 74A have been given go bye and sub-section 18 of Section 74H provides that in the case of the merger of District Co-operative Banks with the Kerala State Co-operative Bank, the provisions of Section 74H will apply as the said provision will have overriding effect on all other provisions of the 1969 Act. It is submitted that 13 District Co-operative Banks passed resolutions while under administratorship for the merger of the District Co-operative Banks with the Kerala State Co-operative Bank, and following this, all other District Co-operative Banks except the Malappuram District Co-operative Bank were merged with the Kerala State Co-operative Bank. It is submitted that since a resolution as contemplated by Section 14A of the 1969 Act could not be passed in respect of the Malappuram District Cooperative Bank, Section 74H was again amended by the Kerala Co-operative Societies (Amendment) Act, 2021 by incorporating the following provisions in Section 74H:-
“9. Amendment of section 74H.—In section 74H of the principal Act.—
(i) in sub-section (1) the following clauses shall be added at the end, namely:—
“(a) if the general body of a District Co-operative Bank has not passed the resolution under section 14A, the Registrar may, after consulting Reserve Bank of India, order merger of such District Co-operative Bank with Kerala State Co-operative Bank, on public interest. No order shall be passed under this clause unless,—
(i) a copy of the proposed order of merger has been sent to the member society or member societies concerned by registered post and published the same in two vernacular dailies having wide circulation in the district in which the society situates, for their objections or suggestions;
(ii) the Registrar shall consider the objections/suggestions, if any, received from the society or societies concerned or from any member or creditor of such society or societies within such period, being not less than fifteen days from the date of posting of the proposed order of merger, as may be specified by the Registrar in this behalf;
(b) the Registrar may after considering the objections/suggestions referred to in sub-clause (ii) of clause(a), make such modifications, in the proposed order as he may deem fit and the order shall contain such incidental, consequential and supplemental provisions as the Registrar may deem necessary, to give effect to the same;
(c) a member or creditor who has objected the proposed order under clause (b) shall have the option of withdrawing his share and/or deposits or close loans, as the case may be, on application, which shall be made to the society, to which its share, deposit or outstanding loan stands allocated, within a period of thirty days from such order;
(d) on merger all other relevant provisions in this chapter shall apply mutatis mutandis to the entities merged under clause (a).”.
(ii) after sub-section (1) following sub-section shall be added, namely:—
“(1A) On and from the date of the passing of the order of merger by the Registrar under sub-section (1)(a), all the assets and liabilities of the District Co-operative Bank as it stood immediately before the order of merger shall, without any further act, instrument or deed, stand transferred to and vested in the Kerala State Co-operative Bank.”.
It is submitted that, thereafter, Ext.P2 proceedings were issued by the Registrar of Co-operative Societies by inviting objections, if any, to the proposed merger of the Malappuram District Co-operative Bank with the Kerala State Co-operative Bank and without paying any heed to the provisions of the Banking Regulation Act, 1949 and completely overlooking the provisions of the DICGC Act, 1961 and the provisions of Section 74A of the 1969 Act, Ext.P6 order was issued merging the Malappuram District Cooperative Bank with Kerala State Co-operative Bank. The learned counsel referred to the provisions of the Banking Regulation Act, 1949, Entries 43 & 45 of List-I and Entry 32 of List-II of the Seventh Schedule of the Constitution of India to contend that Sections 14A and 74H are clearly unconstitutional and beyond the legislative competence of the State Legislature. The learned counsel placed significant emphasis on the judgment of the Constitution of Bench of the Supreme Court in Pandurang Ganpati Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Limited, (2020) 9 SCC 215 in support of his contention that even though the power to make law regulating the incorporation, regulation and winding up of Cooperative Societies is with the State Legislature, in terms of Entry 32 of List-II of the Seventh Schedule of the Constitution of India, when such Cooperative Society engages in banking activity, any order regarding its winding up, amalgamation, reconstruction (including division or re-organization) or an order sanctioning a scheme of compromise or arrangement of such bank can be made only with the permission in writing of the Reserve Bank of India and following the provisions of the Banking Regulation Act, 1949. It is submitted that a Co-operative bank would squarely be subject to the law made by Parliament (Section 44A of the Banking Regulation Act, 1949) regulating the mode of amalgamation (including division or re-organization) in view of the provisions of Section 3 of that Act, as amended w.e.f 26.6.2020.
