Don’t act under pressure: SC to co-op registrars

In a judgment that would go a long way in checking the arbitrary interference of state government in the functioning of cooperative banks and financial institutions,the Supreme Court on Thursday directed that supersession of an elected managing committee/ board by a state government must be “resorted to only in exceptional circumstances”.

Written by Express News Service | New Delhi | Published:May 17, 2013 3:54 am

In a judgment that would go a long way in checking the arbitrary interference of state government in the functioning of cooperative banks and financial institutions,the Supreme Court on Thursday directed that supersession of an elected managing committee/ board by a state government must be “resorted to only in exceptional circumstances”.

In its judgment in the case of State of Madhya Pradesh and others versus Sanjay Nagayach and others,the Bench of Justices K S Radhakrishnan and Dipak Misra also directed that in case of shortcomings or illegalities by previous committees,elected committee in office must not be penalised,unless there’s a “deliberate inaction in rectifying the illegalities committed by the previous committees”.

The Bench also imposed costs on the Madhya Pradesh government and fined the Joint Registrar,Co-operative Societies,Sagar,Rs 10,000 for having acted arbitrarily in the case.

The court was deciding the legality of the order by the Joint Registrar to supersede the Board of Directors of District Cooperative Central Bank,Panna,without previous consultation with the Reserve Bank of India,as provided under law.

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