TaxTMI 
TaxTMI 
2015 (6) TMI 707
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....up company of one Ashok Kapur, by all accounts a person of considerable standing in financial and banking circles. He was one of the victims of the 26th November 2008 terror attacks in Mumbai. Ashok Kapur and Rana Kapoor, the 1st Defendant, promoted a new banking enterprise, the 6th Defendant, Yes Bank. This is a relatively new entrant on India's banking scene but in a very short time it has done extremely well. Defendants Nos. 2 to 5 are Rana Kapoor's wife, daughter and two group concerns. 1.2 Not only were Rana Kapoor and Ashok Kapoor co-founders of Yes Bank, with Ashok Kapur functioning as its Chairman and Rana Kapoor as its Managing Director and CEO, but they were also related by marriage: their wives (Plaintiff No. 1 and Defendant No. 2) are sisters. Although this may not fit the definition of "relatives" within the meaning of the Companies Act, the family bond is undeniable. 1.3 The battle between these two groups has been portrayed, especially in the media and in public imagination, as a fight for control of Yes Bank. It is nothing of the kind. Indeed, I would venture to suggest that the controversy in this litigation is very narrow although it has gone down a ....
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....ions and discrepancies in factual narrative of Yes Bank's and Rana Kapoor's conduct. These inconsistencies and discrepancies are insufficiently explained. The rights claimed by the Plaintiffs are first denied on the ground that these were personal to Ashok Kapur and they died with him. At the same time, these very rights are invoked by Rana Kapoor acting on his own. The Plaintiffs say that these can only be validly invoked if the Plaintiffs do, in fact, succeed to the rights of Ashok Kapur. In Mr. Khambata's telling of the Plaintiffs' story, there is no manner of doubt that the Plaintiffs have been systematically excluded from all aspects of Yes Bank's functioning. The Bank has been entirely ring-fenced against the Plaintiffs. Their ostracism from the company is as complete as it is possible to be. Almost the entirety of Mr. Khambata's case is based on a reading of certain sections of the Companies Act, 2013 and some of the company's Articles. I will, in the course of this judgment, need to refer to these Articles frequently. For this reason, they are annexed to this order as set out below. 1.9 The factual narrative that follows is, given the way even....
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....any of the Rana Kapoor family. Rana Kapoor holds 3.62%; Bindu Kapoor holds 0.45%; Raakhe Kapoor, another daughter of Rana and Bindu Kapoor, holds 95.93%. The Defendants - Yes Bank and its Directors Yes Bank Ltd Defendant No. 6 "Yes Bank"; The Bank set up by Ashok Kapur and Rana Kapoor. Diwan Arun Nanda Defendant No. 7 Appointed Independent Director of Yes Bank. Appointment challenged. Ravish Chopra Defendant No. 8 Appointed as an Indian Partners' Representative Director and then as an Independent Director. Appointment challenged. M. R. Srinivasan Defendant No. 9 Appointed IP Representative Director. Appointment challenged. Rajat Monga Defendant No. 10 Appointed Whole Time Director. Appointment challenged. Sanjay Palve Defendant No. 11 Appointed Whole Time Director. Appointment challenged. Pralay Mondal Appointed Whole Time Director. Appointment challenged. Defendant No. 12 Lt. Gen. (Retd). Mukesh Sabharwal Independent Director. Appointment not challenged. Defendant No. 13 Brahm Dutt Independent Director. Defendant No. 14 Appointment not challenged. Saurabh Sriv....
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....%. Rabobank held 48% of Yes Bank's equity. 3.3 On 16th April 2004, Yes Bank made an application to the RBI seeking approval for the appointment of Rana Kapoor as Yes Bank's Managing Director and CEO for a five-year period. On 25th May 2004, the RBI issued a banking licence to Yes Bank. On 10th November 2004 Yes Bank applied to the RBI for an amendment to its Articles to include a new Article 127A. 3.4 On 24th June 2004, Yes Bank made a public offering of its equity shares. The prospectus in this regard was approved by SEBI. At this stage, it is only necessary to note that in the prospectus, the term "Promoters" was defined to mean Mr. Ashok Kapur and Mr. Rana Kapoor. 3.5 Between 2004 and 2008, Yes Bank's business grew substantially. Mr. Ashok Kapur was the Chairman of Yes Bank, while Rana Kapoor, his brother-in-law was its Managing Director and CEO. Ashok Kapur also served either as a Member or as the Chairman of several of Yes Bank's committees including its Audit and Compliance Committee, its Risk Monitoring Committee, its Investor Relations Committee and its Fraud Monitoring Committee. 3.6 Following the initial public offering ("IPO") by Yes Bank, the....
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....oncurrence was not obtained for this appointment, although, according to them, this was required by Yes Bank's Articles. Although the application was for a five year term, it seems that the RBI's approval came through only for a three year period with effect from 1st September 2009. 3.11 On 20th and 21st October 2009, the NGC and Yes Bank's board, respectively, held meetings. At these, Rana Kapoor, claiming to be now the only 'Indian Partner' , a term used throughout in the previous documentation, purported to exercise rights that, according to him, were available under Article 127(b) and nominated or recommended one S.L. Kapur as Yes Bank's Chairman. Mr. S.L. Kapur was duly appointed by Yes Bank's Board as Non-Executive Part Time Chairman of Yes Bank. 3.12 In 2010, Rabobank sold its shareholding in Yes Bank in the open market on a piecemeal basis. Rabobank thus completely exited the Yes Bank venture. 3.13 Yes Bank's Annual Report for 2009-2010, published on 27th April 2010, listed the major shareholders of Yes Bank as on 31st March 2010. The Plaintiffs' group held 12.68% and Rana Kapoor's group collectively held 16.56%. The only rel....
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.... Less than a month later, on 19th May 2011, Yes Bank again wrote to RBI on this issue. It now claimed that the "Indian Promoter" status and definition in the Articles of Yes Bank was personal to Ashok Kapur and did not travel to his heirs and legal representatives. Evidently, the Plaintiffs were unaware of this correspondence. This was part of the correspondence and documentation disclosed in June 2014. A reminder e-mail followed from Rana Kapoor on 2nd February 2012 to the same effect. 3.18 On 25th April 2012, at a meeting of Yes Bank's Board of Directors, Rana Kapoor was reappointed as its Managing Director and CEO for a period of five years with effect from 1st September 2012 "subject to the approval of RBI and shareholders" . This appointment is also impugned by the Plaintiffs on the ground that it was not jointly recommended by the 'Indian Promoters' or 'Indian Partners' , and also because the Plaintiffs had played no role whatever in making this recommendation or nomination. The Plaintiffs also contend that this appointment was never placed before the shareholders for their approval either at the eighth AGM (14th July 2012) or the ninth AGM (8th June 20....
