INDRAPRASTHA SEHKARI BANK LIMITED Vs. SATISH KUMAR GUPTA

JUDGEMENT

(1.) Indraprashta Sahkari Bank Ltd., the petitioners No. 1 (hereinafter referred to as 'the Bank') is a co-operative bank, governed by the provisions of the Delhi Cooperative Societies Act, 1972 and the Rules framed thereunder. Satish Kumar Gupta, the respondent No.1, has been a promoter member of the Bank. He was elected a director of the Bank on 27.9.92. The Bank received a complaint dated 2.9.93 alleging that the respondent No. 1 was carrying on a competing business with that of the Bank within the local limits of Delhi as he was engaging in the business of providing finance to its members from Umang Leasing & Credit Company Pvt.Ltd. The complaint so received was included in the Agenda dated 3.9.93 drawn up for the meeting of the Board of Directors scheduled to be held on 6.9.93. A show cause notice was also issued to the respondent No.1 to appear before the Board of Directors on 6.9.93 and to explain his position on the allegation of his carrying on a similar business as that of the Bank. The respondent No.l filed a reply on 6.9.93. He remained present before the Board of Directors and was heard. It may be noted that the respondent No.1 being a director of the Bank was present in the meeting of the Board in the capacity of the Director and participated in other business, though he divested himself from such participation when the complaint dated 2.9.93 against him was taken up for discussion by the Board of Directors.

(2.) The respondent No. 1 admitted that he was a shareholder in the Umang Leasing & Credit Company. When he was asked whether he had been the promoter/director of the said leasing and credit company, as stated in the certificate of incorporation of the said company, then respondent No.1 stated that he had at a later point of time stopped working as a Director of the said Company though he was unable to state specifically as to by which point of time he. had so stopped. The Board of Directors by a majority of 9 as against 3 formed an opinion that Umang Leasing & Credit Company Pvt.Ltd. was carrying on an identical business of financing and allied services which was competing and conflicting with the business of the petitioners Bank and as such the respondent No.1 had incurred disqualification for membership of the Bank. The respondent No.l was informed by the Bank vide letter dated 7.9.93 that the Board had terminated his membership w.e.f. 6th September, 1993.

(3.) The respondent No.1 preferred an appeal under Section 76 (l)(e) of the Delhi Co-operative Societies Act, 1.972 to the Registrar of Co-op. Societies against the resolution of the Board of Directors.