Supreme Court reviews Yes Bank AT-1 bond write-down validity

This case concerns the validity of the Administrator's decision to write down Additional Tier 1 (AT-1) Bonds of Yes Bank Limited during its reconstruction in 2020, specifically whether this action was authorized by the Reconstruction Scheme and consistent with RBI regulations.

Who it concerns: Appellants: Yes Bank Limited, Reserve Bank of India, and Union of India; Respondents: Axis Trustee Services Limited and others; Bench: Justice Dipankar Datta.

What the court decided

• The Court framed three issues: (A) whether a decision on merits is warranted given subsequent developments, (B) whether the Administrator could write down AT-1 Bonds without a specific provision in the Reconstruction Scheme, and (C) whether the action conformed to the Master Circular and bond terms.
• The Court rejected the argument that subsequent financial improvements in Yes Bank should end the litigation, stating the validity of the administrative action must be tested as it stood on the date it was passed (14th March 2020).
• The Court noted that the final Reconstruction Scheme omitted the specific clause present in the Draft Scheme that explicitly provided for the permanent write-down of AT-1 Bonds.

Also in the document

• The judgment is marked as 'Reportable' (2026 INSC 1132).
• The Court observed that the High Court had previously set aside the Administrator's action of writing down the bonds.
• The text provided is truncated and does not contain the final operative order or conclusion of the Court on the merits.