Featured image for Supreme Court Judgment dated 05-05-2016 in case of petitioner name UCO Bank vs Saumyendra Roy Choudhury
| |

Bank Director Disqualification Case: Supreme Court Orders Reassessment

The Supreme Court of India recently ruled on a case concerning the disqualification of a bank director due to age restrictions and term limits. The case involved UCO Bank and its former director, Saumyendra Roy Choudhury, who challenged his disqualification based on Reserve Bank of India (RBI) and Government of India guidelines.

Background of the Case

The dispute arose when a nomination committee set up under an RBI Circular dated May 24, 2013, disqualified Saumyendra Roy Choudhury from standing for further election as a director of UCO Bank. The committee cited two primary reasons for the disqualification:

  • He was over 65 years of age.
  • He had already served two terms as a director of the bank.

Choudhury challenged this decision before the High Court in Civil Suit No. 212 of 2013. The High Court ruled in his favor, granting an interim mandatory injunction that deemed him elected as a shareholder director despite the disqualification.

Supreme Court’s Observations

The Supreme Court, in an appeal by UCO Bank, chose not to go into the merits of the dispute but instead focused on procedural fairness. Justice Rohinton Fali Nariman and Justice Kurian Joseph noted that the RBI Guidelines dated November 1, 2007, framed under Section 9 (3AA) of the Banking Companies Act, 1970, should apply to the case.

Key Arguments

Petitioner (UCO Bank)

  • Argued that the disqualification was based on established rules regarding age and term limits.
  • Claimed that allowing Choudhury to continue would undermine the RBI’s regulatory framework.

Respondent (Saumyendra Roy Choudhury)

  • Argued that the guidelines only applied to non-official directors, not elected shareholder directors.
  • Claimed that the RBI Guidelines dated November 1, 2007, should be the sole governing criteria.

Judgment

The Supreme Court set aside the orders of the Single Judge and Division Bench of the Calcutta High Court and remitted the matter back to the nomination committee for reassessment. The Court directed the committee to take into account all criteria laid down in the RBI Circular and Government of India Guidelines without giving undue weight to any single factor. The committee was instructed to reach a fresh decision within four weeks.

Conclusion

This case underscores the importance of procedural fairness in corporate governance and regulatory decisions. The Supreme Court’s decision ensures that due process is followed while determining the eligibility of candidates for directorial positions in banks.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: UCO Bank vs Saumyendra Roy Choud Supreme Court of India Judgment Dated 05-05-2016-1741860798541.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Corporate Governance
See all petitions in Banking Regulations
See all petitions in Judgment by Kurian Joseph
See all petitions in Judgment by Rohinton Fali Nariman
See all petitions in Remanded
See all petitions in Remanded
See all petitions in supreme court of India judgments May 2016
See all petitions in 2016 judgments

See all posts in Corporate and Commercial Cases Category
See all allowed petitions in Corporate and Commercial Cases Category
See all Dismissed petitions in Corporate and Commercial Cases Category
See all partially allowed petitions in Corporate and Commercial Cases Category

Similar Posts