ALL INDIA IDBI OFFICERS Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner - an association of certain employees of Industrial Development Bank of India Limited (hereafter 'IDBI Ltd.') - has filed the present petition, inter alia, praying that Government of India (respondent no.1) be restrained from reducing its shareholding in IDBI Ltd. below 51%. The petitioner also seeks directions to respondent no.2 (Life Insurance Corporation of India - hereafter 'the LIC') not to acquire the controlling stake of 51% in IDBI Ltd. The petitioner also impugns the permission granted by respondent no.6 (Insurance Regulatory and Development Authority of India - hereafter 'IRDAI') to the LIC to acquire more than 15% of the equity share capital of IDBI Ltd.

(2.) The petitioner has challenged the said acquisition of IDBI Ltd. by LIC, essentionally, on three grounds. First, that the reduction of the majority stake of the Central Government in IDBI Ltd. is ultra vires of the Industrial Development Bank of India Act, 1964 read with Industrial Bank (Transfer of Undertaking and Repeal) Act, 2003. Second, that the privatisation of IDBI Ltd. will have an adverse impact on the employment conditions of the employees of the concerned Bank, especially the SC/ST and the OBC employees. And third, that the said acquisition is not in consonance with public interest, as it endangers the investments made by the public in IDBI Ltd. and further deteriorate LIC's ability to pay back its policy holders, in view of LIC's huge investment for acquiring the majority stake.

(3.) Industrial Development Bank of India (hereafter 'the Development Bank') is one of the major public sector bank/nationalised bank in India. The government currently holds around 85% of the stake in the Development Bank (now known as IDBI Ltd.). On the other hand, respondent no.2 (LIC) is an Indian state-owned Insurance Group and investment company, which was found in 1956 to provide for the nationalisation of life insurance business in India by the enactment of the Life Insurance Corporation Act, 1956.