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....hareholding of the 'Indian Partners' in Yes Bank was thus: Plaintiff No. 1 held 9.79%; Plaintiff No. 4, Mags Finvest, held 2.21%; Rana Kapoor held 5.58%; Yes Capital held 3.92% and Morgan Credits held 4.22%. 3.21 There is at this stage, i.e., for the period between 2nd May 2013 and 6th June 2013 when this Suit was filed, a considerable amount of correspondence between the Plaintiffs on the one side and Rana Kapoor on the other. This relates not so much to the question of classification of the Plaintiffs' shareholding as a promoter or a non-promoter shareholding, but to the question of whether Shagun Kapur Gogia, Plaintiff No. 2, was entitled as a matter of right to be nominated to and to serve on Yes Bank's Board. I believe this to be a somewhat different issue from the question of whether or not Rana Kapoor was entitled to make nominations on his own, or whether this or any nominations to the Board required the concurrence, consent, or the joining of the Plaintiffs in the capacity as one of the two initial promoters ('Indian Promoters' or 'Indian partners') of Yes Bank. I will be dealing with both issues separately. 3.22 On 2nd May 2013, Shagu....
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....endant No. 9, then the Chairman of Yes Bank. Srinivasan indicated that he was looking for a satisfactory way forward in the interest of both families and of course Yes Bank. According to the Plaintiffs, Srinivasan at this meeting indicated that Madhu Kapur could nominate Shagun as a director. After this meeting, on 5th June 2013 itself, Shagun Kapur sent an email to Srinivasan in which she referred to the constant exclusion of the Plaintiffs from the management and affairs of Yes Bank despite what she described as the 'rights enshrined' in the Articles. She emphasised the need for a written commitment for such joint nomination. With this, Shagun also sent her own CV and Bio-data to Srinivasan. He replied immediately saying that the CV was impressive and asking till the next day to revert. 3.25 As Srinivasan had not responded, Madhu Kapur sent an email to Rana Kapoor on 6th June 2013 along with a letter. These related to the question of establishing a protocol or procedure to implement nomination rights under the Article. That very day, Shagun Kapur gave to Srinivasan a signed copy of Madhu Kapur's letter to Rana Kapoor and requested Srinivasan to pass this on to Rana....
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....8 The Plaintiffs' ad-interim application was renewed and was taken up on 10th June 0213 and 1st July 2013. An order was passed allowing the Plaintiffs to forward to Yes Bank the recommendation for the appointment of Shagun Kapur Gogia as a director of Yes Bank. This was to be done within seven days and this nomination was to be considered by the Board at its scheduled meeting on 22nd June 2013. There followed between 10th June 2013 and 12th June 2013 some correspondence relating to inspection. I am not immediately concerned with this. On 15th June 2013 the Plaintiffs wrote to Rana Kapoor referring to Article 110 and this Court's order of 10th June 2013. In this letter the Plaintiffs stated that since Rana Kapoor had agreed to Shagun Kapur Gogia's nomination, the Plaintiffs assumed that this proposal had Rana Kapoor's concurrence. On 17th June 2013 the Plaintiffs forwarded their letter of 15th June 2013 to Yes Bank's Board of Directors. Shagun Kapur Gogia was recommended and nominated for the appointment of as a director. The Plaintiffs say this was pursuant to Article 110(b); this is disputed. Shagun Kapur Gogia's resume, CV and other declarations and inform....
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....ions to the jurisdiction of this Court. Preliminary issues were framed under Section 9A of the Code of Civil Procedure, 1908. These were finally heard and rejected by this Court vide its judgment dated 24th March 2014. Appeals were dismissed on 9th May 2014. The Supreme Court declined to stay the present Notice of Motion on Yes Bank's Special Leave Petition. 3.34 In the meantime, on 30th September 2013, Yes Bank applied to the RBI for the approval for the appointment of Defendants Nos. 10 to 12 as whole time Directors. RBI sought clarifications and information in relation to these appointments by its letter dated 4th October 2013. Yes Bank responded on 6th November 2013 saying that its Board was the competent authority to make the appointments in question. 3.35 On 28th March 2014, the Plaintiffs wrote to Rana Kapoor and Yes Bank pointing out that the positions of Chairman and Managing Director of Yes Bank would soon fall vacant and requesting that the be taken into confidence if steps have already been taken to identify suitable candidates for these two positions. 3.36 On 23rd April 2014, the Board of Directors of Yes Bank resolved that Madhu Kapur and her family could....
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.... as promoter, Indian partner and shareholder. In doing so, I permitted the Defendants to redact all material in the documents or correspondence that did not relate to the Plaintiffs or to this declassification/ clarification. A further order on disclosure followed on 20th June 2014. The 10th AGM was video recorded and a copy of that video record was submitted to Court and is in safe custody. 4. THE FRAME OF THE SUIT & THE INTERIM RELIEFS SOUGHT 4.1 The Suit seeks to enforce what the Plaintiffs described as valuable proprietary and participatory rights vested in them, or so they say, by the Articles of Association of Yes Bank. According to the Plaintiffs they are being denied these rights by Rana Kapoor. The Plaintiffs' case is that Yes Bank and Rana Kapoor had both previously acknowledged the existence and subsistence of these rights but it is only now that a contrary stand is being taken. There is in the plaint a prayer for damages, one that I am, of course, not required to consider at this stage. There are also several prayers for a permanent injunction, and these too must be considered at the stage of final hearing of the Suit. Having said that, the reliefs in the Noti....
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.... holding himself out as the Managing Director or CEO of Yes Bank. Prayer clause (a)(xv) is in the same vein, directed against Defendants Nos. 7 and 18 and seeks to have their appointment as independent Directors stayed. Prayer clause (a)(xx) is a stand-alone prayer and seeks to restrain Defendants Nos. 1 to 6 from applying to the RBI from a reclassification of the Plaintiffs' shareholding or continuing with the application already made in that behalf. 4.5 Mr. Khambata in fairness agreed that prayer clause (a)(iii) is substantially covered by prayer clause (a)(vi) and that the prayer clause (a)(xiii) is substantially covered by prayer clause (a)(v). 4.6 Therefore, these prayers can be broadly classified into three categories: (a) One set that seeks recognition of the Plaintiffs' rights to participate in the management of Yes Bank; (b) A second set that seeks to restrain individual Directors from acting as such or holding out themselves as Directors; and (c) Prayer clause (a)(xx) which seeks to restrain the Defendants from making or continuing with any application to the RBI for reclassifying the Plaintiffs' shareholding into a non-promoter shareholding. 5. VOLU....
