In R.C. Cooper v. Union of India (10 Feb 1970), a 10-1 Supreme Court struck down the 1969 bank nationalisation Act. The 1970 Act re-enacted it.
The State Bank of India replaced the Imperial Bank of India, with a mandate to spread branches into rural India.
The government tried regulating bank boards and credit before owning banks. The law took effect on 1 February 1969.
Indira Gandhi took the finance portfolio from Morarji Desai, deepening the split in the Congress party.
Acting President V.V. Giri vested the 14 banks holding at least Rs 50 crore in deposits in new State-owned banks.
R.C. Cooper, a shareholder in four of the banks, a depositor and a director, said his own rights were violated.
Parliament replaced the ordinance with an Act, backdated to 19 July, with a formula for compensation.
255 days, two ordinances, two Acts.
Ten judges held the compensation formula and a ban on the 14 banks unconstitutional. Justice A.N. Ray dissented.
What the Court decided, and did not.
A fresh ordinance took over the same 14 banks again.
Parliament fixed compensation at set sums totalling Rs 87.40 crore, backdated to 19 July 1969.
From Rs 17.50 crore to Rs 2.30 crore.
Rights judged by a law's real impact.
Parliament rewrote Article 31(2) so courts could no longer test the adequacy of what was paid.
The Court read Articles 14, 19 and 21 together, building on R.C. Cooper's effect test.
Property stopped being a fundamental right. Article 300A now governs it.
Article 31 from 1970 to 1979.
Andhra, Corporation, New Bank of India, OBC, Punjab and Sind and Vijaya Bank were taken over.
Nationalisation, then mergers.
After the 2019 and 2020 mergers, India had 12 public-sector banks.
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