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(viii) Amalgamation was earlier proposed by M/s.India Bulls Housing Finance [in short, “M/s.India Bulls”], which has a AAA rating, i.e., the highest rating of CRISIL, and the same was approved by the Competition Commission of India. The scheme of amalgamation, proposed by M/s.India Bulls, did not provide for any write off. RBI refused the proposal for amalgamation of LVB with M/s.India Bulls without assigning any reason. Any order, even be it administrative, has to have a reason, failing which, the order is liable for judicial chastisement.

(vi) The proposal submitted by M/s.India Bulls for voluntary ____________ https://www.mhc.tn.gov.in/judis W.P.No.17521 of 2020 & etc. Batch amalgamation with LVB was rejected by RBI on October 9, 2019. Based on the adverse inputs received from regulatory/enforcement agencies against the conduct of M/s.India Bulls, impinging on the “fit and proper” status of the prospective investors, it was decided by RBI to reject the amalgamation proposal.

In the present case, the declaration of moratorium and the publication of the draft scheme is on the same date, i.e., on 17.11.2020 and only half an hour apart.

10.3. RBI, in exercise of its powers conferred upon it, took a decision to amalgamate LVB on the following premise:

“And whereas the rapidly deteriorating financial position of the Lakshmi Vilas Bank Ltd. Relating to liquidity, capital and other critical parameters, and the absence of any credible plan for infusion of capital has necessitated Reserve Bank of India to ____________ https://www.mhc.tn.gov.in/judis W.P.No.17521 of 2020 & etc. Batch take immediate action in public interest and particularly in the interest of the depositors and accordingly, The Lakshmi Vilas Bank Ltd. was placed under moratorium by an order of the Central Government vide notification number S.O.4127(E), dated the November 17, 2020 in exercise of the powers conferred by sub-section (2) of Section 45 of the Banking Regulation Act, 1949 (10 of 1949).” 10.4. In January, 2018, LVB raised Rs.781 crores through rights issue priced at Rs.122/- per share. In March, 2019, LVB raised Rs.460 crores via Qualified Institutional Placement, valuing the entire entity at Rs.2,300/- to 2,400/- crores. In July, 2019, M/s.India Bulls invested Rs.188 crores by purchasing the shares of LVB at Rs.112/- per share. M/s.Claremont Capital has offered to invest about 300 Million USD for 65% of the equity stake. It valued LVB at Rs.3,700/- to 3,800/- cores. According the LVB, the said offer was communicated to RBI and is pending. In October, 2020, the application was submitted for merger of M/s.Clix Capital with LVB.

11.5. In the case of Ganesh Bank (supra), RBI disclosed the names of the banks whose proposals were received and also gave reasons for selecting a Federal Bank for amalgamation with Ganesh Bank. At that time, RBI did not raise the issue of confidentiality. It is a commercial market. The transaction has to be open, free and fair.

11.6. Section 44A of the Act of 1949 provides for voluntary amalgamation of a banking company. The said scheme is also required to be sanctioned by the RBI. Pursuant to the said provision, LVB was in talks for amalgamation with M/s.India Bulls and also further talks were in progress with M/s.Clix Capital. The proposal of M/s.India Bulls was rejected. The reasons for rejection of the said proposal are not forthcoming. Only on affidavit, it is stated that negative reports were received from the regulators/agencies. The said report is also not placed on record. ____________ https://www.mhc.tn.gov.in/judis W.P.No.17521 of 2020 & etc. Batch 11.7. No further time was also given by the RBI with regard to the proposal of M/s.Clix Capital. Only on the ground that 45 days' time given by M/s.Clix Capital is over, RBI proceeded with the compulsory amalgamation under Section 45 of the Act of 1949. Even a proposal was submitted by M/s.Claremont Capital to infuse more than Rs.3,700 crores and purchase 65% of the equity shares, probably at Rs.112/- per share. The said proposal is not decided. Steps, viz., voluntary amalgamation or infusion of money by investors, would have safeguarded the interest of the shareholders and the bondholders. However, RBI did not promote the said steps, on the contrary, RBI, without assigning any reasons, did not consider the same and proceeded under Section 45 of the Act of 1949.