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....noted, Ashok Kapur and Rana Kapoor between them, their family members and their respective group companies (Mags Invest, Yes Capital and Morgan Credits) held 51% of the equity shares of Yes Bank. The RBI required Yes Bank's shares to be offered to the public. The Share Subscription Agreement of 30th April 2003 contained draft Articles of Association. According to Mr. Khambata, the Articles that governed Yes Bank on its incorporation on 21st November 2003 constitute what he calls "a matrix of participatory of proprietary rights" under the articles. These articles include some of the definitions, and Articles 110, 111, 118, 121 and 127. In 2004, Article 127A was added by amendment. According to Mr. Khambata, this newly introduced Article grants additional participatory rights to the promoters. 8.2 I will turn first to some of the provisions of these articles since these are invoked repeatedly on either side and the entire structure of Mr. Khambata's case depends on an interpretation of these articles. 8.3 Article 3 contains clauses of definitions and interpretation. Both "Ashok Kapur" and "Rana Kapoor" are defined to mean two individuals and, "unless it be repugnant to the cont....
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....ectors shall not be less than 3 (Three) and no more than 15 (Fifteen). (b) So long as the Indian Partners hold along with any of their Affiliates directly or indirectly, at least 10% of the issued and paid up share capital of the Company, the Indian Partners shall have the right to recommend the appointment of three directors collectively referred to as the "IP Representative Directors". So long as Rabo holds along with any of its Affiliates directly or indirectly, at least 10% of the issued and paid up share capital of the Company, Rabo shall have the right to recommend the appointment of one director referred to as the "Rabo Representative Director". (c) Apart from the IP Representative Directors and the Rabo Representative Director, the other directors shall be independent ("Independent Directors"). The Indian Partners shall propose the names of the first three Independent Directors, who upon approval by Rabo, shall be appointed as such by the Board. Rabo and the Indian Partners may, recommend the names of the remaining Independent Directors to the nominations Committee of the Company. For the purpose of this Article the expression "independent directors" means Director....
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....nted. The term "shareholder" is also defined and it means the holder of any share of the Company. This phrase seems to indicate that there is a certain class of shares, the holders of which are entitled to representation on the Board of Yes Bank. 8.11 It is normal in such cases to provide for vacancies in the offices of Directors. Article 118 does precisely this. It does, however, go little further apart from the usual clauses regarding the filling up the casual vacancies Article 118(b) says that if the vacancies so created are of the Rabo Representative Directors or IP Representative Directors these are to be filled in by individual(s) recommended for appointment by either Rabo or the Indian Partners as the case may be. 8.12 Articles 121 to 126 provide for rotation of Directors. The two IP Representative Directors and the Rabo Representative Directors are not liable to retire by rotation. 8.13 Article 127 deals with the Non-executive Chairman and CEO and Managing Director of Yes Bank. Article 127(b) says in terms that the Indian Partners have, again "the right to recommend" the name of the Chairman. They also have "the right to recommend" the CEO and Managing Director of ....
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.... Mr. Khambata submits that taken together these Articles make it abundantly clear that Ashok Kapur and Rana Kapoor had extensive participatory rights in the management of Yes Bank. They were both collectively defined as Indian Partners. Each of them was individually defined as an Indian Partner. The definitions of them by name as also the interpretations of the word "person" in the Articles made it clear that their rights extended to their heirs and legal representatives. The rights that Mr. Khambata speaks of are substantial. Under Article 110, the Indian Partners had a right to recommend the appointment of three Directors to Yes Bank's Board. That Article also provides for a threshold shareholding of 10% in order to exercise that right. This 10% may be made up by adding to the shareholding of the Indian Partners the shareholding of their 'affiliates' , and this term is defined to include companies that are controlled directly or indirectly by Ashok Kapur and Rana Kapoor; i.e., the Indian Partners must together hold at least 10% of the shareholding of Yes Bank to exercise the rights under Article 110(b). In addition, Ashok Kapur and Rana Kapoor were the first IP Representative Dir....
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....lves. (Holmes v. Lord Keyes (1959) Ch 199 (CA) at 215; Rayfield v. Hands, [1958] 28 Com Cases 460; Union of India v. D.N.Revri & Co., AIR 1976 SC 2257). 8.19 Mr. Khambata's submission, based on a plain reading of these Articles, is that the rights conferred in them are not personal. They are heritable and assignable. A share in a company, Mr. Khambata submits, is a bundle of diverse rights contained in the contract that is the Articles of Association of the company. (CIG (Central) v. Standard Vacuum Oil Company AIR 1966 SC 1393). A share is movable property and it carries with it all attributes of movable property.( LIC v. Escorts Ltd AIR 1986 SC 1370). Since shares include proprietary rights, according to Mr. Khambata, the participatory rights contained in the Article and which accrue or endure to the Indian Partners enjoy all the attributes of movable property. This includes heritability and assignability. Thus, even without the express provisions in the definitions contained in the Articles and without the express words of Article 110, any rights that were available to Ashok Kapur would pass on his death to his heirs and legal representatives. If the Articles intended to prov....
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....jointly? (c) What is the precise nature of that right? Is the right to recommend merely a right to suggest, or does it necessarily imply the right to nominate? (d) As a corollary of the second and third questions above, are the Plaintiffs are entitled to what I will call, for want only of a better expression, a 'reserved' seat on Yes Bank's Board? 8.22 Is the right in Article 110(b) (and Article 127A) personal to Ashok Kapur and Rana Kapoor? On a plain reading, such as the one Mr. Khambata advocates, one would have to say it is not. After all, the Articles define the term "Indian Partners" to include both Ashok Kapur and Rana Kapoor; and more unusually in such cases, the Articles also contain a 'definition' of those two names. Those definitions explicitly and unambiguously include their heirs, successors, legal representatives and assigns. There is nothing in either Article 110(b) or Article 127A to indicate that any other definition or interpretation was intended. Mr. Kapadia's submission that this right has its genesis in the banking license originally granted, and that this license was on account of the personal qualifications and ability of Ashok Kapur and Rana Kapoor ....
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....111 and 127 too. The only way to resolve this, in his submission, is to read the references to the names as being personal (and not to include their successors) in all clauses that relate to matters of appointments of directors, chairmen, Managing Directors, whole time directors and so on. There is, I think, a fatal fallacy in this argument. Article 110(b) does not speak of the appointment of any particular person. Articles 111 and 127 on the other hand name individuals to certain posts. There is a distinct conceptual difference between these. Certainly when it comes to Articles 111 and 127 there exists a repugnancy and the references in those Articles must be construed as references to the two individuals concerned. I do not think it is at all possible to extend this to every other such reference. Article 110(b) confers a right. Articles 111 and 127 make an appointment. The difference is crucial. 8.25 Mr. Kapadia's endeavour is to illustrate what he describes as 'absurd' consequences that might result if the two names in Article 110(b) are given their expanded meaning to include successors. He seeks first to link the right to specific shares held by each of the two contesting g....
