The Hindu Business Line : HC fiat to TN Mercantile Bank on AGM

A Division Bench of the Madras High Court on Tuesday extended the time limit to Tamilnad Mercantile Bank to hold its 83rd annual general meeting by June 30, 2006. A single judge had by an order dated September 28, 2005 declared as null and void the proceedings of the AGM held at Tuticorin on December 24, 2004.

Allowing appeals by the bank and its other directors, including Mr B. Ramachandra Adityan, challenging the single judge's order, the Bench, consisting of Mr Justice P. Sathasivam and Mr Justice J.A.K. Sampathkumar, said that since a request had been made by the Bank to allow time to hold the AGM, the Bank had been granted time till June 30, 2006.

PETITION

In the original suit, the TN Mercantile Bank Shareholders' Welfare Association and Mr S. Radhakrishnan, Chairman and Chief Executive of the Bank, had sought relief by granting permanent injunction restraining the defendants from participating and exercising their voting rights in the AGM scheduled for December 24, 2004.

The single judge passed the interim order permitting the Association to vote in the AGM. The grievance of the Shareholders' Association was that the said order had been violated, since the persons holding powers of attorney were not permitted to participate in the meeting. Hence, they filed the contempt petition.

The single judge, while referring exhaustively to the report of the observer (District Judge, Tirunelveli) who attended the AGM, held that the proceedings at the AGM were a one-sided affair. The meeting itself was conducted in disobedience of the orders of this Court, and the Judge declared the AGM held on December 24, 2004 as null and void, and directed the Bank to conduct the fresh AGM within eight weeks.

The Judge also closed the contempt petition. Questioning the said order, all the above appeals were filed by the Bank, its directors and others.

The Division Bench said that in the light of the decisions of the Supreme Court, they were of the view that the directions issued by the single judge, particularly when the parties to be affected, were not before him (single judge), were not warranted and were liable to be set aside. Accordingly, the order made in the contempt petition, was set aside. Consequently, all letter patent appeals were allowed in view of the disposal of the main appeals. In view of the request made by the Bank, the time was extended to hold the 83rd annual general meeting by June 30, 2006.

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