BOB chief not appointed as per law: HC

By Our Special Correspondent

CHENNAI, FEB. 11. A Division Bench of the Madras High Court has upheld a single judge's order, holding that the reappointment of Mr. S. Srinivasan as Chairman of the Bharat Overseas Bank (BOB) was not in accordance with the provisions of the Banking Regulation Act.

The Bench dismissed Mr. Srinivasan's writ appeal, stating it agreed with the finding of the judge that in the reappointment of Mr. Srinivasan as Chairman and Chief Executive, the RBI and the Board of Directors of BOB had given a go by to all norms and procedures by selecting a person who was not even eligible to be considered for the post.

Bank unions had filed a writ petition challenging the reappointment from March 1, 1998. The appointment was conveyed in an order from the RBI Executive Director, granting approval under Sec. 35 (B) (i) (h) of the Banking Regulation Act. The unions had challenged it, saying Mr. Srinivasan had exceeded the age limit prescribed in the advertisement calling for the post.

Mr. Justice K. Govindarajan had allowed the writ petition setting aside his reappointment.

In his appeal, Mr. Srinivasan contended there was no violation of the statute by the RBI or the BOB's Board of Directors in reappointing him. The Directors had the power to relax the age limit and the RBI had the power to grant approval.

The Bench, comprising Mr. Justice A. Venkatachala Moorthy and Mr. Justice B. Akbar Basha Khadiri, noted that as per the original advertisement, issued in August 1997, the Board of Directors had called for applications from persons in the age group of 45-50 years. In a subsequent advertisement, the Board had called for applications from qualified persons in the age group of 45-55 years.

The Board, the Bench said, should have in all fairness and in conformity with acceptable norms, issued another advertisement announcing the relaxation of age for deserving cases and given reasonable time, so that candidates otherwise eligible but who had crossed the age limit could have applied. The BOB was in search of the best candidate, but it had erred in accepting and considering the application of Mr. Srinivasan in a manner unknown to all norms and rules, it noted, after agreeing with the single judge's findings that the RBI's order was not in accordance with the B.R. Act.

The Bench also rejected a request to allow Mr. Srinivasan to continue as Chairman till February 29.

On allegations of irregularities by Mr. Srinivasan in the approval of certain credit proposals, the Bench said though it was not holding him guilty of the irregularities, but ``would like to point out that all complaints against him were not investigated... There was some evidence against him with reference to those complaints, but not sufficient enough to come to a definite conclusion.''

In the circumstances, the RBI should not have granted approval for Mr. Srinivasan's appointment, the Bench concluded.

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