Bombay High Court Refuses to Stay Lakshmi Vilas Bank-DBS Bank Merger

Bombay High Court Refuses to Stay Lakshmi Vilas Bank-DBS Bank Merger

The Bombay High Court has refused to stay the scheme of amalgamation between Lakshmi Vilas Bank Limited (LVB) and the DBS Bank India Ltd. (DBIL), which was approved by the Union Cabinet.

Indiabulls Housing Finance Ltd and Kare Electronics & Development Private Ltd. challenged the amalgamation scheme on the grounds that it would be detrimental to their shareholding in LVB.

Senior Advocates Darius Khambata and Dinyar Madon apprised the Court that the Reserve Bank of India (RBI) had imposed a moratorium on LVB for a period of 30 days to protect the depositors' interest and in the interest of financial stability.

According to them, Indiabulls was a shareholder in LVB and that the scheme has written off paid-up share capital which would lead to Indiabulls shareholders losing their money. They added that the approval of the scheme of amalgamation was given without hearing the suggestions and objections from the public and the Stakeholders.

Senior Advocate Ravi Kadam, appearing for RBI, objected to the prayer for stay and assured the Court that the powers exercised by the RBI were in compliance with the procedure of law and added that the keeping LVB under a moratorium for too long would have affected its 20 lakh depositors.

Senior Advocate Janak Dwarkadas representing DBIL objected to the prayer for stay on the ground that the amalgamation was approved keeping in mind the interest of the shareholders who would benefit after the amalgamation is brought into effect from tomorrow.

After hearing the pleas, the Bench of Justices Nitin Jamdar and Milind Jadhav ordered that they were not inclined to grant an ad-interim stay on the scheme.