IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

INDEX

S.No Particulars Page

1. Proforma A-C

2. Synopsis D-E

3. Petition

4. Vakalatnama

5. Memorandum of Registered Address

6. List of Documents

7. Certificate of Advocate

8. Exhibit A: Copy of impugned circular dated

14.11.2016

9. Exhibit B: Copy of banking license issued to

Petitioner

10. Exhibit C: Copy of notification dated 08.11.2016

issued by Respondent No. 2 being 3407(E)

11. Exhibit D: Copy of circular of Respondent No. 1

being RBI/2016-17/112 DCM (Plg) No.1226/
 10.27.00/2016-17 dated 08.11.2016

12. Exhibit E: Copy of notification allowing certain

persons to accept discontinued currency notes

13. Exhibit F: Copy of corrigendum dated 09.11.2016

issued by the Respondent No. 2 to original
notification

14. Exhibit G: Copy of notice dated 09.11.2016 sent by

the Petitioner to the Respondent No. 1.

15. Exhibit H: Copy of notice dated 11.11.2016 sent by

the Petitioner to the Respondent No. 1

16. Exhibit I: Copy of notice dated 15.11.2016 sent by

the Petitioner to the Respondent No. 1

17. Exhibit J: Copy of bye-laws of the Petitioner

18. Affidavit in Support of Petition

For ABG & Associates

Advocates for the Petitioner

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

PROFORMA

Office notes, memorandum of Court’s or Judge’s Order

quorum, appearance and Court’s
order or direction and
Prothonotary’s order.
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

PROFORMA

Office notes, memorandum of Court’s or Judge’s Order

quorum, appearance and Court’s
order or direction and
Prothonotary’s order.
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

PROFORMA

Office notes, memorandum of Court’s or Judge’s Order

quorum, appearance and Court’s
order or direction and
Prothonotary’s order.
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

SYNOPSIS

A.) List of important dates and events

S.No Date Event Exhibit Page

No.

1. 12.02.1975 The Petitioner was B

incorporated and
registered under the
Maharashtra Co-operative
Societies Act, 1960, in the
year 1974 and started its
functioning on 12th of
February, 1975. It is
licensed to operate as a
bank under the relevant
provisions of the Banking
Regulation Act, 1949.

2. 08.11.2016 The Respondent No. 2 C

whilst exercising its
powers under section
26(2) of the Reserve Bank
of India Act, 1934, issued
a notification by which
existing currency notes of
INR 500.00 and INR
1,000.00 ceased to be
legal tender. This
notification was published
 in the official gazette in
Part II, Section 3(ii),
notification 3407(E).
Paragraph 1 of the
primary notification
allowed “every banking
company defined under
the Banking Regulation
Act, 1949 (10 of 1949)”
to deposit the
discontinued currency
with the Reserve Bank of
India and to receive credit
for the same. Paragraph 2
of the primary
notification, which is
relevant to the present
petition, allowed “any
Issue Office of the
Reserve Bank or any
branch of public sector
banks, private sector
banks, foreign banks,
Regional Rural Banks,
Urban Cooperative Banks
and State Cooperative
Banks” to receive
discontinued currency
notes from members of
the public at large in the
manner provided therein.

3. 08.11.2016 The Respondent No. 1, on D

the same day, i.e on the
8th of November, 2016,
issued a circular being
RBI/2016-17/112 DCM
(Plg)
 No.1226/10.27.00/2016-
17 setting down the
guidelines to implement
the primary notification

4. 08.11.2016 The Respondent No. 2 E

also published another
notification in the official
gazette notifying certain
categories of persons who
were permitted to accept
the discontinued currency
notes as legal tender for
their goods and/or
services.

5. 09.11.2016 The Respondent No. 2 F

published a corrigendum
to the primary notification
in the official gazette.
This corrigendum, in
essence, made paragraph
2 of the primary
notification applicable to
all co-operative banks in
addition to other classes
of banks.

