P NATARAJAN Vs. CENTRAL GOVERNMENT

JUDGEMENT

(1.) In this appeal one of the additional directors of the Tamil Nadu Mercantile Bank Limited has challenged the ex parte directions given by the Company Law Board that the Board of Directors of the Company be superseded with the further direction that a committee comprising of the three nominee directors of the Reserve Bank of India, one of whom is the Chairman, and the two other Directors nominated by the Central Government, function as the Board till the application that was filed by the Central Government before it, for superseding the Board is finally decided.

(2.) Certain other directions also have been given in that order with regard to the holding of the Annual General Meeting which has been deferred by the Company Law Board in order that the share certificates may be despatched to the persons entitled thereto, as the number of such transfers is large, and the Investors Forum which had organised and effected purchase of about thirty for percent of the issued shares and which had been allowed to assist the Board in this regard has not yet been able to complete it's work.

(3.) A group led by a non resident Indian had purchased about sixty seven per cent of the paid up capital some time prior to the year 1996. However, the shares were not transferred in favour of the purchaser, the Reserve Bank of India whose consent for transfer was required under the Banking Regulation Act having declined to grant approval for the transfer, on the ground that the purchaser was an industrial house.