Delhi HC Ruling Backs Government’s Power to Dilute IDBI Stake
The government cites the 2018 judgment and successive Union Budget announcements to clarify the legal position on IDBI Bank’s strategic disinvestment.
- Government clarifies legal position on IDBI stake
- Delhi High Court ruling dates back to 2018
- Proposed 2003 amendment was not enacted
- Budget speeches outlined strategic disinvestment plans
GG News Bureau
New Delhi, 17th Oct: The government has clarified that the legislative history of the IDBI (Repeal) Act, 2003, and a Delhi High Court judgment from 2018 do not restrict its power to dilute or divest its shareholding in IDBI Bank.
In a clarification issued on Saturday, the government said reports and commentary on the legislative developments of 2003 had discussed an amendment intended to restrict the dilution of the government’s stake. However, the proposed amendment was ultimately rejected and was not included in the enacted legislation.
The matter was examined by the Delhi High Court in All India IDBI Officers’ Association v. Union of India & Others, decided on December 17, 2018. While dismissing the writ petition, the Court held that statements made during parliamentary debates could not override the legislation ultimately enacted by Parliament.
The Court also ruled that the doctrine of promissory estoppel could not be invoked to prevent the government from reducing or divesting its stake in IDBI Bank. It observed that the IDBI (Repeal) Act, 2003, contained no provision prohibiting such a move.
The government further pointed to successive Union Budget speeches outlining its policy on IDBI Bank’s transformation and strategic disinvestment. In the 2016–17 Budget, then Finance Minister Arun Jaitley said the government would consider reducing its stake in the bank to below 50 per cent.
In the 2021–22 Budget, Finance Minister Nirmala Sitharaman listed IDBI Bank among the transactions targeted for strategic disinvestment during the financial year, alongside several other public-sector enterprises.
The government said the legislative history, court ruling and Budget announcements collectively demonstrate the evolution of its policy towards IDBI Bank’s strategic disinvestment.
