HYDERABAD: The Telangana High Court directed the Reserve Bank of India (RBI) to appoint an officer, of its choice, to run the administration and day-to-day affairs of Mahesh Cooperative Bank, who will also have power to take policy decisions in the interest of shareholders.
Directing that senior bank officials be consulted for policy decisions, the court said the move is to protect the interests of shareholders and to run daily operations.
Justice C.V. Bhaskar Reddy issued the orders while dealing with interim applications filed by shareholders, seeking directions to returning officer of AP Mahesh Cooperative Urban Bank Ltd to exclude from consideration votes cast by 1,800 gold loanees. They also sought the issuance of a circular to recount the votes and declare the results of board elections afresh.
The writ petitions sought that the court declare circular no. 105, issued by AP Mahesh Bank on September 10, 2018, as arbitrary, invalid and ultra vires the provisions of Section 11 of the Cooperative Societies Act, 2002 and Clause 4 of the bye-laws of Mahesh Bank.
Previously, the court granted interim orders on January 8, 2021, directing the newly-elected members or directors not to take any policy decisions about day-to-day administration.
However, the counsel for the shareholders contended that the entire bank business halted as a result of the said order, inconveniencing them and account holders, besides those seeking loans. Since the order has been in force for over two years, there is no necessity for vacating or modifying it at this stage.
Considering all the contentions, the court did not express any opinion on the merits of the matter, which have to be decided on the validity of the elections and consequential election of members, in a full hearing.
