# PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL MURGUD SAHAKARI BANK LIMITED

- **Citation:** [2020] 5 S.C.R. 1038
- **Court:** Supreme Court of India
- **Decided:** 2020-05-05
- **Case number:** Civil Appeal No.5674 of 2009
- **Bench:** Arun Mishra, Indira Banerjee, Vineet Saran, M. R. Shah, Aniruddha Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pandurang-ganpati-chaugule-v-vishwasrao-patil-murgud-sahakari-bank-limited-34463
- **Pages:** 133

## Headnote

Constitution of India - Seventh Schedule - List I, Entry 45;
List II, Entry 32 - Power of the Parliament to legislate - Applicability
of SARFAESI Act, 2002 to co-operative banks - Held: Co-operative
banks registered under the State legislation and multi-State level
co-operative societies registered under MSCS Act w.r.t 'banking'
are governed by the legislation relatable to Entry 45, List I, Seventh
Schedule - Co-operative banks run by co-operative societies
registered under the State legislation w.r.t the aspects of
'incorporation, regulation and winding up', in particular, w.r.t the
matters outside the purview of Entry 45, List I, Seventh Schedule,
are governed by the said legislation relatable to Entry 32, List II,
Seventh Schedule - Co-operative banks involved in activities related
to banking are covered within the meaning of 'Banking Company'
defined u/s.5(c) r/w s.56(a) of the 1949 Act, a legislation relatable
to Entry 45, List I - Co-operative banks cannot carry on any activity
without compliance of said Act and any other legislation applicable
to such banks relatable to 'Banking' in Entry 45, List I and the RBI
Act relatable to Entry 38, List I, Seventh Schedule - Co-operative
banks under the State legislation and multi-State co-operative banks
are 'banks' u/s.2(1)(c), SARFAESI Act - Recovery is an essential
part of banking; as such, the recovery procedure prescribed u/
s.13 of the said Act, a legislation relatable to Entry 45, List I, Seventh
Schedule, is applicable - Parliament has legislative competence u/
Entry 45, List I, Seventh Schedule to provide additional procedures
for recovery u/s.13 SARFAESI Act, with respect to co-operative banks
- s.2(1)(c)(iva), SARFAESI Act adding "ex abundanti cautela", 'a
multi-State co-operative bank' and notification dtd. 28.01.03 issued
with respect to the co-operative banks registered under the State
legislation are not ultra vires - Securitisation and Reconstruction
[2020] 5 S.C.R. 1038
1038
A
B
C
D
E
F
G
H
1039
of Financial Assets and Enforcement of Security Interest Act, 2002
- ss.2(c), (d), 2(1)(c)(iva), 2(1)(c)(v), 2(1)(d), 13 - Multi-State Cooperative Societies Act, 2002 - ss.3(f), 84 -Banking Regulation
Act, 1949 - Part II, V - ss.5(b), (c), 5A, 6, 11, 18, 19, 22, 23,
35A(1)(c), 56(a)-(c), (e) - Interpretation of Statutes - Doctrine of
Pith and Substance; Incorporation by reference - Recovery of Debts
and Bankruptcy Act, 1993 - Doctrine of Colourable Legislation -
Banking Laws [Application of Cooperative Societies Act, 1965 (Act
No.23 of 1965)] - Reserve Bank of India Act, 1934 - ss.2(bii),
2(biii), 2(biv), 2(ciii), 2(civ) - National Bank for Agriculture and
Rural Development Act, 1981 - State Bank of India Act, 1955 -
Banking Companies Act, 1949 - Transfer of Property Act, 1882.
Banking Regulation Act, 1949 - ss.5(b), (c), 6, 56(a) - Held:
s.6 is not a provision of the conferral of the status of the banking
company - Definitions of 'banking' and 'banking company' are
contained in s.5(b) & 5(c) respectively, and when reading with
s.56(a), it means co-operative banks also - Co-operative bank falls
within the definition of s.5(c), and its activity is of banking, and in
addition a co-operative bank may engage in any of the business as
enumerated in s.6.
Constitution (Ninety Seventh Amendment) Act, 2011 - Arts.
43B, 243ZI, 243ZL, 243ZL(1); and Entry 45, List I, Seventh Schedule
- Held: Art. 43B was added concerning the management of cooperative societies - Art.243ZI provides that the legislature of a
State may, by law, make provisions with respect to 'incorporation,
regulation and winding up' of co-operative societies - Art.243ZL
deals with supersession and suspension of the board and interim
management - Constitutional provision itself makes distinction
between a co-operative bank and other co-operative societies and
applied law enacted u/Entry 45, List I, Seventh Schedule - It set at
rest any controversy concerning the applicability of the Act 1949 to
banks run by co-operati

## Text

_Characters 0–39,857 of 320,166. This is a partial read: ask again with offset=39857 for what follows._

A
B
C
D
E
F
G
H
1038
SUPREME COURT REPORTS
[2020] 5 S.C.R.
PANDURANG GANPATI CHAUGULE
v.
VISHWASRAO PATIL MURGUD SAHAKARI BANK LIMITED
(Civil Appeal No.5674 of 2009)