4. Sri. K. Gopalakrishna Kurup, the learned Advocate General and Sri. P.P. Thajudeen, the learned Special Government Pleader for the Cooperative Department, appear for the State of Kerala. Adv. P.C. Sasidharan appears for the Kerala State Co-operative Bank. The learned Advocate General commenced arguments by referring to the provisions of Section 74A of the 1969 Act. He submits that Section 74A applies to insured Co-operative banks. He submits that the term ‘insured Co-operative Banks’ means a bank insured under the DICGC Act. He submits that for insurance protection under the DICGC Act; it is a condition in the DICGC Act that the amalgamation of an insured bank with any other bank or entity can be made only with the sanction in writing of the Reserve Bank of India. He refers to the provisions of the DICGC Act to contend that the only possible consequence of not obtaining the permission of the Reserve Bank of India would be that the bank may lose the status of an insured Co-operative Bank. It is submitted that this is no ground to contend that any provision of the 1969 Act providing for the amalgamation of a District Co-operative Bank with the Kerala State Co-operative Bank without the sanction in writing of the Reserve Bank of India would be unconstitutional. The learned Advocate General would contend that the petitioners have no locus standi to file these writ petitions as they have no case that they have filed these Writ Petitions representing the member Societies of the erstwhile Malappuram District Cooperative Bank and no authorisation has been produced. It is submitted that the contention raised on behalf of the petitioners that after the amendment of the Banking Regulation Act, 1949, the amalgamation of a Co-operative Society constituted under the 1969 Act and engaged in the activity of banking can be made only with reference to the provisions contained in the Banking Regulation Act, 1949 cannot be sustained. He refers to Entry 43 of List-I of the Seventh Schedule of the Constitution of India to state that the said Entry relates to trading corporations, including banking, insurance and financial corporations, but excludes Co-operative Societies. He submits that though banking is exclusively a List -1 subject under Entry 45 of List-I, the power to make law regarding incorporation, regulation and winding up of Cooperative Societies would be within the competence of the State Legislature under Entry 32 of List-II. The learned Advocate General referred to the decision of the Supreme Court in Jilubhai Nanbhai Khachar and others v. State of Gujarat and another, 1995 Supp (1) SCC 596 to contend that Entries in the Seventh Schedule are not powers but fields of legislation. It is submitted that the said decision is the authority for the proposition that the language of the respective entries must be given the most comprehensive scope of their meaning, and each general word should extend to all ancillary and subsidiary matters which can fairly and reasonably be comprehended in it. It is submitted that when the vires of an enactment is impugned, there is a presumption of its constitutionality, and if there is any difficulty in ascertaining the limits of legislative power, the difficulty must be resolved as far as possible in favour of the legislature putting the most liberal construction upon the legislative entry so that it may have the widest amplitude. Reference is made in this regard to paragraph 7 of the aforesaid judgment. The learned Advocate General then referred to the judgment of this Court in Abdurahiman P and others v. State of Kerla and others, 2020 (1)KHC 507, where this Court had upheld the provisions of Section 2(ia) and Section 14A and Section 74H (as it stood before the 2021 amendment) of the 1969 Act. It is submitted that from paragraph 9 of the said judgment, it is clear that this Court had already considered the validity of Section 2(ia) of the 1969 Act. It is submitted that almost all the contentions taken on behalf of the petitioners in the present case had been considered by the Court and repelled in Abdurahiman P (supra). It is submitted that the amendments now under challenge in the present writ petitions were preceded by a series of ordinances as the matter could not be placed before the Legislature due to difficulties brought about by the COVID-19 pandemic. It is submitted that the amendments were challenged at the ordinance stage by filing W.P.(C)No.33596/2019 and connected cases. It is submitted that by judgment dated 28.4.2021 in W.P.(C)No.33596/2019 and connected cases, this Court had repelled the challenge to the constitutional validity of the ordinance considering each and every contention now raised in these writ petitions. It is submitted that the judgment in W.P.(C)No.33596/2019 and connected cases were challenged before a Division Bench by filing W.A.No.708/2021 and connected appeals. It is submitted that these writ appeals were disposed of by judgment dated 22.5.2022, leaving it open to the appellants to challenge the provisions of the amending Act as the ordinance which was under challenge in W.P.(C)No.33596/2019 and connected cases had by then been replaced by the amending Act. The learned Advocate General relied on the judgment of the Supreme Court in Jayant Verma and others v. Union of India and other, (2018) 4 SCC 743 to contend for the proposition that the provisions of the Banking Regulation Act, 1949, to the extent it encroaches into the fields exclusively reserved to the State Legislature in List-II, may be inoperative. The learned Advocate General then referred to the judgment of the Supreme Court in Ram Tawakya Singh v. State of Bihar and others, (2013) 16 SCC 206 to submit that the words ‘in consultation with the Reserve Bank of India’ occurring in Section 74H of the 1961 Act, after its amendment by the amendment Act 2021, does not mean concurrence. The learned Advocate General states that in paragraph 29 of the Ram Tawakya Singh (supra), the Supreme Court has considered the concept of consultation and has held that where the law requires an authority to take a decision in the matter in consultation with another, it only means that there must be a conference of two or more minds or impact of two or more minds in respect of a topic/subject. He lays emphasis on the last line in paragraph 29 of the judgment to contend that the ultimate decision is with the consultor though he will not generally be ignoring the advice of the consultee. The learned Advocate General points out that the amendments relied on by the petitioners in the Banking Regulation Act, 1949, came into force only on 1.4.2021 while the amendments to Section 74H came into force with effect from 11.4.2020.
