Bifurcation of South Canara co-op bank upheld

Bifurcation of South Canara co-op bank upheld

The High Court on Tuesday upheld a State government order to bifurcate the South Canara District Co-operative Central Bank following a government order dated February 2, 2009.

Hearing an appeal by Vadiraja Shetty, challenging the bifurcation, the Division Bench comprising Chief Justice Vikramajit Sen and Justice B V Nagarathna upheld the single bench order dated August 11, 2011, quashing the petition challenging the bifurcation of the bank into seven district co-operative banks following a Cabinet decision. The petitioner had stated that the government has no provision to bifurcate the bank.

The State government, in its submission, said that the decision is based on the Sunderraman panel report, which had recommended bifurcation of the bank for economic stability. The State government, further citing a Supreme Court judgement dated June 20, 2001, stated that under Article 163(3) of the Constitution of India, the Cabinet decision cannot be questioned.