LexTHE APEX CO-OPERATIVE BANK OF URBAN BANK OF MAHARASHTRA AND GOA LTD. versus THE MAHARASHTRA STATE CO-OPERATIVE BANK LTD. AND ORS.
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- THE APEX CO-OPERATIVE BANK OF URBAN BANK OF MAHARASHTRA AND GOA LTD. v. THE MAHARASHTRA ST A TE CO-OPERATIVE BANK LTD. AND ORS. OCTOBER 29, 2003 (S.N. VARIA VA AND H.K. SEMA, JJ.] A B National Bank for Agriculture and Rural Development Act, 1981- Section 2(4)-Banking Regulation Act, 1949-Multi State Co-operative C Societies Act, 1984-Co-operative Societies Act, 1912-Cooperative Bank Registered under Multi State Act-Grant of banking licence by RBI to carry on activity in other States as well, where the same is not recognized as State Co-operative Bank-Its declaration as State Cooperative Bank under NA BARD Act-Propriety of grant of licence and the declaration by State- D Held : RBI cannot give license to a co-operative Bank unless the same is declared as State Co-operative Bank under NABARD Act~tate could not have declared the Bank as State Co-operative Bank under NABARD Ad as the same was neither registered under Co-operative Societies Ad, 1912 nor under local or State laws relating to Co-operative societies~ociety registered under Multi-State Act cannot be declared as State Cooperative E Bank as the same is not local law-As the definition of Co-operative Societies is restricted to Co-operative Societies under State Laws, RBI can give licence only in respect of the State where it is declared as State Co- operative Bank and not for operation in other States-Multi-unit Co- operative Societies Act, 1942. F Interpretation of Statute : Meaning of a term-Interpretation of~When a term is specifically defined in a statute, for the purposes of that statute that term cannot !Jear G a meaning assigned to it in another statute-Where the legislature intends to restrict the scope of a provision, the same cannot be expanded by process of interpretation. Appellant Bank made application to RBI to start Apex Bank. RBI by its letter stated that it required registration under Multi State Co- H 1071 1072 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R. A operative Societies Act, 1984. Pursuant to letter of R.B.I. they got registered as Multi State Co-operative Society under Multi State Act. However, they were not registered under Banking Regulation Act, 1949. State by Notification declared them as State Co-operative Bank within the meaning of Section 2(u) of National Bank for Agriculture B and Rural Development Act, 1981 (NABARD Act). By two orders, Commissioner for Co-operation and Registrar of Co-operative Societies directed deployment of funds by all Urban Co-operative Banks to the appellant. RBI gave banking licence to appellants u/ss. 22(1) r/w. 56(o) of Banking Regulation Act for the State of Maharashtra and Goa. C Respondent No. 1 challenged the Notification, the two directions and grant of licence by RBI by filing Writ Petition in High Court wherein the Notification and the two orders were quashed and set- aside and the licence was permitted to remain operative till fresh decision was taken by RBI. High Court also concluded that "carrying D on business" must mean carrying on banking business. In appeal to this Court, the questions for consideratfon were : (a) whether a co-operative society registered under the Multi State Act can be granted a licence by the RBI to commence and carry on banking E business, (b) whether a co-operative society registered under the Multi - State Ad can be recognized and notified by the State Government as a State Co-operative Bank and (c) whether a co-operative society registered under the Multi State Act, which has been recognized, and notified by one State Government as a State Co-operative Bank for that State, can be granted a licence by the RBI to commence and carry F on banking activities in other States in which it has not been recognized as a State Co-operative Bank. Disposing of the appeals, the Court G HELD : 1. RBI by virtue of its power under Section 22 of the Banking Regulation Act, 1949 cannot grant a licence to any .co- operative bank unless it is a state co-operative bank or a central'co- operative bank or a primary co-operative bank. It would be necessary that a declaration under the National Bank for Agriculture and Rural H Development Act, 1981 (NABARD) be first obtained. RBI can only give APEX CO-OP. BANK OF URBAN BANK OF MAHARASHTRA AND GOA LTD.,. MAHARASHTRA ~TATE j 073 OPERATIVE BANK. a licence as provided in Section 22(1) i.e. to a co-operative bank. The A term "co-operative bank" has been defined in the Bankin
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