Parliament Enacts Law for Acquisition of Sikkim Bank Shares, Consolidating Banking Facilities

The Parliament of India enacted The State Bank of Sikkim (Acquisition of Shares) and Miscellaneous Provisions Act, 1982, on November 6, 1982. This legislation, an Act of Parliament, was introduced in the public interest to facilitate the acquisition of certain shares of the State Bank of Sikkim. Its primary purpose was to achieve better consolidation and extension of banking facilities within the State of Sikkim. The Act came into force on a date appointed by the Central Government through a notification published in the Official Gazette.

Under the provisions of the Act, all shares in the share capital of the State Bank of Sikkim, excluding those already held by the State Government, were transferred to and vested in the Central Government on the appointed day. These shares were simultaneously freed from all trusts, liabilities, obligations, and encumbrances. Following this initial transfer, the entire undertakings of the Sikkim Bank also vested in the Central Government. The Act stipulated that the Central Government would subsequently direct, through notification, that these shares and undertakings would vest in the State Government of Sikkim. Furthermore, the State Government was empowered to direct that the undertakings of the Sikkim Bank, after vesting in it, would then vest in the Sikkim State Co-operative Bank Limited, thereby establishing the co-operative bank as the new owner of these undertakings. For the shares transferred to the Central Government, the Act mandated a payment of rupees eight lakhs twelve thousand two hundred and ninety-five to the shareholders, calculated at a rate of rupees fifty-five per share, along with simple interest.

The legislation provided: “An Act to provide, in the public interest, for the acquisition of certain shares of the State Bank of Sikkim for the purpose of better consolidation and extension of banking facilities in the State of Sikkim and for matters connected therewith or incidental thereto.” This core intent aimed to address the need for a single apex banking institution in Sikkim. The Act also made comprehensive provisions for the transfer of service of existing officers and employees of the Sikkim Bank to the State Government or the Sikkim State Co-operative Bank, ensuring their rights and privileges regarding pension and gratuity were maintained, unless duly altered. It explicitly stated that such transfers would not entitle employees to compensation under the Industrial Disputes Act, 1947, or any other law. The Act further granted overriding effect to its provisions over any inconsistent elements in other laws or instruments, and provided protection for actions taken in good faith by the Central Government, State Government, or the co-operative bank. Penalties, including imprisonment and fines, were prescribed for wrongful withholding or removal of property belonging to the acquired undertakings. Upon the issue of a notification under Section 6(1), the State Bank of Sikkim was dissolved, and the State Bank of Sikkim Proclamation, 1968, which had constituted the bank, stood repealed.

Keywords: State Bank of Sikkim, Acquisition of Shares, Banking Facilities, Sikkim State Co-operative Bank, Legislative Act, Banking Consolidation, Employee Transfer, Share Vesting, India, Sikkim

Geo Tags: India, Sikkim District: Not Applicable