EX-CHAIRMAN OF CO-OP BANK CAN ATTEND BOARD MEETINGS: HC

MUMBAI: In a major reprieve for Zeeshan Mehdi, the ex-chairman of the Bombay Mercantile Co-operative Bank, the Bombay high court (HC) recently struck down an order which restrained him from attending the bank’s board meetings. The Central Registrar of Co-operative Societies had imposed the restriction on Mehdi last year.

The bench said the order was “very drastic” in nature. “The impugned order dated 16th May, 2018, is completely illegal. Neither the Central government nor the central registrar had a statutory power to pass such a drastic order,” the division bench of justice AS Oka and justice AS Gadkari said while striking down the order.

The May 16 order not only restrained Mehdi from attending board meetings as the bank’s director, but also restricted him from functioning as the chairman of the bank. After the order was passed, he approached the HC.

Though Mehdi’s term as chairman of the Bombay Mercantile Co-operative Bank ended in September 2018, he continues to be on its board of directors. So the HC order assumes much importance.

“There cannot be any dispute that such a drastic order has to be supported by the statutory provisions,” the bench said.

It noted that section 29 of MultiState Co-operative Societies Act, 2002, provides for the disqualification of members and section 122 empowers the Central government to issue directions to specified multi-state cooperative societies. But in this case there was nothing to suggest that Mehdi had acquired disqualifications, the bench said.

MEHDI’S TERM AS CHAIRMAN OF THE BANK ENDED IN SEPTEMBER, BUT HE IS STILL A BOARD OF DIRECTOR