The Supreme Court transferred to the Madras High Court all writ petitions filed in various High Courts contesting the validity of the Banking Regulation (Amendment) Act 2020.

“Because the petitions that have been transferred have been instituted before various High Courts across the country, it would be appropriate if the Division Bench hearing the petitions allows such of the parties who wish to appear through a virtual platform to participate in the course of the hearing on that basis,” the bench of Justices DY Chandrachud and Hima Kohli observed in the order allowing Transfer Petitions filed by the Reserve Bank of India.

The court noted that writ petitions in this subject are currently pending in the High Courts of Andhra Pradesh, Chhattisgarh, Karnataka, Kerala, Madhya Pradesh, Madras, Punjab and Haryana, Uttarakhand, Allahabad, Rajasthan and Bombay.

“In some of the writ petitions before the High Courts, there is a challenge to the Amending Act; in some, a challenge to the validity of the circular, while, in others, a challenge to the Amending Act and the circular. Having regard to the common questions which are involved in the writ petitions, it would be appropriate, in the interests of justice, to transfer all the writ petitions to one High Court for final disposal…We accordingly order and direct that all the writ petitions which have been filed before the High Courts challenging the validity of the Banking Regulation (Amendment) Act 2020 (Act No 39 of 2020) and/or the circular dated 25 June 2021 shall stand transferred to the High Court of Madras “, the court observed

The court also stated that any future petitions challenging the legality of the Amending Act and/or the circular, if filed, will be immediately transferred to the High Court of Madras by the concerned High Court.

2020 Banking Regulation (Amendment) Act:

The declared objective of the Banking Regulation (Amendment) Act, 2020 is to ‘protect depositors’ interests and control cooperative bank operations by bringing them under the regulatory framework of the Reserve Bank of India.’

The primary points of concerns raised are:

• the takes away the legislative power of States under item 32 in List II in the 7th schedule of the Constitution and whether it is liable to be declared as unconstitutional.
• Part IXB of the Constitution of India has been struck down by the Supreme Court of India in Union of India Vs. Rajendra N. Shah and thus the basis of promulgating Banking Regulation (Amendment) Act, 2020 has been struck down by the Supreme Court of India