6. 09.11.2016 Notices were sent by the G

& Petitioner to the
11.11.2016 Respondent No. 1 H

7. 14.11.2016 The Respondent No. 1 A

published the impugned
circular prohibiting
district central co-
operative banks from
either providing the
facility to exchange
 discontinued currency
notes with new ones, or
allowing account holders
to deposit discontinued
currency notes

8. 15.11.2016 Notice sent by the I

Petitioner to the
Respondent No. 1 in
relation to the impugned
circular

9. June 2009 As per the revival scheme,

the mill undertakings
ought to have been fully
operational within 18
months from being
awarded the bid

10. Present day The mill undertakings

which ought to have been
fully operational by now
after entering into the
joint ventures, are still not
functioning evenly close
to their intended capacity.
However, the Respondent
Nos. 1 and 2 have not
taken any steps to
terminate the joint-
venture agreements.
Hence this petition.

B.) Points to be heard:

 That the impugned circular is in excess of the Respondent No. 1’s

authority and powers.
  That the impugned circular ought to be quashed and set aside.

C.) Acts/Rules to be relied upon

 The Constitution of India, 1950

 The Banking Regulation Act, 1949

 The Reserve Bank of India Act, 1934

 The National Bank for Agriculture and Rural Development, 1981

D.) Authorities to be cited

 As required for the Application

For ABG & Associates

Advocates for the Petitioner

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. ____________ OF 2016

In the matter of Articles 14, 19, 21, and

226 of the Constitution of India, 1950;
and
In the matter of section 26(2) of the
Reserve Bank of India Act, 1934;
and
In the matter of circular issued by the
Reserve Bank of India bearing reference
number RBI/2016-17/130 DCM (Plg)
No.1273/10.27.00/2016-17;
and
In the matter of notification published by
the Central Government through the
Ministry of Finance on the 8th of
November, 2016;

In the matter of:

Mumbai District Central Co-operative )
Bank Limited, Mumbai Bank Bhavan, )
207, Dr. D.N Road, Fort, )
Mumbai – 400 001, ) …PETITIONER
v.
1. Reserve Bank of India, )
through the Governor, )
Central Office Building )
18th Floor, Shahid Bhagat Singh )
Road, Mumbai – 400 001 )
)
2. Union of India, through the )
Ministry of Finance, Department )
OfEconomic Affairs, 2nd Floor, )
AaykarBhavan, Maharishi Karve )
Marg,New Marine Lines, )
Mumbai – 400 020 ) …RESPONDENTS
 TO,
THE HONOURABLE CHIEF JUSTICE AND
OTHER HONOURABLE PUISNE JUDGES
OF THIS HONOURABLE HIGH COURT OF
JUDICATURE AT BOMBAY.

THE HUMBLE PETITION OF THE PETITIONER ABOVENAMED:

1. The present writ petition is being filed by the Petitioner above

named in relation to a circular issued by the Respondent No. 1 (the
Reserve Bank of India) on the 14th of November, 2016, bearing
reference number RBI/2016-17/130 DCM (Plg)
No.1273/10.27.00/2016-17 (hereinafter referred to as the
“impugned circular” for the convenience of this Hon’ble Court). A
copy of this impugned circular is being annexed to this petition as
“Exhibit A”. By this circular, the Respondent No. 1 has restricted
the ability of the Petitioner to carry on its lawful banking business as
per the banking license obtained by it. The Petitioner submits that
the impugned circular is, inter alia, arbitrary in nature, in excess of
the Respondent No. 1’s authority, and is in violation of the
provisions of section 26 of the Reserve Bank of India Act, 1934.

2. The Petitioner (“The Mumbai District Central Co-operative Bank

Ltd.”) is a central financing agency for all affiliated co-operative
societies in Mumbai district and is popularly known as "MUMBAI
BANK". The Respondent No. 1 is the Reserve Bank of India, an
autonomous statutory body formed under the provisions of the
Reserve Bank of India, 1934, and derives its powers from that
statute. The Respondent No. 2 is the branch of the government
responsible for overseeing affairs relating to India’s monetary
policies, including those relating to currency.

