homefinance NewsBombay HC refuses to stay merger of Lakshmi Vilas Bank, DBS
finance | Nov 26, 2020 7:05 PM IST

Bombay HC refuses to stay merger of Lakshmi Vilas Bank, DBS


The Bombay High Court on Thursday refused to stay Lakshmi Vilas Bank's (LVB) merger with DBS Bank India which will be effective from November 27. A division bench of Justices Nitin Jamdar and Milind Jadhav was hearing petitions filed by a group of promoters of the ailing Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd, challenging the merger.

The Bombay High Court on Thursday heard a writ petition filed by a group of promoter entities of Lakshmi Vilas Bank challenging the scheme of amalgamation between the ailing south based lender with DBS Bank India.

Recommended Articles

View All

The promoter entities which moved Bombay High Court include KR Pradeep, Kare Electronics, Pranava Electronics holding a total of 6.8 percent stake in Lakshmi Vilas Bank. The Reserve Bank of India (RBI), The Union of India and DBS Bank India have been made respondents in the case.
The Bombay High Court in its order refused to grant any interim relief to the promoter entities.
As far as the verdict goes, the Bombay High Court while refusing to grant an interim stay on the scheme of amalgamation between Lakshmi Vilas Bank and DBS Bank India observed that the relief sought by the petitioners in monetary in nature and can be granted at the time of disposal of the case as well and hence an immediate stay is not required.
This oral order by Bombay High Court was followed by the arguments from Senior Counsel, Darius Khambata, appearing for the shareholders who said that the steps taken by the RBI are in utter haste and with non-application of mind. He also argued that Section 45 (5) (f) of the Banking Regulation Act requires RBI to take consideration of all stakeholders, including the members. However, the shareholders of LVB in the scheme of amalgamation are being wiped out completely.
Ravi Kadam, Counsel for the RBI also argued that continuity of the financial system, economy and depositor interest is important. He further argued, shareholders are risk-takers who run the risk of investment becoming zero.
The matter will now be heard on December 14.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
View All

Most Read

Market Movers

View All
Top GainersTop Losers