New Delhi, Oct. 17: The Delhi High Court has clarified that statements made during parliamentary debates cannot prevent the Union Government from reducing or divesting its shareholding in IDBI Bank. The ruling came in a judgment delivered on December 17, 2018, in All India IDBI Officers’ Association v. Union of India & Others.
The clarification addresses recent media reports about legislative developments in 2003 concerning the Government’s stake in IDBI. During discussions on the Union Budget and the IDBI (Repeal) Act, 2003, an amendment seeking to restrict dilution of the Government’s shareholding was proposed but rejected.
Delhi High Court Says Enacted Law Does Not Restrict Stake Dilution
The High Court dismissed the petition filed by the All India IDBI Officers’ Association. It held that statements made in Parliament could not override or replace the legislation ultimately enacted.
The Court also ruled that the doctrine of promissory estoppel could not be used to prevent the Government from reducing or divesting its stake in IDBI Bank. It found no provision in the IDBI (Repeal) Act, 2003, prohibiting the Government from reducing its shareholding.
The Government’s policy on transforming IDBI Bank and pursuing strategic disinvestment was also reflected in successive Union Budget speeches.
In the 2016–17 Budget, then Finance Minister Arun Jaitley said the Government would continue the bank’s transformation and consider reducing its stake below 50%.
In the 2021–22 Budget, Finance Minister Nirmala Sitharaman listed IDBI Bank among the transactions targeted for strategic disinvestment during that financial year.
The legislative history, court judgment and Budget speeches outline the evolution of the Government’s policy towards IDBI Bank’s strategic disinvestment. The High Court’s ruling makes clear that parliamentary statements alone cannot impose a restriction absent from the enacted law.
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