3. The facts in brief that have led to the filing of the present writ
petition shall now be set out by the Petitioner below:

A. The Petitioner was incorporated and registered under the

Maharashtra Co-operative Societies Act, 1960, in the year
1974 and started its functioning on 12th of February, 1975.
 The Petitioner is a “central co-operative bank” under the
provisions of the Banking Regulation Act, 1949, and the
National Bank for Agriculture and Rural Development Act,
1981. A central co-operative bank is the principal co-
operative society in a district in a State, the primary object of
which is the financing of other co-operative societies in that
district. The purpose of a central co-operative bank is to act as
the banker to other industry and purpose-specific co-operative
societies within a district, for example milk co-operative
societies, agricultural co-operative societies, etc.

B. The Petitioner is currently acting as a central co-operative

bank under the terms of a licence obtained by it from the
Reserve Bank of India, issued under section 22(1) read with
section 56(o) of the Reserve Bank of India Act, 1934. A copy
of this licence, the latest iteration of which was issued on the
20th of December, 2011, is being annexed to this petition as
“Exhibit B”.

C. Since there is no agriculture production in the Mumbai

district, the Petitioner is catering to the financial needs of
non-agricultural co-operative societies such as Urban Co-op.
Banks, Urban Co-op. Credit Societies, Employees Co-op.
Credit Societies, Housing Co-op. Societies, Co-op.
Consumers stores, Industrial, fisheries and labour Co-op.
Societies etc.

D. In India, an integral part of the policies formed as part of the

Co-operative movement is the development of the country,
upliftment of poor and propagation of principles which
represents the very socio-cultural ethos of the country. The
co-operative movement has enabled the nation to develop it’s
economy and to bring social change at large. The success of
the co-operative depends largely on their ability to face the
challenges by converting these challenges into opportunities
of growth and development in the fast changing liberalized
economic era. The Indian co-operative movement is by far
the largest such movement in the world. In India co-
operatives operate in almost all important sectors i.e.
 agricultural, agro-processing, fertiliser, marketing, credit,
dairies, spinning, handloom and handicrafts, sugar, fisheries,
banking, etc.

E. As per the provisions of the Reserve Bank of India Act, 1934,

a central co-operative bank is entitled to carry on the business
of banking in the same manner as any other bank, subject to
certain modifications as set out therein. The Petitioner has
been carrying out its business as per its license and the objects
for which it was formed.

F. On the 8th of November, 2016, the Respondent No. 2 whilst

exercising its powers under section 26(2) of the Reserve Bank
of India Act, 1934, issued a notification by which the existing
series of currency notes of INR 500.00 and INR 1,000.00
ceased to be legal tender. This notification was published in
the official gazette in Part II, Section 3(ii), notification
3407(E). A copy of this notification is being annexed to this
petition as “Exhibit C”. For the convenience of this Hon’ble
Court, this notification shall henceforth be referred to as the
“primary notification”.

G. Paragraph 1 of the primary notification allowed “every

banking company defined under the Banking Regulation Act,
1949 (10 of 1949)” to deposit the discontinued currency with
the Reserve Bank of India and to receive credit for the same.
Paragraph 2 of the primary notification, which is relevant to
the present petition, allowed “any Issue Office of the Reserve
Bank or any branch of public sector banks, private sector
banks, foreign banks, Regional Rural Banks, Urban
Cooperative Banks and State Cooperative Banks” to receive
discontinued currency notes from members of the public at
large in the manner provided therein. Specifically, the entities
mentioned in this paragraph would be allowed to:

(i) Exchange the discontinued currency notes of aggregate

value of INR 4,000.00 or below (later increased to INR
4,500.00) with currency notes after obtaining a requisition
 slip in the specified format and proof of identity of the person
seeking such exchange;

(ii) Receive deposits from account holders of the

discontinued currency notes;

(iii) Permit withdrawals by account holders of amounts upto

INR 10,000.00 per day of valid currency notes from the bank
counters, or INR 2000.00 per day through Automatic Teller
Machines.

H. The Respondent No. 1, on the same day, i.e on the 8thof

November, 2016, issued a circular being RBI/2016-17/112
DCM (Plg) No.1226/10.27.00/2016-17 setting down the
guidelines to implement the primary notification (hereinafter
referred to as the "RBI circular" for the convenience of this
Hon’ble Court). A copy of this circular is being annexed to
this petition as “Exhibit D”.

