The Bombay High Court will continue hearing the YES Bank case, relating to Madhu Kapur’s demand to recognise her rights as a promoter of the bank, on Wednesday.
On Tuesday, a two-Judge Bench of Justices Vazifdar and Colabawalla heard the appeal by lawyers of YES Bank and Madhu Kapur.
The hearing over the jurisdiction of the court to hear the case will be taken up on Wednesday.
The private sector bank had appealed against the court’s decision dismissing 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, “Every election duly held 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 is the widow of the bank’s co-promoter Ashok Kapur and sister of YES Bank CEO and MD Rana Kapoor’s wife.
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.
On Tuesday, YES Bank scrip ended weaker at ₹450.75 a share, down 2.68 per cent over the previous close, on the Bombay Stock Exchange.