Co-operative banks may invoke the securitisation remedy as an additional recovery mechanism notwithstanding other recovery statutes.

A co-operative bank could be notified as a "bank" under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, because the Act uses a broad definition of bank and allows the Central Government to specify additional banks by notification. The Act also provides an independent and additional recovery remedy, operating notwithstanding the Maharashtra Co-operative Societies Act, 1960 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The challenge based on the Banking Regulation Act and legislative competence was rejected, applying the presumption of constitutionality and the pith and substance doctrine. The recovery measures under the Act were therefore upheld.

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Issues: Whether the notification dated 28-1-2003 validly brought co-operative banks within the expression "bank" under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and whether the remedy under that Act could be invoked notwithstanding the Maharashtra Co-operative Societies Act, 1960 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis: The distinction between "bank" and "banking company" under the Securitisation Act was material. The Act defines "bank" broadly and expressly permits the Central Government to specify other banks by notification. It also defines "secured creditor" in wider terms and makes the remedy under the Act additional to, and not in derogation of, other laws in force. The challenge based on the Banking Regulation Act failed because co-operative banks are separately recognised in that Act, and the legislative scheme did not require every bank to be a banking company. The contention that the Securitisation Act could not operate alongside the Co-operative Societies Act or the RDB Act was also rejected, since the Securitisation Act creates an independent remedy for secured creditors and its saving clause expressly extends to other laws. The constitutional objection based on legislative competence was rejected on the principles of presumption of constitutionality and pith and substance. The prior Supreme Court ruling on the general validity of the Securitisation Act did not assist the petitioners.

Conclusion: The notification was upheld, and co-operative banks were held entitled to proceed under the Securitisation Act. The challenge to the recovery action failed.

Final Conclusion: The petitioners could not restrain the recovery measures taken by the co-operative bank under the Securitisation Act, and the writ petition was dismissed.

Ratio Decidendi: A co-operative bank may be notified as a "bank" under the Securitisation Act, and the Act operates as an independent and additional remedy notwithstanding other recovery statutes.

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