I. Part 3(c) of this RBI circular, entitled “Provision of Exchange

Facility” dealt with the mandate set out in paragraph 2 of the
primary notification. As this RBI circular was issued
ostensibly to implement the mandate of the primary
notification, it restricted the operation of this section to public
sector banks, private sector banks, foreign banks, Regional
Rural Banks, Urban Cooperative Banks and State
Cooperative Banks.

J. On the 8th of November, 2016, the Respondent No. 2 also

published another notification in the official gazette notifying
certain categories of persons who were permitted to accept
the discontinued currency notes as legal tender for their goods
and/or services. A copy of this notification is being annexed
to this petition as “Exhibit E”.

K. Thus the Petitioner, being a central co-operative bank (also

known as a district central co-operative bank) was not
allowed to either exchange the discontinued currency notes or
allow their deposit by virtue of the primary notification and
the RBI circular.
L. However, the Respondent No. 2 published a corrigendum to
the primary notification on the 9th of November, 2016, in the
official gazette (hereinafter referred to as the “said
corrigendum” for the convenience of this Hon’ble Court). A
copy of the said corrigendum is being annexed to this petition
as “Exhibit F”. This corrigendum, in essence, made
paragraph 2 of the primary notification applicable to all co-
operative banks in addition to other classes of banks.

M. Aggrieved by the RBI circular, and not yet having received

the said corrigendum, the Petitioner sent a notice to the
Respondent No. 1 on the 9th of November, 2016, setting out
its grievances. A copy of this notice is being annexed to this
petition as “Exhibit G”.

N. The Petitionerwas, alongwith other banks, allowed to resume

business operations from the 10th of November, 2016. On the
basis of the primary notification read alongwith the said
corrigendum, the Petitioner began accepting deposits from its
account holders in accordance with paragraph 2 of the
primary notification. The Petitioner also began allowing the
exchange facility in accordance with paragraph 2 of the
primary notification. The Petitioner continued to do so until
the 13th of November, 2016. By virtue of a circular published
by the Respondent No. 1 bearing reference number
RBI/2016-17/114 DBR. No. Leg. BC.31/09.07.005/2016-17
the Petitioner as well as other banks were directed to remain
open on the 12th and 13th of November, 2016, despite those
dates being a Saturday and a Sunday. The Petitioner craves
the leave of this Hon’ble Court to refer to and rely upon this
notification as and when required.

O. Despite the said corrigendum, the Respondent No. 1 did not

amend the RBI circular to reflect the applicability of the
primary notification to central co-operative banks (also
known as district central co-operative banks). After becoming
aware of the said corrigendum, the Petitioner sent another
notice to the Respondent No. 1 on the 11th of November,
2016, to bring the contents and effect of the said notification
 to the Respondent No. 1’s notice. A copy of this notice is
being annexed to this petition as “Exhibit H”. The
Respondent No. 1 has not replied to either of the notices sent
to it by the Petitioner.

P. Instead, the Respondent No. 1 on the 14th of November, 2016,

published the impugned circular prohibiting district central
co-operative banks from either providing the facility to
exchange discontinued currency notes with new ones, or
allowing account holders to deposit discontinued currency
notes. The Petitioner submits that the impugned notice is
arbitrary in nature and ought to be quashed, on the grounds
that shall be set out later in this petition.

Q. Being aggrieved by the impugned circular, the Petitioner once

again sent a notice to the Respondent No. 1 on the 15th of
November, 2016, setting out how it is legally unsustainable.
A copy of this notice dated the 15th of November, 2016, is
being annexed to this petition as “Exhibit I”. The Petitioner
has not received any response to this notice. The present
petition is being filed in the circumstances narrated above to
challenge the impugned circular.

4. Before stating the grounds upon which the present petition is filed, it
would be pertinent to set out in brief the certain relevant provisions
of the applicable legal framework, as below:

A. The primary notification was issued by the Respondent No. 2

exercising its powers under section 26(2) of the Reserve Bank
of India Act, 1934. Section 26 is reproduced below:

26. Legal tender character of notes. — (1) Subject

to the provisions of sub-section (2), every bank
note shall be legal tender at any place in India in
payment or on account for the amount expressed
therein, and shall be guaranteed by the Central
Government.

