A Bench of Justice Dipankar Datta and Justice Augustine George Masih held that the Administrator of YES Bank could not write down the bonds in contravention of the final YES Bank Limited Reconstruction Scheme, 2020, particularly when the provision expressly providing for the write-down had been omitted from the notified scheme.

The dispute arose from the Administrator's decision dated March 14, 2020, to permanently write down the AT-1 bonds following the reconstruction of the bank. The bonds had been issued in two tranches of ₹3,000 crore and ₹5,415 crore.

The Court observed that the omission of the write-down provision from the final Reconstruction Scheme, considered alongside the deliberative process preceding its notification, indicated that the Central Government had consciously decided not to incorporate such a provision. The Administrator could not rely on a general savings clause in the scheme to claim specific authority to write down the bonds.

The Court also examined the RBI's Basel III Capital Regulations and the Information Memoranda governing the bonds. It considered whether the conditions authorising a write-down had been satisfied and whether the Administrator had acted in accordance with the applicable regulatory and contractual framework.

Upholding the Bombay High Court's decision, the Supreme Court held that the Administrator's action was impermissible. The appeals were accordingly dismissed. The Court further clarified that the annual coupon payments would remain unaffected by the outcome of the appeals and must be made in accordance with the Information Memoranda.

Dua Associates represented ECL Finance Limited, Respondent No. 14, before the Supreme Court. The firm's Partners Hetal Thakore, Jyoti Ghag and Kunal Parekh appeared in the proceedings.