TMI Blog2018 (12) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... or Respondents: Tushar Mehta , SG, Maninder Acharya , ASG, Sandeep Sethi , Sr. Adv., Siddharth Barua , Sahil Sood , Harshul Choudhary and Viplav Acharya , Advs. JUDGMENT V. Kameswar Rao , J. CAV. 1209/2018 Learned counsel for the caveator has put in appearance. Caveat stands discharged. CM Nos. 54239-54240/2018 Exemption allowed subject to all just exceptions. Applications stand disposed of. LPA 732/2018 1. This Intra-Court appeal is filed by the All India IDBI Officers' Association challenging the order of the learned Single Judge dated December 17, 2018 whereby the learned Single Judge has dismissed the writ petition. 2. The appellant in the writ petition had challenged the action of the respondent Government of India reducing its shareholding in IDBI Ltd. below 51%. The appellant had also sought a direction that the Life Insurance Corporation of India should not acquire the controlling stake of 51% in the IDBI Ltd. The appellant had also impugned the direction granted by respondent No. 6 Insurance Regulatory and Development Authority of India to the LIC to acquire more than 15% of equity share capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with IDBI Ltd. on the same terms and conditions and with the same rights and obligations as they would have had in respect of the employment with the Development Bank if its undertaking had not vested with IDBI Ltd. (ii) The assurance held out to them is with regard to the terms and conditions of their service and not as to the nature of the employer - IDBI Ltd. (iii) There was no assurance that can be read with Section 5(1) of the IDBI Repeal Act, 2003 to the effect that IDBI Ltd. would continue to be a Government Company. (iv) The Section 4(1) of the IDBI Act, 1964, which required the Government of India to hold at least 51% of the total share capital in the Development Bank, stood repealed by virtue of Section 15(1) of the IDBI Repeal Act, 2003 and in any event was not applicable to IDBI Ltd., which is a company incorporated under the Companies Act, 1956. (v) The question whether employees have any vested right in their employer continuing to be a Government company, is no longer res integra. This was considered by the Supreme Court in Balco Employees Union (Regd.) v. Union of India and Ors.: MANU/SC/0779/2001 : (2002) 2 SCC 333. In that case, the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use almost 15 years earlier, in a debate relating to a legislative activity, would not preclude the Central Government from diluting its stake in IDBI Ltd. (v) The legislation enacted by the Parliament after the debate did not contain the amendment that was sought to be introduced. (vi) The statements made before the House cannot substitute or override the statue so enacted by the Parliament. (vii) The Parliament was conscious of the import of not including the proviso as proposed. (viii) The principles of promissory estoppel are wholly inapplicable in the aforesaid context. He did not accept that the statements made in Parliament amounted to a representation made to the employees and they had acted to their prejudice based on such representation. The statements made before the House were in the context of enacting a legislation (the IDBI Repeal Act, 2003), and the said Act has to be interpreted in conformity with the settled principles of statutory interpretation. (ix) There is no ambiguity in the language of the IDBI Repeal Act, 2003 and there is no scope to read any provision into the said enactment which proscribes the Government from reducing or divest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n certain informal discussions between the Chairman and Officials of the Government of India. Thereafter, LIC sent communications to IRDAI seeking the approval to acquire 51% shares of IDBI Ltd. and also took the further steps in the said direction. (iv) On 04.05.2018, the LIC's Board had only considered a proposal for acquiring majority stake in a bank. It is also clear that the proposal for acquiring majority stake in IDBI Ltd. was on the anvil but was not specifically placed before the LIC's Board. He found no infirmity with such procedure, as it is common for the executives of a company to complete the ground work and finalise the details of a transaction before seeking the final approval in the Board of Directors. It is apparent that the Chairman of LIC had engaged in informal talks with the officials of the Government for acquiring stake in IDBI Ltd. It is also possible that the first overtures for LIC to acquire such stake may have been made by the Central Government (although there is no material to establish the same). However, the LIC's decision to acquire 51% stake in IDBI Ltd. cannot be faulted as the approval of LIC's Board had been obtained on var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligation to safeguard the interests of its stake holders. This contention was, however, found not persuasive. Undoubtedly, LIC's Board had raised questions with regard to the affairs of IDBI Ltd. and had directed preparation of an action plan to turn around IDBI Ltd. With regard to the IRDAI's decision to reduce LIC's stake over the years, LIC's Board had also directed that LIC bring out a strategy paper. However, these issues related to how LIC would proceed further after the acquisition; it does not establish that LIC's Board had any reservation as to the investment in IDBI Ltd. On the contrary, it clearly establishes that LIC's Board was conscious of the state of affairs of the IDBI Ltd. and despite the issues had resolved that LIC acquires a controlling stake in IDBI Ltd. The minutes of the meetings of the Board of LIC held on 16.07.2018 clearly indicate that the LIC's Board's decision to grant approval was after deliberation and after the LIC's Board was fully apprised of the affairs of IDBI Ltd. (ix) The decision of LIC's Board is a commercial decision and, therefore, it is not open for the Court to examine the merits of the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AI is required to modify or relax the applications of the specified provisions of the Investment Regulations, only if the same is warranted. (iv) The Investment Regulations are silent as to the factors to be considered by IRDAI while exercising its powers under Regulation 14 (2) or the grounds on which such power is required to be exercised. However, it's apparent that where an insurer presents a bona fide reason, which in view of IRDAI warrants departure from the Investment Regulations, it would be incumbent upon IRDAI to grant the same. (v) The IRDAI is also required to bear in mind the object for regulating the investment of an insurer while considering whether to relax any restrictions as specified in the Investment Regulations. The principal object in framing the Investment Regulations is to insulate the policyholders from unwarranted risks and to ensure that the insurers do not default in their commitment to the policyholders. (vi) In the present case, the proposed investment for acquisition of majority shares in IDBI Ltd. is ` 10,000 cr. which, the LIC states, is 2.5% of yearly incremental investment and 0.4% of total investment assets. Thus, evidently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but a permission to LIC to take up controlling stake in the investee company. 11. We also find that the learned Single Judge has even examined the relevant factual context in which Insurance Regulatory Development Authority of India's permission was sought and granted and on examination of the same, the learned Single Judge in para 99, has held as under:- 99. IRDAI had examined the proposal and there was sufficient material for IRDAI to take the decision that it did. This Court is not called upon to supplant its view over that of IRDAI or examine IRDAI's decision on merits. The scope of judicial review in these proceedings is limited. This Court does not sit in appeal on the merits of the decision taken by IRDAI. It is apparent that there was sufficient material for IRDAI to accept that the policyholders' funds were duly protected and that LIC had a sufficient reason to make a strategic investment in IDBI Ltd. Thus, IRDAI's decision cannot be called into question in these proceedings. 12. The aforesaid conclusion of the learned Single Judge on all the three submissions made by Mr. Bansal, before us now, are, justified keeping in view the factual as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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