MAY 05, 2020
[ARUN MISHRA, INDIRA BANERJEE, VINEET SARAN,
M. R. SHAH AND ANIRUDDHA BOSE, JJ.]
Constitution of India - Seventh Schedule - List I, Entry 45;
List II, Entry 32 - Power of the Parliament to legislate - Applicability
of SARFAESI Act, 2002 to co-operative banks - Held: Co-operative
banks registered under the State legislation and multi-State level
co-operative societies registered under MSCS Act w.r.t 'banking'
are governed by the legislation relatable to Entry 45, List I, Seventh
Schedule - Co-operative banks run by co-operative societies
registered under the State legislation w.r.t the aspects of
'incorporation, regulation and winding up', in particular, w.r.t the
matters outside the purview of Entry 45, List I, Seventh Schedule,
are governed by the said legislation relatable to Entry 32, List II,
Seventh Schedule - Co-operative banks involved in activities related
to banking are covered within the meaning of 'Banking Company'
defined u/s.5(c) r/w s.56(a) of the 1949 Act, a legislation relatable
to Entry 45, List I - Co-operative banks cannot carry on any activity
without compliance of said Act and any other legislation applicable
to such banks relatable to 'Banking' in Entry 45, List I and the RBI
Act relatable to Entry 38, List I, Seventh Schedule - Co-operative
banks under the State legislation and multi-State co-operative banks
are 'banks' u/s.2(1)(c), SARFAESI Act - Recovery is an essential
part of banking; as such, the recovery procedure prescribed u/
s.13 of the said Act, a legislation relatable to Entry 45, List I, Seventh
Schedule, is applicable - Parliament has legislative competence u/
Entry 45, List I, Seventh Schedule to provide additional procedures
for recovery u/s.13 SARFAESI Act, with respect to co-operative banks
- s.2(1)(c)(iva), SARFAESI Act adding "ex abundanti cautela", 'a
multi-State co-operative bank' and notification dtd. 28.01.03 issued
with respect to the co-operative banks registered under the State
legislation are not ultra vires - Securitisation and Reconstruction
[2020] 5 S.C.R. 1038
1038
A
B
C
D
E
F
G
H
1039
of Financial Assets and Enforcement of Security Interest Act, 2002
- ss.2(c), (d), 2(1)(c)(iva), 2(1)(c)(v), 2(1)(d), 13 - Multi-State Cooperative Societies Act, 2002 - ss.3(f), 84 -Banking Regulation
Act, 1949 - Part II, V - ss.5(b), (c), 5A, 6, 11, 18, 19, 22, 23,
35A(1)(c), 56(a)-(c), (e) - Interpretation of Statutes - Doctrine of
Pith and Substance; Incorporation by reference - Recovery of Debts
and Bankruptcy Act, 1993 - Doctrine of Colourable Legislation -
Banking Laws [Application of Cooperative Societies Act, 1965 (Act
No.23 of 1965)] - Reserve Bank of India Act, 1934 - ss.2(bii),
2(biii), 2(biv), 2(ciii), 2(civ) - National Bank for Agriculture and
Rural Development Act, 1981 - State Bank of India Act, 1955 -
Banking Companies Act, 1949 - Transfer of Property Act, 1882.
Banking Regulation Act, 1949 - ss.5(b), (c), 6, 56(a) - Held:
s.6 is not a provision of the conferral of the status of the banking
company - Definitions of 'banking' and 'banking company' are
contained in s.5(b) & 5(c) respectively, and when reading with
s.56(a), it means co-operative banks also - Co-operative bank falls
within the definition of s.5(c), and its activity is of banking, and in
addition a co-operative bank may engage in any of the business as
enumerated in s.6.
Constitution (Ninety Seventh Amendment) Act, 2011 - Arts.
43B, 243ZI, 243ZL, 243ZL(1); and Entry 45, List I, Seventh Schedule
- Held: Art. 43B was added concerning the management of cooperative societies - Art.243ZI provides that the legislature of a
State may, by law, make provisions with respect to 'incorporation,
regulation and winding up' of co-operative societies - Art.243ZL
deals with supersession and suspension of the board and interim
management - Constitutional provision itself makes distinction
between a co-operative bank and other co-operative societies and
applied law enacted u/Entry 45, List I, Seventh Schedule - It set at
rest any controversy concerning the applicability of the Act 1949 to
banks run by co-operative societies - It also makes it clear that
such banks are governed by Entry 45, List I, Seventh Schedule -
Banking Regulation Act, 1949.
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 - ss.2(1)(c), (d) - Held:
Term 'bank' has been defined in s.2(1)(c) to mean 'banking
company', a corresponding new bank, a subsidiary bank or a multiPANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1040
SUPREME COURT REPORTS
[2020] 5 S.C.R.
State co-operative bank or such other bank which the Central
Government may by notification specify for the Act - Term 'banking
company' u/s.2(d) shall have the meaning assigned to it in s.5(c)
1949 Act - Thus, the definition of 'banking company' stands
incorporated in s.2(1)(d), SARFAESI Act - Banking Regulation Act,
1949 - s.5(c).
Answering the reference, the Court
HELD: 1.1 The bank ordinarily means any establishment
which carries the business of banking. The expression 'bank'
has been defined in several enactments. Banks can be of different
kinds such as Co-operative Bank, Collecting Bank, Commercial
Bank, Correspondent Bank, Custodian Bank, Depository Bank,
Drawee Bank, Federal Home Loan Bank, Federal Land Bank,
Intermediary Bank, Investment Bank, Mutual Savings Bank,
Nationalised Banks, Negotiable Bank, Non-Member Bank, Payor
Bank, Savings and Loan Bank, Saving Bank. The expression
'bank' has been defined in various enactments relating to it.
[Para 34][1087-F; 1088-D-F]
1.2 The framers of the Constitution cannot be said to have
confined the meaning of 'banking' to a particular definition, as
given in the BR Act, 1949. The word 'banking' has been
incorporated in Entry 45 of List I. The decision in Rustom
Cavasjee Cooper vividly leaves no room for doubt that banking
done by the co-operative bank is covered within the ambit of
Entry 45 of List I. The decision in Gannon Dunkerley & Co.,
(Madras) Ltd. stands neutralised by introduction of Article
366(29A) of the Constitution of India and the meaning of the said
term has been redefined. Entries have to be given full effect in
pith and substance considering forms of business of co-operative
banks performing the activities of banking under a licence. The
same is covered within the purview of Entry 45 of List I. Section
6 deals with the forms of business in which banking companies
may engage. There cannot be any form of activity/business of
banking without there being an entity. Section 6 is not a provision
of the conferral of the status of the banking company. The
definitions of 'banking' and 'banking company' are contained in
Section 5(b) and 5(c) of the BR Act, 1949 respectively, and when
reading with Section 56(a), it means co-operative banks also. The
A
B
C
D
E
F
G
H
1041
co-operative bank falls within the definition of Section 5(c), and
its activity is of banking, and in addition to the business of banking,
a co-operative bank may engage in any of the business as
enumerated in Section 6. [Paras 41, 44][1103-B-D; 1104-A-B]
Rustom Cavasjee Cooper v. Union of India (1970) 1
SCC 248 : [1970] 3 SCR 530 - followed.
The State of Madras v. Gannon Dunkerley & Co.,
(Madras) Ltd. AIR 1958 SC 560 : [1959] SCR 379 -
referred to.