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....a transferee from those might be able to invoke those rights, but not a transferee of a transferee. It seems to me that the clause in Article 110(b) has a defined and limited life-cycle. It is not one that can endure in perpetuity. Finally, it is common ground that both groups have in fact divested themselves of some of their shareholding. None of their transferees, qua 'assigns', have ever laid claim to this right. More importantly, neither group has tried to rope in any 'assigns' to shore up its requisite threshold qualifying shareholding for the exercise of that right. This is a non-issue; nobody is concerned with the exercise of any rights by any 'assigns' . This hypothetical is hardly a guide to interpretation. 8.26 Articles 110, 118, 127 and 127A use the term "Indian Partners". The Defendants argue that Article 49(e), which provides for a lock-in period, is the only one in which the expansive definition of Ashok Kapur and Rana Kapoor can be given full effect. Ex-facie, this seems incorrect. Were it so, the so-called definition of the two persons was entirely unnecessary and it would have been sufficient to include the phrase "heirs, administrators, legal representatives an....
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....tual; he reads the Articles in their plain terms, and it is the Defendants who invite me to subtract meanings from unambiguous terms. It is they who invite an ambiguity where none exists. Indeed, the question of repugnancy that the Defendants raise is more than a little self-defeating; for it is the Defendants' submission that invite me a wholesale rewriting of Articles 110(b) and (c), 118(b), 127(b) and 127A(a), by doing away, where convenient to the Defendants, the words "successors", etc., and elsewhere, the word "assigns" . 8.30 The references to situations that lie at the extremities are, I think, needlessly alarmist. Dr. Tulzapurkar says that it is necessary to test an interpretation against extreme situations. The authorities he cites do not support this proposition, or say that that an absurd result from an extreme test is determinative. By that reasoning, as George Bernard Shaw famously demonstrated, syllogisms can always be forced to failure. All that these authorities say is that the entire document has to be considered as do surrounding circumstances. (Keshav Kumar Swarup v. Flowmore Pvt Ltd (1994) 2 SCC 10; Puransingh Sahani v. Sundari Bhagwandas Kripalani (1991) 2 ....
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....e first three are to be proposed by the Indian Partners, subject to Rabobank approval. Similarly, under Article 127(b), the first Chairman, and the first Managing Director and CEO are named individuals, and these appointments obviously cannot extend to successors or assigns, nor is it anyone's case that they do. But the Indian Partners also have the right to recommend future appointments. This does not mean that the Indian Partners must exercise that right, or that on their failure or inability to exercise that right the appointments cannot be made. There is a material difference between having a right to do a particular thing, which carries with it an option not to exercise that right, and being required to do that thing, without which it cannot be done at all. 8.33 Mr. Kapadia's prediction of a corporate and financial Armageddon is more than somewhat misconceived. It cannot be happenstance that it arises only after, or because of, Ashok Kapur's passing. Every single one of these situations was possible had Ashok Kapur been alive today and disagreed with Rana Kapoor. Might that have resulted in the 'complete shutdown' of Yes Bank? Or are we required to presume that Ashok Kapur ....
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....scription Agreement of 5 November 2003; and the Master Investment Agreement dated 25th November 2003. He drew attention to a number of clauses of these documents and invited a finding that these not only provided context but were permissible aids to interpreting the Articles. According to Dr. Tulzapurkar, these documents show that the rights in the Articles were personal to Ashok Kapur and Rana Kapoor. Of these four documents, the first three precede Yes Bank's incorporation on 21st November 2003; only the Master Investment Agreement is subsequent. The value of the first three pre-incorporation agreements is marginal at best, yet none of these seem to bear out the Defendants' contentions. All three include 'successors', 'legal representatives', 'permitted assigns', 'administrators' and 'executors' in some combination or the other (The Share Subscription Agreement of 5 November 2003 uses the phrase "executors, administrators, legal representatives and permitted assigns", while the other two use the phrase "successors, legal representatives and permitted assigns".), in the definitions of Ashok Kapur (the expression used is 'AK') and Rana Kapoor ('RK'). It is unclear why the warrantie....
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....than the required 50% of the paid up capital of Yes Capital and Morgan Credits. These do not, therefore, fit the definition of his 'Affiliates', if the right be entirely personal to him. As a result, there is no way that Rana Kapoor can, on his own interpretation, satisfy the 10% threshold requirement to invoke Article 110(b) rights. Yet he has done so. How could that be possible, but for the inclusion of his spouse and children, and a combining of their shareholding in Yes Bank, Yes Capital and Morgan Credits? If what the Defendants say is correct, then the 'Indian Partners' collectively pass the 10% threshold criterion only if Rana Kapoor's personal 5.55% shareholding in Yes Bank is added to Madhu Kapur's (the 1st Plaintiff's) 9.74% stake. This also means that the right in Article 110(b) is, on Yes Bank's and Rana Kapoor's own conduct and understanding of it, available to their 'Affiliates', i.e., Yes Capital and Morgan Credits, neither of which is a natural person. 8.38 Mr. Khambata also submits that there is ample evidence to show that the Defendants have, by their conduct at various stages, 'admitted' that the Plaintiffs, are Ashok Kapur's successors, and are entitled to ex....
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....utual agreement, remake them. The process of practical interpretation and application, however, is not regarded by the parties as a remaking of the contract; nor do the courts so regard it. Instead, it is merely a further expression by the parties of the meaning that they give and have given to the terms of their contract previously made. There is no good reason why the courts should not give great weight to these further expressions by the parties, in view of the fact that they still have the same freedom of contract that they had originally. The American Courts receive subsequent actions as admissible guides in interpretation. It is true that one party cannot build up his case by making an interpretation in his own favour. It is the concurrence therein that such a party can use against the other party. This concurrence may be evidenced by the other party's express assent thereto, by his acting in accordance with it, by his receipt without objection of performances that indicate it, or by saying nothing when he knows that the first party is acting on reliance upon the interpretation (see Corbin on contracts, Vol. 3, pp. 249 and 254-55). 8.42 Unless explained, an admission furni....
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....lls us that Ashok Kapur and Rana Kapoor were, under these Articles, conceived to be acting together. 8.45 The scenario before me today is one that was as likely had Ashok Kapur survived. What might have been the result of a disagreement between him and Rana Kapoor? This, I think, lies at the heart of the matter. No one disputes that Ashok Kapur was entitled to these rights. Leaving aside the question of these rights inuring to his successors, how might Ashok Kapur have been entitled to exercise those rights? Could he have done so unilaterally or were he and Rana Kapoor required to act together? Nothing in these Articles suggests that either of these two men could have done so. They were entitled to exercise that right jointly or not at all. Finding that the right passes on to their successors does not and cannot alter this position. The rights in the Articles are, consequently, are ones that can only be exercised jointly, never singly. 8.46 This may seem obvious; it is. It may also seem innocuous; it is not. For the consequences of this are to throw into jeopardy every single non-joint or unilateral exercise of those rights. In every case where the right has been purported to....
