Won’t interfere in LIC IPO share allocation, says apex court

NEW DELHI: The Supreme Court on Thursday refused to interfere in the allocation of LIC shares to 73 lakh persons from India and abroad who oversubscribed the mega IPO of the country’s largest state-owned insurance company.

A bench of Justices D Y Chandrachud, Surya Kant and PS Narasimha heard arguments from senior advocate India Jaising for a PIL petitioner but agreed with additional solicitor general N Venkataraman and ordered that “we are of the considered view that no case for interim relief is made out”.

Vankataraman said that the writ petitioner has filed the plea on May 9, the day the IPO was closed after receiving an overwhelming response with as many as 73 lakh persons from India and abroad subscribing to 2213 crore equity shares of Rs 10 each offered at a premium of Rs 939 per share, which in turn would give the Consolidated Fund of India a receipt of Rs 20,500 crore.

The ASG said that the Bombay HC and Madras HC have refused to interfere in the IPO, which was opened to anchor investors on May 2 and thereafter for the general public during May 4-9 period, which witnessed over subscription of 2.5 times. Venkataraman said that the SC should not interfere with the IPO, which is purely a commercial operation, at the behest of two persons who hold policies of Rs 50,000 each.

“The LIC policy holders have no contractual right for surplus funds as it is the prerogative of the Union government to declare surplus quantum,” he said.

However, Jaising argued that the Union government took the impermissible Finance Bill route to amend Section 28 of the LIC Act for offloading a certain percentage of government equity in the largest insurance company, to alter the relationship between the participating policyholders with the LIC that had remained undisturbed for 75 years.

Venkataraman said that the Money Bill, effecting amendments to the LIC Act, was passed by Parliament on March 28, 2021 and the petitioners have come to the court after 15 months to seek interim relief, grant of which would be travesty of justice and hit at commercial operations involving 73 lakh applicants who participated in the IPO.

The bench said the question of using the Money Bill route to pass Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016, is already pending before a 7-judge bench and said this issue relating to amendment of LIC Act through Money Bill route could also be referred to the larger bench for composite adjudication. However, the bench asked the Union government to file its response to the three petitions, one writ and two SLPs.