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2015 (6) TMI 150
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....g carried out by various Credit Cooperative Societies, spread over in the State of Rajasthan and so also in other states, so as to protect healthy banking system, established by the Reserve Bank of India. (ii) By an appropriate writ, order or direction, the respondent no.1 to 8 may very kindly be directed to take necessary action in the matter, so that, illegal activities, being carried out, in the nature of financial and banking activities, by the respondent No.9 to 12 societies and other such credit cooperative societies which are either registered under Rajasthan Cooperative Societies Act, 2001 or under The Multi-State Cooperative Societies Act, 2002, could be stopped and necessary directions, may kindly be issued for refund of money of public, with interest, who have invested money with these societies or a committee may kindly be directed to be appointed under supervision of Reserve Bank of India, to find out the ways for solution of the problem. (iii) By an appropriate writ, order or direction, the registration certificate of the private respondent credit cooperative societies, and others if found doing banking activities, may kindly be seized and the properties of such....
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....Credit Cooperative Society. It is alleged that several FIRs have been lodged against the petitioner and thus, he is not the person who is competent under the Rules of the Court to file Public Interest Litigation. 5. In response to the preliminary objection raised by learned counsel appearing for the respondents Nos.9 to 12, the petitioner submits that he was the Chairman of one of such society. The business was, however, closed down and that all accounts have been settled. It is stated that he was in legitimate business of cooperative society but since some of his employees had committed fraud, his business had to be closed. He is no longer in any such business for last many years and that in respect of each of FIRs on the deposit of money, final reports have been submitted. It is submitted that though the petitioner may appear to be a concerned person but since he has suffered himself, he wishes to bring notice of the Court the ill-deeds of the other cooperative societies who are carrying on banking business. He wants to save general public from the losses which they may suffer in the hands of unscrupulous persons. 6. We do not find that the petitioner has approached the Cou....
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....i-State Cooperative Society cannot carry out banking business until and unless a licence is issued by the Reserve Bank of India under the Banking Regulation Act. The relevant paras 18 and 46 are quoted below:- "18.In view of the above, we hold that the RBI by virtue of its power under Section 22 cannot grant a license to any cooperative 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 NABARD Act be first obtained......." "46.It is to be seen that the RBI can only give a license to a state co- operative bank which has been so declared by a particular State. As the definition of co-operative societies in the NABARD Act is restricted to co-operative societies registered under State Acts and as the provision is for a State to declare a co-operative society as a "state co- operative bank" the license, which can be issued by the RBI, can only be in respect of that State. Merely because one State declares a co- operative society as a "state cooperative bank" would not enable the RBI to issue that society a license to carry on banking business in other States or in the rest of....
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....n Apex Co-operative Bank of Urban Bank of Maharashtra and Goa Ltd. v. Maharashtra State Co-operative Bank Ltd. & Ors., reported in AIR 2004 SC 141, passed an interim order in following terms :- "As an interim measure, until further orders, the Central Registrar, Multi-State Cooperative Society, New Delhi, the Registrar, Cooperative Society, Rajasthan, Jaipur, the District Collectors, Barmer, Jaisalmer and Jodhpur and Director General of Police, Rajasthan will ensure that respondents Nos.9 to 12 or any other Multi-State Cooperative Society or the State Cooperative Society do not carry on any banking business in the State of Rajasthan, unless they have a licence under the Banking Regulation Act, 1949. These cooperative societies will not be allowed to carry on banking business namely, to take deposits, opening branches for its banking activities, installation and running of ATMs and distributing loans to the depositors. The respondents will not allow any banking business by the Multi-State Cooperative Society and the District Cooperative Society unless they have licence from the Reserve Bank of India under the Banking Regulation Act, 1949." As desired under the order aforesaid,....
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....ies even to carry on activities for which they are legally entitled as per applicable by-laws, the Multi State Cooperative Societies Act, 2002 and the Rajasthan Cooperative Societies Act, 2001, as the case may be. We have considered the arguments advanced. The petitioner has approached this Court to stop banking activities by the respondent cooperative societies who are not having requisite licence as per provisions of the Banking Regulation Act, 1949. Some of the advertisements published in different news papers on behalf of respondents Sanjivani Credit Cooperative Society Ltd. and Navjivan Credit Cooperative Society Ltd. indicate about involvement of the societies in banking activities, however, at this stage we do not want to give any definite finding in this regard but certainly we desire to record our displeasure about such misleading publicity undertaken by the societies. We are also of considered opinion that the respondent societies are not entitled to undertake any banking activity without having licence under the Act of 1949. Looking to the factual position noticed above we deem it appropriate to dispose of the applications with following directions as interim me....
