Supreme Court Sets Aside SAT’s Stay on Transfer of Sahara Life Insurance’s Business to SBI Life
Supreme Court Sets Aside SAT’s Stay on Transfer of Sahara Life Insurance’s Business to SBI Life
The Supreme Court has set aside the stay from the Securities Appellate Tribunal (SAT) on the Insurance Regulatory and Development Authority of India's (IRDAI) decision to transfer the business of Sahara India Life Insurance Policy to SBI Life Insurance Company Limited.
The two-judge’s bench of Justices Abhay S Oka and Sanjay Karol observed that the SAT passed the stay order without providing any reason and thus, asked the Tribunal to decide the case afresh on 3 August.
On 2 June, the IRDAI had passed directions pertaining to the transfer of Sahara’s insurance policies to SBI Life as it had found Sahara not ‘fit and proper’ to run the business. The books of accounts, bank accounts etc. of Sahara India Life Insurance were also directed to be transferred to SBI Life Insurance.
The insurance regulator had passed an ex parte order as Sahara Insurance had failed to comply with its 2020 direction to recover Rs. 78 crores from Sahara India towards its dues.
The appeal before SAT was filed by Sahara India Life Insurance Company Limited, against the order dated 2 June 2023 passed by the IRDAI.
SAT in its order dated 13 June 2023, stayed the operation of the order dated 2 June, 2023 of the IRDAI on the ground that there was no urgency to transfer the policies of Sahara to SBI:
“…the fact that the earlier direction of the respondent in transferring the business to ICICI Prudential Life Insurance Company was set aside in 2018 and since then no steps had been taken to transfer the policies, we find it strange that such steps have been taken after a gap of 5 years and that too without granting an opportunity of hearing. We find that there was no tearing urgency in transferring the policies when the respondent had earlier directed by its order dated June 23, 2017 to service existing policy holders and collect renewal premium was still continuing.”
The Apex Court while staying the order of SAT, clarified that the Tribunal was free to proceed with the hearing of the appeal before it on merits.
The Court observed, “Prima facie, we find that drastic order of interim stay has been passed by the Tribunal without adverting to the merits of the case and that also when the order dated 30.12.2020 was not complied with by the appellant for more than two and half years.”
The Top Court directed the Tribunal to hear the application for stay afresh.
