Supreme Court directs Insurance Board to increase its deadline for Mahalaxmi Life Insurance; Life Insurance company to raise its paid up capital and change its promoters

Supreme Court of the country has its approval to Mahalaxmi Life Insurance to meet the capital requirement and change its promoter.

Acting judge of the court Mr Deepakraj Joshi and Purushottam Bhandari’s bench had issued the mandamus to the life insurance company providing a new ray of hope.

Insurance Board had stooped the life insurance company from changing its promoters as well as making changes to its paid up capital. After Mr Ajayraj Sumargi had not failed to provide the amount for the auctioned shares, the insurance company had failed to meet the capital requirement, due to which the Insurance Board had cancelled its license.

Initially, the Supreme Court had issued instructions directing the insurance board to not cancel the license of the life insurance company. The insurance board had refused after the company had failed to raise its capital within the 3 months deadline given by the board.

The Ministry of Finance had previously directed the Insurance Board to provide added time for the life insurance company to increase its paid-up capital which was not followed by the board. Remaining 9 companies have been conducting transactions in the market after meeting the capital requirement.