2. Recovery of dues would be an essential function of any
banking institution and the Parliament can enact a law under Entry
45 of List I as the activity of banking done by co-operative banks
is within the purview of Entry 45 of List I. Obviously, it is open to
the Parliament to provide the remedy for recovery under Section
13 of the SARFAESI Act. Co-operative bank's entire operation
and activity of banking are governed by a law enacted under Entry
45 of List I, i.e., the BR Act, 1949, and the RBI Act under Entry
38 of List I. 'Incorporation, regulation and winding up' of the cooperative societies are covered under Entry 32 of List II of the
Seventh Schedule of the Constitution of India, whereas 'banking'
is covered by Entry 45 of List I. Thus, aspect of 'incorporation,
regulation and winding up' would be covered under Entry 32 of
List II. However, banking activity of such co-operative societies/
banks shall be governed by Entry 45 of List I. The said banks
are governed and regulated by legislation related to Entry 45 of
List I, the BR Act, 1949 as well as the Reserve Bank of India Act
under Entry 38 of List I. In the matter of licencing and doing
business, a deep and pervasive control is carved out under the
provisions of the BR Act, 1949 and banking activity done by any
entity, primary credit societies, is a bank and is required to submit
the accounts to the Reserve Bank of India, and there is complete
control under the aforesaid Act. For activity of banking, these
banks are governed by the legislation under Entry 45 of List I.
Thus, recovery being an essential part of the banking, no conflict
has been created by providing additional procedures under
Section 13 of the SARFAESI Act. It is open to the bank to adopt
a procedure which it may so choose. When banking in pith and
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1042
SUPREME COURT REPORTS
[2020] 5 S.C.R.
substance is covered under Entry 45 of List I, even incidental
trenching upon the field reserved for State under Entry 32 List
II is permissible. There can be various aspects of an activity.
The co-operative societies may be formed under the provisions
of the State Co-operative Acts. The State law provides for
'incorporation, regulation and winding up' under Entry 32 of List
II, a membership registration, and other matters can be governed
by Entry 32 of List II, and, at the same time, the aspects relating
to the banking, licensing, accounts, etc. can be covered under
Entry 45 List I. The legislation and entries are to be considered
in pith and substance is the settled principles of law, and incidental
trenching is permissible. Thus, section 2(c)(iv)(a) of the
SARFAESI Act and the notification dated 28.2.2003 cannot be
said to be ultra vires. They are within the ken of Entry 45 List I of
the Seventh Schedule to the Constitution of India.
[Paras 48, 58 -60][1107-E-F; 1130-D-G; 1131-G]
3. The aforesaid conclusion finds support by the
Constitutional provisions inserted by way of the Constitution
(Ninety Seventh Amendment) Act, 2011. Article 43B has been
added concerning the management of co-operative societies.
Article 243ZI provides that the legislature of a State may, by law,
make provisions with respect to 'incorporation, regulation and
winding up' of co-operative societies. The Ninety Seventh
Amendment also incorporated Article 243ZL dealing with
supersession and suspension of the board and interim
management. The third proviso to Article 243ZL(1) clarifies that
in case of a co-operative society carrying on the business of
banking, the provisions of the BR Act, 1949 shall also apply
besides the State Act. The fourth proviso to clause (1) of Article
243ZL also contains an exception with respect to multi-State cooperative society carrying on the business of banking, the
provisions of this clause shall have the effect as if for the words
'six months', had been substituted by words 'one year.' Thus,
the constitutional provision itself makes a distinction between a
co-operative bank and other co-operative societies and applied
law enacted under Entry 45 of List I of the Seventh Schedule. It
set at rest any controversy concerning the applicability of the
BR Act, 1949 to banks run by co-operative societies. It also
A
B
C
D
E
F
G
H
1043
makes it clear that such banks are governed by Entry 45 of List
I of the Seventh Schedule. [Paras 61-63][1132-A-B; 1133-F-G]
4.1 The term 'bank' has been defined in Section 2(1)(c) to
mean 'banking company', a corresponding new bank, a subsidiary
bank or a multi-State co-operative bank or such other bank which
the Central Government may by notification specify for the Act.
The term 'banking company' under Section 2(d) shall have the
meaning assigned to it in Section 5(c) of the BR Act, 1949. Thus,
the definition of 'banking company' stands incorporated in Section
2(1)(d) of the SARFAESI Act, which came into force on 21.6.2002.
Section 56(a) was incorporated in the BR Act, 1949 by Act No.23
of 1965, w.e.f. 1.3.1966. On that date, Section 56(a) became part
of the statute. Section 5(c) of the BR Act, 1949 defines 'banking
company' means any company which transacts the business of
banking. By virtue of Section 56(a), a reference to a 'banking
company' or 'the company' or 'such company' shall be construed
as references to a co-operative bank for the application of the
Act to the co-operative banks. Section 5(c) was not amended,
and other provisions were also not amended where they were
placed. However, amendments were incorporated by a different
Chapter V by way of various provisions incorporated in Section
56 as it was necessary to retain certain provisions in the existing
form as they applied to other banks and companies considering
that the amendments and certain modifications which were
necessary and were extensively required. The provisions in
amended form in their application to the co-operative banks were
separately provided. When the BR Act, 1949 was applied to the
co-operative bank, all the provisions under the Act concerning
'incorporation, regulation and winding up' were omitted insofar
as the Act of 1949 is applied to co-operative banks, though they
continue to exist in the Act for other entities but not concerning
co-operative banks. It was mentioned in the advice given to the
President under Article 117 that these matters were specifically
not covered under Entry 45 of List I of the Seventh Schedule and
formed the subject-matter of Entry 32 of List II. Thus, when the
provisions of the Act of 1949 are applied to a co-operative bank,
the definition of 'banking company' has to be read to include a
co-operative bank. Section 56(a) becomes part of Section 5(c),
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1044
SUPREME COURT REPORTS
[2020] 5 S.C.R.
