Which legal doctrine did the court hold wholly inapplicable while rejecting the challenge to the dilution of the Government's stake in IDBI?
- A.Doctrine of eclipse
- B.Doctrine of pith and substance
- C.Promissory estoppel
- D.Basic structure doctrine
Correct answer
Explanation
The correct answer is promissory estoppel. Those challenging the decision argued that assurances given in Parliament amounted to a promise binding on the Government. The court held the principle wholly inapplicable, since the statements were made in the context of enacting a law and could not be treated as a representation on which the employees had acted to their prejudice. The clarification calls the ruling significant precisely because it addresses this doctrine. Option A is wrong because the doctrine of eclipse concerns a pre-constitutional law that is inconsistent with fundamental rights and becomes dormant rather than void, which was not the issue. Option B is wrong because pith and substance is used to decide which legislature is competent to make a law, a federalism question that did not arise. Option D is wrong because the basic structure doctrine limits the amending power over the Constitution and was never invoked in this dispute about shareholding.
Read the full article: IDBI Bank Stake: Ministry Cites 2003 Repeal Act and Court Ruling
Practice Questions
During the parliamentary debate on which law was an amendment moved to restrict dilution of the Government's shareholding in IDBI?
- A.IDBI (Repeal) Act, 2003
- B.Banking Regulation Act, 1949
- C.State Bank of India Act, 1955
- D.Reserve Bank of India Act, 1934
Show answer
The Finance Ministry's clarification records that while the Union Budget of 2003 was being discussed and Parliament was debating this repeal legislation, an amendment was moved that sought to limit any reduction of the Government's holding in IDBI.
Read the full explanation →Which court decided All India IDBI Officers' Association versus Union of India and Others, dismissing the challenge to dilution of the Government's stake?
- A.Supreme Court of India
- B.Delhi High Court
- C.Bombay High Court
- D.National Company Law Tribunal
Show answer
According to the clarification, the association of IDBI officers took the shareholding question to the Delhi High Court, which decided the case on 17 December 2018 and dismissed the writ petition.
Read the full explanation →Which Union Budget speech said the Government would consider reducing its stake in IDBI Bank to below 50 per cent?
- A.Union Budget 2016-17
- B.Union Budget 2021-22
- C.Union Budget 2003
- D.Union Budget 2014-15
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In paragraph 93 of that speech the then Finance Minister Arun Jaitley said public sector banks had to be strong and competitive, that the Bank Board Bureau would be made operational in that year, that a roadmap for consolidating public sector banks would be spelt out, that the transformation of…
Read the full explanation →Which two methods were used to arrive at the benchmark price for the IDBI Bank transaction?
- A.Discounted Cash Flow Method and Book Value Method
- B.Market Multiple Method and Asset Valuation Method
- C.Reserve Price Method and Stock Market Price Method
- D.Dividend Yield Method and Replacement Cost Method
Show answer
Two independent professional agencies valued the bank, one comparing it against the closing accounts of all public sector banks as on 31 March 2026 under relative valuation, the other weighing tangible and intangible assets, land and property included, against liabilities in the audited accounts of the same date.
Read the full explanation →Which entity has been approved as the Strategic Buyer for IDBI Bank Ltd?
- A.M/s 10955230 Canada Inc, a Fairfax Financial Holdings entity
- B.Life Insurance Corporation of India
- C.Prem Watsa Capital Partners Ltd
- D.Emirates NBD Bank PJSC
Show answer
The Cabinet Committee on Economic Affairs picked this company as the Strategic Buyer when it approved the strategic restructuring of the bank, and its parent is M/s Fairfax Financial Holdings Ltd.
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