IN THE HIGH COURT OF DELHI AT NEW DELHIimages.assettype.com/barandbench/import/2018/08/... · 3. Memo of Parties 4. Synopsis & List of Dates 5. Writ Petition along with Affidavit

IN THE HIGH COURT OF DELHI AT NEW DELHI

(EXTRAORDINARY CIVIL WRIT JURISDICTION)

(WRIT PETITION No. ____________ OF 2018)

IN THE MATTER OF:

All India IDBI Officers' Association ……PETITIONER

VERSUS

Union of India&Ors ……RESPONDENTS

INDEX

S.

No.

PARTICULARS Page No.

1. Notice of Motion

2. Court Fee

3. Memo of Parties

4. Synopsis & List of Dates

5. Writ Petition along with Affidavit

6. Annexure P-1: A true copy of the Registration

Certificate of is All India IDBI Officers' Association

7. Annexure P-2: A true copy of the Life Insurance

Act, 1956

8. Annexure P-3: A true copy of the Industrial

Development Bank of India Act, 1964, (18 of 1964)

(IDBI Act)

9. Annexure P-4: A true copy of the 46thLokSabha

report dated June, 2003 as issued by the Ministry

of Finance

10. Annexure P-5: A true copy of the Parliamentary

debate conducted in the LokSabha dated

08.12.2003 with reference to the the IDBI (Transfer

of Undertaking and Repeal) Bill 2002

Bar and Bench (www.barandbench.com )

11. Annexure P-6: A true copy of the Parliamentary

debate conducted in the RajyaSabha dated

15.12.2003 with reference to the the IDBI (Transfer

of Undertaking and Repeal) Bill 2002

12. Annexure P-7: A true copy of the Industrial

Development Bank (Transfer of Undertaking and

Repeal) Act 2003

13. Annexure P-8: A copy of the Articles of

Association of IDBI Bank Ltd

14. Annexure P-9: A true copy of the letter Re.

DBOD/BP/1630/21.04.152./2004-05 dated

15.04.2005 from the Reserve Bank of India to IDBI

Ltd

15. Annexure P-10: A true copy of the letter Ref F No.

7/95/2005-BOA dated 17.02.2006 from the Ministry

of Finance to Secretaries of all Ministries/

Department of the Govt of India

16. Annexure P-11: A true copy of the letter dated

27.04.2016 by Sh. ArvindSawant and Sh.

RajanVichare to The Chairman, Committee on

Petitions, LokSabha

17. Annexure P-12: A true copy of the letter issued as

on 07.06.2016 by the Ministry of State for Finance

in response to the matter raised in the LokSabha

by Sh. Datta regarding the need to retain IDBI as a

Public Sector Bank

18. Annexure P-13: A true copy of the RTI Application

dated 08.01.2016 bearing Ref: CO/RTI/AAD/60372

19. Annexure P-14: A copy of the Thirty First Report

as on 16.03.2017

20. Annexure P-15: A true copy of the Document CIN:

L65190MH2004GOI148838 containing the

Remuneration Policy of the Bank


21. Annexure P-16: A true copy of the letter dated

09.07.2018 issued by the Manager, IDBI Bank Ltd

to the Manager of BSE Lts and NSE Ltd

22. Annexure P-17: A copy of the letter dated

17.07.2018 by IDBI Bank Ltd through Praveen

Agrawal to the Manager of BSE Ltd and NSE Ltd

23. Annexure P-18: A true copy of the media news

article by First Post dated July 17th, 2018

24. Annexure P-19: A copy of the circular dated

18.07.2018 issued by the IDBI Bank Officer’s

Association

25. Annexure P-20: A true copy of the media news

article dated _____

26. Annexure P-21: A true copy of the no objection

issued by the Government of India as on

1.08.2018

27. Annexure P-22: A copy of the order dated

06.08.2018 passed in WP. (C) 8215/2018 by this

Hon’ble Court

28. Annexure P- 23: A true copy of the All India Bank

Officers Association's letter dated 29.06.2018 to

Hon'ble President of India

29. Annexure P- 24: A true copy of the Joint letter of

All India Bank Officer Association and All India

Bank Employee Association dated 01.08.2018 to

the Finance Minister of India

30. Application for permission to file dim copy/ short

font/ illegible annexures u/s 151 CPC

31. Application for interim directions u/s 151 CPC

32. Vakalatnama on behalf of the Petitioner.


Filed Through:

PRANAV SACHDEVA

ADVOCATE FOR THE PETITIONER

NEW DELHI 301, NEW LAWYERS CHAMBER

DATED: 20.08.2018 SUPREME COURT OF INDIA

ENROLLMENT NO.: D/1806/2009

MOBILE NO: +91-9910523811




(WRIT PETITION NO. ____________ OF 2018)

IN THE MATTER OF:


VERSUS

Union of India &Ors ……RESPONDENTS

NOTICE OF MOTION

Sir,

Please find enclosed herewith a complete set of Writ Petition which is

being filed by the Petitioner and the same is likely to be list on

21.08.2018 or soon thereafter.

Copy to:

1. Union of India,

Through its Secretary (Financial Services),

Ministry of Finance,

Department of Financial Services

3rd Floor, Jeevan Deep Building

SansadMarg

New Delhi-110001

2. Life Insurance Corporation,

Through its Director,

18/60, Geeta Colony, Delhi

Pin- 110031


3. IDBI Bank Ltd.

Through its Director

Registered Office at

IDBI Bank Ltd.

IDBI Tower, WTC Complex,

Cuffe Parade, Colaba, Mumbai 400005.

4. Securities Exchange Board of India,


Plot No.C4-A, 'G' Block

Bandra-Kurla Complex, Bandra (East),

Mumbai - 400051, Maharashtra

5. Reserve Bank of India,


Reserve Bank of India

16th floor, Central Office Building

ShahidBhagat Singh Marg

Mumbai - 400 001

6. Insurance Regulatory and Development Authority of India,


Delhi Office – Gate No. 3

Jeevan Tara Building, First Floor

SansadMarg, New Delhi-110001

Filed Through:

PRANAV SACHDEVA





MOBILE NO: +91-9910523811





IN THE MATTER OF:


VERSUS


URGENT APPLICATION

To,

The Registrar,

Hon’ble High Court of Delhi,

New Delhi

Sir,

Kindly treat the accompanying petition as urgent. The ground of urgency

is that the Government of India on 1st August, 2018 has already given its

approval to Life Insurance Corporation of India to acquire 51% of the

shares in IDBI Bank Ltd. If the said stake is acquired by Life Insurance

Corporation of India, the efficacy of the current writ petition will be

severely impacted.

Filed Through:

PRANAV SACHDEVA





MOBILE NO: +91-9910523811


IN THE HIGH COURT OF DELHI

EXTRAORDINARY CIVIL WRIT JURISDICTION

WRIT PETITION No. ___________ OF 2017

MEMO OF PARTIES

IN THE MATTER OF:

1. All India IDBI Officers' Association

Through Its General Secretary,

Correspondence address at

Main Road, Gudivada- 521301,

Krishna District

Andhra Pradesh …Petitioner

VERSUS

1. Union of India,

Through its Secretary (Financial Services),

Ministry of Finance,

Department of Financial Services

3rd Floor, Jeevan Deep Building

SansadMarg

New Delhi-110001 …Respondent No. 1

2. Life Insurance Corporation,


18/60, Geeta Colony, Delhi

Pin- 110031 …Respondent No. 2

3. IDBI Bank Ltd.


Registered Office at


IDBI Bank Ltd.

IDBI Tower, WTC Complex,

Cuffe Parade, Colaba, Mumbai 400005. …Respondent No. 3

4. Securities Exchange Board of India,


Plot No.C4-A, 'G' Block

Bandra-Kurla Complex, Bandra (East),

Mumbai - 400051, Maharashtra …Respondent No. 4

5. Reserve Bank of India,


Reserve Bank of India

16th floor, Central Office Building

ShahidBhagat Singh Marg

Mumbai - 400 001 …Respondent No. 5

6. Insurance Regulatory and Development Authority of India,


Delhi Office – Gate No. 3

Jeevan Tara Building, First Floor

SansadMarg, New Delhi-110001 …Respondent No. 6

Filed Through:

PRANAV SACHDEVA





MOBILE NO: +91-9910523811


SYNOPSIS

That the Petitioner is filing the instant writ petition under Article 226 of the

Constitution of India for the issuance of direction to the Government of

India disallowing them from reducing their shareholding in IDBI Bank Ltd

below 51%. The Petitioner further prays for direction to Life Insurance

Corporation of India(Respondent No. 2)disallowing it from acquiring 51%

stake in IDBI Bank Ltd and directions to Respondents No. 4-6 (regulatory

authorities), disallowing them from giving permission to LIC to obtain a

51% stake in IDBI Bank Ltd.

