Malappuram district co-op bank-Kerala Bank merger: SC expresses disagreement over approach

B Balagopal / Mathrubhumi News

Kerala Bank

New Delhi: The Supreme Court expressed its disagreement over the approach in which Malappuram district cooperative bank was merged with Kerala Bank. The approach was antithetical to cooperative philosophy, it noted. The court even orally observed that the government does not have the power to carry out the merger in this fashion. It also allowed the litigants concerned to approach Kerala High Court for seeking a stay on merger procedures.

The top court’s remarks came while considering a plea demanding an immediate stay on the merger. The petition was filed by IUML MLA and president of Malappuram district cooperative bank UA Latheef and bank vice president PT Ajay Mohan. The plea accused the government of attempting to grab the rights of cooperative societies through its arbitrary amendments.

The court highlighted that the legal validity of the Joint Registrar of Cooperative Societies’ ultimatum on the merger, was not questioned in the Kerala High Court. It dismissed the petition over the same rationale and allowed the litigants to approach Kerala High Court for seeking a stay on merger procedures.

Both the single bench and the division bench of the Kerala High Court were reluctant to stay the merger procedures. The fresh petition filed at the Supreme Court pointed out that the government has initiated the merger procedures even as the detailed hearing of the plea submitted over the matter remains pending at the Kerala High Court.

The merging of the Malappuram district cooperative bank with the Kerala Bank has been put into action based on the 74 H amendment in the Kerala Cooperative Societies Act. The amendment facilitates the government in taking up merging procedures within 15 days of issuing notice to A class members. However, the petitioners alleged that the amendment violated the 44 A section in the Banking Regulation Act of 1947.

13 district cooperative banks merged with the Kerala Bank. The UDF-controlled Malappuram district co-operative bank was the only district cooperative bank in the state that refused to be part of Kerala Bank.

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