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.... therefore, not subject to general body approval. If Article 110(b) is merely a right to suggest, Article 121 is meaningless. 8.50 But what appears to be determinative is this: if the right to recommend is merely a right to suggest, why have it in the Articles at all? Article 110(b) is then entirely redundant. After all, Section 160 of the 2013 Act gives all members of the company the very same right. Nor is this new. The section corresponds to Section 257 of the 1956 Act. If every member - and this would include the Indian Partners - have this right by law, what need was there for it in the Articles? The answer must be that the provision in the Articles went above and beyond that which the law already permitted. It conferred a right not to be found in statute. Given that the statutory right is one to suggest, the right in the Articles can only be a right to nominate. 8.51 I am not in the least persuaded by the arguments by Mr. Kapadia that the right in Article 110(b), worded as it is, can never be the right to nominate but is only a limited right to suggest. The authorities he cites do not, I think, carry the case at hand further.(A. Panduranga Rao v. State of Andhra Pradesh....
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....ogress and development of the enterprise. There is nothing so very absurd in a provision that allows the two progenitors of a commercial enterprise certain special privileges unavailable to others; and it is nobody's case that such a provision is contrary to law. This is the common business sense that Mr. Khambata advocates. Yes Bank's argument seems to be that to extend these rights to 'successors' is absurd. I have already held it is not, and, indeed, would venture to suggest that clear-words argument is one that can with success be deployed against Yes Bank itself. It is today Yes Bank that seeks to have unambiguous words read out of the Articles. 8.54 This is the pudding. What might we make of Yes Bank's and Rana Kapoor's consumption of it? Mr. Khambata has culled a list of what he describes as 'admissions' by both Yes Bank and Rana Kapoor that the right under Articles 110(b) and 127(b) was a right to nominate and not merely to suggest. I will assume for the present that the word 'admissions' is something of a trope to describe a general pattern of conduct, for it includes material of widely varying origin. (I propose to ignore, for instance, the use of the word 'nomination'....
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....ot routine shareholder recommendations (which require an accompanying fee). These were clearly stated to be nominations by Rana Kapoor, described as the Indian Promoter. 8.55 There is other material too: Clause 8.3 of the Master Investment Agreement yields yet another clue; while the promoters have a right to 'recommend' directors, those directors are referred to as their 'nominees'. 8.56 Although I did not hear any response from the Defendants to this line of argument by Mr. Khambata, there is one important distinction to be drawn here. The essence of Mr. Kapadia's argument here is that if these recommendations or nominations - a rose by whatever name - are always subject to regulatory statutes and general body approval then they are nothing but suggestions properly so called. They can always be rejected by the general body (something that has, of course, never happened). But that, in my view, is misdirection. Everything a company and especially a banking company does is subject to oversight by statutory regulators. That does not detract from the nature of the right. What we must consider is the manner in which these 'suggestions' come to be placed before the General Body. D....
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....o a 'fetter' on the Board, i.e., that the Plaintiffs' case was precisely that of the right being a right to nominate and appoint and not merely to suggest. 8.59 This submission, that the powers of the Board are and must always remain unfettered, is one for which I can find no authority when stated in such absolute terms. Indeed, it seems to me that the law, the authorities and the commentaries all point to the contrary. A Board's powers are always subject to the company's Articles. Were it not so, the Board would be entitled to do things wholly outside the confines of the Articles; and here we do have a manifest absurdity. The Articles of every company exist for a reason. That reason is not merely to constitute the Board and then unleash it. Section 179(1) of the 2013 Act in terms makes the powers of the Board of every company subject to its Articles. Article 140(a) of Yes Bank's Articles is consistent with this: it says, as it must, that the Board has all powers, subject to the provisions of the Memorandum & Articles of Association. In my reading of it, this has been settled nearly three decades ago in LIC of India v Escorts Ltd. (supra) We need not travel further afield, but s....
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....ble to understand how Rolta can be usefully applied to this case. As I read it, that decision tested the enforceability of an agreement that stood outside the Articles, not one embodied in them. The agreement in question was a pooling agreement, and it seems to have been urged before the Rolta Court that that agreement resulted in a denuding of the powers of the Board or its 'sterilization'. The observations in paragraph 32 (In the Bom CR Report; para 31 in the Manupatra equivalent.), seem to me to be very context-specific: The shareholders cannot infringe upon the Directors' fiduciary rights and duties. Even Directors cannot enter into an agreement, thereby agreeing not to increase the number of Directors when there is no such restriction in the Articles of Association. 8.62 But the same paragraph goes on to say: The shareholders cannot dictate the terms to the Directors, except by amendment of Articles of Association or by removal of Directors. 8.63 Mr. Kapadia says, on the basis of Rolta and Boulting (cited in the former), that no agreement or contract can trump a statutory fiduciary duty. Therefore, the contractual right in the Articles cannot impinge on the Board's....
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....endants argue that the RBI suitability criteria cannot be met if Mr. Khambata's interpretation is accepted. That is a patent misreading of his submission. I have not understood him to suggest, even remotely, that this right confers a power to nominate a person entirely unsuitable to the task. Mr. Khambata does not say that the Articles must be read such that the two Indian Partners, acting together, can 'nominate', say, a bus driver. That is the Defendants' portrayal of Mr. Khambata's argument and it is unfair. What Mr. Khambata has been at some pains to stress is that while there is a power to nominate, that power is subject to all applicable laws, regulations, directives and requirements. Our bus driver may be quite excellent at what he does, but it is unlikely that he would be suited to, in the words of Rolta, charter the course of anything but his bus. Who is to decide his eligibility (i.e., whether he meets statutorily mandated standards)? Here again, Mr. Khambata is entirely candid, and the Defendants only attempt to sidestep his direct answer: it is for the Board to determine compliance with eligibility criteria and none else. In fact, this in itself wholly undermines Mr. Ka....
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....erved seat for the Plaintiffs on Yes Bank's Board. No such interpretation is possible and the Plaintiffs have no such right. Second, to accept this is necessarily to fly in the face of Rolta and to allow a wholesale curtailment of the Board's powers in respect of a very large number of directorships. Third, Mr. Khambata suggests that Yes Bank's Board can only appoint the minimum number of Independent Directors, i.e., one-third of the total strength, or five of the 15-member Board. It can appoint no more for that would "exhaust the seats required for IP Representative Directors". More than one-third, he says, is not a statutory requirement; and to appoint more is ultra vires the Articles. 9.2 I must disagree. The argument again proceeds on the basis that there must necessarily be IP Representative Directors. That is not so. There are at least three scenarios in which there would be none: (1) if the two groups reduce their respective shareholdings below 10%; (2) if they cannot jointly agree on a nomination; or, (3) if they simply decline to exercise the right. There is, therefore, no 'reservation' on the Board for IP Representative Directors. Further, the statute clearly requires ....