(2) On recommendation of the Central Board the

Central Government may, by notification in the
Gazette of India, declare that, with effect from
such date as may be specified in the notification,
any series of bank notes of any denomination shall
 cease to be legal tender save at such office or
agency of the Bank and to such extent as may be
specified in the notification.

B. A bare perusal of the above provision makes it clear that the

ultimate power of delegitimizing any series of currency notes
rests with the Respondent No. 2. While it is true that the
Respondent No. 2 acts upon the recommendation of the
Respondent No. 1, such recommendation is not binding.
Further, it is the Respondent No. 2 is entitled to specify to
what extent the power is being exercised, and not the
Respondent No. 1.

C. The provisions of the Banking Regulation Act, 1949, are

applicable to co-operative societies engaged in the business of
banking by virtue ofPart V thereof. As per the provisions of
this part, a co-operative bank is defined as:

(cci) “Co-operative bank” means a bank state co-

operative bank, a central co-operative bank and a
primary co-operative bank;
…
(ccvii) “central co-operative bank”, “primary
rural credit society” and “State co-operative
bank” shall have the meaning respectively
assigned to them in the National Bank for
Agriculture and Rural Development Act, 1981.

D. As per the National Bank for Agriculture and Rural

Development Act, 1981, “central co-operative bank” is
defined as below:

(d) “central cooperative bank” means the

principal cooperative society in a district in a
State, the primary object of which is the financing
of other cooperative societies in that district:

Provided that in addition to such principal society

in a district, or where there is no such principal
society in a district, the State Government may
declare any one or more cooperative societies
carrying on the business of financing other
cooperative societies in that district to be also or
to be a central cooperative bank or central
cooperative banks within the meaning of this
definition;
5. The Petitioner submits that the present writ petition is being filed
upon the following grounds, which are in alternative and without
prejudice to one another:

A. That the impugned circular is arbitrary, discriminatory and

illegal and cannot be sustained. The Respondent No. 1 does
not have the authority or power to issue the impugned
circular. The impugned circular violates the provisions of part
III of the Constitution of India, 1950.

B. That the impugned circular is completely outside the purview

of the scope of powers of the Respondent No. 1. The powers
of the Respondent No. 1 are as set out in the Reserve Bank of
India Act, 1934. The primary notification was issued by the
Respondent No. 2 under section 26 of the Reserve Bank of
India, 1950. However, it is clear from even a bare perusal of
this provision that the power of discontinuing any series of
currency notes as legal tender lies with the Respondent No. 2
alone. While it is true that the Respondent No. 2 can exercise
its powers under this section after receiving a
recommendation from the Respondent No. 1, such a
recommendation is not binding. Ultimately, the discretion lies
with the Respondent No. 2. Further, section 26 makes it clear
that it is the Respondent No. 2 alone which has the power to
specify the extent to which any notification passed under that
section is to operate. Therefore, the Respondent No. 1 does
not have the authority to impose any fetters upon a
notification issued under section 26; nor can it restrict or
enlarge the scope of any such notification. It is a settled
principle of law that delegated legislation must fall
completely within the scope of the statute that permits its
creation. However, in the present case, as is clearly visible,
the Respondent No. 1 has exceeded its scope of powers.

C. That the impugned circular ignores, and effectively negates,

the effect of the said corrigendum upon the primary
notification. By virtue of the said corrigendum, the Petitioner
would be entitled to do and/or permit any of the acts set out in
paragraph 2 of the primary notification. However, by the
 impugned circular, the Respondent No. 1 is expressly
restricting the Petitioner and other similar banks from doing
so.

D. As per the said corrigendum, any “banking company, co-

operative bank, corresponding new bank, subsidiary bank,
regional rural bank and the State Bank of India as defined
under the Banking Regulation Act, 1949 (10 of 1949)” is
entitled to do any of the acts set out in paragraph 2 of the
primary notification. The definition of “co-operative bank”
has as per the Banking Regulation Act, 1949, has already
been set out above. It can be seen from this definition that the
term would include banks such as the Petitioner. Therefore,
the said corrigendum clearly and unequivocally brought the
Petitioner under the purview of paragraph 2 of the primary
notification. In light of this, the Respondent No. 1 is not
entitled to circumvent this by issuing the impugned circular
and barring the Petitioner from exercising these rights.

