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The Bombay High Court on Tuesday said it wanted Rana Kapoor and Madhu Kapur to try and settle their dispute out of court over the right to nominate directors on the YES Bank board.
Madhu Kapur is the widow of Ashok Kapur, who co-founded YES Bank along with his brother-in-law, Rana Kapoor. Madhu and Rana's wife, Bindu, are sisters.
“The judges said they wanted the families to settle the dispute within a week. Probably, a meeting will be arranged during the weekend. If no settlement is reached, the court will hear the case next Tuesday (on April 15),” said a person in the know of the development but did not want to be named.
The source added that Tuesday’s hearing was to review an appeal filed by YES Bank against the court’s March 24 ruling that it had the jurisdiction to hear Madhu’s plea. The Bombay High Court had dismissed the bank’s claim that the suit filed by Madhu Kapur, challenging the appointment of three directors on its board was not maintainable. Madhu had moved the court alleging her right as co-promoter of YES Bank was violated and that she was not consulted before the appointment of the three new directors on the bank's board.
According to the articles of association of the bank, the Indian partners of YES Bank must jointly recommend appointment of directors on the board. In her petition, Madhu also claimed the three directors did not meet the 'fit and proper' criteria of the Reserve Bank of India (RBI).
The bank, however, had made a preliminary objection that according to Section 10A (6) of the Banking Regulation Act 1949, a dispute over the appointment of directors on a bank's board cannot be heard by a civil court. YES Bank spokesperson and representatives of Madhu Kapur did not offer comments as the matter is sub-judice.
