YES BANK LIMITED Vs. MADHU ASHOK KAPUR

JUDGEMENT

(1.) This is an appeal against the order and judgment of the learned single Judge answering the preliminary issues raised by the appellant under section 9A of the Code of Civil Procedure, 1908, holding that the suit filed by respondent Nos.1 to 4 is maintainable and that this Court has jurisdiction to entertain and try the suit.

(2.) The appellant is defendant No.6. Respondent Nos.1 to 4 are the plaintiffs. Respondent No.5 - Rana Kapur is defendant No.1. Respondent No.6 - Ms. Bindu Rana Kapur is defendant No.2. Respondent No.7 Ms. Radha Kapur is defendant No.3. Respondent Nos.8 and 9 - Yes Capital (India) Private Limited and Morgan Credits Private Limited are defendant Nos.4 and 5. Respondent Nos.10 to 15 are individuals and are defendants Nos.7 to 12. It is convenient to refer to the parties as they are arrayed in the suit.

(3.) Two questions arise for consideration. The first is whether the judgment of a Civil Court to consider the validity of the appointment of directors is barred in view of the provisions of the Companies Act, 1956. The second is whether in view of section 10-A of The Banking Regulation Act, 1949, which came into effect from 1st February, 1969, the question of validity of appointment of directors can only be raised before and decided by the Reserve Bank of India and not by any other Court, Tribunal or authority. We have upheld the decision of the learned Judge who answered this question in the negative.