Hon’ble Court directed “the RBI to carry out the exercise of valuation of shares and assets of both DBIL and LVB as on the date before amalgamation, and on that basis, take a decision afresh on (a) reduction of the value of shares and (b) writing off the tier -II Bonds” within a period of four months.The learned counsels M/s Ankur Kashyap, Mr. Ramaswamy Meyyappan, Mr. Rohit Rajershi, Mr. Arjun Suresh and Mr. Viyyash Kumar appeared for the Aum Capital Markets Pvt Ltd.

AUM Capital v. U.O.I & Ors : PRESS NOTE
The Hon’ble Madras High Court pronounced the final verdict in the batch of matters challenging the LVB-DBIL Merger. The Petitioner, Aum Capital Private Limited represented by M/s. AKR & Associates preferred a Writ Petition before the Hon’ble Madras High Court challenging the ‘The Lakshmi Vilas Bank Ltd. (Amalgamation with DBS Bank India Limited) Scheme, 2020’ published by the Union of India, the Reserve Bank of India and the erstwhile Lakshmi Villas Bank Limited. The Petitioner was aggrieved by the actions of the Reserve Bank of India and the Union Government, in arbitrarily forcing the amalgamation of Lakshmi Vilas Bank with DBIL and writing down the entire shareholding of the shareholders to “Zero”. The Reserve Bank of India arbitrarily reduced the share value of the erstwhile Lakshmi Vilas Bank shareholders to “Zero” in stark contrast to the accepted principles of valuation of banking companies without any just and cogent reason.
In the month of September 2019, the Reserve Bank of India placed the Lakshmi Vilas Bank under Prompt Coercive Action and on 17th November 2020, the Union Government of India imposed a moratorium on Lakshmi Vilas Bank under Section 45(1) of the Banking Regulation Act, 1949 vide S.O. 4127(E) for a period of 30 days. Subsequently, on the same day, the Reserve Bank of India placed its proposed draft scheme of Amalgamation of LVB with DBS Bank India Limited. Within a period of three days, the Reserve Bank of India closed the window to file objections against that proposed draft scheme of Amalgamation on 20th November 2020 at 5.00 pm. On 25th November 2020, the Reserve Bank of India passed the scheme of amalgamation by notification dated G.S.R. 731(E).
The learned senior counsel(s), Senior Adv. Arvind P. Datar and Senior Adv. P.S. Raman appeared for the Petitioner and contended that the Reserve Bank of India passed the impugned scheme of amalgamation clandestinely and against the interest of the depositors. The entire manner and approach adopted Reserve Bank of India was arbitrary, discriminatory and confiscatory in nature. The learned senior advocates further elucidated the Hon’ble Court with the flawed valuation exercise carried by the Reserve Bank of India.
The Hon’ble Madras High Court stated the “amalgamation has already taken effect four years back” and “the situation is irreversible”. The Hon’ble Court ruled that “we find that the whole process of identifying DBIL and the procedure of carrying out the amalgamation cannot stand the scrutiny of law, still we hold that the amalgamation of LVB with DBIL need not be set aside”. However, to protect the interest of the shareholders and the bondholders, the Hon’ble Court directed “the RBI to carry out the exercise of valuation of shares and assets of both DBIL and LVB as on the date before amalgamation, and on that basis, take a decision afresh on (a) reduction of the value of shares and (b) writing off the tier -II Bonds” within a period of four months.
The learned counsels M/s Ankur Kashyap, Mr. Ramaswamy Meyyappan, Mr. Rohit Rajershi, Mr. Arjun Suresh and Mr. Viyyash Kumar appeared for the Aum Capital Markets Pvt Ltd.