DBS (India) Bank on Wednesday questioned the jurisdiction of the division bench of the Madras High Court hearing the petition filed by shareholders of Lakshmi Vilas Bank (LVB). Senior counsel Mukul Rohatgi appearing for DBS India argued that the matter should be first heard by a single bench before being posted to a division bench. The petitioner and respondents have now approached the court registry seeking administrative orders over who should hear the matter.
While Mukul Rohatgi and ARL Sundaresan are appearing for DBS, senior counsel Vijay Narayanan is representing RBI.
“Respondents raised an issue about jurisdiction and said it may have to go to a single judge rather than a division bench so the matter has been posted for clarifications before the court registrar to clarify whether the case will be heard by the division bench or if it will be heard by a single judge,” said a lawyer present in the hearing but did not wish to be named.
The division bench of the Madras high court last week passed an interim order protecting shareholders of LVB and said no prejudicial action should be taken against them. The court also said that DBS Bank should furnish an undertaking in the Court that in case the Court concludes and directs it to provide compensation to LVB, they will pay the same.
“The relief can be classified into two, one that the scheme has to be set aside but both the courts have said they will not interfere, as of now,” said KR Pradeep, one of the promoters of Lakshmi Vilas Bank. “In case that is not possible, shareholders are looking to get appropriate valuation so that they get a just and fair value. In their petition, the shareholders have put LVB’s valuation as Rs 5250 crore. Another appropriate remedy would also be a swap by allocating a portion of DBS India shares, seeing as there is a merger.”
Meanwhile a group of bond holders have also joined the petitioners seeking against the RBI move to write-off tier 2 bonds worth Rs 320 crore. Senior counsel Vijayraghavan is appearing for these bond holders.
Another set of bond holders represented by a charitable institution and a 83-year old investor have also filed separate writ petitions which are yet to be heard by the Madras high court.
“Generally when aggrieved parties group together, they get to put up a united fight rather than have different proceedings go on simultaneously in different places, this way there is consistency in the matter,” said a counsel involved in the matter who did not wish to be quoted.
This group of senior citizen bondholders have also petitioned the finance minister Nirmala Sitharaman seeking her intervention in the matter. In a letter to Sitharaman which ET has seen bond holders argued that they would be in peril if the write-off of bonds was allowed to go through.
Credit: Stocks-Markets-Economic Times