although it is located in a separate place. As only Part V of the
Act applies to the co-operative banks, Section 56(a) amends the
definition of the 'banking company,' and it becomes an integral
part of Section 5(c), as the full effect is required to be given. The
present one is a case of incorporation by reference in the same
Act by a subsequent amendment in the application to co-operative
banks. When the provisions of Section 5(c) are applied to the cooperative banks, the co-operative banks have to be read as part
and parcel of said definition as mandated statutorily. In case a
company is not taken as a reference to the co-operative societies/
banks in Section 5(c), several problems as to the interpretation
of Section 56 would arise. It would have become necessary to
amend all the provisions wherever words 'banking company' occur
in the BR Act, 1949 in the application to co-operative banks. In
order to avoid verbatim reproduction of the earlier provisions,
which did not apply to a co-operative bank, a device was carved
out in Section 56(a) to read 'company' as 'banking company' or
'the company' or 'such company' as references to a co-operative
bank. If the definition in Section 5(c) and interpretation clause
are not read as incorporated and having been amended, the
interpretation clause and the entire amendment of Part V will
become unworkable. It was not practical to amend the entire Act
of 1949 as it dealt with 'incorporation, regulation and winding up'
of other entities relatable to List I, as such the provisions were
required to be retained, and such matters concerning co-operative
societies/banks, relatable subject-matter under Entry 32 of List
I of the Seventh Schedule of the Constitution of India, were to be
excluded. As various provisions were to be omitted in their
application to the co-operative societies and other provisions
were to apply in a modified form, the amendments were made in
the provisions in their application to the co-operative banks by
providing a separate Chapter. Thus, it was not considered
necessary nor would have been appropriate to amend the
definition of Section 5(c) where it existed, in fact it was so
amended in Section 56(a). Entire Chapter V was enacted
concerning the application of the Act to the co-operative banks
and has to be given full effect. Merely because the procedure for
recovery of dues is provided in the Co-operative Societies Act,
could not have come in the way of interpretation of that expression
A
B
C
D
E
F
G
H
1045
'co-operative bank' which was included in the definition and
interpretation clause of Section 5 of the BR Act, 1949. It was
open to the Parliament to deal with the subject of 'banking' in
Entry 45 of List I and this Court in Greater Bombay Coop. Bank
Ltd. itself opined that the BR Act, 1949 applies to co-operative
banks which is the enactment related to Entry 45 of List I and
third proviso to Article 243-ZL(1) of the Constitution of India
also provides that the BR Act shall also apply. Thus, the
Parliament considered it appropriate to provide additional remedy
for speedy recovery which is an alternative even if there is an
incidental encroachment on the field reserved for the State under
Entry 32 of List II, as in pith and substance, the 'banking' is part
of Entry 45 of List I and recovery procedure is covered within
the ken of Entry 45 of List I. Thus, considering the Doctrine of
Pith and Substance and incorporation by amendment made, cooperative banks are included in the definition of 'bank' and
'banking company' under Section 2(1)(c) and 2(1)(d) of the
SARFAESI Act. [Paras 71, 72 & 79][1139-F-H; 1140-A-F; 1142D-E; 1146-B-H; 1147-A-B]
Greater Bombay Coop. Bank Ltd. v. United Yarn Tex
(P) Ltd. and Ors. (2007) 6 SCC 236 : [2007] 4 SCR
823 - referred to.
4.2 The co-operative banks, which are governed by the BR
Act, 1949, are involved in banking activities within the meaning
of Section 5(b) thereof. They accept money from the public,
repayable on demand or otherwise and withdrawal by cheque,
draft, order or otherwise. Merely by the fact that lending of money
is limited to members, they cannot be said to be out of the purview
of banking. They perform commercial functions. A society shall
receive deposits and loans from members and other persons.
They give loans also, and it is their primary function. Thus, they
are covered under 'banking' in Entry 45 of List I. [Para 84]
[1154-C-D]
5.1 Since the activity of a co-operative bank is banking
regulated by the law enacted within the relatable Entry 45 of List
I, there is no reason as to why the Parliament lacked the
competence to enact the SARFAESI Act and to provide a
procedure for the speedy recovery of dues. The SARFAESI Act
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1046
SUPREME COURT REPORTS
[2020] 5 S.C.R.
also covers the activities undertaken by the co-operative banks.
The co-operative banks are doing banking business under Section
5(b) of the BR Act, 1949, and the exclusion of the co-operative
societies from Entry 43 of List I, does not have any bearing
regarding the interpretation of Entry 45 of List I. Even assuming
for the time being that definition of 'bank' in Section 5(c) of the
BR Act, 1949 did not cover the co-operative banks; the
expression 'bank' has been defined in the SARFAESI Act under
Section 2(1)(c), and the provisions contained in Section 2(1)(c)(v)
authorise the Central Government to specify 'such other bank'
for that Act. Thus, the notification issued on 28.1.2003 notifying
'co-operative bank' as the 'bank' is covered by Entry 45 of List I
as they are regulated by the BR Act, 1949, and the RBI Act. For
the 'banking' activity under Entry 45 of List I, the Parliament
had the power to enact such a provision defining 'bank' to
authorise and prescribe the recovery procedure for such a bank
as provided in Section 13 of the SARFAESI Act; However, cooperative societies/banks stand included by incorporation in
Section 5(1)(c) of the BR Act and the notification was issued ex
abundanti cautela. By virtue of Section 56(a), co-operative banks,
as defined in Section 56(cci) of the BR Act, 1949, are included in
Section 5(1)(c). Similarly, multi-State co-operative banks were
also covered. The earlier procedure for recovery of dues was
differently provided for general banks and the co-operative banks
through the Civil Court or Tribunal. In the SARFAESI Act, a
procedure has been prescribed under Section 13 without the
intervention of the court/tribunal to keep pace with the time.
Thus, the malady of inordinate delay with which the order of civil
court suffered as well as of the co-operative tribunals or summary
procedure under the Co-operative Societies Act, was sought to
be redressed. Apart from that, it is permissible for the Parliament
to enact the law to provide recovery procedures for bank dues
that have been done by providing speedy recovery of secured
interest without intervention of the court/tribunal. [Paras 8587][1154-F-H; 1155-A-F]
5.2 'Banking' relating to co-operatives can be included
within the purview of Entry 45 of List I, and it cannot be said to
be over inclusion to cover provisions of recovery by co-operative
banks in the SARFAESI Act. It cannot be said to be over-inclusion
A
B
C
D
E
F
G
H
1047
on the anvil of the principles laid down by this Court. The provision
in question/notification cannot be said to be colourable legislation.