The reduction of 51% stake by the Government of India in IDBI Bank Ltd

and acquisition of 51% stake by LIC is ultra vires of the Industrial

Development Bank of India Act, 1964 and the Industrial Development

Bank (Transfer of Undertaking and Repeal) Act 2003, when read in

conjunction. The said acquisition will result in the loss of the status of

IDBI as a “public sector bank” and a “Government Company”, which is in

violation of the parliamentary assurances. The said loss of status as a

“public sector bank” shall adversely affect the employment conditions of

the employees of the IDBI Bank especially the SC/ST and the OBC

employees. Further, the said acquisition is not in public interest since it

exposes the investments made by the public in IDBI, corrodes the ability

of LIC to pay back its policy holders since it will have to invest an amount

of Rs 13,000 crores to acquire a 51% stake, allows the Government to

shift its responsibility of development onto LIC and paves the path for the

future privatization of IDBI Bank Ltd.

Industrial Development Bank of India (IDBI) was established under the

Industrial Development Bank of India Act, 1964 to provide for credit and

other facilities for the development of industry. With a view to facilitating

the Development Finance Institution role effectively by lowering the cost

of its funds through accessing low cost retail deposits, IDBI was

converted into a “Deemed Banking Company” through IDBI (Transfer of

Undertaking and Repeal) Act, 2003. IDBI was renamed as IDBI Ltd. The

then Hon’ble Finance Minister of the NDA Government on the floor of the

Parliament on 08.12.2003 had assured that post the conversion,

Government of India, shall at all times, maintain not less than 51% of the

issued capital of the Company. This solemn assurance forms a part of


the records of the Parliamentary Committee on Assurances formed the

very basis for the ultimate passage of the IDBI (Transfer of Undertaking

and Repeal) Bill, 2002. The compliance of the same was confirmed by

incorporating in Clause 4 of the Article of Association of IDBI Ltd. (now

renamed IDBI Bank Ltd.) that the Central Government being a

shareholder of the Company, shall at all times maintain not less than fifty

one per cent of the issued capital of the Company. In specific reference

to the assurance, the Reserve Bank of India, vide its letter Re.

DBOD/BP/1630/21.04.152./2004-05, categorized IDBI Ltd. under a New

Sub Group: Other Public Sector Banks. Government of India advised

that IDBI Bank be treated on par with Nationalised Bank/State Bank of

India for all purposes.

However, in 2018, Life Insurance Company (LIC) of India wrote a letter

expressing their interest in acquiring 51% controlling stake in IDBI Bank,

as a Promoter through preferential allotment of shares/open offer.

Insurance Regulatory and Development Authority of India (IRDAI) gave

its approval to LIC to acquire a major stake in the Bank subject to

reduction of shareholdings to less than 15% within 5 years and also

subject to approvals from other regulators such as SEBI, RBI and

Government of India. IDBI Bank’s Board considered LIC’s letter dated

16.07.2018 in its meeting and decided to seek Government of India’s

decision in this regard. Government of India approved the same giving a

nod to LIC’s interest in acquiring 51% stake in IDBI Bank on 1st August,

2018.

The Petitioner submits that the said acquisition is ultra vires of the Acts

when read in conjunction and along with the parliamentary assurances.

Section 4C of the IDBI Act, 1964 clearly stipulated that the direct holding

of the Government cannot fall below 51%. The IDBI (Transfer of

Undertaking and Repeal) Act, 2003 under Section 4, contemplates a

similar scheme of arrangement. The intent of the Legislature while

amending the IDBI Act, was never to dilute the stake of the Government

of India below 51%.

The dilution of government holding will have an adverse impact on the

employees of IDBI Bank Ltd. The reservation policy of the IDBI Bank Ltd.

is as per Government policy and guidelines. Once IDBI Bank Ltd loses is


status as a Government company, it will no longer have the mandate to

follow the reservation policy of the Government which will have

negatively impact around 2,000 plus employees of IDBI Bank Ltd who

fall under the SC/ST/OBC category. Further, the remuneration policy of

IDBI Bank Ltd. is determined by the Government or with the approval of

the Government. After the said dilution, the Government will no longer be

the determinant of the remuneration policy. Furthermore, public national

banks offer many favorable conditions of employment, such as medical

leaves, wage revisions, conducive transfer policies, etc, as per the

Government policy. However, after losing it status as a public bank, IDBI

Bank Ltd. will no longer have the obligation to offer the said terms and

conditions of employment. The said acquisition is a major blow on the

confidence of the employees since one of the major reasons for why

they sought employment in IDBI Bank Ltd was because of its status as a

“national bank”.

The said acquisition by LIC is also in violation of Section 27 A sub

Section (2) Clause 1 of the Insurance Act and Amendment 10 of

Regulation 5B of the Insurance Act (Laws and Regulations) 2013, which

prevents the insurer to acquire more than 15% stake in a particular

company.

Further the said acquisition will have an adverse impact on the general

public since the said acquisition will expose the 10,000 crores which the

general public had invested in IDBI Bank Ltd since the Government of

India will no longer have the obligation to secure the said investment.

Further the said acquisition is not a financially prudent decision for LIC

given the fact that IDBI Bank Ltd. has gross NPA’s amounting to a

whopping Rs. 55,588.26 Cr. The said investment will be made from the

funds of 38 crore policy holders of LIC who have invested their hard

earned money to secure their own futures. The said investment made by

LIC will adversely hamper its own abilities to pay its insurance holders.

The acquisition is also in violation of the Insurance Act and its

regulations since insurance companies are not allowed to hold more

than a 15% stake in another company. Hence, the instant petition.


LIST OF DATES & EVENTS

DATE PARTICULARS OF EVENTS

1964 Industrial Development Bank of India (IDBI) was

established under the Industrial Development

Bank of India Act, 1964 to provide for credit and

other facilities for the development of industry. It

functioned as a department of Reserve Bank of

India (RBI) till 1976.

1977 IDBI was de-linked from RBI and made into a

Statutory Body wholly owned by the Government

of India.

1994 IDBI Act was amended with an objective to allow

IBDI to enlarge its shareholder’s base and access

the capital market for resources which reduced

the shareholding of the Government of India to

58.5%.

2003 Hon’ble Finance Minister, ShriJaswant Singh

categorically assured the LokSabha on

08.12.2003 and RajyaSabha on 15.12.2003 that

the Government of India (GoI) shall, at all times,

retain its shareholding at not less than 51%. The

above assurance was taken on records of the

Parliamentary Committee on Government

Assurances. The compliance of the same was

confirmed by incorporating it in Clause 4 of the

Articles of Association of IDBI Ltd. (now renamed

IDBI Bank Ltd.) that the Central Government

being a shareholder of the Company, shall at all

times maintain not less than fifty one per cent of

the issued capital of the Company.

10.10.2004 With a view to facilitating the Development

Finance Institution role effectively by lowering the

cost of its funds through accessing low cost retail


deposits, IDBI was converted into a “Deemed

Banking Company” through IDBI (Transfer of

Undertaking and Repeal) Act, 2003. IDBI was

renamed as IDBI Ltd.

15.04.2005 In specific reference to the assurance, the

Reserve Bank of India, vide its letter Re.

DBOD/BP/1630/21.04.152./2004-05, categorized

IDBI Ltd. under a New Sub Group: Other Public

Sector Banks.

31.12.2007 The Government of India, Department of

Financial Services vide its letter Ref.F.No.

7/95/2005-BOA addressed to all Secretaries of

Ministries/ Departments of Government of India

that Central Government shall at all times

maintain not less than 51% of the issued capital

of the company. The Bank has been categorized

under a new Sub-Group: Other-Public Sector

Bank. Government of India advised that IDBI

Bank be treated on par with Nationalised

Bank/State Bank of India for all purposes.

2015-16 The threat to privatise was for the first time

announced by Hon’ble Finance Minister, Mr.

ArunJaitley, in September 2015 at Singapore and

for the second time in February 2016 budget

speech. Pursuant to these announcements, the

staff of IDBI Bank went on strikes to oppose the

privatization of the Bank on both occasions.

Insurance Regulatory and Development Authority

of India (IRDAI) has given its approval to LIC to

acquire a major stake in the Bank subject to

reduction of shareholdings to less than 15%

within 5 years and also subject to approvals from

other regulators such as SEBI, RBI and

Government of India.


16.07.2018 A letter was received from Life Insurance

Corporation of India (LIC) expressing their

interest in acquiring 51% controlling stake in IDBI

Bank, as a Promoter through preferential

allotment of shares/open offer.

17.07.2018 IDBI Bank’s Board considered the above letter in

its meeting and decided to seek Government of

India’s decision in this regard.

1.08.2018

The Government of India gave its approval and

no objection to LIC for the acquisition of IDBI

Bank Ltd

20.08.2018 Hence, the present petition.





IN THE MATTER OF:


VERSUS


WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF

INDIA FOR ISSUANCE OF DIRECTIONS TO DISALLOW THE

GOVERNMENT OF INDIA FROM REDUCING ITS STAKE IN IDBI

BANK LTD BELOW 51% AS PER THE GOVERNING ACTS AND

PARLIMANETARY ASSURANCES, ISSUANCE OF DIRECTION TO

RESPONDENTS NO. 2 FROM ACQUIRING A 51% TAKE IN IDBI

BANK LTD AND DIRECTIONS TO RESPONDENTS 4-6 TO

DISALLOW THEM FROM GIVING PERMISSION TO LIC TO OBTAIN

51% SHARE HOLDING IN IDBI BANK LTD.

TO,

THE HON’BLE CHIEF JUSTICE OF HIGH COURT OF DELHI AND HIS

COMPANION JUSTICES OF HIGH COURT OF DELHI.