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....ontinued to act as Managing Director and CEO from 2012 without shareholder approval till as late as 2014. (c) Mr. Kapadia and Dr. Tulzapurkar point out that this argument incorrectly places the appointment of the Managing Director and CEO under Article 127(b) on the same footing as the appointment of IP Representative Directors under Article 110(b). I believe they are correct. The appointment of a Managing Director and CEO is a statutorily recognized appointment. The Board always has the power to make that appointment, even without Article 127(b). IP Representative Directors are a creation of the Articles. The Board cannot appoint an IP Representative Director absent a valid nomination. This distinction is crucial. Further, as in the case of Article 110(b), the Indian Partners are not required to make a recommendation of the Managing Director and CEO; they have that option. The non-exercise of that option does not result in that appointment not being made because the Board's powers immediately and automatically come into play. This does not happen under Article 110(b). (d) Mr. Kapadia also submits that Article 127(b) clearly contemplates an election, in that it requires the R....
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....ast in my understanding of it) that the Board is powerless and, for want of a joint recommendation, cannot ever appoint a Managing Director and CEO. (g) In fact, the Plaintiffs have made it clear, even in their written submissions, that they will support the continuance of Rana Kapoor as Managing Director and CEO provided a full disclosure is made and Yes Bank's seeks his reappointment as a special resolution (on the footing that he is a 'Related Party'). I will turn to this argument regarding the need for a special resolution in a moment; but the rest seems to me to be clutching at straws. Before the general body a sufficient disclosure was made. The Plaintiffs complain that inspection was not fully given to Shagun, or not given in an appropriate manner. With tensions running high, this is the kind of thing that sometimes happens, but it is an unsure foundation for so mountainous a case to unseat one of the founders of the enterprise and send him packing to the corporate dungeons. There is also a submission that the AGM notice elides necessary information about the extent of Rana Kapoor's remuneration and perquisites. This is an argument of, if I might be permitted the liberty,....
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....or who receives, say, rent-free accommodation, must be appointed by a special resolution and in no other fashion. Section 188(1)(f ) says in terms that it applies to the 'related party's' appointment to any office or place of profit in the company; and 'office or place of profit' is defined in the explanation to that section: Explanation.- In this sub-section,- (a) the expression "office or place of profit" means any office or place- (i) where such office or place is held by a director, if the director holding it receives from the company anything by way of remuneration over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise; (k) The change in law is, I think, in the direction Mr. Kapadia suggests, viz., that under the 1956 Act, a Managing Director could possibly have been appointed a sole selling agent without a special resolution. This is no longer possible. The appointment of a Managing Director is separately carved out and placed in Section 196. A special resolution is required if he is to be appointed a sole selling agent, etc and to receive additional perqu....
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....could not have been done. It was an impermissible unilateral nomination. It cannot be saved. It is ultra vires the Articles and is void. The subsequent election at the Annual General Meeting is irrelevant; the initial appointment was bad. (c) At the 10th AGM on 14th June 2014, Ravish Chopra was 're-designated' as an independent director. This just cannot be. Yes Bank itself says, as of 19th February 2014, that he was a promoter nominee non independent director. (Notice of Motion, Vol IV, p. 869) The fact that the initial appointment was as a promoter nominee in October 2012 is accepted on affidavit by Yes Bank. (Affidavit in Reply dated 27th February 2014, Notice of Motion, Vol IV, para 6, p. 872.). In that affidavit, there is some attempt at obfuscation by saying that Mr. Chopra is now not what he once was, and that he was 'nominated' as an additional director. A later Report on Corporate Governance, part of Yes Bank's 2013-14 Annual Report (Plaint, Vol. II, p. 412) refers to Mr. Chopra as a non-independent director. (d) Article 110 speaks of Independent Directors and IP Representative Directors. Article 127A introduced a category of Whole Time Directors. These are the only ....
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.... the criterion [sic] of an Independent Director as specified in law.' He also claimed that Rana Kapoor's nomination of Ravish Chopra was good for only one year. As we have seen, neither of these statements is accurate. (i) The Defendants' case contradicts itself in another aspect too. If Mr. Chopra was appointed as what they call a 'normal' director at the 9th AGM, he was not due for rotational retirement at the 10th AGM. The only manner in which he could be 'redesignated' , being a non-retiring director, was if the company received notice from a member proposing him with a deposit of Rs. 1 lakh (up from the Rs. 500 in the earlier statutory scheme). There was no such proposal, and Mr. Chopra could not have been validly appointed even at the 10th AGM under Section 160 of the 2013 Act. 9.6 The appointment of Defendant No. 9 (M. R. Srinivasan) as Director and Chairman (a) Srinivasan was apparently appointed as an Additional Director, designated "non-executive non-independent" by a Board Resolution of 23rd October 2012.(Joint Compilation, Vol. III, p. 1196) (b) The NGC, at its meeting on 15th January 2013, and the Board at its meeting on 16th January 2013, 'changed' Sriniva....
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.... or 10th AGMs of Yes Bank. Shareholder approval was sought only to his remuneration. (h) Srinivasan's appointment at the 8th AGM is also bad since the Notice for that AGM (Joint Compilation, Vol. III, p. 1238 at p. 1243) proceeds on the basis that Srinivasan could have been validly nominated by Rana Kapoor in the first place. (i) In any case, Srinivasan is age-ineligible under the current RBI directives. The result is that the initial appointment of Srinivasan as a Director is ultra vires and non-est; his subsequent re-classification and appointment to Chairmanship also fails. It matters not a whit that the law does not require chairmanship to be approved in general meeting. The Board resolution asked for this, and it was necessary therefore to act strictly according to that resolution. It is not permissible for the Board to make an appointment subject to certain conditions and then to step around those on the footing that the law does not demand them. The law also does not prohibit them, and the Board might have been within its rights not to insist on shareholder approval for the chairmanship of Srinivasan. It did insist and it was bound to obtain it. (j) As a matter of f....
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....e 127A.(Joint Compilation, Vol. I, p. 180). These appointments are subject to a recommendation by the 'promoters' . There was no such recommendation from the Plaintiffs. In the trial on the preliminary issue, it seems to have been admitted that Madhu Kapur falls within the definition of 'promoter'). The other route for appointment of Whole Time Directors is by selection of members from the Board under Article 127A(b). Yes Bank says that the three appointments fell under this Article and did not need a recommendation. Defendants Nos. 7 to 18 veer from this course and suggest that the appointment under Article 127A(b) is not limited to sitting Board members, for that would result in the company being always unable to appoint its employees to whole time directorships. On a plain reading, this submission from the directors demands the complete effacing of the words "one or more of its members". The word "its" in Article 127A(b) clearly references the Board. (b) Monga, Palve and Mondal were not on Yes Bank's Board on 27th June 2012 when they were all appointed as Whole Time Directors by the Board. This is also admitted in the trial on the preliminary issue. There is as yet no shareho....
