In Brief
Religare Finvest Limited sought recovery of ₹791 crores from Laxmi Vilas Bank (LVB) for alleged misappropriation of fixed deposits. Criminal proceedings were filed against LVB officials and the bank itself. Subsequently, RBI directed LVB's non-voluntary amalgamation with DBS Bank on 27 November 2020. DBS challenged the criminal proceedings against it, contending that a successor bank cannot inherit criminal liability of the amalgamated bank. The Supreme Court held that upon statutory amalgamation, the transferor company ceases to exist and criminal liability cannot transfer to the transferee corporation. Individual officials who committed the offences remain liable for prosecution, but the successor bank (DBS) cannot be prosecuted for the acts of LVB officials. The Court quashed proceedings against DBS.
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