Thursday, February 24, 2011

Court notice to RBI in co-op bank merger case

The petitioner challenged the legality of Abhyuday Co-operative Bank’s merger with Manekchowk Co-operative Bank
Gujarat High Court has issued notices to Reserve Bank of India, Abhyuday Co-operative Bank Ltd and the registrar of co-operative societies while hearing a petition challenging the merger of a multi state co-operative bank with a state level bank. 
The petitioners questioned the legality and validity of the order passed by joint registrar (audit), co-operative societies, Gandhinagar, on October 8, 2008, which paved way for the merger of Abhyuday Co-operative Bank Ltd with erstwhile Manekchowk Co-operative Bank Ltd.
The plea was filed on the grounds that there is no directive in law on the merger of a co-operative bank constituted under state mechanism with a multi state co-operative bank. The petitioners sought an appropriate writ, order or direction to quash and set aside the joint registrar’s order.
The petitioners, alleged debtors of Manekchowk bank, stated that they received no individual notice prior to the merger.
While Abhyuday Co-operative Bank Ltd is constituted under the Multi State Co-operative Societies Act, Manekchowk Co-operative Bank Ltd was formed under the Gujarat Co-operative Societies Act.
Manekchowk bank had instituted summary lavad suit No 182 of 2003 for an amount of Rs 1,77,04,503 against the petitioners before the board of nominees. The court has posted the case for further hearing on March 1.

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