Introduction

In a significant ruling, the Delhi High Court has upheld corporate governance principles while deciding on an appeal concerning the Reserve Bank of India Act, Section 45. The case involved the appellant, Dr. Rashmi, who was initially appointed as a Non-Executive Independent Director of the respondent company in 2018. Subsequently, she assumed the position of Executive Chairperson.

As the company approached its Annual General Meeting (AGM) in 2025, Dr. Rashmi was slated for retirement by rotation, a move she strongly opposed. She contended that her proposed retirement violated RBI regulations and could potentially harm her professional reputation. Consequently, she sought an injunction to prevent the company from voting on her replacement.

However, the Single Judge of the Delhi High Court denied her request for an interim injunction. Dissatisfied with this decision, Dr. Rashmi filed an appeal, but the High Court upheld the earlier ruling. The court emphasized that corporate governance decisions should not be interfered with unless absolutely necessary, particularly when financial compensation is an available remedy.

Furthermore, the High Court took into account that Dr. Rashmi had previously accepted the provision of retirement by rotation and had delayed her legal challenge. Given these circumstances, the court concluded that she failed to establish a prima facie case. It also determined that the balance of convenience did not favor her, nor was there any irreparable injury that would justify granting the injunction.

Ultimately, the appeal was dismissed, and the decision of the lower court was affirmed, reinforcing the principle that judicial interference in corporate governance matters should be exercised with caution.

Case Title: Dr. Rashmi vs. Religare FAOOS 14/25 (06/02/25)