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The Bombay High Court on Wednesday reserved its judgment in the Yes Bank promoter case relating to hearing of Madhu Kapur’s demand to recognise her rights as the bank's promoter.
A two-judge Bench of Justices Vazifdar and Colabawalla heard the arguments of both the parties, Yes Bank and Madhu Kapur, and will now pronounce the judgment any day from now.
Out-of-court settlement
The HC’s decision if taken in favour of the bank could close the matter to be left by the parties to resolve it out of court. However, if the ruling goes against the bank, Madhu Kapur’s plea will be taken up by the court and a judgment can be passed thereafter.
The private sector bank had challenged against the court’s earlier decision that dismissed its objection that as per Section 10A (6) of the Banking Regulation Act, 1949 the dispute over appointment of directors on a bank’s board cannot be heard by any civil court.
The YES Bank lawyer contested that any election of board members does not fall under the jurisdiction of the court. The lawyer said, “An election duly held under the Section 10 A (6) shall not be questioned in any court…Election is separate from reconstitution (appointment or removal) of the board.''
Last week, the private bank’s board decided that being a successor, Madhu Kapur cannot inherit the rights under Articles of Association or the status of promoter of the bank, thereby ruling out the possibility of an amicable settlement out of court.
Madhu Kapur's plea
Madhu is the widow of the bank’s co-promoter Ashok Kapur and sister of YES Bank CEO and MD Rana Kapoor’s wife. The case was first filed against the bank by Madhu Kapur, along with daughter Shagun Kapur Gogia and son Gaurav Kapur, in June last year.
In the same month, Shagun was also nominated by Madhu Kapur to be on the board, as directed by the HC, and was rejected by the bank’s board on the grounds that she did not meet the “fit and proper” guidelines required by the Reserve Bank of India.
At present, Madhu Kapur holds 11.91 per cent stake, while Rana Kapoor, directly and through other family-owned ventures, holds 13.64 per cent stake in the mid-sized bank.
At about 1 p.m., the YES Bank scrip was trading at Rs 446 per share, down 1.05 per cent over the previous close, on the Bombay Stock Exchange.
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