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.... to have this sort of an effect. I am not prepared to do anything of the kind. The correspondence indicates that there was much in discussion; including a proposal dated 5th June 2013, a day before the suit was filed, to have one IP Representative Director from each family and the third one by rotation,(Joint Compilation, Vol. IV, p. 1443, 1444) a proposal that lies wholly outside the Articles. 10.3 In June 2013, the Plaintiffs began agitating their rights. I have already set out the relevant dates. Srinivasan met with Madhu Kapur and Shagun Kapur Gogia on 5th June 2013. From this, Mr. Khambata wants me to infer that Rana Kapoor and Yes Bank both accepted that Shagun's nomination would be joint. But it is equally possible that all that they were saying was that they would agree to the nomination being considered by Yes Bank; not that it would be a choiceless nomination under Article 110(b). Srinivasan's email of 6th June 2013 sets out his stand.(Joint Compilation, Vol. IV, p. 1454) He says that the Plaintiffs could suggest Shagun or anyone else as a joint proposal, but goes on to say that his role is limited and does not extend to family issues. On that day this suit was filed a....
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....ew days later, Yes Bank made it clear that this nomination would be considered according to the High Court order and the law, but not as a joint nomination under Article 110(b).(Joint Compilation, Vol. IV, p. 1592.) This letter cannot be insignificant, nor can it be said that because it was not signed by Rana Kapoor, he must be deemed or held not to have disputed that the nomination was joint. 10.7 The NGC rejected Shagun's nomination. It did so after calling for a welter of information, material it has not sought from others it considered for appointment to the Board. Mr. Khambata sees this as vindictive, an attempt to deny the Plaintiffs' their 'rights' . It is possibly only circumspection or caution. The nomination was not of a known figure in Indian banking circles, though Shagun's background is perhaps more impressive than most. It is, however, not neutral in any sense. Mr. Khambata says that the Board was bound to accept her nomination as one made under Article 110(b). That is not possible. That kind of nomination requires the explicit and unambiguous endorsement of both Indian Partners, not an inferential or tacit or deemed consent. The reason is obvious. But for an expre....
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....e it is open to the RBI to now go into the question and arrive, possibly, at a contrary view. The question indeed is at the core of the Plaintiffs' case and could not have been evaded here. Now that it has been decided, that application cannot possibly be pursued. The RBI is not a party before me. No injunction against it is possible for that limited reason. But an order is certainly possible against Rana Kapoor and Yes Bank from following up on that application or pursuing it. That seems to me to be necessary and inescapable. A relief is sought in just such terms. 11.3 Second, as regards the directorships. I must stress that in assessing these appointments, I have not examined the credentials, capabilities, competence and achievements of any of the directors whose appointments are assailed. For that matter, neither has Mr. Khambata. I cannot do this for obvious reasons: it means sitting in appeal over the Board and over the General Body, on merits. The assessment has been only on law and seeing whether the Defendants have adhered to the mandated processes. Where they have not, the results must follow. Some directors will have to step off the bus. But this is not necessarily cat....
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....the RBI to this end are motivated, self-serving and prima facie unlawful. 12.6 It also follows that any recommendations made by the 1st Defendant, Rana Kapoor, without the concurrence and consent of the Plaintiffs are also ultra vires the Articles and are null and void. 12.7 Although the right to recommend is the right to nominate, it is an indivisible right and must be exercised jointly. It cannot be splintered into component rights with each group nominating its own person to Yes Bank's Board. The right to nominate is also distinct from the right to serve on Yes Bank's Board; there is no such right to serve, and the Plaintiffs do not have the right to demand that the 2nd Plaintiff be accepted onto the Board without Rana Kapoor's concurrence and consent. The suggestion that each group could nominate one person and a third IP Representative Director would be chosen for alternating terms is wholly outside the scheme and frame of these Articles. The right must be exercised jointly or not at all. It is incorrect to say that Yes Bank's Board was bound to accept the nomination of the 2nd Plaintiff as a joint nomination made under Article 110(b). It is also not for a court to quest....
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....y rights that the Plaintiffs claim and which have been denied to the Plaintiffs, and he seems to have done so in the very manner that he says the Plaintiffs cannot. That is an incongruity never satisfactorily resolved or explained. Add to this the fact that, on the face of it, the record is littered with instances of the Defendants having accepted by their conduct and actions those rights that they now claim do not endure to the Plaintiffs. Nothing else explains the actions regarding the various meetings between the two sides, the correspondence and, most of all, Yes Bank's and Rana Kapoor's repeated entreaties to the RBI to declassify the Plaintiffs' shareholding and to have it treated as that of a non-promoter group. Again, there is no cogent explanation for this at all. 13.3 Would the Plaintiffs' interpretation necessarily and inevitably prejudice Rana Kapoor? It might; but this makes very little difference, because the question of balance of convenience is not to be assessed in a matter such as this by whether or not an individual benefits, or the power he is used to wielding is curbed. Against this must be balanced the wholesale denial of all rights to the Plaintiffs. Yet t....
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....at is in any way tied to Ashok Kapur's demise. The Plaintiffs' suggestion earlier in correspondence, and one that, in fairness, Mr. Khambata placed with evident hesitation, viz., that each side should 'nominate' one person to the Board, and then a third person should be appointed by alternate rotation, is obviously not something I can accept. It is entirely outside the Articles and the law. Apart from anything else, a demand for a seat on the Board seems to me to fly in the face of the Yes Bank's ethos. It is said to be the professional's bank. That necessarily means that it cannot be run like a family estate. Consequently, I do not believe it is open to the Plaintiffs to demand that any one of them take a seat reserved for them on Yes Bank's Board. One may find any number of faults with the way in which the Board went about the business of considering Shagun's so-called nomination. It may be described as churlish or even vindictive. But adjectival descriptions do not create a right where none exists. Nothing in Article 110 lends itself to an interpretation that the right to recommend, even when construed as a right to nominate, included a right to a unilaterally proposed reservati....
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.... before it even now a plenitude of options even when it comes to the directors whose appointments are in jeopardy, what need is there for an interim order? Here, too, I think the answer is an inevitability: if something has been done that is illegal or ultra vires, to allow it to continue for the next two decades while the suit wends its tortuous way through a trial is patently unfair. On the question of balance of convenience, commercial expediency cannot trump acts ultra vires or illegal. If reliefs are not granted, the Articles' meaning is forever lost. The Articles of a company are to it very like what the Constitution is to citizens. Shareholders are truly 'invested' in the enterprise: not merely for making profits and earning dividends, but also with a view to ensure that their rights, enshrined in the Articles, are always protected. It is of little use to say that the Plaintiffs are not a minority because they have a large shareholding. 13.11 Finally: the arguments have been extensive and prolonged, taking several days. As I have previously noted, the record itself is very considerable, nearly 4000 pages at the interlocutory stage. I am conscious that the Supreme Court ha....