E. That the impugned circular is in excess of the Respondent No.

1’s powers of creating delegated legislation. There is no
provision in the Reserve Bank of India, 1934, allowing the
Respondent No. 1 to issue any directions as those that have
been issued by the impugned circular. The impugned circular
cannot be justified or backed by any of the provisions of this
statute. On this ground alone, it deserves to be quashed and
set aside.

F. That the impugned circular has the effect of preventing the

petitioner from carrying out its banking business despite
holding a valid licence under the provisions of the Banking
Regulation Act, 1949. By virtue of such a license, the
Petitioner ought to be entitled to operate its banking business
and to accept deposits. However, the impugned circular
prevents it from doing so. This is arbitrary in nature which, if
permitted, would have the effect of bestowing wide powers
upon the Respondent No. 1 to curtail the rights attached to
such a licence without any legal justification. Further, by
preventing the Petitioner from doing its business, the
 impugned circular must be held to be in violation of article 19
of the Constitution of India, 1950.

G. That the impugned circular is discriminatory in nature, and is

thus in violation of article 14 of the Constitution of India,
1950. The impugned circular singles out district central co-
operative banks and disallows them from doing any of the
acts set out in paragraph 2 of the primary notification.
However, there is no such restriction on any other type or
class of bank. The impugned circular, while creating this
distinction, does not give any reason why such a distinction is
being made. Nor is it explained how such a distinction, even
if valid, is relevant to the proper implementation of the
primary notification. Therefore, in the absence of any such
intelligible differentia or reasonable nexus between that and
the object of the primary notification, the impugned circular
cannot be sustained and must be held to be in violation of
article 14 of the Constitution of India, 1950.

H. That the impugned circular is arbitrary, insofar as it

completely ignores the said corrigendum and its effect. The
said corrigendum clearly and unequivocally makes paragraph
2 of the primary notification applicable to the Petitioner and
other such central co-operative banks. The said corrigendum
(as well as the primary notification itself) was notified by the
Respondent No. 2, which is the Central Government and is
empowered to exercise all sovereign functions as per the
Constitution of India, 1950. The Respondent No. 1, being a
statutory body, cannot circumvent the actions taken by the
Respondent No. 2 without any clear authority to do so.
Therefore, the impugned circular must be held to be arbitrary,
and consequently to be struck down as in violation of articles
14, 19, and 21 of the Constitution of India, 1950.

I. The Petitioner, by its very nature, acts as the banker to other

co-operative societies within the Mumbai District. Therefore,
the Petitioner provides banking services to numerous co-
operative societies established to act for the collective benefit
of all their members. Due to the impugned circular, the co-
 operative societies would be unable to deposit the
discontinued currency notes with their banker, i.e the
Petitioner. At the same time, these currency notes would be
useless for most purposes. This would cause great loss to the
members of such co-operative societies. On this ground also,
the impugned circular ought to be quashed and set aside.

J. Many hospitals, petrol pumps, medical stores, schools, etc

maintain accounts with the Petitioner. However, due to the
impugned circular, they will not be able to deposit any of the
discontinued currency notes in their possession in their bank
accounts maintained with the Petitioner. It is pertinent to note
that certain classes of business have been permitted to accept
the discontinued currency notes as legal tender such as petrol
pumps, consumer co-operative stores, and milk booths.
However, these same entities are now being prevented from
depositing those same old currency notes in their accounts
maintained with the Petitioner. This is clearly in violation of
article 14 of the Constitution of India, 1950.

