TaxTMI 
TaxTMI 
2004 (2) TMI 714
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.... (for short SBL). On 11th December, 1987 the Banking Regulation Act (for short the Act) became applicable to Sikkim. Section 22 of the Act reads as follows: "22. LICENSING OF BANKING COMPANIES.- (1) Save as hereinafter provided, no company shall carry on banking business in India unless it holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued subject to such conditions as the Reserve Bank may think fit to impose. (2) Every banking company in existence on the commencement of this Act, before the expiry of six months from such commencement, and every other company before commencing banking business in India, shall apply in writing to the Reserve Bank for a licence under this section : Provided that....
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....o carry on banking business in India; (f) that having regard to the banking facilities available in the proposed principal area of operations of the company, the potential scope for expansion of banks already in existence in the area and other relevant factors the grant of the licence would not be prejudicial to the operation and consolidation of the banking system consistent with monetary stability and economic growth; (g) any other condition, the fulfillment of which would, in the opinion of the Reserve Bank, be necessary to ensure that the carrying on of banking business in India by the company will not be prejudicial to the public interest or the interests of the depositors. (3A) Before granting any license under th....
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....ps for complying with for complying with or fulfilling such condition. (5) Any banking company aggrieved by the decision of the Reserve Bank cancelling a licence under this section may, within thirty days from the date on which such decision is communicated to it, appeal to the Central Government. (6) The decision of the Central Government where an appeal has been preferred to it under sub-section (5) or of the Reserve Bank where no such appeal has been preferred shall be final." SBL applied for a license. It appears that RBI did not issue any notice informing SBL that the license could not be granted. Thus SBL continued to carry on banking business by virtue of the proviso of sub- clause (2). In 1996 RBI pointed out certain ope....
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....March, 1999, on the advise of RBI, the Government of India passed an Order of Moratorium under Section 45 (2) of the Act. SBL filed a Writ Petition in the High Court of Sikkim challenging the Order of Moratorium. However, the Petition was dismissed on 2nd September, 1999. The Special Leave Petition filed against the Order has also been recently dismissed. On 21st December, 1999 the Government of India issued an Order notifying a Scheme of Amalgamation under Section 45(7) of the Act. By this scheme SBL was amalgamated with the Union Bank of India (for short UBI). Under the scheme all the depositors were to be paid on pro-rata basis. It is an admitted position that the depositors are only getting 9.037 % of their deposits and they are requ....