Axis Bank: Delhi HC rejects PIL on alleged profit from share transactions in Max Life Insurance deal

The court instructed the sectoral regulators SEBI, RBI, and IRDAI to complete their investigations on the matter expeditiously.

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The Delhi High Court on August 12 declined to admit a PIL filed by politician Subramanian Swamy, who alleged that Axis Bank had made Rs 4,000 crore in undue profits through non-transparent share transactions in Max Life Insurance.

The court led by Acting Chief Justice Manmohan and Justice Tushar Rao Gedela, declined to admit the PIL, and instructed the sectoral regulators SEBI, RBI, and IRDAI to complete their investigations expeditiously.

ALSO READ: Axis Bank says no material impact from allegations on Max Life Insurance deal

Senior counsels Mukul Rohatgi and Shri Rajeev Nayar, representing Axis Bank, argued that the PIL was not maintainable, saying that the principle of locus standi for PILs applies only in specific conditions, such as cases involving the most disadvantaged individuals, and Swamy, did not meet these criteria. The transactions were purely commercial and involved shares of an unlisted company, thus falling outside the purview of writ jurisdiction, and regulatory bodies were already handling the matter, making the court’s intervention unnecessary, they added.

While filing the PIL in February, Swamy contented that Axis Bank group companies bought 12.02 percent shareholding in Max Life Insurance for Rs 31.51- Rs 32.12 a share at total consideration of Rs 736 crore, which is below the fair market value. He further said that though the IRDAI imposed a penalty of Rs 3 crore on Max Life Insurance for misrepresentation but it was negligible compared to the size of the "fraud".

In a statement on August 12, an Axis Bank spokesperson said: "The Delhi High Court, after hearing the lengthy argument presented by all parties, declined to admit the PIL filed by Dr. Subramanian Swamy and has disposed off the matter. The High Court also noted that regulators are already seized of this matter, and directed that regulators proceed to complete their investigation expeditiously and in accordance with the law. The allegations which were made in the PIL (that now stands disposed off by the High Court) are strongly denied. Axis Bank remains committed to conducting business with transparency, fairness, and a focus on delivering value to our stakeholders.”