The Bombay High Court, Circuit Bench at Kolhapur, has refused to grant interim relief to cooperative banks and their directors challenging the implementation of revised tenure norms under the Banking Regulation Act, 1949, as amended in 2025.
A Division Bench of Justice M. S. Karnik and Justice Ajit B. Kadethankar passed the order while hearing a writ petition filed by the Kolhapur District Urban Banks Co-operative Association Ltd. and others, which questioned directions issued by the Reserve Bank of India (RBI) regarding eligibility of directors in forthcoming cooperative bank elections.
The petitioners argued that the Banking Laws (Amendment) Act, 2025, effective from 1 August 2025, prescribing a maximum continuous tenure of 10 years for directors of cooperative banks, was being applied retrospectively. They contended that directors who had completed ten years prior to the amendment coming into force should not be disqualified from contesting elections.
Opposing the plea, the RBI and the Union of India submitted that the amended provision operates prospectively and is intended to prevent prolonged concentration of power on cooperative bank boards.
After hearing both sides, the High Court noted that the petition does not challenge the constitutional validity of either the 2020 or 2025 amendments to the Banking Regulation Act. The Court held, prima facie, that the RBI has merely implemented the amended law and that directors who complete a continuous tenure of 10 years on or after 1 August 2025 become disentitled to continue in office by operation of law.
The Bench reiterated the settled legal principle that statutes are presumed to be prospective unless expressly or by necessary implication made retrospective, and found no prima facie illegality in the RBI circular enforcing the amended tenure provision. In doing so, the Court relied on the Supreme Court’s ruling in Keshavan Madhava Menon v. State of Bombay (1951), which lays down this rule of statutory interpretation.
The Court also distinguished a Gujarat High Court ruling cited by the petitioners, observing that in the present case the impugned directions were issued directly by the RBI, the competent authority under the Banking Regulation Act, and not by an election officer acting independently.
Accordingly, the High Court rejected the request for interim relief. However, considering the controversy involved, the Court admitted the petition for final hearing on 15 June 2026 and directed the parties to complete their pleadings.
It may be noted that other High Courts have also, in different factual contexts, declined to interfere with tenure-based eligibility conditions in cooperative bank elections, underscoring judicial reluctance to dilute statutory caps intended to strengthen governance norms.
It bears recalling that the Calcutta High Court had earlier dismissed a petition challenging the tenure-restriction clause in the nomination form for Santragachi Co-operative Bank elections, which disqualifies directors who have completed two consecutive terms or ten continuous years from contesting again.
