The Bombay High Court on Tuesday adjourned the case filed by the shareholders and investors of Lakshmi Vilas Bank (LVB) to December 22, after the Reserve Bank of India (RBI) and DBS Bank India informed that they have approached the Supreme Court to get all the cases transferred to one High Court.
The division bench of Justice Nitin Jamdar and Justice Milind Jadhav after hearing the lawyers said the matter will be kept for direction on December 22.
Currently, along with the Bombay High Court, the merger scheme has been also challenged in Karnataka, Madras and Delhi High Courts. Now, RBI and DBS Bank India are seeking the Apex Court’s intervention to consolidate all the matters and to be heard in one High Court only.
On Monday senior counsel Mukul Rohatgi appearing for DBS Bank submitted in the Madras High Court that the matter of transfer of all cases will be mentioned before the Supreme Court during this week itself and it is likely to be taken up before the Supreme Court closes for Winter Holidays on December 18.
After the hearing, the division bench of the Madras High Court, comprising Justice Dr Vineet Kothari and Justice MS Ramesh has posted the matter for further hearing on December 22 and directed parties to place the Apex Court order if any on the day of the hearing.
Earlier on November 26, the shareholders of LVB, including Kare Electronics and Development, Pranava Electronics Private Ltd and KR Pradeep had approached the Bombay High Court to challenge the scheme of amalgamation. In a separate petition, Indiabulls Housing Finance has also challenged the same scheme the Bombay High Court.
In the case, law firms Trilegal and Parinam Law Associates are representing shareholders and bondholders respectively. While RBI and DBS Bank India are being represented by AZB & Partners and Shardul Amarchand Mangaldas & Co respectively.
Earlier, a division bench of the Madras HC in an interim order had sought to protect the interests of LVB shareholders, which was amalgamated with DBS under Reserve Bank of India directions. The bench ordered that no prejudicial action should be taken against the shareholders. It also asked DBS to furnish an undertaking that it would pay compensation to LVB shareholders in case the court directed it to do so.
Meanwhile, a group of bondholders have also joined the petitioners, opposing the RBI move to write off tier-2 bonds worth Rs 320 crore. This group of the bondholders and investor had also petitioned finance minister Nirmala Sitharaman seeking her intervention in the matter. In a letter to Sitharaman, bondholders had argued that they would be in peril if the write-off of bonds was allowed to go through.
The 94-year LVB wrote down Basel III-compliant tier 2 bonds on November 26, just a day before its amalgamation with DBS Bank India. It was done on RBI’s instructions. LVB ceased to exist from November 27 with all of its branches operating as DBS Bank.
Source: Economic Times