Sahara Life Case: Supreme Court Overturns SAT Stay On Transfer Of Policy Liabilities
After repeated opportunities, Sahara India failed to bring back the Rs 78 crore it owes to its policyholders, the bench held.
The Supreme Court on Monday overturned an order of the Securities Appellate Tribunal that had stayed the IRDAI's decision to transfer the policy liabilities of Sahara India Life Insurance Co. to SBI Life Insurance Co.
The top court has directed the tribunal to hear the case on Aug. 3 and decide it afresh.
The two-judge bench headed by Justice Abhay S. Oka observed that even after repeated opportunities, Sahara India has failed to bring back the Rs 78 crore it owes to its policyholders.
Arguing for the Insurance Regulatory and Development Authority of India, Solicitor General Tushar Mehta stated that, as an insurer, Sahara should be happy that its liabilities are being transferred to another company.
But this insistence by Sahara that it will not part with its insurance policies is because many of its policies might be in the names of fake people, Mehta said.
Earlier this month, the IRDAI moved the Supreme Court to challenge the SAT order.
The regulator’s June 2 order, which was stayed by the tribunal, had directed SBI Life Insurance to take over the liabilities of around two lakh policies, along with the assets of Sahara India Life Insurance, with immediate effect.
The IRDAI passed this order against Sahara because the company failed to comply with a 2020 order of the regulator directing it to recover a sum of Rs 78 crore from Sahara India Financial Corp. that was owed to its policyholders.
The decision to transfer the policy liabilities was taken by the IRDAI in view of the deteriorating financial health of Sahara India Life Insurance.
However, the tribunal noted that IRDAI passed this order without granting Sahara an opportunity to be heard, mainly on the grounds that it had failed to comply with its 2020 directions. It further stated that there was no ‘tearing urgency’ in transferring the policies of the company.
On an earlier occasion, SAT had also set aside the transfer of Sahara’s insurance business to ICICI Prudential Life Insurance Company in 2018.
In a media statement, Sahara Life's spokesperson said that the company remains committed to transparency and adherence to regulatory requirements and that it assures its policyholders, stakeholders, and the public that it has fully complied with all legal obligations.
The statement added that the company did not divert any funds, as alleged by the IRDAI.
