Delhi High Court Rejects Subramanian Swamy’s Petition Over SEBI Chairperson Madhabi Buch
In its judgment, the Delhi High Court has thrown out public interest litigation filed by former Union Minister Subramanian Swamy in relation to the alleged misconduct of Securities and Exchange Board of India Chairperson Madhabi Puri Buch.
Findings by the Court on the Allegations
The plea was regarding the purported ₹5,100 crore scam involving the Axis-Max Life deal; however, the court pointed out that Buch was neither a party in the PIL nor was she directly arraigned in the matter.
A Division Bench of Acting Chief Justice Manmohan and Justice Tushar Rao Gedela made the observation while disposing of Swamy’s petition. The Court said that though personal allegations have been made against Buch, she has neither been impleaded as a party to the PIL nor has her position as SEBI Chairperson been questioned directly in the petition.
Personal Allegations Against SEBI Chairperson
Swamy’s affidavit on March 13, 2024, alleged that Buch, in her tenure as an additional director and director at Max Healthcare Institute Limited from February 4, 2015, to April 3, 2017, had a past association with the Max group. Swamy’s contention was that due to this association, there was no prompt investigation by SEBI into the Axis-Max Life deal. However, the court pointed out that these allegations were not directly related to the legal questions raised in the PIL.
It also held that even assuming Buch had professional links with the Max group, it did not absolve SEBI’s obligation to probe the allegations in question in accordance with the law. It pointed out that assuming the past associations of Buch affected the ultimate decision of SEBI, Swamy could agitate that subsequently.
Highlights of the Allegations
Swamy, in the PIL, alleged that Axis Bank had made unwarranted profits on the transactions with Max Life Insurance shares and other affiliates. Swamy indicated that there were reports of fraudulent practices at Max Life Insurance as well as Max Financial Services\ that provided a cloak to Axis Bank and its affiliates to make undeserved revenues. The writ petition had averred that these acts contravened the directions of the IRDAI and had claimed investigation from a committee of experts.
Court’s Order and Directions
In its judgment, the Delhi High Court also took notice of the fact that the matter needs to be handled by sectoral regulators, namely, SEBI and IRDAI, which are already seized of the issue. The Court directed such regulators to further their ongoing investigations as per law and with all expedition. The Court judgment further reiterated other appropriate measures, if any, to be taken from their investigation results.
The bench commented, “Keeping in view the fact that sectoral regulators namely SEBI and IRDAI 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.”
Representation and Legal Counsel
Mr. Rao was represented by a team of Advocates: Aakanksha Kaul, Meherunnisa Aanand Jaitley, Areeb, Satya SAbharwal, Aman Sahani, Ajay Sabharwal, Tanya Arora, and Aakash Saksena, whereas Union of India was represented by the Central Government Standing Counsel (CGSC) Kirtiman Singh and other advocates comprising Waize Ali Noor, Varun Pratap Singh, Varun Rajawat, Maul.
The Delhi High Court’s dismissal of the PIL filed by Subramanian Swamy reiterates that under the legal framework, there should be a direct allegation against the parties concerned and all the parties should be properly impleaded. The Court has asked the regulators to complete their investigations, so it is a commitment to legal due process in regard to the right handling of allegations on financial misconduct.
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