THE PETITIONER ABOVE NAMED

MOST RESPECTFULLY SHOWETH:

1. That the present writ petition has been filed for the issuance of

direction preventing the Government of India from reducing its

shareholding below 51% stake in Industrial Development Bank

of India Ltd. (hereinafter referred to as IDBI Bank Ltd.) by

transferring its shareholding to Life Insurance Corporation. The

said reduction of 51% stake by the Government of India in IDBI

Bank Ltd. is ultra vires of the Industrial Development Bank of

India Act, 1964 and the Industrial Development Bank (Transfer

of Undertaking and Repeal) Act 2003, when read in conjunction


since the Acts contemplate an arrangement where the

Government of India owns 51% stake in IDBI Bank Ltd. The

said divestment by the Government of India will result in the

loss of the status of IDBI as a “public sector bank” and a

“Government Company”, which is in violation of the

parliamentary assurances. The said loss of status as a “public

sector bank” shall adversely affect the employment conditions

of the employees of the IDBI Bank especially the SC/ST and

the OBC employees. Further, the said acquisition is not in

public interest since it exposes the investments made by the

public in IDBI, corrodes the ability of LIC to pay back its policy

holders, allows the Government to shift its responsibility of

development onto LIC and paves the path for the future

privatization of IDBI Bank Ltd.

2. That the Petitioner is All India IDBI Officers' Association which

is a registered organization under Trade Union Act with

Registration No.ALC - KARYASAN - 17 - 10311 with office of

Assistant Labour Commission (ALC) of Mumbai. At present

10,500+ members (Officers) are a part of the above mentioned

organization. AIIDBIOA enjoys a check-off facility i.e., monthly

subscription of Rs.50/- being deducted from monthly salary of

all members reflecting in their payslips and the Bank will credit

such collected monthly subscription to Bank account of

AIIDBIOA every month. Every month, Salary section of

Administration Department of IDBI Bank will provide an excel to

General Secretary (GS) of AIIDBIOA providing the details of

members and amount deducted along with arrears of

deduction, if any. Further,AIIDBIO is a signatory as on July 3rd,

2018 to a tripartite Memorandum of Understanding (MOU)

between the Government of India, the Unions and Associations

and the IDBI Bank Ltd for the improvement of the financial

health of IDBI Bank Ltd. The General Secretary of AIIDBIOA is

part of the Monitoring Committee as set up by the said MOU,

along with Deputy Managing Directors of IDBI Bank Ltd.

Furthermore, AIIDBIO enjoys the power of negotiating with IDBI

Bank Ltd for wage revision for 2012-2017 for almost 2 years


since July 02, 2016. AIIDBIOA had received offer letter dated

July 19, 2018 of the Bank on wage revision for the period from

November 01, 2012 to October 31, 2017 for which Government

of India approval came in this August, 2018 month. The offer

was accepted by AIIDBIOA in writing on July 19, 2018 based on

which, the Government of India had given its

approval. Inasmuch, it is evident from the above cited facts that

AIIDBIOA is a prominent union which is a true representation of

the interests of the officers of the IDBI Bank Ltd.

A true copy of the Registration Certificate is annexed hereto

and marked as ANNEXURE A-1.

3. Life Insurance Corporation of India was established to provide

for the nationalization of life insurance business in India by the

enactment of the Life Insurance Act, 1956.

A true copy of the Life Insurance Act, 1956 is annexed hereto


4. That in 1964, the erstwhile Industrial Development Bank of

India (IDBI) was established as a term lending financial

institution under the Industrial Development Bank of India Act,

1964, (18 of 1964) (IDBI Act). It was to provide credit and other

facilities for the development of the industry in various forms

and to function as the principal financial institution to coordinate

the workings of institutions engaged in financing, promoting or

developing industry and assisting the development of such

institutions. It functioned as a department of RBI till 1976.

5. That in 1976, the entire shared-holding of IDBI was transferred

to the Central Government. The IDBI Act was amended in

1994, which inter alia, enabled IDBI to enlarge its share holder

base and access the capital market for resources. An

amendment was made to the IDBI Act where Section 4C (2) of

Industrial Bank of Development Act, 1964, clearly stipulated

that “The Board may, from time to time, increase the issued


equity share capital of the Development Bank by allotment of

shares to such persons and on such terms and conditions as

the Board may determine: Provided that no increase in the

issued equity capital shall be made in such a manner that the

Central Government holds at any time less than fifty-one per

cent of the issued equity capital of the Development Bank.”

A true copy of the Industrial Development Bank of India Act,

1964, (18 of 1964) (IDBI Act) is annexed hereto and marked as

ANNEXURE A-3.

6. IDBI was later sought to be converted into a Deemed Banking

Company through IDBI (Transfer of Undertaking and Repeal)

Bill 2002 with the avowed objective of facilitating IDBI to

discharge its mandated development finance institution role in

an effective manner by lowering its costs of funds through

accessing low cost retail deposits viz. Saving bank and current

account deposits.

7. The Bill which was introduced in LokSabha on 04.12.2002 was

referred to the Standing Committee on Finance after the

introduction witnessed division of 91 in favour and 84 against

the introduction of the Bill.

8. The 46thLokSabha Report was formulated where the

introduction of the IDBI (Transfer of Undertaking and Repeal)

Bill 2002 was extensively debated. The Report was issued by

the Ministry of Finance (Department of Economic Affairs) where

the various opinions of the Government was recorded.

A true copy of the 46thLokSabha report dated June, 2003 as

issued by the Ministry of Finance is annexed hereto and

marked as ANNEXURE A -4.

9. In the 13thLokSabha, the Parliamentary Standing Committee on

Finance under the Chairmanship of Shri. N.


JanardharshanaReddy in detail, dealt with the IDBI (Transfer of

Undertaking and Repeal Bill) 2002. Spelling out the objectives

of the present Bill, the Ministry of Finance has furnished their

written submission as under

“ The concept behind the restructuring of the IDBI is that the

country is still in need of a development financing institution and

the IDBI by virtue of its past experience, is eminently suited to

continue to function as one. Further, since Government has the

responsibility for development, IDBI would continue to be a

Government institution.”

10. The Finance Secretary has further clarified before the

Committee the structure of the IDBI proposed after becoming a

banking company as below: (para 15)

“ The structure is- governmental company, owned by the

Government, a bank which can access retail with facility for

creating capital so that it can finance development funding

intended only for development banking finances...”

11. The Parliamentary Standing Committee in its report at Para 33

had also recommended as under “ The Committee are given to

understand that there is a huge investment of Rs 10,000 crores

by the general public in IDBI which is not secured. They are of

the opinion that this dispensation holds good so long as IDBI is

a Government owned banking company, but the day the

Government holding in converted IDBI comes below 51% there

will be chaos-like situation in the country making investors

panicky. Hence, they recommend that the Government should

make provisions which will ensure that the government’s

shareholding in IDBI do not come below 51%”

12. The Bill was subject matter of extensive debate on 4.12.2002,

21.08.2003, 8.12.2003 in LokSabha and 15.12.2003 in

RajyaSabha. Having regard to the recommendations of the

Parliamentary Standing Committee on Finance as also the

strong sentiments expressed by the Hon’ble members of

Parliament, the then Hon’ble Finance Minister, Shr.


JaswantSingh categorically assured the LokSabha on

8.12.2003 that the Government shall, at all times, retain its

share holding at not less than 51%.

A true copy of the Parliamentary debate conducted in the

LokSabha dated 08.12.2003 with reference to the the IDBI

(Transfer of Undertaking and Repeal) Bill 2002 is annexed

hereto and marked as ANNEXURE A-5

13. That on 08.12.2003, the Hon’ble Minister of Finance assured

the Hon’ble Members of LokSabha that the employees of IDBI

would be fully taken care of. “ We have attempted to take full

care of the protection of the employees of the IDBI. I would like

to assure hon. Members that the provision that we have been

making will, in fact, be beneficial to the employees. It is possible

that you do not agree with what I say. But I assure you that we

cannot afford not to take fully satisfactory measures for the

employees. We have already taken it. The Standing Committee

considered all these aspects. We are taking it. But even after all

this, should we find in the implementation of what we are doing

that there are some difficulties or lacunae or shortcomings, I

assure the hon. Members that we will come back to the House

and amend this or strengthen those particular aspects.”

14. That on 15.12.2003, the Hon’ble Minister of Finance assured

the Hon’ble Members of RajyaSabha on 15.12.2003 as under, “

May I assure the Hon. Members that when IDBI coverts into a

Bank after the approval of the Parliament today, it will become

subject to banking regulation. That is currently with the

Standing Committee on Finance. And there, it is mandatory.

Unless that is amended, how can IDBI shareholding be reduced

below 51 percent”

A true copy of the Parliamentary debate conducted in the

RajyaSabha dated 15.12.2003 with reference to the the IDBI

(Transfer of Undertaking and Repeal) Bill 2002 is annexed

hereto and marked as ANNEXURE A-6.


15. On 10.10.2004, the Industrial Development Bank (Transfer of

Undertaking and Repeal) Act 2003 was enacted where the

business and undertaking of the erstwhile IDBI, a statutory

corporation established under the IDBI Act has been transferred

to, and vested in, Industrial Bank of India, (IDBI Ltd), a

company registered and incorporated under the Companies

Act, 1956 and a banking company within the meaning of

Section 5(c) under the Banking Regulation Act, 1949.

