Banking Woes: Plea in Delhi HC against LVB-DBS merger

The petition was listed before a bench of Chief Justice DN Patel and Justice Jyoti Singh on January 13, but was adjourned to February 19 after the bench was told that the Reserve Bank of India (RBI) has moved a plea in the Supreme Court to transfer all pleas against the amalgamation scheme to the Bombay High Court. 

The petition in the Delhi High Court has been filed by lawyer Sudhir Kathpalia, who was also a shareholder in Lakshmi Vilas Bank (LVB) and 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 and reserves and surplus, including the balances in the share/securities premium account of the transferor bank, shall stand written off.” The petition has said under the scheme, DBS was not required to give any shares to the LVB investors in return and they were “left in the lurch”.