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....ulated at this stage. Ordinarily, there would have been no difficulty in accepting this submission, because this is undoubtedly what needs to be done in any reference to mediation under Section 89 of the Code of Civil Procedure, 1908. In this particular case, however, not only is the judgment ready but the reference to mediation must necessarily follow my findings to forge a solution in times ahead, particularly because only some of the Plaintiffs' reliefs have been granted, and not all of them. This means that some issues, in particular the question of whether the Plaintiffs are entitled to the exercise of rights under Article 110 and the question of Yes Bank's application to RBI for declassification, are among the matters that cannot be the subject matter of a mediation and cannot be left open. At the same time, I have very little doubt that there are Articles that require amendment, both for consistency going forward and also to resolve the present disputes. Although I have attempted over a last month to frame the summary of disputes, I believe an agreement is necessary if the reference is to be meaningful and not left open-ended. Mr. Khambata submits that this might in fact be ....
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....ers: (a)(v), (a)(vi), (a)(vii), (a)(viii), (a)(xv) and (a)(xx). It is clarified that as regards prayer (a)(vii) in relation to Defendant No.9, M. R. Srinivasan, and as regards the injunction in that regard, this will not operate if, because of an age-bar, he is ineligible to continue on Yes Bank's Board. 14.2 It is not necessary to grant prayer (a)(xiii) since prayer (a)(v) has been allowed. Similarly, prayer (a)(iii) is unnecessary, being covered by prayer (a)(vi). 14.3 Prayers (a)(iv) and (a)(xiv) are expressly rejected. 14.4 Given the nature of this order, the fact that arguments spanned so many days and the time it has taken to deliver this judgment, the operative part of this judgment in relation to the seven individual directorships is stayed for a period of five weeks from today. The order in terms of prayer clause (a)(iii) regarding future recommendations under Article 110(b) and in terms of prayer (a)(xx), regarding the de-classification application, is not stayed and will operate immediately. 15. It remains only to thank Mr. Khambata, Mr. Kapadia, Dr. Tulzapurkar, Mr. Madan, Mr. Cooper, Mr. Shyam Mehta, Mr. Agarwal, Mr. Ankoosh Mehta, Mr. V. P. Singh and their....
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....tiffs. (iv) that this Hon'ble Court be pleased to issue such orders or directions as are necessary to give full effect to its order of 10th June 2013 including directing the Board of Directors of Defendant No. 6 to reconsider the nominations of Plaintiff No. 2 to the Board of Directors of Defendant No. 6 as a joint nomination by the Indian Partners under Article 110(b) and for that purpose to direct Defendant No. 1 to act in accordance with his obligation to jointly nominate under Article 110(b); (v) restrain Defendant No. 1 from nominating any Directors to fill up the two vacant slots for IP Representative Directors under Article 110(b) without the express concurrence of the Plaintiffs (or at least Plaintiff No. 1); (vi) restrain Defendant No. 1 from exercising and Defendant No. 6 from acting upon any purported exercise of rights under Articles 110, 118, 121, 127 and 127A of the Articles of Association of Defendant No. 6 to the exclusion of the Plaintiffs (or at least Plaintiff No. 1) and without their express concurrence (or at least Plaintiff No. 1's express concurrence); (vii) restrain Defendant Nos. 8 and 9 from acting or holding themselves out ....
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....on'ble Court be pleased to declare that Defendant No. 9 was not validly appointed the Non-Executive Part-time Chairman of Defendant No. 6 from the date of his purported appointment; (xvii) that the Hon'ble Court be pleased to order and direct Defendant No. 9 to repay to Defendant No. 6 all the payments received by him as the purported Non-Executive Part-time Chairman from Defendant No. 6 from the date of his purported appointment till date; (xviii) restrain Defendant No. 7 and Defendant No. 18 from acting or holding themselves out to be Directors of Defendant No. 6; (xix) restrain Defendant Nos. 1 and 6 by themselves, their servants, agents and officers by a temporary order and injunction from appointing any person either as chairman and/or as managing director without consulting and obtaining the prior written consent of the Plaintiffs in this regard. (xx) restrain Defendant Nos. 1 to 6, by themselves, their servants, agents and officers by a temporary order and permanent injunction from in any manner initiating, taking or continuing any steps (including, making representations to any regulators/authorities and acting on the representations already ....
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....atives and assigns: (b) Interpretation. Any reference in these Articles to:- (iv) "person" means any individual, firm or partnership or association, joint stock company, joint venture corporation, trust, unincorporated organization or government or agency or sub-division thereof; (vii) a person shall include, in case of a body corporate, references to its successors and permitted assigns and in case of a natural person, to his heirs, executors, administrator and legal representatives; 49. (a) An application for the registration of a transfer of any share (s) debenture (s) or any other securities or other interest of a Member in the Company may be made either by the transferor or by the transferee. (b) Where the application is made by the transferor and relates to partly paid Shares, the transfer shall not be registered, unless the Company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice. (c) For the purpose of sub-article (b) above, notice to the transferee shall be deemed to have been duly given if it is dispatched by prepaid registered post to the ....
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....ependent ("Independent Directors"). The Indian Partners shall propose the names of the first three Independent Directors, who upon approval by Rabo, shall be appointed as such by the Board. Rabo and the Indian Partners may, recommend the names of the remaining Independent Directors to the nominations Committee of the Company. For the purpose of this Article the expression "independent directors" means Directors who apart from receiving Director's remuneration, do not have any other material pecuniary relationship or transactions with the Company, its promoters, its management or its subsidiaries which in judgment of the Board may affect independence of judgment of the Director. 118. (a) The Office of a Director shall become vacant as per the provisions contained in Section 283 of the Act and where: (i) he resigns office by notice in writing addressed to the Company or to the Board; or (ii) he becomes disqualified under Article 112 (b); or (iii) he is disqualified for being appointed as a Director under any of the provisions of either of the said Acts. (b) If the office of any Director appointed by the Company is vacated before his term of office expires in the....
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....ng Director as the case may be if he ceases to hold the office of Director for any cause. (g) The remuneration of the Chairman, CEO and Managing Director or whole-time Director shall (subject to Section 309 of the Act and other applicable provisions of the said Acts and these presents and of any contract between him and the Company) be fixed by the Board, from time to time and may be by way of fixed salary and/or perquisites or by any or all these modes or any other mode not expressly prohibited by the Act. (h) The appointment, reappointment, termination of appointment, remuneration payable to and other terms and conditions of service of the Chairman and the CEO and Managing Director shall be subject to the approval of the Reserve Bank and also subject to such approval as may be necessary under the Act. 127A. (a) Subject to the provisions of the said Acts and these presents, the Board shall subject to a recommendation made by the Promoters, also include such Whole time Director/s as may be appointed in terms of these Articles. (b) The Board may, subject to its obtaining approval from the Reserve Bank and also subject to such approval as may be necessary under the Act, a....