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....ative societies falling within their jurisdiction and also to report this Court about their functioning. Put up on 20.04.2015." 5. It is stated by learned counsel appearing for the respondent - Cooperative Societies, in which the respondent No.9 is Multi-State Cooperative Society that they are carrying on business strictly in accordance with the provisions of the Rajasthan Cooperative Societies Act, 2001 and the Multi-State Cooperative Societies Act, 2002, under which, they are entitled on the registration of the Cooperative Society and a Multi-State Cooperative Society to accept the deposits from its members. Reference has been made to the provisions of Section 50 and 51 of the Rajasthan Cooperative Societies Act, 2001 and the provisions of Section 49(2)(h)(k) and (l) and Section 67 of the Multi-State Cooperative Societies Act, 2002 as well as the Byelaws of the Cooperative Societies registered under the Rajasthan Cooperative Societies Act, 2001 and with the Central Registrar under the Multi-State Cooperative Societies Act, 2002 to justify the deposits and borrowings. 6. Learned counsel appearing for the petitioner submits that respondents Cooperative Societies are not Co....
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....ension Yojana etc., which are widely advertised in general public is attracted to deposit money on the attractive prizes of Cell Phone, Motor Cycle, Car etc. These deposits are not secured. There is no security in terms of RBI and SEBI guidelines for investors. The Regulations such as Cash Reserve Ratio and Statutory Liquidity Ratio are not applicable to Cooperative and Multi State Cooperative Socities leaving investors' fund at risk. Although it is stated that nominal members are not given loans, most of the loans are given to the nominal members for which the complaints have been made and enquiries are pending with the Registrar, Rajasthan Cooperative Societies and the Central Registrar, Cooperative Societies, in which, investigations having not been made. 8. It is submitted by learned counsel appearing for the Registrar, Cooperative Societies and the Central Registrar, Cooperative Societies that they do not have any machinery to investigate the complaints and to carry out the investigation. They hand over these complaints to the machinery of the State Government with no effective steps taken so far. 9. Learned counsel appearing for the Reserve Bank of India has categorical....
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....d 21.11.2014 was also issued to the Central Registrar. A copy of communication dated 21.11.2014 is hereby produced and marked as ANNEXURE-R/3-4. 6. That the Joint Registrar (Banking), Office of Registrar, Co-operative Societies, Rajasthan sent a communication dated 27.11.2014 and alongwith the said communication the details regarding Co-operative Societies situated in various Districts of all the seven Divisions were sent to the RBI. It becomes apparent from this communication that information from certain units were still not received. The said communication was received at the Jaipur office of the RBI on 16.12.2014. Copy of communication dated 27.11.2014 is hereby produced and marked as ANNEXURE-R/3-5. 7. That after due examination entire information as provided the Registrar, Co-operative Societies, Rajasthan, it was found that five societies were accepting deposits from non-members. Details regarding paid-up capital of two such societies were also available whereas, the said information regarding other three societies was not available. The respondent Bank compiles the relevant information and the same has been sent to the Central Office vide communication dated 06.01.201....
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....e-laws. He submits that activity of the respondent No.9 in accepting deposit and giving loans is not a banking activity as deposits are not accepted from public. He submits that Cooperative Society is formed for the benefits of members and that a Cooperative Society can carry on its business within the purview of the provisions of the Rajasthan Cooperative Societies Act, 2001 and the Multi-State Cooperative Societies Act, 2002 and its registered bye-laws. It does not require a licence under the Act of 1949. It is submitted that the petitioner was also running a Cooperative Society in which deposits were accepted. This Court has directed an enquiry into the affairs of the petitioner both as Director of the Cooperative Society and as Advocate and that Superintendent of Police is carrying out the enquiry. The petitioner has not filed balancesheet and the income tax returns despite direction issued by the Court and thus, he is not entitled to maintain the writ petition. 13. After hearing learned counsels for the parties, we are of the view that activities carried out by the respondents Nos.9 to 12 as Cooperative Societies may be within the purview of legitimate business under the Ra....
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....discontinue accepting deposit from nominal members. The letter dated 26.03.2014 is quoted as under:- "OFFICE OF THE CENTRAL REGISTRAR OF CO-OPERATIVE SOCIETIES ORDER 1. Vide order of even number dated 29th May, 2013, certain instructions were issued for registration and extension of area of operation of Multi-State Cooperative Societies having objects and functioning relating to thrift and credit. 2. In order to protect the interest of members and public, it has been decided to extend the applicability of the instructions issued vide this Department's order of even number dated 29th May, 2013 to the multipurpose cooperative societies. 3. It has also been decided that, henceforth, the primary multi state cooperative societies shall be registered initially with only two contiguous states, UTs as area of operation. After starting the operation, the society may submit proposal for amendment of its byelaws for extending the area of operation. 4. The existing multipurpose and credit societies shall have to submit N.O.C. from the concerned Registrars for extending type of activities and area of operation. 5. Reserve Bank of India (RBI) is of the view that acceptan....