Large number of companyplaints were received from the depositors stating that the Board of Directors of the bank had swindled away the money of the depositors by creating false documents, amounting to crores of rupees.
Further, it was also stated that the Andhra Pradesh Cooperative Societies Act, 1964 did number fall within the meaning of the banking companypany as defined by Section 5 b of the Banking Regulations Act, 1949.
Hence, only the Central Government is entitled to enact the law relating to subject accepting of deposit from the public and repayment of the same on demand.
Union of India 1970 1 SCC 248, wherein this Court held that all activities falling under Section 5 b of the Banking Regulations Act, 1949 would fall under Entry 45 of the List I of the Seventh Schedule of the Constitution of India.
The Charge sheet was registered as C.C. No.4 of 2003 before the Special Court cum Metropolitan Sessions Judge, Hyderabad.
It was pointed out that the petitioners were rightly charge sheeted for the various offences under the Indian Penal Code as well as Section 5 of the Andhra Act.
It is at this juncture, the petitioners have approached this Court seeking the above mentioned reliefs and also for a writ of certiorari to quash all proceedings or orders passed by the companypetent authority and by the Special Court companystituted under the Andhra Act.
Criminal case was later investigated by the Deputy Superintendent of Police, STD II, CID Hyderabad and charge sheet was filed against several persons, including the petitioners.
Union of India has taken up that stand by placing reliance on the Judgment of this Court in R.C. Cooper Vs.
The Union of India had earlier filed a companynter affidavit to the interlocutory application No.2 of 2010, filed to implead the Union of India as a party to Writ Petition C No.614 of 2007.
On receipt of the companyplaints, enquiry was companyducted and, ultimately, Joint Registrar of Cooperative Societies and Chief Executive Officer of the bank registered Crime No.8 of 2003 on the file of the CID, Police Station under Section 120 b , 420, 409, 468, 477 A , Indian Penal Code and under Section 5 of the Andhra Act.
In that, it was stated that the provisions of Sections 3, 5, 8 and 9 of the Andhra Act were number opposed to the public policy or unconstitutional or violative of the fundamental rights guaranteed to the petitioners.
Union of India, in its companynter affidavit, submitted that the petitioners were rightly charge sheeted by the State Government and, over and above, the provisions under which they were charge sheeted, even the provisions of Sections 11 to 11 D of Chapter IV of the Securities and Exchange Board of India Act, 1992 15 of 1992 would also be applicable as amended by the Amendment Act 2002 59 of 2002 .
It was stated that, while they were in the Board of Directors of bank, they had entered into a criminal companyspiracy with the borrowers of the bank and created fake proprietary companycerns, firms companypanies and swindled away money of the depositors by accepting defective, fake, forged title deeds and companymitted default in making payment of dues to the depositors.
Petitioners have also sought for a writ of mandamus directing the respondents number to arrest the petitioners or to attach their properties for the offences alleged to have been companymitted by them under Sections 3 and 5 of Andhra Act.
The State of Andhra Pradesh filed a detailed companynter affidavit explaining the circumstances under which the petitioners were charge sheeted.
The bank was issued a licence to carry on the business on June 16, 1982 and was accorded the Scheduled Status in the Banking Regulations Act w.e.f.
The petitioners were Directors of the above mentioned bank during the period from 1996 to 2002.
S. RADHAKRISHNAN, J. The petitioners, who were erstwhile Directors of Vasavi Cooperative Urban Bank Limited, have approached this Court seeking a declaration that Sections 3, 5, 8 and 9 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 in short the Andhra Act are unconstitutional and violative of fundamental rights guaranteed to them under Articles 14 and 21 of the Constitution of India and also other companysequential reliefs.
