A petition in the High Court of Delhi has challenged the scheme of amalgamation of Lakshmi Vilas Bank with Development Bank of Singapore (DBS), contending that its shareholders have been "left in the lurch" & the Centre & the Reserve Bank have failed to protect their interests.
The plea was listed before a bench of Chief Justice D N Patel & Justice Jyoti Singh on Jan 13 but was adjourned to Feb 19 after the bench was told that the Reserve Bank of India (RBI) has moved a plea in the Apex Court to transfer all pleas against the amalgamation scheme to the High Court of Bombay.
The plea in the High Court of Delhi has been filed by Advocate Sudhir Kathpalia, who was also a shareholder in Lakshmi Vilas Bank (LVB) & lost his 20,000 shares in the company due to the amalgamation scheme.
Kathpalia has sought quashing of the clause in the scheme which states that from the date of merger, "the entire amount of the paid-up share capital & reserves & surplus, including the balances in the share/securities premium account of the transferor bank, shall stand written off".
The plea has said that under the scheme, DBS wasn't required to give any shares to the LVB investors in return & they were "left in the lurch".
The amalgamation scheme was approved by the RBI on Nov 25, 2020, & the merger took place on Nov 27, 2020.
The plea has contended that the Centre & RBI have failed to protect the interests of the shareholders.
It has also alleged that DBS was chosen for the merger without inviting bids from other banks & financial institutions.
It has alleged that the "scheme of amalgamation was irregular, arbitrary, irrational, unreasonable, illegal & thus, void".
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