State co-operative bank investment restrictions coexist with banking law; mandamus can compel action on statutory breach.

Section 71 of the Gujarat Co-operative Societies Act, 1961, which restricts investment of co-operative society and co-operative bank funds, was found not to be repugnant to Sections 5(b) and 6(1)(a) of the Banking Regulation Act, 1949. The central Act operates in addition to, and not in derogation of, other laws, and Presidential assent under Article 254(2) supported coexistence of the two enactments. Applying the test of direct and irreconcilable conflict, the provisions were held capable of operating together, so the challenge to Section 71 failed. A writ of mandamus may issue to compel authorities to act on a statutory breach where a public duty is shown and the competent authority does not act, so the High Court's direction was sustained.

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Issues: (i) Whether Section 71 of the Gujarat Co-operative Societies Act, 1961 was repugnant to Sections 5(b) and 6(1)(a) of the Banking Regulation Act, 1949 so as to permit the co-operative bank to invest funds contrary to the State Act. (ii) Whether the High Court was justified in issuing a writ of mandamus directing the authorities to take action for breach of Section 71 of the Gujarat Co-operative Societies Act, 1961.

Issue (i): Whether Section 71 of the Gujarat Co-operative Societies Act, 1961 was repugnant to Sections 5(b) and 6(1)(a) of the Banking Regulation Act, 1949 so as to permit the co-operative bank to invest funds contrary to the State Act.

Analysis: The statutory scheme showed that the Banking Regulation Act, 1949 was expressly stated to operate in addition to, and not in derogation of, other laws in force. Section 71 of the State Act prescribed a restrictive mode of investment for co-operative societies and co-operative banks, and the President's assent under Article 254(2) negatived any inference of repugnancy. Applying the test of direct and irreconcilable conflict, the provisions were capable of co-existence and did not compel obedience to one law in breach of the other.

Conclusion: No repugnancy or inconsistency existed between the two enactments, and the challenge to Section 71 failed.

Issue (ii): Whether the High Court was justified in issuing a writ of mandamus directing the authorities to take action for breach of Section 71 of the Gujarat Co-operative Societies Act, 1961.

Analysis: The complaint alleged violation of the statutory investment norms and inaction by the competent authorities. Where a statutory breach is brought to notice and the authorities fail to discharge their duty, judicial intervention by mandamus is permissible to compel performance of the public duty imposed by law.

Conclusion: The writ of mandamus was validly issued and the High Court's order called for no interference.

Final Conclusion: The appeals were found to be without merit, the statutory challenge failed, and the direction to initiate action for breach of the investment restrictions was sustained.

Ratio Decidendi: A State law regulating co-operative bank investments is not repugnant to the Banking Regulation Act where the central law operates in addition to other laws and the State law has received Presidential assent under Article 254(2); mandamus may issue to enforce compliance with a statutory duty when the competent authorities fail to act.

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