Author: Arpita Singh Bhadauriya, Shambhunath institute of law, Prayagraj
Abstract
Approximately fifty five years ago, Indra Gandhi former prime minister announced the nationalization of bank industry. The unpredicted ordinance in 1969 passed which is acquisition and transfer of undertakings. Rustom cavasjee cooper v. union of India was the first case came forward related to bank nationalization in this way it is also called first bank nationalization case. This case grabs lots of attention at that time in banking law because the ordinance passed for the nationalization of bank in which list of 14 banks was issued because private doesn’t work properly according to the government so they passed the ordinance for bank nationalization . petitioner was the director of the bank named central bank of India. Cooper filed the case in Supreme Court when the bank nationalization ordinance passed that his fundamental rights violates because when the list of 14 bank issued it was necessary to leave the seat of the directors according to ordinance.
He filed a writ petition under article 32 that there rights violates under article 14, 19 and 31 in the year 1969. Lots of issues raised by Mr. Nani palkhiwala, he was the advocate of the case he raised issue that; wither the article of 19(1) (g) and 31(2) of the constitution is impugned act. Or whether the ordinance is properly made.
Supreme Court in 11 judge’s bench held that the article 31 of the Indian constitution not violates and the court can make impugned ordinance if it is necessary. Court also held that the impugned act not violative of article (1) (g) of constitution.
To the point
Bank nationalization case generally renowned by the cooper case because it is the first case related to bank nationalization. This case questioned about the violation of fundamental right, and impugned act of parliament and also about the power of shareholders in a company. Bank nationalization was necessary according to government because some banks are private and they are sole entity and they don’t fulfill the conditions made by government and it was also necessary to protect the money of public. This article is all about the nationalization of 14 listed banks. And the questioned was on impugned act of parliament.
Use of legal jargon
Cooper case considered several legal jargons which are as follows:
Fundamental rights: this case challenged the violation of article 31 and 19(1)(g) and 14 of the Indian constitution.
Doctrine of severability: this doctrine also examined in this case; doctrine states that if the part of law is void it is declared as unconstitutional and the other part of law will applicable if it is valid.
Doctrine of eclipse: overshadow the anterioridad part of constitution and other part will be considered constitutional.
The Proof
The proof this case is that the ordinance passed names banking companies (acquisition and transfer of undertakings) 1969 passed and by challenging this ordinance this case came forward and by this case lots of issues examined in the Supreme Court like one of the issue was related to socialism and the rights of shareholder act of parliament and ,many more. Petitioner argued the ordinance passed under article 123 of constitution was invalid and also article 19(1) (g) and 31 also invalid on the other side respondent argued that article 123 confers the powers of president and it is valid and the article 19(1) (g) also valid as it is fell under the act made by parliament.
Case laws
Bhagat singh v. the king emperor: in this case it argued that for the ordinance passed by parliament must be fulfilled and it is subjective in nature.
Bennet Coleman v. union of India: court in this case upheld that rights of people will upheld with rights of company.
Conclusion
In above statement it is to be said that this cooper case also known for first bank nationalization case as it became the precedent on the other landmark cases also. As this case expand the article 31 and article 19. In this case Supreme Court ruled on the shareholders right and preservation of the dignity of directors of the bank and also protects the ordinance of the parliament.
FAQs
What is bank nationalization?
The word bank defined under sec.5 (b) of banking regulation act means that acceptance of money deposit by public by which they can receive when they demanded for their purpose.
Name of bank listed for nationalization?
The banks listed for nationalization are as follows; central bank of india ltd., union bank of india ltd., bank of Baroda ltd., Dena bank ltd., bank of Maharashtra ltd., canara bank ltd., Punjab national bank ltd., syndicate bank ltd., Indian overseas bank ltd., united bank of india ltd., united commercial bank ltd., Allahabad bank ltd., bank of india ltd..
Why the need of nationalization arose?
The need of bank nationalization arose because private bank doesn’t work with the conditions of government. It was also necessary to save the monetary of public for their future and upcoming policies.