The SARFAESI Act qualifies the test of legislative competence,
as well as the definition, cannot be said to be colourable piece or
over-inclusive or beyond the competence of the Parliament.
[Paras 100, 102][1166-D-E; 1168-E; 1169-D]
6. Resultantly, the reference is answered as under:
(1)(a) The co-operative banks registered under the State
legislation and multi-State level co-operative societies registered
under the MSCS Act, 2002 with respect to 'banking' are governed
by the legislation relatable to Entry 45 of List I of the Seventh
Schedule of the Constitution of India.
(b) The co-operative banks run by the co-operative
societies registered under the State legislation with respect to
the aspects of 'incorporation, regulation and winding up', in
particular, with respect to the matters which are outside the
purview of Entry 45 of List I of the Seventh Schedule of the
Constitution of India, are governed by the said legislation
relatable to Entry 32 of List II of the Seventh Schedule of the
Constitution of India.
(2) The co-operative banks involved in the activities related
to banking are covered within the meaning of 'Banking Company'
defined under Section 5(c) read with Section 56(a) of the Banking
Regulation Act, 1949, which is a legislation relatable to Entry 45
of List I. It governs the aspect of 'banking' of co-operative banks
run by the co-operative societies. The co-operative banks cannot
carry on any activity without compliance of the provisions of the
Banking Regulation Act, 1949 and any other legislation applicable
to such banks relatable to 'Banking' in Entry 45 of List I and the
RBI Act relatable to Entry 38 of List I of the Seventh Schedule of
the Constitution of India.
(3)(a) The co-operative banks under the State legislation
and multi-State co-operative banks are 'banks' under section
2(1)(c) of Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002. The recovery is
an essential part of banking; as such, the recovery procedure
prescribed undersection 13 of the SARFAESI Act, a legislation
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1048
SUPREME COURT REPORTS
[2020] 5 S.C.R.
relatable to Entry 45 List I of the Seventh Schedule to the
Constitution of India, is applicable.
(3)(b) The Parliament has legislative competence under
Entry 45 of List I of the Seventh Schedule of the Constitution of
India to provide additional procedures for recovery under section
13 of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 with respect to
co-operative banks. The provisions of Section 2(1)(c)(iva), of
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, adding "ex abundanti
cautela", 'a multi-State co-operative bank' is not ultra vires as
well as the notification dated 28.1.2003 issued with respect to
the co-operative banks registered under the State legislation.
[Para 103][1169-D-H; 1170-A-E]
S.S. Dhanoa v. Municipal Corporation, Delhi and Ors.
(1981) 3 SCC 431 : [1981] 3 SCR 864; Dalco
Engineering Private Limited v. Satish Prabhakar
Padhye and Ors. (2010) 4 SCC 378 : [2010] 4 SCR 15
- distinguished.
Virendra Pal Singh and Ors. v. District Assistant
Registrar, Cooperative Societies, Etah, and Anr. (1980)
4 SCC 109 - held inapplicable.
Hindustan Lever and Anr. v. State of Maharashtra and
Anr. (2004) 9 SCC 438 : [2003] 5 Suppl. SCR 685;
Kerala State Electricity Board v. Indian Aluminium Co.
Ltd. (1976) 1 SCC 466 : [1976] 1 SCR 552; Sita Ram
Sharma and Ors. v. State of Rajasthan and Ors. (1974)
2 SCC 301; UCO Bank and Anr. v. Dipak Debbarma
and Ors. (2017) 2 SCC 585 : [2016] 11 SCR 723; State
Bank of India v. Santosh Gupta and Anr. (2017) 2 SCC
538 : [2016] 9 SCR 985; Calcutta Gas Company
(Proprietary) Ltd. v. State of West Bengal and Ors. AIR
1962 SC 1044 : [1962] 3 Suppl. SCR 1; Central Bank
of India v. State of Kerala and Ors. (2009) 4 SCC 94 :
[2009] 3 SCR 735; State of W.B. v. Kesoram Industries
Ltd. and Ors. (2004) 10 SCC 201 : [2004] 1 SCR 564;
Mary Roy, etc. v. State of Kerala and Ors. (1986) 2
SCC 209 : [1986] 1 SCR 371; U.P. Avas Evam Vikas
A
B
C
D
E
F
G
H
1049
Parishad v. Jainul Islam and Anr. AIR 1998 SC 1028 :
[1998] 1 SCR 254; Surana Steels Pvt. Ltd. v. Dy.
Commissioner of Income Tax and Ors. (1999) 4 SCC
306 : [1999] 2 SCR 589; Ram Sarup and Ors. v. Munshi
and Ors. AIR 1963 SC 553 : [1963] 3 SCR 858; Soma
Suresh Kumar v. Government of Andhra Pradesh and
Ors. (2013) 10 SCC 677 : [2013] 10 SCR 328; K.K.
Baskaran v. State Represented by its Secretary, Tamil
Nadu, and Ors. (2011) 3 SCC 793 : [2011] 3 SCR 527;
M/s. Ujagar Prints and Ors. (II) v. Union of India and
Ors. (1989) 3 SCC 488 : [1988] 3 Suppl. SCR 770;
Keshavlal Khemchand and Sons Private Limited and
Ors. v. Union of India and Ors. (2015) 4 SCC 770 :
[2015] 2 SCR 51; Jayant Verma and Ors. v. Union of
India and Ors. (2018) 4 SCC 743 : [2018] 2 SCR 679;
Federation of Hotel & Restaurant Association of India,
etc. v. Union of India and Ors. (1989) 3 SCC 634 :
[1989] 2 SCR 918; Bharat Coop. Bank (Mumbai) Ltd.
v. Coop. Bank Employees Union (2007) 4 SCC 685 :
[2007] 4 SCR 347; Reserve Bank of India v. M.
Hanumaiah and Ors. (2008) 1 SCC 770 : [2008] 1 SCR
16; State of Gujarat and Anr. v. Shri Ambica Mills Ltd.,
Ahmedabad, and Anr. (1974) 4 SCC 656 : [1974] 3
SCR 760; Girnar Traders (3) v. State of Maharashtra
and Ors. (2011) 3 SCC 1 : [2011] 3 SCR 1; State of
Tamil Nadu and Ors. v. K. Shyam Sunder and Ors.
(2011) 8 SCC 737 : [2011] 11 SCR 1094 - relied on.
