)
The hearing on YES Bank’s appeal against the maintainability of Madhu Kapur’s suit challenging the appointment of three directors on the bank’s board would continue on Wednesday, said people privy to the matter.
The bank had appealed against the court’s decision that dismissed its preliminary objection. In the objection, it had said according to Section 10A (6) of the Banking Regulation Act, 1949, a dispute over the appointment of directors on a bank’s board couldn’t be heard by a civil court.
“The hearing over the jurisdiction of the court to hear the case will continue tomorrow (Wednesday),” said a person, requesting anonymity.
Sources said the Bombay High Court would hear Madhu Kapur’s petition, claiming violation of her right as the bank’s co-promoter, on Friday.
At a meeting last week, the YES Bank board had maintained its stance of not considering Madhu Kapur as co-promoter.
“As Madhu Kapur is the successor of late Ashok Kapur, she cannot be considered an Indian partner or Indian promoter and accordingly, cannot inherit the rights under the articles of association or the status of promoter of YES Bank,” the bank had said in an emailed statement.
The bank has been arguing banking isn’t a family business and “financial family successors” do not automatically become part of a bank’s promoter group, owing to regulatory criteria.
The decision has almost ruled out the possibility of an out-of-court settlement. Madhu Kapur has claimed her rights as co-promoter were violated and she wasn’t consulted before directors were appointed on the bank’s board.
The bank had appealed against the court’s decision that dismissed its preliminary objection. In the objection, it had said according to Section 10A (6) of the Banking Regulation Act, 1949, a dispute over the appointment of directors on a bank’s board couldn’t be heard by a civil court.
“The hearing over the jurisdiction of the court to hear the case will continue tomorrow (Wednesday),” said a person, requesting anonymity.
Sources said the Bombay High Court would hear Madhu Kapur’s petition, claiming violation of her right as the bank’s co-promoter, on Friday.
At a meeting last week, the YES Bank board had maintained its stance of not considering Madhu Kapur as co-promoter.
“As Madhu Kapur is the successor of late Ashok Kapur, she cannot be considered an Indian partner or Indian promoter and accordingly, cannot inherit the rights under the articles of association or the status of promoter of YES Bank,” the bank had said in an emailed statement.
The bank has been arguing banking isn’t a family business and “financial family successors” do not automatically become part of a bank’s promoter group, owing to regulatory criteria.
The decision has almost ruled out the possibility of an out-of-court settlement. Madhu Kapur has claimed her rights as co-promoter were violated and she wasn’t consulted before directors were appointed on the bank’s board.
