In the latest move reported by Business Standard, the Securities and Exchange Board of India (SEBI) filed a petition in the Supreme Court (SC) seeking transfer of two public interest litigation (PIL) in separate high courts on unit-linked insurance plans (ULIPs) to the SC.
The move is a sequel to SEBI’s decision not to approach either the SC or any high court jointly with the Insurance Regulatory Development Authority (IRDA) to resolve their dispute over ULIPs. Both say they have jurisdiction over these investment-cum-insurance products.
According to the new SEBI petition, since two high courts are dealing with the same issue, it will be advisable to transfer both cases to the SC. According to Article 139A of the Constitution, if cases involving same or substantially the same questions of law are pending in two different high courts, a party in the case can move the SC. This is meant to avoid duplication of judicial work and possible conflict of views.
Both suits raise substantially the same issues. The one in the Bombay High Court seeks reversal of the SEBI ban on sale of ULIPs. The other, before the Allahabad High Court, complains that insurance companies promised high returns on ULIPs and questions the claims.
On its part, IRDA has informed the finance ministry about SEBI’s letter to it stating that it has changed its mind on filing a joint application in a court. The insurance regulator is, however, yet to decide its next move.