Suryaa National Desk: Surya Commercial & National Desk: Controversy over divestment of strategic stake in public sector financial institution IDBI Bank, objections of trade unions... Surya Commercial & National Desk: The Union Finance Ministry has issued a comprehensive clarification on the disputes and objections raised by trade unions on the process of divestment of strategic stake in public sector financial institution IDBI Bank. According to the IDBI Repeal Act of 2003, there is no provision to reduce the share of the government below 51 percent under any circumstances, and the Delhi High Court has clearly confirmed this point in 2018. The finance department has clarified that there is no legal restriction on the share limit in the legislation passed by Parliament. Parliament Debates – Background to Rejection of Amendment: The Ministry referred to the developments during the 2003 Union Budget Debates and the passing of the 'Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003'.
It is recalled that Parliament clearly rejected the proposed amendment to limit the share of the government to 51 percent. It clarified that the amendment did not form part of the final law passed by Parliament. The finance department has ruled that speeches made by members of parliament or ministers during the debate on legislation cannot supersede or supersede the official legislation passed. Basis of historical judgment of Delhi High Court: The Center prominently cited the Delhi High Court judgment on 17 December 2018 in the case of 'All India IDBI Officers Association vs Union of India' on the issue of share reduction. It said the court made it clear that the speeches made in the House at the time of the passage of the Act could not prevent the reduction of the government's share almost a decade and a half later.
The High Court held that the principle of 'promissory estoppel' was not applicable to this legislative process and the negotiations of the date could not be considered as a statutory guarantee given to the employees. It was recalled that the court had made a clear ruling that there was no ambiguity in the provisions of the IDBI Repeal Act, 2003 and that there was no provision in the Act prohibiting the reduction or divestment of the Government's shareholding. Steps towards strategic privatisation: In the past, former finance minister Arun Jaitley and current finance minister Nirmala Sitharaman had announced reforms in their budget speeches to reduce the government's stake in IDBI Bank to less than 50 per cent, the finance department said. In the wake of the recent Union Cabinet Committee on Economic Affairs approval for the sale of 60.72 per cent stake in IDBI Bank to a subsidiary of Fairfax Financial Holdings for ₹52,878.08 crore, the government issued this comprehensive statement explaining that there are no legal hurdles.