Life Insurance Corporation Law Insider

Khushi Gupta

Published on: May 12, 2022 at 16:48 IST

The Supreme Court refused to grant a stay in a batch of petitions challenging the Central Government’s decision to sell 5% of its stake in Life Insurance Corporation (LIC) through an Initial Public Offering (IPO).

A Bench of Justices DY Chandrachud, Surya Kant and PS Narasimha issued a notice to the Central Government in the case but declined to pass any stay order.

“We cannot grant any interim relief now. In matters of IPO, court will be reluctant in granting interim relief. It is about investments,” the Bench said.

“Issue regarding money bill has been referred to the Constitution bench and it has to go to 7 now. We will issue notice and tag it with that matter,” said Justice Chandrachud.

The Bench then passed an order refusing interim relief and observed that, “On the aspect on interim relief the court must be guided by well-settled principle of prima facie case, balance of convenience and irreparable injury.”

“The Court has been informed that 73 lakh applicants from India and globally have subscribed to the IPO and it has been oversubscribed 6 times even by policy holders. It is important to note percentage dilution of LIC has been 3.25 percent, 22.13 crore equity shares of value of ₹10 each is offered at ₹939 and consolidated fund will receive ₹22.5 k crores.”

“IPO opened for anchor investors on May 2 and others on May 4 and closed on May 9. We are of the view that no case of interim relief has been made out. No interim relief granted”.

The Court averred that:

“On first aspect we issue notice on the issue of passing of money bill, the submission by petitioner regarding Section 28 warrants further consideration…Notice on the writ petition and the SLPs filed. Counsel to formulate brief note on submissions. Reply in 4 weeks and counter after that in 4 weeks.”

The appeal filed through Advocate Abhishekh Jebaraj stated, “Therefore, the Speaker’s certification of the Bill as a Money Bill, and its subsequent enactment as one, is a colourable exercise and a fraud on the Constitution”.

Senior Counsel Indira Jaising appearing for one of the writ petitioners said, “My plea argues that there is a violation of Article 300A. The question that whether it is money bill or not is there but it also has to be seen if it violates Article 300A.

Additional Solicitor General (ASG) N Venkataraman appearing for the Central Government said, “This petition is just to scare investors and to play a spoilsport! 73 lakh bank accounts are blocked. How can such important policy decisions be interfered with at the eleventh hour ?”

The Court after hearing the parties refused to grant any interim relief but issued notice in the matter.

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