What Delhi High Court said on Subramanian Swamy's allegations against SEBI Chairperson Madhabi Buch

The Delhi High Court recently said that even though former Union Minister Subramanian Swamy made allegations against Securities and Exchange Board of India (SEBI) Chief Madhabi Puri Buch in relation to the Axis-Max Life deal, she is not even a party in his public interest litigation (PIL).

A Division Bench of Acting Chief Justice Manmohan and Justice Tushar Rao Gedela made the observation while disposing of Swamy’s plea alleging a scam of nearly ₹5,100 crore in the deal.

Swamy had filed an affidavit in the Court on March 13, 2024 alleging that Buch was an additional director and director in Max Healthcare Institute Limited from February 4, 2015 to April 3, 2017, and it is because of this past association that the SEBI is not investigating the allegations with promptitude.

However, the Court said that even though personal allegations had been made against Buch, Swamy had not amended his petition or made her a party to the PIL.

"This Court is of the view that even if the Chairperson of SEBI has had a professional relationship with Max group in the past, it will not take away the Regulator’s obligation and duty to decide the matter in accordance with law. Also, if the final decision of SEBI is in any manner influenced or affected because of the alleged erstwhile professional relationship of its Chairperson, the Petitioner shall surely be entitled to agitate the said ground at that stage," the order stated.

Swami had moved the High Court accusing Axis of making “undue gains” by way of transactions in shares of Max Life Insurance. As per the plea, there was blatant fraud in Max Life Insurance and Max Financial Services allowing their shareholder, Axis Bank Limited and its group companies Axis Securities Limited and Axis Capital Limited to make "undue profits/gains from the purchase and sale of equity shares of Max Life in non-transparent manner”.

The transactions were in violation of the mandatory directions of the Insurance Regulatory and Development Authority of India (IRDAI), Swamy said in his plea. Therefore, the transaction should be investigated by a committee of experts, he contended

The High Court disposed of the matter after noting that the regulators [SEBI and IRDAI] are considering the matter and they should complete the probe as soon as possible.

“Keeping in view the fact that sectoral regulators namely SEBI and RBI are seized of the controversy this court disposes of the writ petition with the direction to the regulators to complete the investigation in accordance with law as expeditiously as possible. If any further action is required to be taken, the same shall be done in accordance with law,” the Court ordered.

Senior Advocate Rajshekhar Rao with Advocates Aakanksha Kaul, Meherunnisa Aanand Jaitley, Areeb, Satya SAbharwal, Aman Sahani, Ajay Sabharwal, Tanya Arora and Aakash Saksena appeared for Swamy.

Central Government Standing Counsel (CGSC) Kirtiman Singh withAadvocates Waize Ali Noor, Varun Pratap Singh, Varun Rajawat, Maulik Khurana and Kartika Baijal represented the Union of India.

SEBI was represented through Senior Advocate Pratap Venugopal and Advocate Ashish Aggarwal.

Senior Advocates Mukul Rohtagi and Rajiv Nayar as well as Advocates Raunak Dhillon, Madhavi Khanna, and Niharika Shukla appeared for Axis Bank.

Advocate Rahul Kumar appeared for Axis Capital.

RBI was represented through Advocates Ramesh Babu MR, Monisha Singh, Nisha Sharma, Jagriti Bharti, Rohan Srivastava and Tanya Chowdhary.

[Read Order]