Case Law Details
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.
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