16. The Industrial Development Bank (Transfer of Undertaking and

Repeal) Act 2003, contemplated a similar scheme of

arrangement with reference to the share holding by the

Government. Section 4 of the Industrial Development Bank

(Transfer of Undertaking and Repeal) Act, 2003 deals with the

general effect of transfer and vesting of undertaking. Section 4

(1) stipulates that “ the Central Government, being the

shareholder of the Development Bank and every other

shareholder of the Development Bank immediately before the

appointed day shall be deemed to be registered on and from

the appointed day a shareholder of the Company to the extent

of the face value of the shares held by such shareholder.”

Section 4(2) holds that “the undertaking of the Development

Bank which is transferred to, and which vests in, the Company

under Section 3 shall be deemed to include all business,

assets, rights, powers, authorities and privileges,...” Section

4(3) of the Act stipulates that “ all contracts, deeds, bonds,

guarantees, powers of attorney, other instruments and working

arrangements subsisting immediately before the appointed day

and affecting the Development Bank shall cease to have effect

or be enforceable against the Development Bank and shall be

of as full force and effect against or in favour of the Company in

which the undertaking of the Development Bank has been

vested by virtue of this Act.”


A true copy of the Industrial Development Bank (Transfer of

Undertaking and Repeal) Act 2003 is annexed hereto and

marked as ANNEXURE A-7.

17. With regard to the assurance that the Government shall

maintain its shareholding at 51%, the same was taken on

records of the Committee on Government Assurances and the

same was confirmed by incorporating Clause 4 of the Articles of

Association of IDBI Bank Ltd that “ the Central Government

being a shareholder of the Company, shall at all times maintain

not less than fifty one percent of the issued capital of the

Company. ”

A copy of the relevant Articles of Association of IDBI Bank Ltd is

annexed hereto and marked as ANNEXURE A-8.

18. That in March 2004, a trust was created by the Government of

India to acquire by transfer the Stressed Assets of IDBI and for

managing these assets with a view to recovering the amount

due on these assets. The Government as a settler, set up a

special purpose vehicle in the form of a Trust and created the

Stressed Assets Stabilization Fund (SASF). The Government

then invested Rs 9,000 crores in SASF in the form of non-

interest government of India IDBI Special Securities 2004

redeemable in 20 years, SASF assigned these special

securities of Rs 9,000 crore to IDBI Bank , which in turn

transferred NPASs with Loan Outstanding of Rs 9,000 crore to

SASF. The said fund was under the scrutiny and was to be

accounted for by the Comptroller Auditor General.

19. That vide letter dated 15th April, 2005, the Reserve Bank of

India wrote a letter to the Chairman, IDBI Bank Ltd regarding

the categorization of IDBI Bank Ltd. The Reserve Bank of India

confirmed that “Considering the shareholding pattern, IDBI Ltd.

may be considered as a Government owned bank. In view of

the assurance by the Parliament given on 8th December, 2004

by the Finance Minister during the discussion of the Repeal Bill,


2003 that the Government holding in IDBI Ltd. would always be

above 51%, IDBI Ltd. is categorized under a new sub- group

“Other Public Sector Banks”.

A true copy of the letter Re. DBOD/BP/1630/21.04.152./2004-

05 dated 15.04.2005 from the Reserve Bank of India to IDBI Ltd

is annexed hereto and marked as ANNEXURE A-9.

20. That on 31.12.2007, the Government of India, Department of

Financial Services wrote vide its letter Ref.F.No. 7/95/2005-

BOA addressed to all Secretaries of Ministries/ Departments of

Government of India that Central Government shall at all times

maintain not less than 51% of the issued capital of the

company. The Bank has been categorized under a new Sub-

Group: Other-Public Sector Bank. Government of India advised

that IDBI Bank be treated on par with Nationalised Bank/State

Bank of India for all purposes.

A true copy of the letter Ref F No. 7/95/2005-BOA dated

31.12.2007 from the Ministry of Finance to Secretaries of all

Ministries/ Department of the Govt of India is annexed hereto


21. That on September 2015, the decision to reduce stake in IDBI

Bank Ltd. was for the first time announced by Hon’ble Finance

Minister, Mr. ArunJaitley, at Singapore. Pursuant to the

announcements, the staff of IDBI Bank went on strike to oppose

the reduction of stake of the Government in IDBI Bank Ltd.

22. That on 30th December, 2015, the Government vide its letter

had allowed IDBI Bank Ltd. to raise capital to the tune of Rs

3771 crore through QIP route subject to the condition that the

Government of India holding does not fall below 52 percent.

23. That on February 29th, 2016, the Hon’ble Finance Minister, Sh.

ArunJaitely had said, “The process of transformation of IDBI

Bank has already started.” He also stated that “ Government

will take it forward and also consider the option of reducing its


stake to below 50%” This announcement was also followed by

strikes conducted by the IDBI employees.

24. That on April 27th, 2016, members of the LokSabha, Sh.

ArvindSawant and Sh. RajanVichare made a representation to

the Chairman, Committee on Petitions, LokSabha to request

the Committee to advise the Government to not allow

acquisition of 51% of the IDBI Bank Ltd. by LIC. The grounds

on which they made the representation were that there seemed

to be a distinct differentiation in treatment to the IDBI Bank vis-

a-vis the other Public Banks. Secondly, there was an

apprehension regarding the fate of the SC/ST and OBC

members of the Bank, once the IDBI Bank Ltd. was put on the

road to privatisation. Thirdly, neither the IDBI Act, 1964 nor the

Repeal Act, 2003 had mentioned about privatisation of the Bank

and hence such acquisition by LIC was uiltra vires of the said

Acts.

A true copy of the letter dated 27.04.2016 by Sh. ArvindSawant

and Sh. RajanVichare to The Chairman, Committee on

Petitions, LokSabha, is annexed hereto and marked as

ANNEXURE A-11.

25. That on 07.06.2018, a letter was issued by The Ministry of State

for Finance in response to the matter raised in the LokSabha by

Sh. Datta regarding the need to retain IDBI as a Public Sector

Bank. As per the letter the Ministry informed that the Public

Sector Banks including IDBI Bank have been allowed to raise

capital from Public Markets through Follow- on Public Offer

(FPO) or Qualified Institutional Placement (QIP) by diluting

Government of India holding upto 52% in a phased manner.

A true copy of the letter issued as on 07.06.2016 is annexed


26. That on 08.07.2016, an RTI reply was received, as filed by Sh.

Suresh Y Pawar with reference to the question that “ Whether

shareholdings of LIC in a company is considered to decide


whether the investee company is a Govt. Company as defined

under the Companies Act, 2013?” The reply to the query is as

follows “applicant is informed that LIC Shareholding is not

considered to decide whether the investee company is a

Government company.”

A true copy of the RTI Application dated 08.01.2016 bearing

Ref: CO/RTI/AAD/60372 is annexed hereto and marked as

ANNEXURE A-13.

27. That on 16.03.2017, the Petition containing the Representation

received from Sh, ArvindSawant and Sh. RajanVichare , MPs

LokSabha, was presented before the LokSabha regarding

transformation,/privatization of IDBI Bank Ltd. The thirty first

report was prepared with reference to the above mentioned

Petition.

A copy of the Thirty First Report as on 16.03.2017 is annexed


28. The Committee in its Thirty First Report made observations

regarding the reservation policy followed by the IDBI Bank Ltd.

It took note of the fact that the employees have to apply to IDBI

through common recruitment process for all Public Sector

Banks and have to undergo a rigorous selection method. The

employees opt to work in IDBI Bank on the assurance that they

will have the opportunity to work in a public sector Bank. In

Paragraph 11, the Committee noted that “ The IDBI Bank

recruits officers in Grade “A” through common recruitment

process for all Public Sector Banks (PSBs) conducted by the

Institute of Banking Personnel Selection(IBPS and Executives

through a separate recruitment process though IBPS route on a

stand alone basis. Further, the Bank also recruited, through a

separate recruitment process, four dedicated and professionally

qualified Officers in Grade ‘B’ as Security officers for taking care

of security related matters. In May 2015, the Bank has

extended the Memorandum of Understanding (MoU) with

Manipal Global Education Services Pvt. Ltd, Bengaluru under


which students are enrolled for one year Post Graduate

Diploma in Banking and Finance (PGDBF) which works on the

model of “Train, Recruit and Induct”. During the year 2015-16,

the Bank had recruited 415 candidates as Assistant Managers

on successful completion of the course.

29. That the Committee observed in Para 36 of the Report, that “

The Committee notes that IDBI Bank Ltd, has been following

the Government of India’s policy on reservation in services as

applicable to the Public Sector Banks (PSBs). The reservation

is made available in direct recruitment as well as inter cadre

promotions.” “ The Committee further note that relaxations in

the age limit (5 years for SC/STs and 3 years for OBSs), 5% in

the minimum qualifying marks and 5% in the marks obtained in

the interview for SC and ST candidates are also being extended

in the IDBI Bank Ltd.” The Committee in Para 37 made further

observations that IDBI, in compliance with the Government

policy was also maintaining a Reservation Register“in terms of

the comprehensive and updated Brochure of Reservation for

SC, STs & OBCs as issued by the Government.”

