Kerala High Court asks Dhanlaxmi Bank to adjourn AGM

The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

The order by Judge PB Suresh Kumar came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai (B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE. The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The HC interim order has upheld the importance of shareholders in appointing directors. The bank rejected applications without any valid reasons. The AGM is supreme for any company, including banking company. Some of the directors who came to that position with the votes of majority shareholders are now behaving as if they were made directors by some other authority, and not by shareholders. The interim order of HC is an eye opener for all who try to belittle importance of shareholders in the administration of any company,” PK Vijayakumar said.