Should 
Keshub Mahindra step down as the chairman of Mahindra and Mahindra following his conviction in the Bhopal gas tragedy case?
Will he vacate his seat on the boards of HDFC, Bombay Dyeing and a host of other Mahindra group companies? These are some of the legal and ethical questions that do not have a clear answer yet.
Mahindra is regarded as an icon when it comes to issues of corporate governance and ethics. He was nominated for the Padma Bhushan in 2002, but he declined the award as the trial was on in the Bhopal gas leak case.
"This is a matter for the board of the company to decide. The matter is subject to appeal and an appeal will be filed, so the question is premature," an M&M spokesperson said.
Agrees Rajiv Luthra, founder and managing partner, Luthra &Luthra Law Offices, "From a legal point of view, one can now file an appeal to get a stay and get bail They can eventually also win that appeal."
Lawyers, however, said a convict stands disqualified from holding the post of a director in a company until his conviction is stayed and the board of directors would have to take note of this.
"Even though Mahindra has been granted bail, this will have no bearing on the disqualification provisions related to directors according to the Companies Act. The very fact that one is convicted means he must go," said a Delhi-based Supreme Court lawyer, requesting not to be named.
But will these provisions apply to Mahindra, the then non-executive chairman of Union Carbide India?
Lawyers said the relevant sections do not differentiate between an executive or non-executive chairman. Any member of the board, irrespective of the designation, is liable, they said.
"Being a director is good enough...The court must have given cogent reasons for finding Mahindra guilty. Even though he was a non-executive chairman, it can be argued that he was liable for the day-to-day running of operations," said Kumkum Sen, Partner, Rajinder Narain & Company.
Tarun Das, former chief mentor of the Confederation of Indian Industry, was pretty clear when he said, "He's a role model for all of us. With JRD Tata not there, Keshub Mahindra is the doyen of the Indian industry today. Knowing his high principles and personal stand, I feel he will resign from all board positions in a day or two."
Both Das and Luthra said this judgment would have wider ramifications for corporate-governance issues in India. "Prima facie, this is a nail in the coffin of the institution of non-executive chairman and independent directors in India, said Luthra. "How can you be held responsible for a crime, if you have just attended a couple of meetings in a year?"
Das said the debate is on whether the chairman and managing directors should be held liable. A non-executive chairman has to be a mentor, while the MD should represent the management and will be responsible for day-to-day operations. "This judgment will dissuade people from joining company boards as independent or even as non-executive chairman."
Image: Keshub Mahindra