30. That as per a Notice issued by IDBI Bank Ltd, the

Remuneration of Directors is fixed by the Government of India.

The Remuneration of the Key Managerial Personnel is to be

finalized by the Bank with the approval of the Board of the

Directors and the approval of the Government of India. The

Remuneration of the Officers and the Employees would be

finalized by the IDBI Bank, based on negotiations with

respective employee associations and after obtaining Board of

Director’s and Government of India’s approval. In this regard, a

practice/ process similar to the one being followed by other

Public Sector Banks.

A true copy of the Document CIN: L65190MH2004GOI148838

containing the Remuneration Policy of the Bank is annexed



31. That on July 03, 2017, a tripartite Memorandum of

Understanding (MOU) was signed by All India Industrial

Development Bank of India Officers Association (AIIDBIOA) to

improve the financial health of IDBI Bank Ltd. The three parties

to the said MOU are the Government of India,IDBI Bank Ltd

Bank and the prominent Unions & Associations. Based on this

MOU, so far 8 meetings of Monitoring Committee have been

convened by the Bank. The General Secretary of AIIDBIOA is

part of MoU Monitoring Committee along with Deputy Managing

Directors of IDBI Bank Ltd.

32. That on 09.07.2018, the Manager, IDBI Bank forwarded the

shareholding pattern of IDBI Bank Ltd as on the quarter ended

June 30, 2018 to BSE ltd and NSE Ltd under Regulation

31(1)(b) of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015. As per the shareholding,

Government of India has 85.96% share holding in IDBI Bank

Ltd.

A true copy of the letter dated 09.07.2018 issued by the

Manager, IDBI Bank Ltd to the Manager of BSE Lts and NSE

Ltd is annexed hereto and marked as ANNEXURE A-16

33. That on 16th July, 2018, a letter was received by IDBI Bank from

LIC expressing their interest in acquiring 51% controlling stake

in IDBI Bank, as a promoter through preferential allotment of

shares/open offer. The Bank’s Board in the meeting held on

17th July, 2018, had considered the above letter and decided to

seek Government of India’s decision on that regard. IDBI Bank

vide letter dated 17.07.2018 informedthe manager of BSE Ltd

(Bombay Stock Exchange Ltd) and the Manager (Listing) of

National Stock Exchange, with reference to the above

mentioned proceedings.

A copy of the letter dated 17.07.2018 by IDBI Bank Ltd through

Praveen Agrawal to the Manager of BSE Ltd and NSE Ltd is

annexed hereto and marked as ANNEXURE A-17.


34. As per certain news articles,the finance ministry is likely to

infuse about Rs 10,000 crore within a few days in some state-

owned lenders including PNB, Corporation Bank and Central

Bank of India, to help them meet the regulatory capital

requirement since they are saddled with non-performing assets

(NPAs) or bad loans of about Rs 10 lakh crore.Out of 21 public

sector banks, 13 have already taken the approval of their

boards or shareholders for raising capital through the equity

market. These media articles clearly show that there is

differential treatment of IDBI Bank Ltd. as compared to other

banks.

A true copy of the media news article by First Post dated July

17th, 2018 is annexed hereto and marked as ANNEXURE A-18.

35. That on 18th July, 2018, a circular was issued by the IDBI Bank

Officer’s Association where they vehemently opposed the

acquisition of more than 51% stake by LIC on the grounds that

various hardships would be faced by the employees of IDBI if

such move was to go through.

A copy of the circular dated 18.07.2018 issued by the IDBI

Bank Officer’s Association is annexed hereto and marked as

ANNEXURE A-19.

36. That various media articles show that even the LIC employees

are vehemently opposed to the LIC acquisition in IDBI since

they are of the opinion that the said move will affect the ability

of LIC to pay back its policy holders.

A true copy of the media news article dated _____ is annexed


37. That on 1st August, 2018, the Union Cabinet chaired by Prime

Minister ShriNarendraModi had approvedconveyingof no

objection to reduction in Government of India shareholding in

IDBI Bank Limited tobelow 50% by dilution. It has also

approved acquisition of controlling stake by LIC as promoter in

the bank through preferential allotment /open offer of equity,


and relinquishment of management control by the Government

in thebank. The said information is available on the website of

the Press Information Bureau.

A true copy of the no objection issued by the Government of

India as on 1.08.2018 is annexed hereto and marked as

ANNEXURE A-21

38. That as per the Annual Report of IDBI Bank for 2017-18, the

IDBI Bank has a total staff strength of 17,475. The number of

the employees that fall under the SC/ST/OBC category are

2,560. Currently, IDBI follows the reservation policy and

guidelines as mandated by the Government of India.

39. That the employees of IDBI had formed a union under the IDBI

Bank’s Aggrieved Employees and the Officer’s

Association(unregistered) and had approached this Hon’ble

Court vide WP. (C) 8215/2018 for the prohibition of reduction of

the Government’s shareholding in IDBI below the current level

of 77%. The said prayer was made solely on the ground that

the said act was in contravention of Section 4C(2) and Section

13(A)(2) of the Industrial Development Bank of India, 1964. The

above mentioned writ petition was dismissed by this Hon’ble

Court on the ground that the said contention was unmerited by

virtue of the fact that the Industrial Development Bank of India,

1964 had been repealed by Section 15(1) of the Industrial

Development Bank (Transfer of Undertaking and Repeal) Act

2003.

A copy of the order dated 06.08.2018 passed in WP. (C)

8215/2018 by this Hon’ble Court is annexed hereto and marked

as ANNEXURE A-22.

40. That the Petitioners would like to clarify that the above

mentioned writ petition does not take up all legal grounds as

have been mentioned in the current writ petition. The current

petition relies on other grounds which have not been covered

and hence it is submitted that the order dated 06.08.2018 does


not have any bearing on the fate of the current petition. Further

the said association which is the Petitioner in WP. (C)

8215/2018, is an unregistered association and does not enjoy

the same privileges as the current Petitioner organization.

41. That various representations have been made to the Finance

Minister and the President of India by the officers and the

employees with reference to the divestment of the Government

of India and the acquisition of 51% stake by Life Insurance

Corporation of India. All India Bank Officer Association's letter

dated 29.06.2018 to Hon'ble President of India and Joint letter

of All India Bank Officer Association and All India Bank

Employee Association dated 01.08.2018 to Finance Minister

clearly express the dissatisfaction of the officers and the

employees of IDBI Bank Ltd. with reference to the deal going

through.

A true copy of the All India Bank OfficersAssociation's letter

dated 29.06.2018 to Hon'ble President of India is annexed


A true copy of the Joint letter of All India Bank Officer

Association and All India Bank Employee Association dated

01.08.2018 to the Finance Minister of India is annexed hereto


42. That Insurance Regulatory and Development Authority of India

(IRDAI) has given its approval to LIC to acquire a major stake in

the Bank subject to reduction of shareholdings to less than 15%

within 5 years and also subject to approvals from other

regulators such as SEBI, RBI and the Government of India. The

said approval is in violation of Section 27 A sub Section (2)

Clause 1 of the Insurance Act and Amendment 10 of Regulation

5B of the Insurance Act (Laws and Regulations) 2013, which

prevents the insurer to acquire more than 15% stake in a

particular company. It is important to note that the approvals by


RBI and SEBI are yet to be obtained by LIC for the said

acquisition in IDBI Bank Ltd.

A true copy of the relevant extracts of the Section 27 A sub

Section (2) Clause 1 of the Insurance Act, 1938 and

Amendment 10 of Regulation 5B of the Insurance Act (Laws

and Regulations) 2013 is annexed hereto and marked as

ANNEXURE A- 25.

43. The petitioner has not filed any other petition regarding the

matter in issue seeking similar reliefs before the Hon’ble

Supreme Court or any High Court or any other Court. The

petitioner has no better remedy available.

GROUNDS

A. Because the said acquisition by LIC is ultra vires of the

Industrial Bank of Development Act, 1964 and the Industrial

Development Bank (Transfer of Undertaking and Repeal)

Act, 2003, when read in conjunction. Section 4C (2) of

Industrial Bank of Development Act, 1964, clearly stipulated

that no increase in the issued equity capital shall be made in

such a manner that the Central Government holds at any

time less than fifty-one per cent of the issued equity capital

of the Development Bank. The Act was later repealed by the

Industrial Development Bank (Transfer of Undertaking and

Repeal) Act, 2003. However, Section 4 of the Industrial

Development Bank (Transfer of Undertaking and Repeal)

Act, 2003 contemplates and envisages a similar

arrangement. Section 4(2) holds that “the undertaking of the

Development Bank which is transferred to, and which vests

in, the Company under Section 3 shall be deemed to include

all business, assets, rights, powers, authorities and

privileges,...” Section 4(3) of the Act stipulates that all

“working arrangements” enforceable against the

Development Bank shall be of as full force and effect against

or in favour of the Company. It is evident from Section 4 of

the Repeal Act, 2003 that the Act envisages that the similar

“working arrangement” stipulated under Section 4C of the


previous Act would continue where the Government holds a

stake of not less than 51%. Further the Company would

enjoy the same “privilege” and “power” where it would be

constituted as a Government institution due to the

Government holding of not less than 51%. Inasmuch the

said acquisition by LIC is in direct violation of Section 4 of

the Repeal Act, 2002 read in conjunction with Section 4C of

the IDBI Act, 1964.