K. There are a total of 1,03,873 savings accounts opened by

individuals and 12,285 savings accounts opened by housing
societies maintained in the Petitioner bank, the owners of
which are barred from depositing any discontinued currency
notes in their possession into them. Further, there are more
than 600 staff members of the Petitioner who maintain their
accounts with the Petitioner bank who are now unable to
deposit their discontinued currency notes with the Petitioner.
This is clearly causing great hardship to a large number of
persons and societies. The impugned circular does not contain
any rationale or justification for the same. Apart from this, it
is not uncommon for persons who have obtained loans from
the Petitioner to pay their EMIs using cash; which they will
now be unable to do due to the impugned circular.
Additionally, the Petitioner has had to return many cheques as
dishonoured as it is unable to accept deposits from the
individuals who issued the cheques into their accounts. Due
to all of these reasons, this Hon’ble Court ought to quash and
set aside the impugned circular.
 L. That it is absurd that by virtue of the RBI circular and the
impugned circular, urban co-operative banks are allowed to
collect deposits but the Petitioner isn’t. The Petitioner acts as
a clearing agent for many urban co-operative banks. Thus, the
impugned circular has created an absurd situation and
deserved to be quashed and set aside.

M. That the impugned circular does not prohibit withdrawals

from being made by account-holders of the Petitioner from
their accounts. However, at the same time, it prevents the
Petitioner from accepting any deposits. This puts the
Petitioner in the difficult position of not being able to
replenish its funds. This also attests to the fact that the
impugned circular is arbitrary in nature and ought to be set
aside.

N. That the impugned circular has the effect of discouraging the

Petitioner’s customers from maintaining their accounts with
the Petitioner, and to encourage them to transfer their
accounts to another bank. This is clearly in violation of the
Petitioner’s rights under articles 14, 19, and 21 of the
Constitution of India, 1950.

O. That the impugned circular is ex facie illegal and cannot find

support from any provision of the Reserve Bank of India Act,
1934. The impugned circular has been issued by the
Respondent No. 1 in excess of its authority under the relevant
statute. As such, it cannot be sustained.

6. In light of the above, the Petitioner has had no choice but to

approach this Hon’ble Court under Article 226 of the Constitution of
India, 1950, for appropriate reliefs. The Petitioner does not have any
alternate or efficacious remedy except for this writ petition.

7. The Petitioner also seeks urgent ad-interim and interim reliefs. Due
to the nature of the impugned circular and the current overall
situation due to the primary notification, every day the Petitioner is
unable to accept deposits from its customers is resulting in
irreparable loss and harm. It is further causing grave hardship and
 difficulties for the account holders themselves. For this reason, the
Petitioner is seeking that, pending the hearing and final disposal of
the present petition, the impugned circular be stayed and it be
allowed to accept deposits from persons who maintain accounts with
it.

8. The Petitioner submits that it has not filed any other petition or other
proceedings concerning the same subject matter for the same reliefs
in any other court or tribunal.

9. The Petitioner submits that the present petition is being verified by,
and is being supported by the affidavit of, one Mr. Devdas S. Kadam
who is a General Manager of the Petitioner and is fully aware of the
facts and circumstances of the case. He is authorised to affirm such
an affidavit and file the present petition by virtue of the bye-laws of
the Petitioner. A copy of these bye-laws are being annexed to this
petition as “Exhibit J”.

10. The Petitioner submits that it is paying the appropriate court fees of
INR 250.00 upon this petition.

11. As the subject matter of the present petition is located in Mumbai,

this Hon’ble Court has the territorial jurisdiction to hear the present
petition.

12. In light of the facts and circumstances set out above, the Petitioner
humbly prays that:

A. That this Hon’ble Court be pleased to declare that the

Petitioner is entitled to do any of the acts set out in paragraph
2 of the primary notification;

B. That this Hon’ble Court be pleased to quash and set aside the
impugned circular, and declare that it is void ab initio as
having been made in excess of the Respondent No. 1’s power
and authority;

C. That, pending the hearing and final disposal of this petition,

this Hon’ble Court be pleased to stay the operation of the
 impugned circular and allow the Petitioner to accept deposits
as per paragraph 2 of the primary notification.

D. For costs of this petition;

E. Any other order that this Hon’ble Court may deem fit in the
facts and circumstances of this case.

Dated this ___ day of July, 2016

For advocates for the Petitioner For the Petitioner

VERIFICATION

I, Mr. Devdas S. Kadam, the General Manager of the Petitioner

abovenamed, solemnly declare that what is stated in paragraphs 1 to 5 and
12 is true to my own knowledge, and that what is stated in the remaining
paragraphs 6 to 11 is stated on information and belief, and I believe the
same to be true.