Delhi Cloth & General Mills Co. Ltd. v. Union of India
and Ors. (1983) 4 SCC 166 : [1983] 3 SCR 438; T.
Velayudhan Achari and Anr. v. Union of India and Ors.
(1993) 2 SCC 582 : [1993] 1 SCR 832; Union of India
and Anr. v. Delhi High Court Bar Association and Ors.
(2002) 4 SCC 275 : [2002] 2 SCR 450; Narendra
Kantilal Shah v. Joint Registrar, Co-operative Societies
AIR 2004 Bom 166; Rama Steel v. Union of India
(2007) 6 Mah. L.J. 387; Neel Oil Industries v. Union
of India AIR 2015 Gujarat 171; Mahaluxmi Bank Ltd.
v. Registrar of Companies, West Bengal AIR 1961
Calcutta 666; ICICI Bank Limited v. Official Liquidator
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1050
SUPREME COURT REPORTS
[2020] 5 S.C.R.
of APS Star Industries Limited and Ors. (2010) 10 SCC
1 : [2010] 12 SCR 644; Diamond Sugar Mills Ltd. and
Anr. v. State of Uttar Pradesh and Anr. AIR 1961 SC
652 : [1961] 3 SCR 242; I.T.C. Ltd. v. Agriculture
Produce Market Committee and Ors. (2002) 9 SCC 232
: [2002] 1 SCR 441; Hinsa Virodhak Sangh v. Mirzapur
Moti Kuresh Jamat and Ors. (2008) 5 SCC 33 : [2008]
4 SCR 1020; K. C. Gajapati Narayan Deo and Ors. v.
State of Orissa AIR 1953 SC 375 : [1954] SCR 1; Apex
Cooperative Bank of Urban Bank of Maharashtra &
Goa Ltd. v. Maharashtra State Cooperative Bank Ltd.
and Ors. (2003) 11 SCC 66 : [2003] 4 Suppl. SCR
1071; Daman Singh and Ors. v. State of Punjab and
Ors. (1985) 2 SCC 670 : [1985] 3 SCR 580; Iqbal
Naseer Usmani v. Central Bank of India and Ors. (2006)
2 SCC 241; The Majoor Sahakari Bank Ltd. v. N.N.
Majmudar and Anr. AIR 1957 Bom 36; The Shamrao
Vithal Co-operative Bank Ltd., Mumbai, and Anr. v.
M/s. Star Glass Works, Mumbai and Ors. AIR 2003
Bom 205; State of A.P. and Ors. v. Mcdowell & Co.
and Ors. (1996) 3 SCC 709 : [1996] 3 SCR 721; Dewan
Bahadur Seth Gopal Das Mohta v. Union of India and
Ors. [1955] 1 SCR 773; Khyerbari Tea Co. Ltd. and
Ors. v. State of Assam [1964] 5 SCR 975; Belsund Sugar
Co. Ltd.v. State of Bihar (1999) 9 SCC 620 : [1999] 1
Suppl. SCR 146; Sant Sadhu Singh v. State of Punjab
AIR 1970 P&H 528; Nagpur District Central
Cooperative Bank Ltd. v. Divisional Joint Registrar,
Cooperative Societies AIR 1971 Bom 365 -
referred to.
Justice G.P. Singh- 'Principles of Statutory
Interpretation' 12th Edition 2010 Pages 318-320 -
referred to.
Portsmouth Corporation v. Smith (1885) 10 AC 364;
Secretary of State v. Hindustan Cooperative Insurance
Society Ltd. AIR 1931 PC 149 - referred to.
Concise Oxford English Dictionary; Black's Law
Dictionary, Ninth Edition - referred to.
A
B
C
D
E
F
G
H
1051
Case Law Reference
[2007] 4 SCR 823
referred to
Para 1
[1983] 3 SCR 438
referred to
Para 1
[1993] 1 SCR 832
referred to
Para 1
[2002] 2 SCR 450
referred to
Para 1
[1970] 3 SCR 530
followed
Para 9(a)
[2010] 12 SCR 644
referred to
Para 9(b)
[1959] SCR 379
referred to
Para 9(b)
[1961] 3 SCR 242
referred to
Para 9(b)
[2002] 1 SCR 441
referred to
Para 9(h)
[2008] 4 SCR 1020
referred to
Para 9(i)
[1954] SCR 1
referred to
Para 9(j)
[2003] 4 Suppl. SCR 1071
referred to
Para 9(k)
(1980) 4 SCC 109
held inapplicable
Para 9(k)
[1981] 3 SCR 864
distinguished
Para 9(k)
[1985] 3 SCR 580
referred to
Para 9(k)
[2010] 4 SCR 15
distinguished
Para 9(k)
(2006) 2 SCC 241
referred to
Para 10
[2003] 5 Suppl. SCR 685
relied on
Para 17(a)
[1976] 1 SCR 552
relied on
Para 17(a)
[1974] 2 SCC 301
relied on
Para 17(a)
[1996] 3 SCR 721
referred to
Para 17(d)
[1955] 1 SCR 773
referred to
Para 18
[1964] 5 SCR 975
referred to
Para 18
[2016] 11 SCR 723
relied on
Para 49
[2016] 9 SCR 985
relied on
Para 50
[1999] 1 Suppl. SCR 146
referred to
Para 52
[1962] 3 Suppl. SCR 1
relied on
Para 53
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1052
SUPREME COURT REPORTS
[2020] 5 S.C.R.
[2009] 3 SCR 735
relied on
Para 54
[2004] 1 SCR 564
relied on
Para 60
[1986] 1 SCR 371
relied on
Para 73
[1998] 1 SCR 254
relied on
Para 74
[1999] 2 SCR 589
relied on
Para 76
[1963] 3 SCR 858
relied on
Para 78
[2013] 10 SCR 328
relied on
Para 88
[2011] 3 SCR 527
relied on
Para 89
[1988] 3 Suppl. SCR 770
relied on
Para 90
[2015] 2 SCR 51
relied on
Para 91
[2018] 2 SCR 679
relied on
Para 93
[1989] 2 SCR 918
relied on
Para 94
[2007] 4 SCR 347
relied on
Para 96
[2008] 1 SCR 16
relied on
Para 97
[1974] 3 SCR 760
relied on
Para 98
[2011] 3 SCR 1
relied on
Para 99
[2011] 11 SCR 1094
relied on
Para 102
CIVIL ORIGINAL/APPELLATE JURISDICTION: Civil Appeal
No. 5674 of 2009.
