The Calcutta High Court on Friday quashed a stay granted by a civil court against the merger of Bank of Rajasthan with ICICI Bank, paving the way for the deal. Bank officials said the order would remove any uncertainty over the validity of the EGM of BoR approving the merger.
The high court also asked the petitioner to reimburse costs of Rs 50,000 for filing a frivolous case. Last month, some shareholders had approached the City Civil Court at Kolkata, seeking a stay on the merger. On June 21, the day of the EGM, the court restrained BoR from holding the meeting seeking shareholder approval for the merger.
The order resulted in high drama. The BoR management walked out of the EGM. However, some of the shareholders organised themselves and appointed a chairman for the meeting and voted in favour of the merger. Later in the day, ICICI Bank obtained an order from the Calcutta High Court, which stayed the civil court injunction and posted the matter for a hearing later.
The court quashed the order on grounds that the lower court did not have the jurisdiction over the matter. Earlier, the locus standi of ICICI Bank was also questioned on whether it was right in appealing against an injunction against the shareholders’ meet of BoR. However, the high court upheld ICICI Bank’s right to appeal as BoR was in the process of merging with it and pending all approvals, the Udaipur-based bank was held by a trust.
Hearing the matter, the high court also examined the jurisdiction of the civil court. Observing that the matter should not have been entertained in a civil court, and it related to an entity outside Kolkata, the high court quashed the injunction.
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