Clearing the decks for merger of Bank of Rajasthan with ICICI Bank, the Calcutta High Court on Friday quashed a civil court injection against the deal and asked the petitioner to pay a cost of Rs 50,000 for a frivolous case.
A civil court here on June 21 had restrained Bank of Rajasthan (BoR) from holding a shareholders' meet the same day, where an approval was being sought for merger with ICICI Bank.
Although, the BoR management called off the Extraordinary General Meeting, the shareholders went ahead and voted in favour of the merger and the issue is now pending approval of the Reserve Bank of India.
The same day, ICICI Bank appealed to the Calcutta High Court, which in turn stayed the civil court injunction and posted the matter for hearing later.
Taking up the matter, the High Court on Friday quashed the civil court injunction and also raised questions over jurisdiction of the lower court in the case.
Finding the litigation as frivolous too, the High Court asked the petitioner, an investor who claims to represent the shareholders of BoR, to pay the cost of Rs 50,000 for acting in a frivolous way.
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, both in terms of territorial issues and dealing with a company matter.
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.
Earlier on June 21, when BoR's shareholder meet was underway in Mumbai, its Managing Director received a letter from an advocate in Kolkata, informing him about the civil court injunction.
Subsequently, the MD decided to adjourn the meet and left the venue, but shareholders decided to go ahead with the meeting. They even passed the resolution towards the merger of BoR with ICICI Bank, the country's top private sector bank, and later the resolution was sent to authorities concerned.
ICICI Bank in May agreed to take over BoR in a share-swap deal that valued the Udaipur-based bank at over Rs 3,000 crore.
The share swap ratio was fixed at one ICICI Bank share for every 4.72 shares of BoR. The deal is now pending for approval from RBI.