Sudhir Kavdia vs Syndicate Bank

Anand Byrareddy, J.—Heard the learned counsel for the petitioner and the learned Senior Advocate Shri Ashok Haranahalli appearing for the counsel for the respondent.

The petitioner is said to be a qualified Chartered Accountant with 28 years of experience. He is a shareholder of the respondent - Bank which is a nationalized bank. The petitioner had sought to contest the election as a shareholder - Director of the respondent - Bank in pursuance of a notice dated 26.05.2015 issued by the respondent to its shareholders of conducting an Annual General Meeting of shareholders of the Bank to be held on 26.06.2015 at Manipal. One of the items of the Agenda, Item No. 4, was to elect a Director from amongst the shareholders of the Bank other than Central Government in respect of whom valid nominations as prescribed have been received, in terms of Section 9(3)(i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.

The petitioner is stated to have filed his nomination in the Bank''s prescribed format. The application was accompanied with all requisite documents along with a declaration and undertaking by the petitioner in the prescribed declaration form. He had provided complete details of his personal information, his educational qualification, his experience and other details to enable the Bank to address his candidature. But, to the petitioner''s surprise, he had received a letter on 16.06.2015 to state that adequate information regarding his experience in different sectors as enumerated in his application had not been provided. Thus, the respondent -Bank could not determine the ''fit and proper status'' of the petitioner who stands for election. It was also stated that the nomination committee had directed to commence the election process afresh. The petitioner''s grievance is that the Bank had not spelt out any specific deficiency of the information as required in the prescribed norms with respect to the petitioner''s experience. The petitioner having furnished complete details of his experience in various fields, etc., there was no reason whatsoever for the Bank to have taken such a stand.

The respondent - Bank is also said to have informed the National Stock Exchange of India Limited that one of the applicants was found not fit and proper and the petitioner had not provided adequate information regarding his experience in different sectors as enumerated in the application. Therefore, the election of one shareholder - Director stood cancelled. The petitioner on receipt of the letter dated 18.06.2015, had made a detailed representation to the Bank on 18.06.2015 explaining the entire sequence of events and that there was no failure or lapse on his part and by virtue of his qualification as a Chartered Accountant, documentary evidence was produced to indicate that he possessed the requisite specialized knowledge in the field of finance, economics and banking and it was also brought to the knowledge of the Bank that the Reserve Bank of India, vide its notifications issued from time to time has laid down specific ''fit and proper'' criteria which is to be fulfilled by persons seeking to be elected as Directors on the Boards of the Nationalised Banks under the provisions of Section 9(3A) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 which are uniformly applicable to all nationalized banks. Therefore, it was emphasized that the petitioner''s candidature had already been accepted by three other nationalized banks where applications had been made in the very same format, without any demur. Therefore, the rejection of the application by the respondent was obviously motivated by ill-designs. Therefore, the petitioner contended and asserted that his candidature be considered by the respondent-Bank.

In reply to the petitioner''s representation in this regard dated 18.06.2015, the respondent - Bank, by a letter dated 2.7.2015 had indicated that his grievance had been placed before the Disputes Committee constituted in terms of Regulation 67 of the Syndicate Bank (Shares and Meetings) Regulations, 1998 and the Disputes Committee had confirmed the rejection of the application form of the petitioner and therefore, the Bank was no longer obliged to consider the application form of the petitioner. However, since a fresh calendar of events had been issued for holding of elections to the shareholder - Director, it is open for the petitioner to make necessary application in the proper format providing all necessary details. It is pursuant to this the present writ petition had been filed seeking a declaration that the petitioner was a fit a proper candidate and the rejection of his candidature was illegal and that as per the Calendar of events of the Annual General Meeting of the Bank, petitioner was the only fit and proper candidate from the quota of shareholders for which elections were to be held on 26.06.2015 as the same were to be announced on 17.06.2015.

The learned Senior Advocate Shri Ashok Harnahalli would point out that the petitioner had not chosen to challenge or seek quashing of the order passed by the Nomination Committee or the Disputes Committee and in the absence of which, the writ petition itself is infructuous. The orders would stand and therefore, the question of declaring the petitioner as ''a fit and proper candidate'' is absolutely a question of fact. In that way, the required details were furnished in the application is a question to be examined. This Court would not be the proper forum to go into the said issue and in any event, the petitioner cannot be said to be aggrieved, as the election is yet to be conducted and the fresh Calendar of events is issued and the last date of making application is on 16.10.2015, and hence, the petitioner is not out of the race. If the petitioner''s self-declaration that he is fully fit and proper with the necessary credentials, it is for him to produce the same in the proper format. According to the respondent, it would insist that the details furnished were incomplete and in this regard, he would submit that the petition ought to be rejected on the threshold.

Given the facts and circumstances, if the respondent -Bank had committed an error in rejecting the application form of the petitioner, and if that error had been compounded by the Disputes Committee, the petitioner not having chosen to question those orders, would not be entitled to any declaration as sought for. Even if such a challenge is made, it would be necessary for this Court to arrive at a finding of fact as to whether the details furnished by the petitioner was in order. It is therefore not warranted that this petition should be entertained. In any event, the petitioner cannot be said to be aggrieved as he is still not out of race and he would still be entitled to make an application as of right and hence, the petition is rejected without prejudice to the petitioner''s right to make a fresh application with all necessary details.