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TMI Blog2001 (2) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... raordinary general meeting as provided under section 184 of the Companies Act in the matter of amalgamation. 2. The writ petition was filed on the file of this Court on 12-1-2001. Even before the writ petition could be taken up for admission, the extraordinary general meeting was held on 19-1-2001. Hence, the main prayer in the writ petition for the postponement of the extraordinary general meeting of the shareholders convened by the second respondent for considering the scheme of amalgamation between the Bank of Madura Ltd. and ICICI Bank Ltd. has become infructuous in the sense that the extraordinary general meeting of the shareholders of Bank of Madura Ltd. was held on 19-1-2001, at Hotel Pandian, Madurai. 3. The case record reveals that the writ petition filed by the petitioner- association came up before my learned brother, K.P. Sivasubramanian, J., and the learned Judge has not passed any order either admitting the writ petition or ordering notice to the respondents for admission prior to the holding of the extraordinary general meeting. On 24-1-2001, the learned Judge directed the Registry to post the matter before the Company Court for hearing and the Registry put u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd respondent, it is stated that R.M. Chidambaram who subsequently claimed to have become the Secretary of the petitioner-association holds 258 shares. However, it is also stated in the counter-affidavit that the said R.M. Chidambaram acquired the shares while he was an employee of Bank of Madura Ltd. In spite of opportunities granted to the petitioner, the petitioner-association is not able to establish before this Court that either the President or any one of the office-bearers other than R.M. Chidambaram or its members was a shareholder of Bank of Madura Ltd. Further, the petitioner association is also not able to establish that R.M. Chidambaram, Secretary of the association, was an office-bearer at the relevant point of time. 8. Insofar as Mr. Shyam, party in person, is concerned, though he has stated during the course of arguments that his other name is Shanmugam, he is not able to produce any share certificate standing either in the name Shyam, or in the name of Shanmugam. On the other hand, the learned senior counsel appearing for the second respondent has produced before this Court copies of folios showing the names of Shanmugam, who are holding shares in Bank of Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Mr. C.A. Sundaram, the learned senior counsel appearing for the second respondent, have to be considered in the light of the provisions of the Banking Regulation Act, 1949. The Banking Regulation Act has been enacted with a view to consolidate and amend the law relating to banking. Part III of the Banking Regulation Act deals with suspension of business and winding-up of banking companies. Section 44A of the Banking Regulation Act deals with the procedure for amalgamation of banking companies. Under sub-section (1) of section 44A, the following conditions must be fulfilled for the amalgamation of one banking company with another banking company : ( a )the scheme containing terms of amalgamation has to be placed in draft before the shareholders of each of the banking companies concerned, and ( b )the scheme should be approved by the resolution passed by a majority in number representing two-thirds of value of the shareholders of each of the companies present either in person or by proxy at a meeting called for that purpose. Sub-section (2) of section 44A deals with the procedure for the issue of notice for the convening of the meeting. Sub-section (3) of section 44A i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dissenting shareholder to obtain from the banking company concerned the market value of his shares as determined by the Reserve Bank of India. The provisions of section 44A also enable the Reserve Bank of India to determine the market value of shares of the dissenting shareholder. If the petitioner association is really aggrieved that the market value of shares of both the companies has not been determined properly, it is always open to it to get the market value of shares evaluated by the Reserve Bank of India, and obtain the value of the shares from the banking company. 12. Mr. Shyam, party in person, submitted that though the petitioner- association is not opposing the scheme of amalgamation, yet, the petitioner-association is concerned with the swap ratio of the shares. I am of the view that the Reserve Bank of India is the authority empowered under the Banking Regulation Act to determine the market value of shares and to direct payment of the value of shares to the dissenting shareholder. I, therefore, hold that though this Court has wide powers under article 226 of the Constitution, however, in view of the specific provisions contained in the Banking Regulation Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the banking companies concerned should be granted their approval or not, with the ultimate control vested with the Reserve Bank of India. In the statutory set-up, I am of the view that it is neither desirable, nor permissible, to express any opinion on the valuation of shares adopted for the determination of the swap ratio of shares. 15. Mr. Shyam, party in person, made a complaint that respondent Nos. 2 and 5 have not furnished the book value of the shares. The submission of Mr. Shyam is not correct as the learned senior counsel appearing for the second respondent has produced before this Court the report of the chartered accountants which contains the book value of shares of Bank of Madura Ltd. as well as ICICI Bank Ltd. 16. One other contention urged by Mr. Shyam was that the notice of the meeting of shareholders was not published in the newspapers having circulation in the locality where the registered office of the banking company is situate. The submission is stated to be rejected as the learned senior counsel for the second respondent has produced before this Court the copies of the bills issued by the advertisers dated 29-12-2000, and 3-1-2001, by which a sum of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled for certain particulars from Bank of Madura Ltd. This contention is also liable to be rejected as there are no materials to establish the inside trading with reference to the dealing of shares of Bank of Madura Ltd., and the calling for certain particulars by the Bombay Stock Exchange does not establish that there were certain violations and there was heavy inside trading with reference to the dealing of shares of Bank of Madura Ltd. In any event, the petitioner association has not produced any material in support of such plea. 21. The next submission of Mr. Shyam was that shareholders were coerced and the third respondent has compelled the shareholders to give proxies. In my view, the said contention has to be examined only by the Reserve Bank of India while considering the question whether the scheme of amalgamation should be sanctioned or not. Moreover, it is seen from the report of the Chairman of the extraordinary general meeting that no shareholder has raised the protest that proxies were obtained by force or coercion, and no shareholder has come forward before this Court stating that proxies were obtained by force or coercion by the third respondent. Hence, the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered office of the transferor-bank on any working day except Sunday till the date of meeting between 10 a.m. and 4 p.m. and one such document is the valuation report of the chartered accountants. As already stated, the petitioner association has not proved that any of its members except the second petitioner was a shareholder of Bank of Madura Ltd. or a particular shareholder was denied the opportunity of inspecting the documents. Further, the petitioner association has not produced any letter to show that any shareholder has made a complaint to the effect that he was not allowed to inspect the documents. 25. Insofar as the appointment of the chartered accountants is concer-ned, the chartered accountants are expected to arrive at the market value of shares of both the companies and, hence, it is desirable to appoint the same chartered accountants with the power to go through books of account of both the banking companies, and evaluate the value of shares of both the companies. It must be remembered that the com-panies proposed to be merged are banking companies, and considering the nature and scope of banking transaction which involve great deal of confidential information, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transferor-bank have accepted and approved the scheme of amalgamation, the question of ordering probe by this Court into the scheme of amalgamation does not arise. 28. The other submission of Mr. Shyam was that under clause 34 of the scheme, time is available up to 31-7-2001, and, therefore, the writ petition should be admitted and the petitioner-association should be given further opportunity. This submission is also liable to be rejected as the effective date of the scheme of amalgamation is the date on which the scheme is sanctioned by the Reserve Bank of India, and it may be either the date mentioned in the scheme or such other date as may be fixed by the Reserve Bank of India by order in writing. Though in clause 34 of the scheme, the outer time-limit is fixed as 31-7-2001, it does not mean that this Court should admit the writ petition when the petitioner-association has not made out any prima facie case calling for interference by this court. 29. Moreover, it is relevant to note the conduct of the petitioner. When the writ petition was filed before this Court, the petitioner-association has also filed an application, W.M.P. No. 1328 of 2001 seeking leave of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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