Co-operative bank debt recovery belongs to banking law, placing such claims within Debts Recovery Tribunal jurisdiction.

A co-operative bank carrying on banking business was treated as a bank and banking company for purposes of the Banking Regulation Act, 1949 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Claims for recovery of debts arising from such banking activity and exceeding the statutory limit fell within the exclusive jurisdiction of the Debts Recovery Tribunal, so the Andhra Pradesh Co-operative Societies Act could not sustain adjudication or recovery by the Registrar in that field. Applying pith and substance, the subject was held to lie in the Union field of banking, and the conflicting State recovery provisions were read down or severed. The 2002 notification did not alter the 1993 Act, and estoppel could not confer jurisdiction.

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Issues: (i) Whether a co-operative bank is a bank and banking company within the meaning of the Banking Regulation Act, 1949 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. (ii) Whether claims by co-operative banks for recovery of debts exceeding the statutory threshold fall within the exclusive jurisdiction of the Debts Recovery Tribunal, and whether sections 61 and 71 of the Andhra Pradesh Co-operative Societies Act, 1964 can sustain such adjudication and recovery. (iii) Whether the subject of recovery of dues of co-operative banks falls within the State legislative field of co-operative societies or within the Union field of banking. (iv) Whether the Central Government notification issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 controls the interpretation of the 1993 Act, and whether the petitioners were estopped from questioning jurisdiction.

Issue (i): Whether a co-operative bank is a bank and banking company within the meaning of the Banking Regulation Act, 1949 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis: A co-operative bank which carries on banking business, uses the expression bank in its name, and falls outside the excluded categories under the Banking Regulation Act, 1949 is covered by the definition of co-operative bank in section 5(cci) of that Act. By section 56, references to a banking company are to be construed as references to a co-operative bank. The 1993 Act adopts the definition of banking company from the 1949 Act, and the expression must be read as amended and as contextually applied through section 56.

Conclusion: The respondent co-operative banks are banks and banking companies for the purposes of the 1993 Act.

Issue (ii): Whether claims by co-operative banks for recovery of debts exceeding the statutory threshold fall within the exclusive jurisdiction of the Debts Recovery Tribunal, and whether sections 61 and 71 of the Andhra Pradesh Co-operative Societies Act, 1964 can sustain such adjudication and recovery.

Analysis: Recovery of debt due to a bank is part of the core banking function. Under sections 17 and 18 of the 1993 Act, the Debts Recovery Tribunal has exclusive jurisdiction over such matters within the monetary limits prescribed by section 1(4). The State Act provisions enabling the Registrar to adjudicate disputes and issue recovery certificates cannot operate in that field when the claim is by a co-operative bank for dues arising out of banking business. Sections 61 and 71 of the 1964 Act were therefore required to be narrowly construed, and the words authorising financing bank recovery in section 71(1) could not stand.

Conclusion: The Debts Recovery Tribunal alone has jurisdiction, and the Registrar lacks authority to entertain or determine such claims or issue recovery certificates for them.

Issue (iii): Whether the subject of recovery of dues of co-operative banks falls within the State legislative field of co-operative societies or within the Union field of banking.

Analysis: Applying pith and substance, harmonious construction, and the doctrine of incidental and ancillary powers, the essential subject of recovery of monies due to banks is intrinsically connected with banking and not merely incidental to regulation of co-operative societies. Entry 45 of List I covers banking as a core Union field, while entry 32 of List II cannot be read to include recovery of bank dues in a manner that trenches upon that core. Where the State law overlaps, the Union law prevails. The offending words in section 71(1) were severable, and the remaining provisions of sections 61 and 71 had to be read down to exclude recovery claims of co-operative banks arising from banking business.

Conclusion: The subject belongs to the Union field of banking, and the impugned State provisions are invalid to the extent they confer such recovery jurisdiction on the Registrar.

Issue (iv): Whether the Central Government notification issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 controls the interpretation of the 1993 Act, and whether the petitioners were estopped from questioning jurisdiction.

Analysis: The notification under the 2002 Act was treated as an executive measure that could not govern the meaning of the 1993 Act. It could not be used as a reliable guide to exclude co-operative banks from the 1993 Act. The objection based on acquiescence or participation before the Registrar also failed because jurisdictional competence and constitutional validity cannot be conferred by waiver or estoppel.

Conclusion: The notification did not alter the meaning of the 1993 Act, and the estoppel objection was rejected.

Final Conclusion: Recovery of dues arising from the banking business of co-operative banks lies within the exclusive Union field, the Debts Recovery Tribunal mechanism governs such claims, and the State recovery machinery cannot be used for those claims. The writ petitions and connected matters were therefore allowed, with consequential directions.

Ratio Decidendi: Recovery of debts due to a co-operative bank from its members, when arising from banking business, is an integral part of the banking field under entry 45 of List I and cannot be assigned to the State co-operative societies field by characterising it as merely incidental or ancillary.

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