The Delhi High Court in the case Dr. Subramanian Swamy v. Union Of India And Others observed wherein the public interest litigation, PIL is moved by BJP leader Dr Subramanian Swamy against an alleged scam for an amount of Rs.5100 crores which involves Axis Bank making undue gains from transactions in shares of Max Life Insurance.
The bench comprising of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora was hearing the present plea.
The counsel, Senior Advocate Rajshekhar Rao, representing Swamy contended before the court that even though the total quantum of alleged undue gains in the instant case exceeds for an amount Rs.5,100 crores, no worthwhile action has been taken.
The court in the case observed and has adjourned the of the matter to March 13, asking Swamy’s counsel to serve a copy of the petition on the Bank.
In the present case, it has been claimed by Swami that Max Life Insurance Co. Ltd. and Max Financial Services Ltd. fraudulently allowed the Max Life shareholder-Axis Bank and its group companies, the Axis Securities Limited and Axis Capital Limited to make undue profits or gains from sale or the purchase of equity shares in a non-transparent manner, violating the directions of Insurance Regulatory and Development Authority of India, IRDAI.
Further, it has been alleged that in the transactions between Max Life and Axis Bank, selling price of shares was way more than the purchase price and as such the Bank, using its dual relationship as shareholder and corporate agent of Max Life, gained substantially from the transactions. Moreover, the transactions were contrary to the directions issued by IRDAI in 2021.
The court in the case observed and has stated that it being evident from the above that, 12.002 % of shareholding in Maxlife is bought by the Axis Bank group companies at Rs. 31.51 or Rs. 32.12 per share at total consideration of 736 Crores, which is evidently below the fair market value.
The court pointed out that IRDAI had imposed a penalty for an amount of Rs.3 crores on Max Life for not complying with the directions which are issued by the Authority, for misrepresenting in order to obtain prior approval of the Authority for transfer of sharers and on account of registering transfer of shares in violation of the directions of the Authority resulting in passing of undue monetary consideration of substantial amounts to Axis Bank.
The court observed that as per Swamy, as it being against the total undue gains involved, thus, this penalty is negligible and the said case requires intervention of the Court.
It has also been prayed before the court that the Court constitute an Expert Committee to investigate into the impugned transactions and issue guidelines.
The counsel, Senior Advocate Rajshekhar Rao, Advocates Satya Sabharwal and Tanya Arora appeared for the Petitioner or swamy.
The counsel, Senior Advocate Mukul Rohatgi represented the Axis Bank.