Mandatory RBI consultation before superseding a cooperative bank board; breach justifies writ relief despite alternate remedy.

A cooperative bank's elected board could not be superseded unless the governing statute's requirement of previous consultation with the Reserve Bank of India was satisfied. The consultation had to be real and effective, with the relevant materials, the board's reply, and the proposed action placed before the Reserve Bank so it could form an independent view; mere forwarding of a show-cause notice was insufficient. On the facts, that mandatory condition was not met, and the grounds relied on were found too general to justify supersession. The availability of an alternative statutory appeal did not bar writ relief where the action was unlawful and contrary to a mandatory statutory safeguard.

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Issues: (i) Whether the order superseding the Board of Directors of the cooperative bank was invalid for want of previous consultation with the Reserve Bank of India under the governing statute. (ii) Whether the availability of an appeal under the Act barred the High Court from exercising jurisdiction under Article 226 of the Constitution of India.

Issue (i): Whether the order superseding the Board of Directors of the cooperative bank was invalid for want of previous consultation with the Reserve Bank of India under the governing statute.

Analysis: The statutory scheme made previous consultation with the Reserve Bank of India a mandatory condition before an order of supersession could be passed against a cooperative bank. The consultation contemplated was not a mere forwarding of the show-cause notice, but a meaningful and effective consultation requiring the materials, the reply of the Board, and the proposed action to be placed before the Reserve Bank so that it could form an independent view. On the facts, the Registrar did not comply with that requirement, and the grounds in the notice were also found to be largely general or relating to earlier committees and not grave enough to justify supersession.

Conclusion: The supersession order was invalid and liable to be set aside.

Issue (ii): Whether the availability of an appeal under the Act barred the High Court from exercising jurisdiction under Article 226 of the Constitution of India.

Analysis: The existence of an alternative remedy does not operate as an absolute bar where the impugned action is arbitrary, unlawful, and in clear breach of a mandatory statutory requirement. Since the supersession was found to be contrary to the statute and to have been passed without lawful consultation, the High Court was justified in entertaining the writ petition and granting relief.

Conclusion: The High Court's exercise of writ jurisdiction was upheld and the alternative remedy did not bar relief.

Final Conclusion: The appeals failed, the supersession was quashed, and the elected Board was directed to be restored for the remainder of its lawful term.

Ratio Decidendi: Where a statute prohibits supersession of a cooperative bank's elected board without previous consultation with the Reserve Bank of India, such consultation is a mandatory condition precedent and must be real, effective, and based on the relevant materials; failure to comply renders the supersession illegal, and writ jurisdiction may be exercised notwithstanding an alternate statutory remedy.

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