HC rejects plea against LKB merger with Centurion Bank

Kochi, Aug 22 (UNI) The Kerala High Court today dismissed a petition, challenging the amalgamation of Lord Krishna Bank with Centurion Bank of Punjab.

The petitioner, Umesh Kumar Pai from Kochi, who is a minority shareholder of the Lord Krishna Bank, had sought a direction to the Central Government to appoint an inspector to investigate into the affairs of the bank.

Mr Justice M N Krishnan, dismissing the petition, observed that banking regulations provide for internal management and also for inspection and action and the Reserve Bank of India was the expert body to consider the question of amalgamation as well.

''It has to be held that even in the case of an investigation, the Central Government may have to resort to the help of the RBI and as the RBI is directly concerned with the bank, I feel that the court need not exercise its power to direct the Central Government to order an investigation,'' he said.

The petitioner had contended that Lord Krishna bank conducted its annual general body meeting on September 30, 2006, at Ernakulam in a highly arbitrary and high handed manner and most of the shareholders were prevented by the directors from participating in the meeting. The agenda of the AGM was the amalgamation of the LKB with the Centurion Bank, he submitted.

The guidelines issued by the Reserve Bank of India were not observed by the Lord Krishna Bank, he alleged.

UNI