From the Judgment and Order dated 13.08.2008 of the High Court
of Judicature at Bombay in First Appeal No. 1481 of 2008.
 With
Civil Appeal Nos. 5684, 5682, 5681, 5675 of 2009, 10871, 4391,
7410 of 2010, 2384, 2385, 2386, 2387-2390, 2391-92, 2393-2394, 2395,
2396-2397, 2398, 2399, 2400, 2401, 2402, 2403, 2404, 2405, 2406 of 2020,
C.C. No. 7586 of 2014, W.P. (C) Nos. 318 of 2010, 41, 220, 293, 306,
338, 375 of 2011, 122, 199, 250, 291, 386, 487, 537, 554 of 2012, 36, 146,
138, 179, 192, 191, 112, 111, 151, 175, 181, 201, 233, 236, 238, 253, 250,
248, 271, 265, 270, 279, 266, 280, 284, 353, 469, 452, 588, 758, 762, 761,
800, 753, 819, 922, 1007, 1037, 1044, 1043, 1045 of 2013, 5, 10, 40, 142,
169, 168, 352, 408, 420, 421, 492, 712, 714, 795, 754, 827, 849, 838, 1020
A
B
C
D
E
F
G
H
1053
of 2014, 26, 86 of 2015, 1035, 1232, 1355, 1331, 1339, 1353 of 2019, 31,
62, 72, 134, 207, 271, 289, 292, 373 of 2020.
Tushar Mehta, SG, Jayant Muthraj, Jaideep Gupta, Shekhar
Naphade, Vijay Hansaria, Vinay Navare, Ritin Rai, Sr. Advs., Mahesh
Agarwal, Ankur Saigal, Vikrant Pachnanda, Utkarsh Pratap, E.C.
Agrawala, Devansh A. Mohta, Shishir Deshpande, Amit Yadav, Nilakanta
Nayak, Ms. Sujata Kurdukar, Mrigank Prabhakar, Ms. Sakshi Banga,
Gautam Prabhakar, Gaurav Nair, Ms. Sanika Mehra, Ms. Pranati
Bhatnagar, Kritya Sinha, Varun Singh, Vikas Mehta, Apoorv Khator,
Rajat Sehgal, Satpal Singh, Ms. Seema Thapliyal, Jaimon Andrews,
K. Prajagopal, Piyo Harold Jaimon, Sandeep Thakur, Naresh Kumar,
Zaid Ali Subzposh, Tamim Qadri, Lakshmi Raman Singh, Vineet Bhagat,
Nikhil Goel, S.K. Kulkarni, M. Gireesh Kumar, Ankur S. Kulkarni,
M.P. Vinod, Atul Shankar Vinod, Dileep Pillai, Ajay Kumar Jain, Sajith
P., Kannan Gopal Vinod, Chinmoy Khaladkar, Sanjay Kharde,
Ms. Chandan Ramamurthi, Pradhuman Gohil, Mrs. Taruna Singh,
Ms. Ranu Purohit, Ms. Tanya Srivastava, Ms. Charu Mathur, Yadav
Narender Singh, Ms. E.R. Sumathy, Sarad Kumar Singhania,
Ms. Vanshaja Shukla, Rameshwar Prasad Goyal, H. Chandra Sekhar,
Mrs. Rekha Chandra Shekhar, Karri Venkata Reddy, Chirag M. Shroff,
Ms. Yashika Verma, Ms. Abhilasha Bharti, M.A. Chinnasamy, Arvind
Gupta, Sandeep Kumar Singh, Anil Kumar Sahu, Prakash Gautam, Sujeet
Kumar, J.N. Pathak, Sunil Kumar Pandey, Amol Nirmalkumar
Suryawanshi, S. Sada Siva Reddy, Karri Venkata Reddy, S. Usha Reddy,
Santosh Krishnan, Ms. Rakhi Ray, Abhay Kumar, M.J. Paul, Renjith B.,
Lakshmi N. Kaimal, Jayakrishnan U., Mahendra Kumawat, Subodh S.
Patil, Ms. Supriya Patil, Ajay Kumar Singh, Garvesh Kabra, Mrs. Pooja
Kabra, Ms. Nikita Kabra, Harshvardhan Jha, Anup Lohiya, Adarsh
Upadhyay, Abhishek Chaudhary, Anurag Kishore, Mridula Kanti Sinha,
S.K. Rajora, Ms. Mamta Upadhyaya, Kusum Chaudhary, Atul
Babasaheb Dakh, Mrs. Pragya Baghel, Ajay Majithia, Satyajit A. Desai,
Ms. Anagha S. Desai, Bankey Bihari Sharma, Rabin Majumder, Abhishek
Agarwal, A. Venayagam Balan, Gaurav Agrawal, Bharat L. Gandhi,
Mrs. Vithika Garg, Ms. Vidushi Garg, Ms. Karishma Singhal, Ms. Garima
Prashad, Suresh Chandra Tripathy, Anirudh Sanganeria, Karunakar
Mahalik, B. Vishwanath Bhandarkar, Sarbendra Kumar, Upendra
Narayan Mishra, Durga Dutt, Prakash Sharma, Dilip Annasaheb Taur,
Rajul Shrivastav, Mohit D. Ram, Ms. Monisha Handa, Sachin Kaushal,
Bhagirath N. Patel, Rajat Nair, Ms. Swati Ghildiyal, Akshay Amritanshu
PANDURANG GANPATI CHAUGULE v. VISHWASRAO PATIL
MURGUD SAHAKARI BANK LIMITED
A
B
C
D
E
F
G
H
1054
SUPREME COURT REPORTS
[2020] 5 S.C.R.
