Delhi HC dismisses plea challenging LIC’s acquisition of 51% stake in IDBI Bank

The Delhi High Court today dismissed the plea challenging Life Insurance Corporation of India’s (LIC) acquisition of a 51% stake in IDBI Bank . The plea had also challenged the Centre’s move to disinvest its stake in the public sector bank..The judgment was delivered by a Single Judge Bench of Justice Vibhu Bakru after it was reserved in November..All India IDBI Officers Association had moved the Delhi High Court in August this year, fearing that IDBI’s loss of status as a “public sector bank” would adversely affect the employment conditions of its employees, especially the ones belonging to SC/ST and OBC categories..The petition filed through Advocate Pranav Sachdev ahad alleged that the said acquisition was not a financially prudent decision for LIC, given that IDBI has gross NPAs amounting to Rs. 55,588.26 crore. It was contended that IDBI Bank’s acquisition by LIC is not in public interest as it exposes the investments made by the public in IDBI, and corrodes the ability of LIC to pay back its policyholders..Appearing for the Association, Advocate Prashant Bhushan had argued that the acquisition of stake by LIC was “malafide” and borne out of “complete non-application of mind”..Solicitor General Tushar Mehta, who represented LIC, argued in favour of the acquisition. Calling it a “financially viable” move, Mehta informed the Court that the decision to acquire IDBI Bank was arrived at after thorough due diligence and approval by the Investment Committee of LIC..IDBI Bank supported the Centre’s decision to dis-invest its share as well as the subsequent acquisition by LIC. Senior Advocate Sandeep Sethi, appearing for the Bank, argued that IDBI employees have no “vested right” to continue being employees of an instrumentality of the State.