Delhi High Court Disposes PIL Against Hinduja Group As IndusInd Bank Promoters, Directs RBI To Consider Representation

The Delhi High Court on Monday directed the Reserve Bank of India (RBI) to treat as representation a PIL seeking to reconsider the decision to increase the stakes held by Hinduja Group as the promoters of IndusInd Bank.

A Division Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla directed the RBI to examine the petition, highlighting the criminal antecedents of the promoters and seeking probe into its "fit and proper" status.

The petition was filed by Advocate Mahek Maheshwari, appearing in person, as an upshot of recommendations made by RBI's Internal Working Group for raising shareholding of promoters in private banks from 15 percent to 26 percent.

Initially, the Bench expressed its disinclination to interfere in the matter. It orally remarked,

"This is a policy decision. We or you are not here to dictate them to do this, do that...If what you're alleging is true, then why should they have even 15%?"

The Petitioner then cited several instances of irregularity on part of the promoters. It was alleged that increasing their stakes will open gateways for fraud by siphoning off public money.

The counsel appearing for RBI informed the Court that the said recommendation has not been notified. It was alleged that plea appears to be motivated. However, the Petitioner highlighted that an interim arrangement has been made whereby the stakeholders will be guided by these recommendations.

Though the Bench observed that this does not tantamount to increase in the Group's shareholding, it directed the RBI to examine the petition as a representation and communicate its decision to the Petitioner in a time-bound manner.

Case Title: Mahek Maheshwari v. Union of India & Ors.

Citation: 2022 LiveLaw (Del) 303