5. Sri. P. C. Sasidharan, the learned counsel appearing for the State Co-operative Bank, would endorse the arguments of the learned Advocate General and further contend that the provisions of Section 13C of DICGC Act, 1961 read with Section 2(gg) of the said Act would indicate that the only effect of not obtaining the sanction in writing of the Reserve Bank of India for the merger of the Malappuram District Co-operative Bank with the State Cooperative Bank would be that the Malappuram District C0-operative Bank may not be an eligible Co-operative Bank for the purposes of the DICGC Act, 1961.
6. Mrs. Sumathi Dandapani, the learned senior counsel appearing for the Reserve Bank of India, ably assisted by Adv. Vishnu Sharesh would refer to the counter affidavits filed in W.P.(C) No.4215/2023 to contend that the provisions of Section 3 of the Banking Regulation Act, 1949 read with provisions of Section 44A and the contents of Ext.R4(a) [letter dated 3.10.2018 granting in-principle approval for amalgamation of District Cooperative Banks with the State Co-operative Bank] would indicate that the process for amalgamation of the Malappuram District Co-operative Bank with the State Co-operative Bank is contrary to the provisions contained in the Banking Regulation Act, 1949. It is submitted that both the State Co-operative Bank and the Malappuram District Co-operative Bank are licensed under the Banking Regulation Act, 1949 and therefore, any order of amalgamation of the Malappuram District Co-operative Bank with the State Co-operative Bank could have only been in accordance with the provisions of the Banking Regulation Act, 1949 and the terms of the in-principle approval granted by the Reserve Bank of India. It is submitted that one of the conditions imposed by the Reserve Bank of India was clearance from the Deposit Interest Credit Guarantee Corporation. It is submitted that in respect of the merger of all other District Co-operative Banks with the State Co-operative Bank, the permission of the Deposit Interest Credit Guarantee Corporation was taken. The learned senior counsel refers extensively to Ext.R4(c) which are the terms of a circular issued by the Reserve Bank of India to all State and Central Cooperative Banks on 24.5.2021 containing guidelines for the merger of District Co-operative Banks with the State Co-operative Banks. It is submitted that the provisions of the said circular make it clear that the merger and amalgamation of a District Co-operative Bank with the State Co-operative Bank have to be sanctioned by the Reserve Bank of India in terms of the provisions contained in Section 44A read with Section 56 of the Banking Regulation Act, 1949. Reference is then made to Ext.R4(f) [letter dated 12.1.2023] produced along with the additional counter affidavit filed by the Reserve Bank of India to establish that even after the incorporation of Section 74H, the Registrar of Co-operative Societies had sought approval of the Reserve Bank of India for the merger of Malappuram District Co-operative Bank with the State Co-operative Bank. Reference is also made to Ext.R4(e) where the State Co-operative Bank had sought advice from the Reserve Bank of India regarding payment of DICGC premium. Reference is made to paragraphs 31 and 32 of the counter affidavit dated 28.5.2023 to state that the provisions of Section 44A of the Banking Regulation Act, 1949 would squarely apply to Co-operative Banks. The provisions of the DICGC Act, 1961 are referred to and it is pointed out that the provisions of the Act intend to provide protection to depositors of eligible banks and if the Malappuram District Co-operative Bank is not an eligible bank, the interest of depositors will be affected. It is submitted that in terms of Entry 43 of List-I, winding up, amalgamation etc. of banking companies is squarely within the competence of the Union Parliament and therefore, a Co-operative Society, which is a bank, can only be amalgamated in tune with the provisions contained in the Central legislation (Banking Regulation Act, 1949).
