Cooperative banks should be kept away from political pressure: SC
New Delhi: The Supreme Court has passed a slew of directions to give more power to Cooperative Banks' Board and to reduce political interference in its functioning, holding that their Registrar should be subjected to disciplinary proceedings if he acts under political influence.
A bench of justices K S Radhakrishnan and Dipak Misra said, "Registrar/Joint Registrar shall not act under political pressure or influence and, if they do, be subjected to disciplinary proceedings and be also held personally liable for the cost of the legal proceedings."
"Supersession of an elected managing Committee/Board is an exception and be resorted to only in exceptional circumstances and normally elected body be allowed to complete the term for which it is elected," the bench said.
The bench said that the elected committee be not penalised for the shortcomings or illegalities committed by the previous committee, unless there is any deliberate inaction in rectifying the illegalities committed by the previous body.
The apex court said, "Registrar/Joint Registrar are legally obliged to comply with all the statutory formalities, including consultation with the financing banks or controlling banks etc. Only after getting their view, an opinion be formed as to whether an elected Committee be ousted or not".
"Registrar/Joint Registrar should always bear in mind the consequences of an order of supersession which has the effect of not only ousting the Board out of office, but also disqualify them for standing for election in the succeeding elections.
"Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power," it said.
The apex court passed the verdict while quashing a Registrar order of superseding the Board of Directors of District Cooperative Central Bank Ltd, Panna without previous consultation with the Reserve Bank of India.