A.K. Sharma, Shubham Saurav, Ms. Vanshaja Shukla, Kuldeep
S. Parihar, H.S. Parihar, Ms. Ikshita Parihar, Shivaji M. Jadhav, Nicholas
Choudhary, Aditya P. Khanna, Aditya S. Jadhav, Shiv Ram Pandey,
S. Lakshmi Iyer, Ms. Aishwarya Dash, Chinmoy Khaladkar, (for
M/s. S.M. Jadhav and Company), Rutwik Panda, Ms. Nikhar Berry,
Ms. Anshu Malik, M.Y. Deshmukh, Ms. Manjeet Kirpal, Avanish Pandey,
Ms. Sneha Kalita, Gwen Karthika, Ms. Abha R. Sharma, P.S. Sudheer,
Rishi Maheshwari, Mrs. Mayuri Nayyar Chawla, Ms. Anne Mathew,
Bharat Sood, Ms. Shruti Jose, Amar Dave, Vishwas K. Shah, Massom
K. Shah, Anup Jain, Udit Gupta, Pulkit Tare, Ashok Panigarhi, Apoorv
Kurup, Ms. Upama Bhattacharjee, Ms. Nidhi Mittal, Mrs. Anil Katiyar,
Pratap Venugopal, Ms. Surekha Raman, Ms. Ayushi Gaur, Akhil Abraham
Roy, Vijay Valsan, (for M/s. K.J, John and Co.), A.N. Arora, Piyush
Sharma, M.T. George, Mrs. Susy Abraham, Johns George, Aniruddha
P. Mayee, A. Rajarajan, Ms. N. Annapoorani, D. Bharat Kumar, Prasanna
Kumar Parhi, Tadimalla Bhaskar Gowtham, Aman Shukla, D.V. Raghu
Vamsu, Siddhartha Sinha, Hathindra Manda, Abhijit Sengupta, Anil Kumar
Mishra, Ms. Praveena Gautam, Pawan Shukla, Ms. Sweety Pandey,
Raja Ram, M. Khairati, Irshad Ahmad, Aniruddha Joshi, Rajeev
Maheshwaranand Roy, Gunjan Kumar, P. Srinivasan, Navjeet Giri, Rajeev
K. Panday, V.N. Raghupathy, Manendra Pal Gupta, S.N. Bhat,
Ms. Hemantika Wahi, Chinmoy Khaladkar, Ms. Neha Sharma,
Deeptakriti Verma, Rajiv Shankar Dwivedi, Ms. Anuradha Mutatkar,
Ms. Usha Singh, Ms. Nidhi Saini, Siddharth Mittal, Arun Aggarwal, Ankur
Prakash, Praveen Chaturvedi, Dr. Lalit Bhasin, Ms. Nina Gupta,
Ms. Palak Chadha, Ms. Ruchika Joshi, P.V. Yogeswaran, Ms. Asha
Gopalan Nair, Sudhanshu S. Choudhari, Rameshwar Prasad Goyal,
Debmalya Banerjee, Kartik Bhatnagar, Rohan Sharma, A.S. Aman,
Ujjwal Singh, Vandaan Wanchoo (for M/s. Karanjawala & Co.), Soumyajit
Pani, Chittaranjan Singh (for Vinodh Kanna B.,), A. Venayagam Balan,
P.I. Jose, Prashant K. Sharma, Jenis Francis, Ravi Sagar, Anupam
Mishra, Hari Kumar V., Siddhesh Kotwal, Ms. Bansuri Swaraj, Nirnimesh
Dube, Ms. Astha Sharma, Ms. Arshiya Ghose, Divyansh Tiwari,
Ms. Ana Upadhyay, Rajesh Mahale, Arjun Krishnan, Ankur Singh,
Shourya Bari, Aaditya A. Pande, Chander Shekhar Ashri,
Chandrashekhar A. Chakalabbi, Awanish Kumar, S.K. Pandey, Anshul
Rai (for M/s. Dharmaprabhas Law Associates), B.K. Pal, G. Prakash,
Jishnu M.L., Mrs. Priyanka Prakash, Mrs. Beena Prakash, P.V. Dinesh,
Uday B. Dube, Y. Raja Gopala Rao, Ms. Vismai Rao, Sanjeev Kumar,
A
B
C
D
E
F
G
H
1055
Pankaj Tikde, Sanjay Kumar, H.K. Naik, Rajnish K., Awanish Kumar,
Ajay Amritraj, Arvind Kr. Sharma, Aniteja Sharma, Raj Kishor Choudhary,
Rohit K. Singh, Uday Tiwary, P.N. Razdan, Mirza Kayesh Begg,
Ms. Anshruta Maheshwari, Ms. Usha Nandini. V, Bineesh Karat, Biju
P. Raman, M.S. Vishnu Sankar, Ms. Athira G. Nair, Sonal Jain, Kumar
Shashank, Ms. Rukhmini Bobde, Aviral Kapoor, Ms. Shagufa Salim,
Nivesh Kumar, Ms. Riya Dhingra, Satyavir Yadav, Vishal Prasad, Anil
Nag, Arjun Vinod Bobde, Ms Richa Relhan, Sathak Bhatia,
S. Bushra Kazim, Rajat Joseph, Suresh Dutt Dobhal, Anil Kumar Sangal,
Harish Pandey, Ms. Pratibha Jain, Vijay Kumar, Dharmendra Kumar
Sinha, Shashibhushan P. Adgaonkar, Rahul Chitnis, Sachin Patil, T.L.V.
Rama Chari, Hitesh Kumar Sharma, Akhileshwar Jha, T. Ramamurty,
Ms. Sushma Suri, Shreekant N. Terdal, Tanvir Nayar, Praful Sinha, Manoj
Kr. Mishra, M/s. Udit Kishan Associates, Advs. for the appearing parties.
The Judgment of the Court was delivered by
ARUN MISHRA, J.
1. The matters have been referred in view of conflicting decisions
in Greater Bombay Coop. Bank Ltd. v. United Yarn Tex (P) Ltd. and
Ors.1, Delhi Cloth & General Mills Co. Ltd. v. Union of India and
Ors.2, T. Velayudhan Achari and Anr. v. Union of India and Ors.3,
and Union of India and Anr. v. Delhi High Court Bar Association
and Ors.4. The question relates to the scope of the legislative field covered
by Entry 45 of List I viz. 'Banking' and Entry 32 of List II of the Seventh
Schedule of the Constitution of India, consequentially power of the
Parliament to legislate. The moot question is the applicability of the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (for short, 'the SARFAESI Act') to the
co-operative banks.
2. The Parliament's competence to amend Section 2(c) of the
SARFAESI Act by adding sub-clause '(iva) - a multi-State co-operative
bank' has also been questioned.