B. Because the Hon’ble Apex Court in Centre for Public Interest

Litigation v. Union of India, (Writ Petition 171 of 2003)

prevented the divestment process for two major oil PSUs -

HPCL and BPCL on the ground that as per the language of

the governing Acts, the method adopted by the Government

in exercising its executive powers to disinvest HPCL and

BPCL without repealing or amending the law is not

permissible. Similarly, in the present case, the acquisition by

LIC is not permissible even after the permission of the

Government of India since the governing Act, the IDBI Act,

1964 and the Repeal Act, 2003 do not allow for the said

acquisition by which the Government holding in IDBI reduces

below 51%

C. Because the said acquisition of 51% stake in IDBI Bank Ltd

by LIC will cause IDBI Bank Ltd to lose its status as

“Government company” and a “Public Sector Bank”. Section

2(45) of the Companies Act. 2013 clearly stipulates that a

Government company is one where 51% of the shares are

directly owned by the Government, or the State. Further the

RTI dated 08.07.2016 clearly clarifies that “LIC

Shareholding is not considered to decide whether the

investee company is a Government company.” In the

present scenario, the LIC shareholding in IDBI will not be

taken into consideration to determine whether IDBI is a

Government company or not. As soon as the direct stake of

the Central Government reduces below 51%, IDBI will lose


its status as a “Government Company” and a “Public Sector

Bank”.

D. Because the loss of status as a “Public Sector Bank” and a

“Government Company” is clearly against the Legislative will

and intention of the Parliament which was expressed when

the Industrial Development Bank (Transfer of Undertaking

and Repeal) Act 2003 was being debated and analysed in

the Parliament. The said intention is evidently clear from the

Parliamentary Standing Committee, where the Committee

with reference to the structure of IDBI recorded that “The

structure is- governmental company, owned by the

Government, a bank which can access retail with facility for

creating capital so that it can finance development funding

intended only for development banking finances...”

E. Because the said acquisition of LIC will corrode the very

purpose for which IDBI Bank has been established. While

spelling out the objectives of IDBI, the Ministry of Finance

had furnished their written submission as under Para 7

before the Standing Committee that “The concept behind

restructuring of the IDBI is that the country is still in need of a

development financing institution and the IDBI by virtue of its

past experience, is eminently suited to continue to function

as one. Further, since the Government has the responsibility

for development, IDBI would continue to be a Government

institution.” Further, the then Hon’ble Finance Minister, Shri.

Jaswant Singh categorically assured the LokSabha on

8.12.2003 that “Now, I given an assurance to this House that

the development finance aspect of the IDBI shall not be

diluted. That is the principal purpose. We continue to

subscribe to the view that access to development finance,

project finance is a very important aspect of the process of

growth in the country’s industrial or other development.” The

Government of India, being a social welfare State, has a

responsibility for development and has acknowledged that


IDBI has been established for the said purpose. The Central

Government by divesting itself of its stake to LIC, cannot

delegate its responsibility of development to LIC. The said

divestment will corrode the very purpose for which IDBI had

been established and will have an adverse impact on the

industrial development of the nation. The said acquisition is

in violation of the assurance that the development finance

aspect of the IDBI shall not be diluted since the delegation of

development by the Government to LIC shall have the exact

undesired effect.

F. Because the said acquisition by LIC is in violation of the

parliamentary assurances made by the then Hon’ble Finance

Minister, Shr. Jaswant Singh, where he categorically

assured the LokSabha on 8.12.2003 that the Government

shall, at all times, retain its share holding at not less than

51%. Further, on 15.12.2003, the Hon’ble Minister of

Finance assured the Hon’ble Members of RajyaSabha on

15.12.2003 as under, “ May I assure the Hon. Members that

when IDBI coverts into a Bank after the approval of the

Parliament today, it will become subject to banking

regulation. That is currently with the Standing Committee on

Finance. And there, it is mandatory. Unless that is amended,

how can IDBI shareholding be reduced below 51 percent”

G. Because the said acquisition by LIC will take away the status

of “other public sector bank” as conferred by the Reserve

Bank of India. The status of “other public sector bank” has

only been conferred on IDBI on the basis of the fact that the

Government holding in IDBI Ltd would always be above 51%

and in view of the assurance given by the Parliament as on

8th December, 2004. The said statement is substantiated by

the letter dated 15th April, 2005, where the Reserve Bank

clearly stated that “Considering the shareholding pattern,

IDBI Ltd. may be considered as a Government owned bank.

In view of the assurance by the Parliament given on


8thDecember, 2004 by the Finance Minister during the

discussion of the Repeal Bill, 2003 that the Government

holding in IDBI Ltd. would always be above 51%, IDBI Ltd. is

categorized under a new sub- group “Other Public Sector

Banks”.

H. Because the said acquisition by LIC will take away the status

of IDBI where it is treated on par with other nationalised

banks/State Bank of India by Govt. Departments/Public

Sector Undertakings since the direct shareholding of the

Government in IDBI will reduce below 51%. The letter dated

17th February, 2006, by the Government of India, Ministry of

Finance confirmed that on the basis of the share holding

pattern, where the Central Government being a shareholder

of the company shall at all times maintain not less than 51%

of the issued capital of the Company, “IDBI may be treated

on par with Nationalised Banks/ State Bank of India by Govt.

Departments/Public Sector Undertakings/other entities for

the limited purpose of acceptance of guarantees issued by

IDBI Ltd.”

I. Because the said acquisition by LIC is in violation of Article 4

of the Articles of Association of IDBI which was incorporated

in good faith on the basis of the Parliamentary assurances,

that the Government shall at all times maintain not less than

51% stake in IDBI.

J. Because the said acquisition by LIC in IDBI, by which IDBI

shall lose its status as a “government bank” and a “public

sector bank” constitutes as differential treatment with

reference to the other Public Sector Banks under the Central

Government. The main reason given by the Government for

such divestment in IDBI is the accumulation of Non

Performing Assets. However, it is important to note that

there are many public sector banks which are suffering from

the accumulation of NPA’s. With reference to the other

public sector banks, the Central Government has chosen to

infuse capital in the said banks or allow them to raise funds

through the Open market. Though, with reference to IDBI,

the Central Government has chosen to divest and reduce its


stake which will have serious implications for the status of

IDBI and its employees. The differential treatment by the

Central Government of IDBI in comparison to other similarly

placed public banks suffering from NPAs, is in violation of

Article 14 of the Constitution of India, 1950.

K. Because the loss of status of IDBI Bank as a public sector

bank will result in the loss of the morale of Grade “A”

employees who sought employment on the stand alone

basis that IDBI Bank is a public sector bank. IDBI Bank

recruits officers in Grade “A” through common recruitment

process for all Public Sector Banks (PSBs) conducted by the

Institute of Banking Personnel Selection(IBPS and

Executives through a separate recruitment process though

IBPS route on a stand alone basis. The said process is

rigorous and extensive and the employees apply through the

IBPS system specifically to seek employment in a “public

sector bank”.

L. Because the acquisition by LIC will adversely impact the

freshly recruited candidates who sought employment

through their University in IDBI Bank on the guarantee that

IDBI Bank is a public sector Bank. In May 2015, the Bank

has extended the Memorandum of Understanding (MoU)

with Manipal Global Education Services Pvt. Ltd, Bengaluru

under which students are enrolled for one year Post

Graduate Diploma in Banking and Finance (PGDBF) which

works on the model of “Train, Recruit and Induct”. During the

year 2015-16, the Bank had recruited 415 candidates as

Assistant Managers on successful completion of the course.

M. Because the loss of status of IDBI Bank as a “government

bank” and a “public sector bank” shall adversely affect the

position of 2,560 employees falling under the SC/STs and

OBC category in Bank of IDBI. As a Public Sector Bank,

IDBI has been following the Government of India’s

reservation policy with reference to reservation.

Furthermore, reservation is provided to SC and ST


employees in promotions from certain classes as per the

Government of India Guidelines. However, once IDBI loses

its status as a public sector bank, the Board of IDBI will no

longer be mandated to follow the Government of India’s

policy on reservation with reference to SC/ ST and OBC

which will have a major impact on the livelihood and

employment conditions of the future and current SC/ ST and

OBC employees of the IDBI Bank.

N. Because the said acquisition will adversely affect the

remuneration policy of the IDBI Bank. Since the Government

of India will no longer have the major holding, it will be

unable to determine the remuneration policies of IDBI which

has an adverse impact on the future employment conditions

of the employees of IDBI Bank. As per the current

remuneration policy, the Remuneration of Directors is fixed

by the Government of India. The Remuneration of the Key

Managerial Personnel is to be finalized by the Bank with the

approval of the Board of the Directors and the approval of

the Government of India. The Remuneration of the Officers

and the Employees would be finalized by the IDBI Bank,

based on negotiations with respective employee

associations and after obtaining Board of Director’s and

Government of India’s approval. The remuneration policy

currently is a practise/ process similar to the one being

followed by other Public Sector Banks which will however be

amended post the acquisition to the detriment of the

employees of IDBI Bank.