7. Having heard the learned senior counsel appearing for the petitioners, the learned Advocate General for the State, the learned senior counsel appearing for the Reserve Bank of India and the learned counsel appearing for the State Co-operative Bank, I am of the opinion that the following issues arise for determination in this case:-
i) Are the impugned provisions of the Kerala Co-operative Societies Act, 1969 liable to be struck down as being beyond the legislative competence of the State Legislature? And;
ii) What is the effect of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, on the provisions of Section 74H of the 1969 Act ? In other words, are the provisions of Section 74H inconsistent with the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and liable to be struck down on that ground?
Re-issue No.1:-
8. A plenary legislation can be declared unconstitutional by the Supreme Court under Art.32 of the Constitution of India and by the High Courts under Art.226 of the Constitution of India only on the following grounds:-
i) Violation of the fundamental rights guaranteed under Part III of the Constitution of India;
ii) Lack of legislative competence;
iii) Violation of basic structure; and
iv) Manifest arbitrariness meaning “something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. – See Shayara Bano v. Union of India; (2017) 9 SCC 1
9. When the provisions of legislative enactment are questioned before the Court, the Court has to examine the matter with reference to the aforesaid grounds. The legislature is never before the Court. The counter-affidavits filed by the executive and other authorities do not represent the views of the legislature. They only represent the understanding of the executive or the authority regarding the law made by the Legislature. In Sanjeev Coke Manufacturing Company v. M/s. Bharat Coking Coal Limited and another, (1983) 1 SCC 147, it was held:-
“No one may speak for the Parliament and Parliament is never before the court. After Parliament has said what it intends to say, only the court may say what the Parliament meant to say. None else. Once a statute leaves Parliament House, the Court is the only authentic voice which may echo (interpret) the Parliament. This the court will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding of what Parliament has said or intended to say or what they think was Parliament’s object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for Parliament. No Act of Parliament may be struck down because of the understanding or misunderstanding of parliamentary intention by the executive Government or because their (the Government’s) spokesmen do not bring out relevant circumstances but indulge in empty and self-defeating affidavits. They do not and they cannot bind Parliament. Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said.”
Therefore, it is not necessary to set out in any detail the views expressed by the State and the Reserve Bank of India through counter affidavits filed in this Court except to the extent they aid or assist this Court in considering the validity of the impugned legislation. As already noticed, the only ground raised in these writ petitions to challenge the constitutional validity of the impugned provisions of the 1969 Act is lack of legislative competence and it was argued with reference to Entry 45 of List-I of Seventh Schedule to the Constitution of India and with reference to the amendment made to Section 3 of the Banking Regulation Act, 1949, (in 2020) that Co-operative banks engaged in the business of banking and using the words ‘bank, banker and banking’ and acting as drawee of the cheques will squarely fall within the legislative control of law made under Entry 45 of List-I (the Banking Regulation Act, 1949) and any provision in the law made with reference to Entry 32 of List-II cannot, therefore, provide for the amalgamation of a Cooperative Bank contrary to and against the provisions contained in the Banking Regulation Act, 1949.
10. Entry 43 of List-I of the Seventh Schedule to the Constitution of India deals with the incorporation, regulation and winding up of Corporations including banking, insurance and financial corporations but not including Co-operative Societies. Entry 45 of List I deals with the subject of banking. A reading of the aforesaid two Entries of List-I would clearly suggest that matters relating to incorporation and regulation and winding up of all sorts of corporations including banking corporations and any law touching upon the aspect of banking would be exclusively subject to law made by Union Parliament. However, Entry 43 of List-I specifically excludes Co-operative Societies. Therefore, in respect of a banking company other than a Co-operative Society, the aspect of incorporation, regulation and winding up as well as any law regulating banking activities would both be subject to law made by Parliament with reference to Entries 43 and 45 of List-I. To take the example of the State Bank of India, the said bank is a banking company incorporated under the State Bank of India Act, 1955. It is a company engaged in the business of banking. Therefore, all matters relating to the incorporation, regulation and winding up of the State Bank of India as well as its banking activities would both be subject to laws made by the Union Parliament with reference to Entries 43 and 45 of List-I. In other words, the Banking Regulation Act, 1949 or any other law made by parliament could regulate the affairs of banking as well as aspects relating to incorporation, regulation and winding up of banking corporations with reference to Entries 43 and 45 of List-I. However, when it comes to a Co-operative Society engaging itself in the business of banking, the laws relating to incorporation, regulation and winding up of such Co-operative Societies would be subject only to laws made by the State Legislature with reference to Entry 32 of List-II. Entries 43 and 45 in List-I and Entry 32 in List-II are extracted hereunder:
