Live Help
Want to know more
Enter the details and we'll call you soon

Name :

Company Name :

City :

Mobile No. :

Email id :

  

Thank you for your details



Our Executive will reach you shortly.

Your Session Will Expire in   seconds.
If you do not wish to log-out, choose 'Let me continue'
Reset SessionCancel Session
 

Recovery process u/s 13 of SARFAESI Act applies to Co-op/multi-State co-op banks: SC

May 6, 2020[2020] 116 taxmann.com 414 (SC)
98 Views

FEMA, BANKING & INSURANCE: Recovery procedure prescribed under section 13 of SARFAESI Act is applicable to Cooperative banks registered under State legislation and multi-State cooperative banks and Parliament has legislative competence to provide additional procedures for such recovery (viz. amending SARFAESI Act)

• Cooperative banks registered under State legislation and multi-State level cooperative societies registered under MSCS Act, 2002 with respect to 'banking' are governed by legislation relatable to Entry 45 of List I of Seventh Schedule of Constitution of India.

• Cooperative banks run by cooperative societies registered under State legislation with respect to aspects of 'incorporation, regulation and winding up', in particular, with respect to matters which are outside purview of Entry 45 of List I of Seventh Schedule of Constitution of India, are governed by said legislation relatable to Entry 32 of List II of Seventh Schedule of Constitution of India.

• Cooperative banks involved in activities related to banking are covered within meaning of 'Banking Company' defined under Section 5(c) read with Section 56(a) of Banking Regulation Act, 1949, which is a legislation relatable to Entry 45 of List I. It governs aspect of 'banking' of cooperative banks run by cooperative societies. Cooperative banks cannot carry on any activity without compliance of provisions of Banking Regulation Act, 1949 and any other legislation applicable to such banks relatable to 'Banking' in Entry 45 of List I and RBI Act relatable to Entry 38 of List I of Seventh Schedule of Constitution of India.

• Cooperative banks under State legislation and multi-State cooperative banks are 'banks' under section 2(1)(c) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Recovery is an essential part of banking; as such, recovery procedure prescribed under section 13 of SARFAESI Act, a legislation relatable to Entry 45 List I of Seventh Schedule to Constitution of India, is applicable.

• Parliament has legislative competence under Entry 45 of List I of Seventh Schedule of Constitution of India to provide additional procedures for recovery under section 13 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 with respect to cooperative banks. 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 cooperative bank' is not ultra vires as well as notification dated 28.1.2003 issued with respect to cooperative banks registered under State legislation.

read more

taxmann.com
Payment
Best view in 1140 x 768