Greater Bombay Cooperative Bank v. United Yarn Tex Pvt Ltd

Facts

• Greater Bombay Cooperative Bank filed an application before the Debt Recovery Tribunal (DRT) seeking recovery of a loan from United Yarn Tex
• The borrower challenged the jurisdiction of the DRT, contending that cooperative banks do not fall within the definition of "bank" under the RDDB Act
• The cooperative bank argued it was a "banking company" regulated under the BR Act and therefore entitled to DRT access

Issue

1. Whether a cooperative bank registered under a state cooperative societies Act qualifies as a "bank" under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Held

• The Court held that the RDDB Act defines "bank" with reference to the Banking Regulation Act. Cooperative banks, while brought under RBI regulation through Part V of the BR Act, are not "banking companies" under S.5(c) because they are not incorporated under the Companies Act. They are registered under state cooperative societies Acts. Since the RDDB Act's definition requires the entity to be a "banking company," cooperative banks fall outside its scope and cannot approach the DRT.

Ratio Decidendi

Cooperative banks are not "banking companies" under S.5(c) BR Act because they are not companies incorporated under the Companies Act. Legislation conferring jurisdiction on DRTs using the term "bank" as defined in the RDDB Act excludes cooperative banks.