Greeva Garg –
Published on: September 6, 2021, at 11:55 IST
The Madhya Pradesh High Court stayed a June 25, 2021, circular issued by the Reserve Bank of India (RBI) for Appointments of Managing Director (MD) and Chief Executive Officers (CEOs) in Urban Cooperative Banks.
While hearing a Writ Petition filed by an Urban Cooperative Bank, Mahanagar Nagrik Sahkari Bank Ltd, Bhopal, the Division bench comprised Chief Justice Mohammad Rafiq and Justice Vijay Kumar Shukla passed an interim order in regard to the matter on September 3.
The plea challenged the Banking Regulation (Amendment) Act, 2020, and the June 25, 2021, RBI circular, stating that both are ultra vires to the Indian Constitution.
Shri Ajay Gupta, leaned counsel with Shri Ravi Kant Patidar, representing petitioner submitted that “Part IXB was inserted in Constitution, by 97th Constitutional Amendment, 2011, whereby 2nd Proviso to Article 243ZL made all the provisions of Banking Regulation Act, 1949 applicable to all such co-operative societies doing the business of banking.”On the strength of this provision in the Constitution of India, Parliament made Banking Regulation (Amendment) Act, 2020.”
“Article 243ZL, along with Part IXB of the Constitution of India has been struck down by the Supreme Court of India in its judgment dated 20th July, 2021 passed in Union of India Vs. Rajendra N. Shah. Thus, the basis of promulgating Banking Regulation (Amendment) Act, 2020 has been struck down by the Supreme Court of India,” Ajay Gupta argued.
Considering all the arguments of the petitioners, the Court has issued notices to the respondents, seeking their reply till the next hearing of the matter, to be heard after 8 weeks.
Click here to read/download the Order
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