The SC issued notice on petitions challenging passage of Finance Act 2021 as money bill and amendments made to LIC Act accordingly. The court referred the question of money bill to a larger bench.
The Supreme Court on May 12 refused to interfere in the ongoing Initial Public Offering of the Life Insurance Corporation and halt the share allotment process.
The apex court, however, issued notice on the petitions that challenge the passage of Finance Act, 2021 as a money bill. It was the Finance Act of 2021 and the amendments to the LIC Act made accordingly that facilitated the ongoing IPO.
The court said that the question of passage of Finance Act 2021 as money bill and amendments to LIC Act is a question “that needs further reconsideration.”
A similar question concerning passage of Finance Act, 2017 as money bill remains pending before the Supreme Court. The current petitions assailing the same treatment to Finance Act 2021 will be heard along with the pending cases by a larger bench, the court said.
While refusing to grant interim relief of halting IPO process, the court said “on the aspect of interim relief, the court must be guided by the well-settled principle of prima facie case, balance of convenience, and irreparable injury.”
The IPO is ongoing and it is a matter wherein large investments have already been made, the bench observed during the hearing. It would not be appropriate for the court to interfere in a matter of this nature at such a juncture, the bench added while declining to grant interim relief.
According to the timeline, the IPO closed on May 9 and the offer price for shares would be finalised by May 12. The monies collected by unsuccessful bidders would be returned on May 13 while successful bidders would receive the equity shares in their demat accounts on May 16. LIC’s shares are scheduled to begin trading in the equity market on May 17.
The petitioners before the court were aggrieved by the government’s decision to trade 5 percent of its holding in LIC through the IPO.
The petitioners seeking a halt on the IPO process came before the Supreme Court after their respective petitions were rejected by Madras and Bombay High Courts. A fresh writ petition filed directly before the Supreme Court also sought similar relief from the court and the batch of these pleas were heard by the court together.
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