Bombay High court rejected the plea filed by the shareholders of Lakshmi Vilas bank against the merger of the two banks. The scheme of the merger was put forward by the Reserve bank of India and the same was granted approval from the Union Cabinet.
The petitioners filed the plea to get a stay on the merger as an ad-interim relief. Since the merger was to be effective from November 27, 2020, the plea was moved as an urgent matter. The petition was filed by Indiabulls Housing Finance Ltd and Kare Electronics & Development Private Ltd. since they were shareholders in the LVB. The petitioners submitted that the scheme was passed with non-application of mind and in a hasty manner without taking in consideration the interests, objections or suggestions of the stakeholders and members of the bank. The petitioner further pleaded that the scheme will cause major losses to all the shareholders of the LVB due to which they stay on merger must be granted.
The counsel appearing for the RBI referring to the financial details of the bank submitted that the scheme was to protect the interest of the account holders and further added that the scheme was legally legitimate since it followed due process of law and was approved by the union as a legislative act.
The bench of Justice Nitin Jamdar and Justice Milind Jadhav considering the pleas refused to grant the ad-interim relief. Due to shortage of time, the court didn’t list all the reasons to reject the plea but remarked “We are of the opinion, prima facie, that the Petitioners’ claim being a monetary claim, can be considered at the time of disposal of the petitions.”
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