Bhaskar Mukherjee & Anr. Vs State of West Bengal & Ors. (Calcutta High Court)
Summary: The Calcutta High Court allowed the appeal arising from the winding up of Pranabananda Cooperative Bank Limited and quashed the Registrar of Cooperative Societies’ order dated August 6, 2002. The appellant no. 1 was a member of the institution, which originated as Pranabananda Cooperative Credit Society and was later included by the Reserve Bank of India in the list of primary cooperative banks. Its application for a banking licence under Section 22 of the Banking Regulation Act, 1949 was rejected by RBI on January 25, 2001 after inspections disclosed serious financial and regulatory deficiencies. By a separate order of the same date, RBI required the Registrar to wind up the institution under Sections 99 and 100 read with Section 145 of the West Bengal Cooperative Societies Act, 1983 and Section 13D(1) of the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
The Registrar thereafter ordered winding up on August 6, 2002. The dispute travelled repeatedly through the Cooperative Tribunal and the High Court, culminating in the present appeal against the Single Judge’s order dated June 4, 2018, which had sustained the winding up. The Division Bench held that the Registrar was required to act within the four corners of the 1983 Act. Section 99(1) contemplated specified statutory preconditions, including an inspection under Section 92. Although the State relied upon a 1999 inspection, it did not establish that the inspection report had been served upon the appellants. The Court drew an adverse inference and concluded that the report had not been served before the winding-up order.
