BOB , VJB AND DENA banks, merger is unconstitutional and violation of article 14 of the constitution case filled at delhi high court

The Delhi High Court on Tuesday sought a response from the Centre on a plea challenging the proposed merger of Dena Bank, Vijaya Bank and Bank of Baroda.

The merger of Vijaya Bank and Dena Bank into Bank of Baroda, which is proposed to be effective from April 1, 2019, aims at consolidating and integrating smaller banks with bigger banks.

A bench led by Justice S Raveendra Bhat issued a notice to the finance ministry, RBI, Bank of Baroda, Dena Bank and Vijaya Bank on a petition filed by the All India Bank Officers Confederation and the All India Vijaya Bank Officers Association against the proposed amalgamation scheme that was published on January 2 under Section 9(6) of the of the Banking Companies (Acquisition and Transfer of Undertakings) Act(s), 1970/80.

Challenging the decision-making process involved in the merger, the petition contended that the proposed amalgamation of three public sector banks, which have sizable market share, affects the interests and fundamental rights of a large number of persons including members of the organisations.

They said that the decision was unconstitutional for not following the due process and being in violation of Article 14 of the Constitution, and also for lacking effective consultation with RBI as is required under Section 9(1) of the Acts.

The petition also challenges Section 15 of the Bank Nationalisation Acts as ultra vires Article 14 of the Constitution, inasmuch as it validates proceedings of the boards of these banks despite a prolonged vacancy, amounting to abeyance, in the statutorily mandated posts of the workmen and officer employee directors in the board and to the extent that major decisions that significantly affect not only the service conditions of the employees, but also the very subsistence of the entity, can be taken without the participation of such workmen directors and officer employee directors. The two bodies said that there has been no effective consultation with the RBI inasmuch as the ministry “has repeatedly attempted to inaccurately describe the events leading up to the decision as to the amalgamation as if the boards of the banks have taken a voluntary and autonomous decision to amalgamate themselves into a single entity.”