The court, however, did not accept the contention and said if there was any violation of the Insurance Act, then the association has to approach the Insurance Regulatory and Development Authority (IRDAI).
"We cannot hold any enquiry into whether the Insurance Act was violated. Go to IRDAI," the bench said.
The LIC, meanwhile, told the court that the amount it was investing in the bank was just one per cent of its entire funds and assured the bench that interests of its policy holders are protected.
The association was concerned that taking away public sector bank status of the IDBI could affect the employment conditions of its staff.
The bench was of the view that this issue has been addressed by the single judge in his decision of December 17.
The LIC had argued before the single judge that it wanted to acquire 51 per cent stake in the IDBI as since 2000, the state-run insurance company has been toying with the idea of having banking operations.
It had said it had in the past made several attempts to have a bank of its own, but its endeavours had "failed" as "nothing fructified".
The IDBI, in which the government holds 85.96 per cent stake, had posted a net loss of Rs 2,409.89 crore in the quarter ended June 2018. It had posted a gross non-performing asset (NPA) of about Rs 57,807 crore.
The association had claimed before the single judge that the change in shareholding was not in public interest as it "exposes the investments made by the public in the IDBI and corrodes the ability of the LIC to pay back its policy holders since it will have to invest an amount of Rs 13,000 crores to acquire the 51 per cent stake".
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