📋Case Title: Sandeep S. Ghandat & Ors. v. Reserve Bank of India & Ors.
📑Citation: 2026 INSC 955 | Civil Appeal Nos. 5351‑5352 of 2025
📅Date of Judgment: 03 September 2026
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📌Background-
-Abhyudaya Co‑operative Bank, a multi‑State co‑operative bank, had its Board of Directors elected in May 2019 for five years.
– RBI superseded the BoD on 24.11.2023 citing financial distress, depositor protection, and need for professional management.
– Supersession was extended in 2024 and 2025, even after the BoD’s tenure expired.
🧩Issues
1. Does Article 243ZL(1) of the Constitution limit RBI’s power to six months?
2. Can supersession extend beyond the elected BoD’s tenure?
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📃Arguments
– Appellants: Supersession cannot go beyond BoD’s term; consultation with Central Govt ignored; elections should follow expiry. Relied on Kishansing Tomar v. Ahmedabad Municipal Corp. (2006) 8 SCC 352; Union of India v. Rajendra N. Shah (2022) 19 SCC 520.
– RBI: Section 36AAA of BR Act allows supersession up to 5 years; Article 243ZL’s six‑month limit doesn’t apply to co‑operative banks. Relied on Pandurang Ganapati Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Ltd. (2020) 9 SCC 215.
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🔎Supreme Court’s Observations
-Article 243ZL(1) incorporates BR Act into the constitutional scheme for banking co‑operatives.
– The six‑month ceiling does not restrict RBI’s powers; Section 36AAA permits supersession up to five years.
– Supersession can extend beyond the BoD’s elected tenure.
– Depositor protection and financial stability take precedence over rigid governance timelines.
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📝Conclusion
The Supreme Court upheld RBI’s authority to supersede and extend supersession of multi‑State co‑operative bank boards beyond their elected term, affirming depositor protection and banking discipline as paramount.
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📌Official Copy of judgement
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Nicely Articulated