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Bank merger does not end litigation

Disciplinary proceedings against a manager can be continued even if the bank in which he was working amalgamated with another, the Supreme Court stated in its judgment last week in the appeal, Jagdish Lal vs Punjab National Bank (PNB). This assistant general manager was working in the Hindustan Commercial Bank Ltd. It was merged with Punjab National Bank. During his tenure in the earlier bank, the manager was facing disciplinary proceedings for flouting lending norms. In spite of that PNB absorbed him because the Supreme Court had passed an order that transferee banks are obliged to take in managers of merged banks. PNB, however, revived the charge-sheet against the manager. He challenged it on several grounds. Primarily he argued that the proceedings against him cannot be revived merely because he is under a new employer. He also contended that he was holding a higher rank in the old bank, while a lower ranking manager issued the fresh charge-sheet. The court rejected all such arguments and stated that under the amalgamation scheme, the new employer was entitled to resume the proceedings. Though he was holding a higher rank earlier, that was a smaller bank and the officer in the larger bank, PNB, had the power to issue the charge-sheet.

 Article referred: http://www.business-standard.com/article/opinion/trade-marks-are-not-for-hoarding-115101100811_1.html

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