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Bank merger does not end litigation

Disciplinary proceedings against a manager can be continued even if the bank in which he was working amalgamated with another, the Supreme Court stated in its judgment last week in the appeal, Jagdish Lal vs Punjab National Bank (PNB). This assistant general manager was working in the Hindustan Commercial Bank Ltd. It was merged with Punjab National Bank. During his tenure in the earlier bank, the manager was facing disciplinary proceedings for flouting lending norms. In spite of that PNB absorbed him because the Supreme Court had passed an order that transferee banks are obliged to take in managers of merged banks. PNB, however, revived the charge-sheet against the manager. He challenged it on several grounds. Primarily he argued that the proceedings against him cannot be revived merely because he is under a new employer. He also contended that he was holding a higher rank in the old bank, while a lower ranking manager issued the fresh charge-sheet. The court rejected all such argumen...

SEBI has no locus in Scheme Petition under sections 391, 394 of Companies Act: High Court

Stock market regulator Securities and Exchange Board of India (SEBI) does not have locus to intervene in a Scheme Petition under Sections (391 and 394) of Companies Act, the Bombay High Court has held in a recent judgment by Justice Kathawalla. Sections 391 and 394 of the Companies Act deal with issues relating to merger, amalgamation, restructuring of companies. SEBI had applied to the Bombay High Court to set aside the High Court’s earlier order sanctioning a scheme of arrangement and amalgamation in a matter relating to Ikisan Ltd and Kakinada Fertilizers . SEBI had contended in its application that a fraud had been perpetrated on the Court by suppression and/or misrepresentation of facts and documents relating to the court sanctioned composite scheme between Kakinada Fertilizers, erstwhile Nagarjuna Fertilizers and Chemicals Ltd (NFCL), Ikisan Ltd and Nagarjuna Oil Refinery Ltd (NORL). Under this composite scheme, the oil business of the erstwhile NFCL was demerged into NORL an...