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Synopsis

Bharatiya Janata Party (BJP) leader Subramanian Swamy has initiated a Public Interest Litigation (PIL) before the Delhi High Court, alleging a colossal scam of nearly Rs. 5,100 crore involving Axis Bank.

The PIL asserts that Axis Bank made "undue gains" through transactions in shares of Max Life Insurance.

The petition has been filed through Advocates Satya Sabharwal and Tanya Arora.

According to the plea, there were blatant fraudulent activities observed in Max Life Insurance and Max Financial Services, allowing Axis Bank Limited and its affiliated entities, Axis Securities Limited and Axis Capital Limited, to reap "undue profits/gains" from the purchase and sale of Max Life's equity shares in a non-transparent manner. Swamy contends that these transactions violated the mandatory directives of the Insurance Regulatory and Development Authority of India (IRDAI).

Swamy argues that the magnitude of the alleged scam warrants a thorough investigation by a committee of experts.

The PIL was heard today by a division bench of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora.

Represented by Senior Advocate Rajshekhar Rao, Swamy emphasized that despite the substantial amount involved, which exceeds Rs. 5,100 crore, no action has been taken by the Enforcement Directorate (ED).

On the contrary, Senior Advocate Mukul Rohatgi, appearing for Axis Bank, raised the issue of not receiving an advance copy of the petition. Rohatgi informed the court that, although an email was sent, the attached petition could not be accessed.

In response, the court directed Swamy's counsel to furnish a copy of the plea to Rohatgi and adjourned the case to March 13 for further proceedings.

In the PIL, Swamy contends that the matter is of national importance, directly impacting the financial security of the country's citizens. He highlights that Axis Bank's group companies acquired a 12.002% shareholding in Max Life at rates evidently below the fair market value, resulting in unlawful gains of approximately Rs. 4,000 crore.

"On simple calculation, resulting to make undue profits/gains from the purchase on the sale of equity shares of Max Life in non-transparent manner, Axis Bank has unlawfully gained approx. Rs. 4000 Crores," the plea reads.

Furthermore, Swamy underscores the inadequacy of the penalty imposed by IRDAI, amounting to Rs. 3 crore, in light of the total fraud committed.

"...Court may intervene by directing investigation by a Committee of Experts appointed by it, as also by directing the formulation of proper and comprehensive guidelines in accordance with the recommendations of such Committee, to prevent such future acts/transactions of such nature and to regulate the arrangements entered into between banks or other financial/ insurance institutions", the plea stated.

The court scheduled the matter for further hearing on March 13, 2024.

Case Title: Dr. Subramanian Swamy v. Union of India & Ors.