Delhi High Court refuses to interfere with Bank of Baroda’s plan to sell majority stake in Nainital Bank

The Delhi High Court Friday refused to interfere with state-owned Bank of Baroda’s (BoB) plan to sell its majority stake in Nainital Bank, saying divestment being a “policy decision involving complex economic factors” cannot be interfered with by the courts.

Dismissing the Nainital Bank Officers Association plea challenging issuance of an advertisement by BoB inviting expressions of interest (EoI) from interested parties for acquisition of its stake holding in Nainital Bank, Justice Purushaindra Kumar Kaurav said “in the absence of there being a clear violation of any statutory provision, no interference is called for. More so, the decision of BoB for divestment cannot be said to be arbitrary or illegal so as to warrant interference of this court under its power of judicial review”.

“The courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason that the courts would decline to interfere.”

However, the HC said that it would be open to the officers’ body to raise any grievance at an appropriate stage, if so necessitated.

The association had alleged that the decision of inviting EoI was arbitrary, illegal and in violation of the recommendations made by a parliamentary committee as well as by the finance ministry.

However, the government had opposed the petition, terming it to be “presumptuous and premature”. It further said there were communications from RBI advising the BoB to either merge or to divest its share. If the BoB on the basis of the attendant circumstances had taken a policy decision to go for divestment, the same cannot be interfered with, the ministry added.