TMI Blog2021 (9) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... n 160 of the Act in the Annual General Meeting scheduled on 29.9.2021 is not in dispute. In other words, the writ petitions are instituted for enforcing a statutory obligation of the Bank. That apart, the Bank is a listed company engaged in banking business. It is a scheduled bank regulated by the Reserve Bank. The materials on record indicate that the Bank has had a chequered history on the governance issues, forcing the Reserve Bank to intervene at regular intervals; that there are adverse reports concerning the functioning of the Board and Committees of the Bank, especially as regards lack of transparency in the selection of Directors by the NRC; that having found that the Bank is functioning with a minuscule number of Directors, the Bank has been directed by the Reserve Bank, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949 to expedite and complete the process of appointment of Directors and that the Bank has, for some or other reasons, not complied with the said direction of the Reserve Bank. The writ petitions are instituted for enforcing obligations of public nature as well - it is deemed appropriate to pass an interim order directing the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow informed that the Board has decided on 20.09.2021 not to place the notices issued by the petitioners under Section 160 of the Act in the ensuing Annual General Meeting of the bank or any adjournment thereof. Ext.P3 is the communication issued by the Secretary to the Board of the Bank to the first petitioner. The petitioners, in the circumstances, seek, among others, directions to respondents 2, 3 and 8 to place the notices issued by them under Section 160 of the Act, signifying their candidature as Directors of the Bank in the ensuing Annual General Meeting as provided for under Section 160 of the Act. 4. The petitioner in W.P.(C) No.20425 of 2021 is a former Director of the Bank. It is stated by the petitioner that since the NRC of the Bank has decided not to recommend his name for reappointment as Director of the Bank, he too gave notice signifying his candidature as Director of the Bank as provided for under Section 160 of the Act. It is alleged that he was also issued a communication by the Secretary to the Board informing that the Board has decided on 20.09.2021 not to place the notice issued by him under Section 160 of the Act in the ensuing Annual General Meeting of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nomination process and follow best corporate governance practices. It was also submitted by the learned Senior Counsel that in the circumstances, in terms of the said communication, the Reserve Bank has directed the Bank to expedite and complete the process of appointment of Directors in accordance with the best governance standards. It was also submitted that though the direction issued by the Reserve Bank dated 03.06.2021 has been considered by the Board and a decision was taken to expedite and complete the process of appointment of Directors by 31.07.2021, the Bank is yet to comply with the direction of the Reserve Bank and it is in the aforesaid background that the writ petitions have been filed. 8. The learned counsel for the Bank opposed the prayer of the petitioners for the interim order, pointing out that the writ petitions are not maintainable. It was argued by the learned counsel that the Bank being a private bank and not a statutory body or an instrumentality or an agency of the Government, it is not amenable to the writ jurisdiction of this Court. It was also pointed out by the learned counsel that the Bank is not one running on Government funding and its sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the maintainability of the writ petition, it is to be mentioned that it is now trite that a writ petition can be entertained even against a private body when it becomes necessary to compel such body to enforce any statutory obligation or such obligations of public nature. The said proposition has been reiterated by the Apex Court in Sagar Thomas also. Though a counter affidavit has been filed by the Bank in W.P.(C) No.19758 of 2021, the Bank does not have a case in the counter affidavit that it is not obliged to place the notices given by the petitioners in terms of Section 160 of the Act before the General Meeting. The fact that the Board has refused to place the notices given by the petitioners under Section 160 of the Act in the Annual General Meeting scheduled on 29.9.2021 is not in dispute. In other words, the writ petitions are instituted for enforcing a statutory obligation of the Bank. That apart, the Bank is a listed company engaged in banking business. It is a scheduled bank regulated by the Reserve Bank. The materials on record indicate that the Bank has had a chequered history on the governance issues, forcing the Reserve Bank to intervene at regular intervals; tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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