Supreme Court struck down Bank Nationalisation Act 1969, Read R.C. Cooper vs Union of India case
Did You Know? The Supreme Court of India cancelled the nationalisation of Banks in 1969. Yes, you heard it right. In this article, we will have a look at the Supreme Court case.
On February 10, 1970, the Supreme Court of India struck down the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969, which had nationalized 14 major commercial banks. In the landmark R.C. Cooper v. Union of India case, a 10-1 majority ruled the act unconstitutional due to hostile discrimination and inadequate compensation.
The then Prime Minister Indira Gandhi wanted to nationalise the private banks so that banks could participate in the development of the nation and public welfare. In 1969, the Government of India, led by Prime Minister Indira Gandhi, nationalised 14 major commercial banks. The government took control of these private banks to improve credit flow to farmers, small industries, and weaker sections. However, this decision was challenged in the Supreme Court. R.C. Cooper filed case in Court against the Government.
Rustam Cavasjee Cooper (R.C. Cooper) was a prominent figure in the Indian financial sector. He served as the Director of the Central Bank of India Ltd. & held significant shares in multiple banking institutions. When the government moved to nationalize banks, Cooper felt his rights as a shareholder & a citizen were being crushed. He was not just a businessman; he became the face of a movement that forced the Supreme Court to reconsider the limits of state power over private enterprise.
The Court said:
- The compensation given to bank shareholders was not fair.
- The law violated the Right to Property (which was a Fundamental Right at that time under Article 31).
- Some provisions of the Act were unconstitutional.
Because of this, the nationalisation law was declared invalid.
In response to this, the government later passed the 25th Constitutional Amendment to reverse the ruling and tighten state control over private property. The government quickly brought a new law with changes to remove the legal problems. After that, bank nationalisation continued.
Download Court Order PDF (This PDF is available for Premium Users Only. Click here to join premium)
