Shareholder approval for bank amalgamation upheld where the required majority at an extraordinary general meeting was shown.

A challenge to the amalgamation of Bank of Rajasthan with ICICI Bank turned on whether the scheme was vitiated for want of a general body meeting of shareholders under Section 44A of the Banking Regulation Act, 1949. The objection was that RBI approved the scheme without verifying compliance with the shareholder meeting requirement. The material before the Court showed, however, that the scheme had been passed by the required majority at an extraordinary general meeting, as reflected in the communication produced. On that basis, the alleged procedural defect was not established, and the challenge to the amalgamation approval failed.

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Issues: Whether the scheme of amalgamation of the Bank of Rajasthan with ICICI Bank was vitiated for want of a general body meeting of shareholders under Section 44A of the Banking Regulation Act, 1949.

Analysis: The objection was that the Reserve Bank of India approved the amalgamation without considering the alleged absence of a general body meeting of shareholders in accordance with Section 44A. The opposing material placed before the Court showed that the scheme had in fact been passed by the required majority in the extra-ordinary general meeting, as stated in the communication produced before the Court. In view of that material, the asserted procedural defect was not established.

Conclusion: The challenge failed and the amalgamation approval was not interfered with.

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