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Supreme Court refuses to grant interim relief on pleas seeking stay on LIC IPO share allotment

The amendment envisaged allotment of shares in the LIC through the public issue
Last Updated 12 May 2022, 16:25 IST

The Supreme Court on Thursday declined to grant any interim relief with regard to LIC IPO, which has been oversubscribed six times and is expected to fetch Rs 22,500 crore to the government.

A bench presided over by Justice D Y Chandrachud, however, agreed to examine the validity of the amendment made to the LIC Act by Finance Act, 2021 through a money bill and tagged the matter with a pending case related to Roger Mathews before a Constitution bench.

The amendment envisaged allotment of shares in the LIC through the public issue.

The bench said no ground was interim relief was made out as the court had to consider the principles of balance of convenience and irreparable harm and injury to the parties.

"We cannot grant any interim relief now. In matters of IPO, the court would be reluctant as it is about investment," the bench said.

The Union government and the LIC led by Additional Solicitor General N Venkatraman opposed the plea by a batch of policyholders against the amendment and IPO, contending they are playing spoilsport and wanted to scare the investors.

The plea was marred by complete laches and inordinate delay as the Finance Act was passed on March 28, 2021. It wanted to challenge the interests of 75 lakh applicants, he said.

Senior advocate Indira Jaising, appearing for the petitioners led by Thomas Franco, contended the insurance company which is of the character of a mutual benefit society is being changed to a joint stock company. This amounted to expropriation as till now, the policyholders owned it.

The question involved here related to violation of the right to property under Article 300A of the Constitution, she said.

With the IPO, third party rights would be created in the LIC, which enjoyed 66 per cent of the insurance market, she submitted.

She said the amendments to the LIC Act, seriously affected the interest of participating policyholders and the amendments should not have been carried out through Money Bill.

The top court issued notice to the Union government and the LIC in the matter but declined any interim relief.

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(Published 12 May 2022, 09:27 IST)

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