TaxTMI 
TaxTMI 
1970 (1) TMI 83
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....g Ordinance and the Amending Act, which have replaced it are ultra vires the Constitution so far as the Banking Co-operative Societies are concerned. (2) That the exercise of the power by the State Legislature in enacting the Amending Act and the promulgation of the Ordinance by the Governor are a colourable exercise of power so far as the Banking Cooperative Societies are concerned. (3) That the Ordinance as well as the Amending Act are violative of Articles 14 and 19 of the Constitution of India. 2. It may be mentioned that only the first ground of attack was really pressed. The two grounds of attack have been merely stated to be rejected. We have been unable to see how the Act or the Ordinance are a colourable exercise of power, whereas the complete answer to the 3rd ground of attack is furnished by Article 31A of the Constitution of India. Therefore, we only propose to deal with the facts of Civil Writ Petition No. 2820 of 1969 in order to bring out the controversy pertaining to the first ground. It is conceded that whatever our decision is in this petition it will conclude the other three petitions. We have not thought it necessary to advert to the facts o....
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.... winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies. No. 44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities. No. 45. Banking. "List II. Entry No. 32. Incorporation, regulation and winding up of corporations, other than those specified in List I, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; co-operative societies." 5. On the basis of these entries the argument of the learned counsel for the Petitioners is that entry No. 43 clearly confers the power of regulation of Corporations including Corporations doing banking business in the Central Parliament and only those Co-operative Societies are excluded from entry No. 43 which are not doing the business of banking. This fact, according to the learned counsel, finds further support if entry No. 32, List II is taken into consideration. That entry only brings those Corporations within the purview of the legislative power of the State Legislature which ....
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....h is in these terms: - "Banking, that is to say, the conduct of banking business by corporations other than corporations owned or controlled by a Federated State and carrying on business only within that State." 9. This entry more or less corresponds to entry No. 45 in List I, Schedule VII of the Constitution of India. The entry corresponding to entries Nos. 43 and 44 in List I, Schedule VII of the Constitution of India is entry No. 33 in List I of the Government of India Act, 1935. Entry No. 33 is in the following terms:- "Corporations, that is to say, the incorporation, regulation and winding-up of trading corporations, including banking, insurance and financial corporations, but not including corporations owned or controlled by a Federated State and carrying on business only within that State or co-operative societies, and of corporations whether trading or not, with objects not confined to one unit." 10. Their Lordships of the Supreme Court in Gujarat University, Ahmedahad v. Krishna Rangnath Mudholkar, 1963 Supp (1) SCR 112 at page 141 = (AIR 1963 SC 703 at page 716). in the matter of construction of entries in Schedule VII observed :- "Item No....
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....ontent and make it nugatory." 13. Keeping in view these principles, the meaning and scope of entry No. 43 has to be ascertained. The contention of the learned counsel for the petitioners is that the various provisions in the Ordinance, which has been replaced by the Amending Act, impinge on the business of banking inasmuch as the entire control of the management is more or loss vested with the Registrar and the right of the shareholders to elect their representatives has been taken away. This is so. It is evident that entry No. 43 and entry No. 45 relate to different heads of legislation. Whereas entry No. 45 gives the power to the Central Legislature to legislate qua banking business, entry No. 43, on the other hand, gives power to the Central Legislature to legislate regarding corporations. It is immaterial whether those Corporations were doing the banking business or not. In other words, Central Legislature is competent to legislate with regard to Corporations engaged in the business of banking, in view of entry No. 43. List I. But so far as the Co-operative Societies are concerned, they were taken out of the ambit of entry No. 43 and put in entry No. 32, List II. The word &#....