The Supreme Court of India on Tuesday admitted the appeals filed by the Reserve Bank of India in the ongoing dispute concerning the restructuring and merger of district cooperative banks in Kerala, marking a key procedural development in the matter.
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe granted leave and admitted the appeals while disposing of certain interlocutory applications. The proceedings arise from a judgment of the High Court of Kerala relating to the merger process involving district cooperative banks, including the Malappuram District Cooperative Bank, into the state-level cooperative banking framework.
During the hearing, the Court confined itself to issues relating to interim arrangements. The Bench sought clarity on the present operational status of the concerned cooperative entity, particularly in light of an earlier status quo order.
Submissions were made that while functional control is claimed to have been assumed pursuant to the merger process, separate accounts continue to be maintained. It was also contended that the claim of representation by the Kerala State Cooperative Bank on behalf of the Malappuram District Cooperative Bank proceeds on the assumption that the merger has been completed, a question that remains under consideration.
In the course of arguments, a limited request was made for modification of the earlier status quo order to permit the engagement of temporary employees as a stopgap measure to ensure the smooth functioning of the Malappuram District Cooperative Bank. It was submitted that such appointments, if permitted, would be without prejudice to the rights and contentions of the parties and that the employees would remain on the rolls of the district bank.
With leave granted and the appeals admitted, the Supreme Court will now examine the issues arising from the merger process, including questions relating to regulatory oversight and administrative control within Kerala’s cooperative banking structure.
The matter is likely to be closely watched by stakeholders in the cooperative sector given its implications for governance and operational management of cooperative banking institutions in the state.
