The Calcutta High Court has dismissed a petition challenging the inclusion of a tenure-restriction clause in the nomination form for the board elections of Santragachi Co-operative Bank Ltd. The clause disqualifies individuals who have served as directors for two consecutive terms or a total of ten continuous years from contesting again.
The petitioners argued that the restriction, derived from Section 10A(2A)(i) of the Banking Regulation Act, 1949, should not apply to a state-registered co-operative society and was therefore arbitrary. The Court, however, observed that the amendments made to the Act in 2020 and further refined in 2025 explicitly make Section 10A applicable to co-operative banks, including a provision prohibiting directors from holding office for more than ten consecutive years. It further clarified that two successive five-year terms constitute ten continuous years under the law.
Emphasizing that co-operative societies fall under the State List but the banking activities they undertake fall under the Union List, the Court held that the central amendments were fully valid and enforceable.
It concluded that the tenure cap promotes “sound banking” and better governance, upheld Clause “C” of the nomination form, and dismissed the petition. The Court also directed that the elections proceed strictly as per the previously notified schedule.
It bears recalling that a petition before the Bombay High Court’s Kolhapur Circuit Bench, concerning the tenure of cooperative bank directors, also came up for a brief hearing on December 5.
In that matter, Adv. Godbole argued that the amendments to the Banking Regulation Act in 2020 and 2025 allow existing directors to continue in office until March 31, 2031.
RBI’s counsel, Adv. Venkatesh Dhond, strongly opposed this interpretation, clarifying that under the 2025 amendment, any director who has completed ten consecutive years as of August 1, 2025 becomes ineligible to continue, with the only exceptions being the Chairman and whole-time directors.
The State supported RBI’s view, adding that the petitioners had already completed ten years and may return to the board only after the mandatory term gap.
The Court has scheduled December 9, 2025 for interim orders and December 22, 2025 for detailed hearing.