O. Because the loss of status of a “public sector bank” will

negatively impact the service conditions of the employees

since in a private sector bank there is no job security and

guarantee whereby wage revisions and annual increments

are guaranteed. Further the transfer and promotion policies

in a Public sector banks are more employee friendly as

opposed to the policies in a private sector bank.


P. Because the loss of status of a “public sector bank” due to

acquisition by LIC, will adversely affect the morale and the

confidence of the employees of the IDBI Bank since they

sought employment in IDBI on the basis of the fact that IDBI

is a public sector bank and will remain so as guaranteed by

parliamentary assurances. The fact that the Parliament has

reneged its solemn assurance has adversely affected its

employees is evident from the representations made by the

employees of IDBI and the strikes held by them. The loss of

status of a “public sector bank” will adversely affect the

employment conditions of IDBI Bank since there are there

are various benefits that are offered to the employees of a

public sector Bank. The future of pensioner employees of

IDBI bank including all permanent staff, job surety of

employee requiring any medical leave for treatment of long

time duration towards life necessity, job surety of old age

employees, social surety of woman employees are

conditions which earlier guaranteed favourably under public

sector bank, will now be questioned under the new regime of

IDBI.

Q. Because the said acquisition will negatively impact the fate

of the retirees who are drawing pension from IDBI Bank Ltd.

Under the Government policy, the various funds set up by

the Government were regulated. However with the

privatisation of the IDBI Bank, there is uncertainty regarding

the pension to be received by the retired employees and the

utilisation of the various funds.

R. Because the said acquisition is in violation of the

parliamentary assurance whereby on 08.12.2003, the

Hon’ble Minister of Finance assured the Hon’ble Members of

LokSabha that the employees of IDBI would be fully taken

care of. “ We have attempted to take full care of the

protection of the employees of the IDBI. I would like to


assure hon. Members that the provision that we have been

making will, in fact, be beneficial to the employees. It is

possible that you do not agree with what I say. But I assure

you that we cannot afford not to take fully satisfactory

measures for the employees. We have already taken it. The

Standing Committee considered all these aspects. We are

taking it. But even after all this, should we find in the

implementation of what we are doing that there are some

difficulties or lacunae or shortcomings, I assure the hon.

Members that we will come back to the House and amend

this or strengthen those particular aspects.”

S. Because the said acquisition by LIC will expose the

unsecured investments of the public in IDBI, to the extent of

Rs 10,000 crores since IDBI will no longer be a Government

owned banking company. The Parliament itself noted that “

The Committee are given to understand that there is a huge

investment of Rs 10,000 crores by the general public in IDBI

which is not secured. They are of the opinion that this

dispensation holds good so long as IDBI is a Government

owned banking company, but the day the Government

holding in converted IDBI comes below 51% there will be

chaos-like situation in the country making investors panicky.

Hence, they recommend that the Government should make

provisions which will ensure that the government’s

shareholding in IDBI do not come below 51%”

T. Because the said acquisition by LIC in IDBI Bank Ltd. is not

in tandem with the purpose for which it was established

under the Life Insurance Corporation Act. 1965. Section 6

(1) of the LIC Act, 1956 stipulates that it shall be the general

duty of the Corporation to carry on life insurance business.

Sub section (2) allows for LIC to invest in other business

however it is important to note that the primary function of

LIC is to deal in the life insurance business. IDBI Bank Ltd. is

a bank set up for developmental purposes inasmuch LIC and

IDBI Bank Ltd. have completely different fields of operation


in the economy. The said acquisition by LIC in IDBI does not

functionally and financially make sense.

U. Because the said acquisition by LIC in IDBI Bank Ltd is not

in the spirit of economic prudence with reference to LIC’s

own NPAs and investment portfolio. In a letter penned by CH

Venkatachalam, general secretary, All India Bank

Employees Association, to Interim Finance Minister

PiyushGoyal, claimed that LIC was already grappling NPA

issues of its own. "It is pertinent to point out that while

investment is part of LIC's business, it cannot be that all

loss-making institutions are to be bailed out by LIC at the

cost of the interest of the common people who are investors

in LIC," wrote Venkatachalam, adding that, "It is also well-

known that similar to banks facing huge bad loans, LIC is

also saddled with huge portfolio of non-performing assets/

investments. Instead of taking stringent measures to address

this vital problem, adding further investments in a bank,

which is facing huge bad loans and losses, is not a fair

proposition."

V. Because the said acquisition by LIC is being massively

opposed by the employees of LIC themselves. Rajesh

Kumar, general secretary, All India LIC Employees

Federation, told The Indian Express, "We are anxious and

seriously concerned about this sale. Now as a concerned

and a responsible trade union in LIC, it is morally worth

questioning whether IDBI Bank, a lender with humongous

bad loans close to a third of its book, makes for a good

investment for LIC," "It should also be noted that no private

investor has shown any interest in IDBI Bank even though

the government has wanted to sell equity for over two years

now."


W. Because the said acquisition by LIC is being done so that

the Government can escape its responsibility to the

generalpublic who has invested a sum of Rs 10,0000 crores

in IDBI Bank, believing it to be a “Government owned

banking company”. The said acquisition is nothing but a

sundry move by the Government of India to shift its financial

liability with reference to IDBI to LIC. The Government is

already guilty of using LIC as its convenient ATM as and

when funds are required, to bail out public sector companies.

Over the last four years, it has given questionable soft

loans to the Railways, subscribed to the power

sector’sUjwalDiscom Assurance Yojana (UDAY) bonds and

invested in the National Investment and Infrastructure

Fund. All this apart from being an active partner of the

Centre’s disinvestment agenda.In 2015 and 2016, LIC

already came to the rescue of a number of public sector

banks to cover for their shortage of capital and bought into

preferential share issues.

X. Because LIC to acquire a 51% stake in IDBI will have to

invest a sum of Rs 13,000 crores and will have to keep

infusing capital in IDBI to ensure the health of IDBI. The said

funds to be invested by LIC will be generated from the hard

earned money of 38 crore policy holders. The said

acquisition is financially unsound owing to the volume of

NPA’s of IDBI , and will have an adverse impact on the

ability of LIC to pay back its policy holders which will have

an adverse impact on the general public. The fact that the

employees of LIC are also vehemently opposed to the said

acquisition is proof of the fact that said acquisition is

financially unsound.

Y. Because the said acquisition is in gross violation of Section

27 A sub Section (2) Clause 1 of the Insurance Act and

Amendment 10 of Regulation 5B of the Insurance Act (Laws

and Regulations) 2013, which prevents the insurer to acquire

more than 15% stake in a particular company. In the present


https://www.livemint.com/Companies/3EZEd6WwVevYHKusHrJCRN/LIC-Lender-of-the-resort.html

https://www.livemint.com/Companies/3EZEd6WwVevYHKusHrJCRN/LIC-Lender-of-the-resort.html

scenario, LIC, the insurer is set to acquire a 51% stake in

IDBI which is substantially higher than the allowed limit of

15%.

Z. Because the said approval as given by IRDAI is in complete

violation of the sections of the Insurance Act as mentioned

above. The IRDAI has overridden the above mentioned

regulations and that is apparent from the fact that IRDAI has

allowed the acquisition subject to reduction of shareholdings

to less than 15% within 5 years and also subject to

approvals from other regulators such as SEBI, RBI and

Government of India.

AA. Because Section 6A of the Life Insurance Corporation Act,

1956 allows for LIC to impose conditions on the insuree

company, as it may think necessary or expedient for

protecting of the interest of the Corporation. The said

provision will allow LIC to impose conditions with reference

to its own self interest and this will further reduce the

purpose of “development” for which IDBI was incorporated in

the first place.

BB. Because the said acquisition by LIC is not the only solution

to reduce the NPA’s of IDBI Bank Ltd and the Government

may alternatively constitute a Stressed Assets Stabilization

Fund (SASF) for the reduction of NPA’s of IDBI Bank Ltd.

The said fund would be controlled under the Comptroller

General of India and hence the extent of the NPA’s would be

monitored. If funds from LIC are to be infused, there would

be no public accountability of the manner in which the NPA’s

have been re structured/ realised. The NPA’s would then be

taken out of the control of the Government of India and into

private hands which would worsen the situation rather than

act as a solution to the said problem.


CC. Because the said acquisition by LIC is not the only solution

to reduce the NPA’s of IDBI Bank Ltd and the Government

may alternatively allow IDBI Bank Ltd to raise capital from

Public Markets through Follow- on Public Offer (FPO) or

Qualified Institutional Placement (QIP) by diluting

Government of India holding upto 52% in a phased manner

as has been done earlier by the Government of India

DD. Because the said acquisition will be the beginning of the

privatisation of IDBI which was always meant to be a

development bank run by the Government. As a modern

welfare state, the responsibility of “development” is that of

the Government and cannot be delegated to private players.

However, if the current acquisition is to go through, IDBI

Bank will ultimately fall in the hands of private players, which

is against the very purpose for which IDBI was established.