Solemnly declared at Mumbai )

Dated this __ day of November, 2016 )

Before Me
For ABG & Associates

Advocates for the Petitioner

I am not a member of Welfare Fund,
hence, stamp of Rs.2/- is not affixed.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. ____________ OF 2016

In the matter of:

Mumbai District Central Co-operative )
Bank Limited, Mumbai Bank Bhavan, )
207, Dr. D.N Road, Fort, )
Mumbai – 400 001, ) …PETITIONER
v.
1. Reserve Bank of India, )
through the Governor, )
Central Office Building )
18th Floor, Shahid Bhagat Singh )
Road, Mumbai – 400 001 )
)
2. Union of India, through the )
Ministry of Finance, Department )
Of Economic Affairs, 2nd Floor, )
AaykarBhavan, Maharishi Karve )
Marg, New Marine Lines, )
Mumbai – 400 020 ) …RESPONDENTS

To

The Prothonotary & Senior Master,

High Court,
Bombay.

Sir,

I, Mr. Devdas S. Kadam, the General Manager of the Petitioner

abovenamed, do hereby appoint ABG & Associates, Advocates,
having his office at A / 104, RidhiSidhi Complex, M.G. Road, Borivali
(E), Mumbai – 66, to act, appear and plead for me in the above matter.
 IN WITNESS WHEREOF, I have set and subscribed my
hands to this writing at Mumbai this _____ day of __________, 2016.

(Mr. Devdas S. Kadam)

(General Manager, for the
Petitioner)

Accepted:
ABG & Associates

Advocates for the Petitioner

Reg. No: I 6879
OS Reg: 10083
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

MEMORANDUM OF REGISTERED ADDRESS

Mumbai District Central Co-operative Bank Limited

c/o ABG & Associates,
Advocates for the Petitioner,
A / 104, RidhiSidhi Complex, M.G. Road,
Borivali (E), Mumbai – 66.
Tel: 28901165/66
Email: abg.associates@yahoo.in

For ABG & Associates

Advocates for the Petitioner

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

LIST OF DOCUMENTS WHICH THE PETITIONER WILL

RELY UPON

1. All Exhibits to the Petition

2. All the documents, legal proceedings including pleadings, and
Affidavits therein referred to and relied upon by the Petitioner in the
Petition; and
3. All other relevant documents with the permission of this Hon’ble
Court.

For ABG & Associates

Advocates for the Petitioner

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

ADVOCATES CERTIFICATE UNDER RULE 636(2) OF THE

BOMBAY HIGH COURT (ORIGINAL SIDE) RULES, 1980

This is to certify that the present Writ Petition does not pertain to
any of the matters referred to in Rule 636(1)(a) of The Bombay High Court
(Original Side) Rules, 1980, and therefore is to be heard by a Division
Bench of this Hon’ble Court as per the provisions of Rule 636(1)(b) of The
Bombay High Court (Original Side) Rules, 1980.

For ABG & Associates

Advocates for the Petitioner

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. __________ OF 2016
Mumbai District Central Co-operative
Bank Limited …PETITIONER
v.
Reserve Bank of India & Anr …RESPONDENTS

AFFIDAVIT IN SUPPORT

I, Mr. Devdas S. Kadam, the General Manager of the Petitioner

abovenamed, having my office at Mumbai Bank Bhavan, 207, Dr. D.N
Road, Fort, Mumbai – 400 001, do hereby state on solemn affirm and state
as under:-

1. I say that I am the General Manager of the Petitioner above-named,

and as such, I am fully aware of the facts and circumstances of this
case, and am fully competent to make this affidavit.

2. I say that the Petitioner abovenamed has filed this petition seeking to
quash and set aside the circular dated the 14th of November, 2016,
issued by the Respondent No. 1, as better set out in the petition. I say
that the contents of the petition are true and correct and that no
material fact has been withheld from this Hon’ble Court. I say that
the Petitioner is entitled to the reliefs sought for.

3. Therefore, I humbly pray that this Hon’ble Court be pleased to grant

the relief sought for in this petition.

Solemnly affirmed at Mumbai )

This ___ day of November, 2016 )
Before Me
For ABG & Associates

Advocates for the Petitioner