Summary
The Supreme Court harmonised cooperative banks’ power to appoint their CEOs with statutory cadre requirements for State-assisted Central Societies. Such a bank must select an RBI-eligible CEO from the panel supplied by the notified Apex Society where a cadre exists; otherwise prior Registrar approval is required. The respondent bank’s proposed appointee was outside the prescribed cadre, while the appellant’s appointment had been ratified and accepted. The writ petition’s dismissal was restored.
Issues
- How the 2016 CEO-appointment amendments interact with State-assisted Central Societies’ cadre requirements.
- Whether the respondent bank could appoint a CEO outside the Apex Society’s cadre.
Provisions considered
- Section 49-E(2), Chhattisgarh Co-operative Societies Act, 1960Preserves cadre-based appointment or prior Registrar approval for Central Societies receiving the specified State financial support. (¶¶ 10, 23, 24, 38, 47)
- Section 54, including subsection (3)(a) and (b), Chhattisgarh Co-operative Societies Act, 1960CEO appointment power and RBI eligibility requirements must be harmonised with cadre constitution, notified obligations and the Registrar’s default power. (¶¶ 13, 16, 25, 34, 36, 45, 47)
- Schedule, first entry, State notification dated 12 January 1971 under Section 54(3)Requires Central Cooperative Banks to employ officers from the State Cooperative Bank cadre, read with the Court’s panel-selection construction. (¶¶ 14, 15, 40, 45, 47, 48)
Held
- The 2016 special provisions confer on cooperative banks power to appoint their CEOs subject to RBI eligibility, excluding them from the general notification power for that limited purpose. But the legislature left intact Section 49-E governing State-assisted Apex and Central Societies. (¶¶ 34, 35, 36, 38, 47)
- For a cooperative bank falling within Section 49-E(2), an existing Section 54 cadre remains the required source. The State may notify the Apex Society’s cadre; the Apex Society must forward a panel and the bank selects its CEO from that panel, subject to RBI eligibility. This construction preserves both statutory purposes. (¶¶ 39, 40, 41, 45, 46, 47)
- Where no such cadre exists, the CEO of a cooperative bank within Section 49-E(2) must be appointed with the Registrar’s prior approval. (¶ 47)
- The respondent was admittedly a Central Society governed by Section 49-E(2) and the 1971 notification. Its proposed CEO was outside the appellant’s cadre, making that appointment unsustainable. The alternative appointment had been ratified by the Registrar and accepted by the bank’s board. (¶¶ 48, 49, 50)
Result
Appeal allowed; Division Bench judgment set aside and Single Judge’s dismissal of the writ petition restored for the reasons given by the Supreme Court. No costs.