PRAYERS

In view of the facts & circumstances stated above, it is most

respectfully prayed that this Hon’ble Court may be pleased to:-

a) Issue an appropriate writ directing the Government of India

(Respondent No. 1)not to reduce its shareholding in IDBI Bank Ltd

below 51% in conformance with the governing acts and

parliamentary assurances.

b) Issue an appropriate writ directingthe Life Insurance Corporation of

India (Respondent No. 2) notto acquire a stake of 51% in IDBI

Bank Limited

c) Issue an appropriate writ directingthe SEBI and RBI (Respondent

No. 4 and 5) not to grant permission to LIC from obtaining a 51%

stake in IDBI Bank Ltd.

d) Issue an appropriate writdirecting the IRDAI (Respondent No. 6) to

withdraw the permission given by them in violation of the insurance

regulations.

e) Issue an appropriate writ directing the Union of India not to

change the public character of the office/employment of the

officers and employees of the IDBI Bank and direct it not to


make any adverse changes in the service conditions of the

officers and employees of IDBI Bank.

f) Issue an appropriate writ to the Government of India to constitute a

Stressed Assets Stabilization Fund (SASF) for the reduction of

NPA’s of IDBI Bank Ltd or alternatively, allow IDBI Bank Ltd to

raise capital from Public Markets through Follow- on Public Offer

(FPO) or Qualified Institutional Placement (QIP) by diluting

Government of India holding up to 51% in a phased manner

g) Pass any other writ, order or direction this court may deem fit and

proper under the facts and circumstances of this case.

Petitioner Through:

(PRANAV SACHDEVA)

COUNSEL FOR PETITIONER

Drawn by: Ms. Aastha Shah, adv.

Dated: 20.08.2018

New Delhi


IN THE HON’BLE HIGH COURT OF DELHI AT NEW DELHI

CM NO ___________ OF 2018

IN

WRIT PETITION (CIVIL) NO. _____ OF 2018

IN THE MATTER OF:


VERSUS


APPLICATION FOR PERMISSION TO FILE DIM COPY/ SMALL FONT/

ILLEGIBLE ANNEXURES UNDER SECTION 151 OF THE CPC WITH

AFFIDAVIT

To,

THE HON’BLE ACTING CHIEF JUSTICE OF THE DELHI HIGH

COURT;

AND HER COMPANION JUDGES OF THE DELHI HIGH COURT.

The Humble Petition of the Petitioner above-named

MOST RESPECTFULLY SHOWETH: -

That it is submitted that the applicant has placed on record

annexure/s which are dim, part of the official communications and

documents. Considering the urgency in the matter the same could

not by typed. The Applicant undertakes to furnish typed copy of the

same as and when directed by this Hon’ble Court.

PRAYERS

In view of the above facts and circumstances, it is most

respectfully prayed that this Hon’ble Court may be pleased: -

i. Permit the applicant from filing dim copy/ short font/

illegible annexures; and/or


ii. To grant such other reliefs as this Hon’ble Court may

deem fit and proper in light of the facts and

circumstances of the case.

Filed Through:

PRANAV SACHDEVA


NEW DELHI 301, NEW LAWYERSCHAMBER


ENROLMENT NO.: D/1806/2009

MOBILE NO: +91-9910523811


IN THE HON’BLE HIGH COURT OF DELHI AT NEW DELHI

CM NO ___________ OF 2018

IN

WRIT PETITION (CIVIL) NO. _____ OF 2018

IN THE MATTER OF:


VERSUS


APPLICATION FOR INTERIM DIRECTION U/S 151 CPC

To,

THE HON’BLE ACTING CHIEF JUSTICE OF THE DELHI HIGH

COURT;

AND HER COMPANION JUDGES OF THE DELHI HIGH COURT.

The Humble Petition of the Petitioner above-named

MOST RESPECTFULLY SHOWETH: -

1. That the present writ petition has been filed for the issuance of

direction preventing the acquisition of 51% stake by Life

Insurance Corporation India (hereinafter referred to as LIC) in

Industrial Development Bank of India Ltd. (hereinafter referred

to as IDBI Ltd.). The said acquisition by LIC is ultra vires of the

Industrial Development Bank of India Act, 1964 and the

Industrial Development Bank (Transfer of Undertaking and

Repeal) Act 2003, when read in conjunction. The said

acquisition will result in the loss of the status of IDBI as a

“public sector bank” and a “Government Company”, which is in

violation of the parliamentary assurances. The said loss of

status as a “public sector bank” shall adversely affect the

employment conditions of the employees of the IDBI Bank

especially the SC/ST and the OBC employees. Further, the said


acquisition is not in public interest since it exposes the

investments made by the public in IDBI, corrodes the ability of

LIC to pay back its policy holders, allows the Government to

shift its responsibility of development onto LIC and paves the

path for the future privatization of IDBI Bank Ltd. in the future.

2. That the Petitioner is All India IDBI Officers' Association which

is a registered organization consisting of over 10,000

employees working in different branches across the country.

3. That the Cabinet Approval for the acquisition of 51% of the

stake by LIC in IDBI Bank Ltd was given on 1stAugust, 2018.

Approval from the other regulatory authorities such as IRDAI

has already been sought. LIC has already sent a letter of

interest to IDBI Bank Ltd for acquiring 51% stake in the

Company and the same has already been considered by the

Board of IDBI.

4. The Petitioner apprehends that the said acquisition may take

place any time soon since the required approvals have been

sought and obtained. In light of the said circumstances, it is

essential that this Hon’ble Court grants a stay on the acquisition

of 51% stake in IDBI Bank Ltd by LIC during the pendency of

proceedings.

5. That the said stay is necessary in light of the fact that if LIC

acquires a 51% stake in IDBI, then it would be difficult to

reverse the said action and it would have an adverse impact on

the efficacy of the current writ petition.

PRAYERS

In view of the above facts and circumstances, it is most

respectfully prayed that this Hon’ble Court may be pleased: -

i. Direct the respondents not to allow the acquisition of

51% of the shares in IDBI Bank Ltd by the LIC during

the pendency of proceedings; and/or


ii. To grant such other reliefs as this Hon’ble Court may

deem fit and proper in light of the facts and

circumstances of the case

Filed Through:

PRANAV SACHDEVA


NEW DELHI 301, NEW LAWYERSCHAMBER


ENROLMENT NO.: D/1806/2009

MOBILE NO: +91-9910523811




IN THE MATTER OF:


VERSUS

Life Insurance Corporation of India &Ors ……RESPONDENTS AFFIDAVIT

I, A.V. Vithal Koteswara Rao, aged 43 years, son of Amara

Madhusudhana Rao, R/o Gudivada, Krisha District, Andhra Pradesh,

Pin- 521301, presently at New Delhi, the General Secretary of the

Petitioner organization herein, do hereby solemnly affirm and declare on

oath as follows:

1. I am the General Secretary of the Petitioner organization herein,

and in that capacity am fully conversant with the facts of the case

and competent to swear this affidavit. I, as the General Secretary

have been granted the authority and the permission to swear this

affidavit.

2. I have been explained the contents of the writ petition which has

been drafted upon my instructions and submit that the same are

true and correct. Para No. 1 to 43 of the petition pertains to the

facts of the present case and I affirm that the same are true and

correct on the basis of personal knowledge and belief. The

Grounds and the Prayer clause are legal submissions and are

believed by me to be true on the basis of legal advice received.

The annexures are true copies of their respective originals.

Deponent

Verification :

I the abovenamed deponent do verify that the contents of my above

affidavit are true and correct. No part of it is false and nothing material

has been concealed therefrom. Verified at Delhi on this the_______ day

of August 2018.

Deponent



C.M. NO. _________ OF 2018 IN WRIT PETITION No. ____________ OF 2018

IN THE MATTER OF:


VERSUS

Life Insurance Corporation of India &Ors ……RESPONDENTS

AFFIDAVIT





oath as follows:

1. I am the General Secretary of the Petitioner organization, having

its correspondence address at Main Road, Gudivada- 521301,

Krishna District Andhra Pradesh, herein, and in that capacity am

fully conversant with the facts of the case and competent to swear

this affidavit. I, as the General Secretary have been granted the

authority and the permission to swear this affidavit.

2. I have been explained the contents of the accompanying

application which has been drafted upon my instructions and

submit that the same are true and correct. Para No. ___-____ of

the accompanying application pertains to the facts of the present

case and I affirm that the same are true and correct on the basis of

personal knowledge and belief.

Deponent

Verification :

I the above named deponent do verify that the contents of my above



of August 2018

Deponent


IN THE HIGH COURT OF DELHI AT NEW DELHI C.M. NO. _________ OF 2018 IN

WRIT PETITION No. ____________ OF 2018

IN THE MATTER OF:


VERSUS


AFFIDAVIT





oath as follows:













Deponent

Verification :




of August 2018

Deponent


IN THE HIGH COURT OF DELHI AT NEW DELHI C.M. NO. _________ OF 2018 IN

WRIT PETITION No. ____________ OF 2018

IN THE MATTER OF:


VERSUS


AFFIDAVIT





oath as follows:













Deponent

Verification :




of August 2018

Deponent


Documents

IN THE HIGH COURT OF DELHI AT NEW DELHIimages.assettype.com/barandbench/import/2018/08/... · 3. Memo of Parties 4. Synopsis & List of Dates 5. Writ Petition along with Affidavit