Exclusion of one of the natural heirs cannot be ground for challenging of Will

Exclusion of one of the natural heirs cannot be ground for challenging of Will

Exclusion of one of the natural heirs cannot be ground for challenging of Will

The exclusion of one of the natural heirs from the bequest, cannot by itself be a ground to hold that there are suspicious circumstances – Cases in which a suspicion is created are essentially those where either the signature of the testator is disputed or the mental capacity of the testator is questioned. There is no place for the Court to see whether the distribution made by the testator was fair and equitable to all of his children. The Court does not apply Article 14 to dispositions under a Will.”

Above was the observations made by the Hon’ble Supreme Court Of India in the case of Civil Appeal No.1565 of 2022 (Arising out of Special Leave Petition (C) No.13840 of 2019) Swarnalatha & Ors. Versus Kalavathy & Ors.Decided on March 30, 2022

A probate granted to the appellant by the District Court in respect of two last Wills and Testaments were set aside by High Court of Madras. SC held neither individually nor collectively creates a suspicion on looking into the facts and circumstances of both the cases hence allowed the appeal.

Case Ref: Swarnalatha & Ors. Versus Kalavathy & Ors. Special Leave Petition (C) No.13840 of 2019

Decided On March 30, 2022

Are Chartered Accountants or Chartered accountant firm service providers under Consumer Protection Act 2019

Are Chartered Accountants or Chartered accountant firm service providers under Consumer Protection Act 2019

Are Chartered Accountants or Chartered accountant firm service providers under Consumer Protection Act 2019

To understand the context, we first need to understand the definition of ‘services’ under Consumer Protection Act. Under the Act Services’ means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

If one goes by this definition of ‘services’ when CA or CA firm charges fee for its special advise or expert opinion or services related to its/his  profession ,it is considered rendering services under the Consume Protection Act   

Interpretation by the Courts

Jacob Mathew V State Of Punjab  Sc 2005, three judges bench

 Every professional including advocates, charted accountants, doctors, etc who provide professional services by receiving payment is a service provider under Consumer Protection Act”


Lucknow Development Authority v M K Gupta (1994) 1 SCC 243 SC

This court order held that statutory authorities are amenable to jurisdiction of consumer courts if there is deficiency in services.

“If the statutory authority, other than the core sovereign duties, is providing service, which is encompassed under the Act, then, unless any Statute exempts, or provides for immunity, for deficiency in service, or specifically provides for an alternative forum, the Consumer Forums would continue to have the jurisdiction to deal with the same.”

The legislative intent of Section 2(42) of the Consumer Protection Act, 2019 was to make ‘services’ as inclusive as possible. In the Dr.Vijil & Others V/S Ambujakshi .T.P 7 Others High Court of Kerela, the Court specified that

“A reading of the inclusive part in Section 2(42) would show that the Parliament intended to specifically underline that certain services like Banking, Financing, Insurance, Transport, etc., which are in the nature of public utility services, would come within the purview of ‘services’. The definition is inclusive and not exhaustive. Therefore, all services which are made available to potential users would fall under Section 2(42), except those services rendered free of charge or under a contract of personal service.”

The words “but not limited to” appearing in Section 2(42) clarifies the intention of the Parliament. The medical services therefore would indeed fall within the ambit of Section 2(42), unless of course the service is free of charge or is under a contract of personal service,” the Court noted in its order.

From the above discussion, it is clear that all services by individuals, by traders or business entities or professionals are covered under Consumer Protection Act whether word specified or not 

The purpose and Intention of the Law is the most important factor when judiciary gives its interpretation. In other words, judiciary is to give explanation and help the law to be implemented in its proper spirit.

By Dr Prem Lata

Legal Head VOICE

 

 

Inverter Air Conditioners: Making the Best Choice

Inverter Air Conditioners: Making the Best Choice

Inverter Air Conditioners: Making the Best Choice

Inverter technology based air conditioners are relatively expensive but offer several advantages. An inverter AC runs the compressor at different speeds according to the ambient temperature, therefore stacking up well on energy efficiency when compared to a non-inverter AC. Choosing it over other conventional ACs may seem to be a smart decision. But at the best of time and with the best of information and budget, making the final choice can still be a challenge. What can be considered best? The best according to your need, capacity, budget, preference or best according to the environment. Other practical concerns can run the gamut from size and cost to capacity and noise, and after-sales service as well. Here is a compilation of all the things that you would want to know before making the all-important buy.

Inverter or Non-inverter ACs: What Do You Prefer?

In an inverter AC, the compressor (fitted in the outdoor unit) is powered by a variable-speed drive or ‘inverter’ that enables the compressors to run at range of speeds from slow to fast, to match the output required. An inverter unit will gradually increase its capacity based on the capacity needed in the room to cool down or heat up the room. This means the compressor doesn’t need to switch on and off continuously, but instead just speeds up or down as need demands. By not actually having to stop and start several times a day, there’s less stress on the compressor and less electricity is used, which is why inverter models are generally more efficient and cost less to run. They can maintain a set temperature within a narrow range. Many split systems in the market these days are inverter models.

Most conventional compressors run at a constant speed and these types of units vary their capacity by switching on and off at different intervals. Switching on this type of unit will start to run on full load. This can cause more wear and tear on the compressor and uses more power to start up each time. These models aren’t as efficient to run as the inverter models, but can be cheaper to buy.

Types of Air Conditioners

  1. Window air conditioner: This is usually utilised for cooling individual room/ chamber/ apartments. A window air conditioner houses all the elements of an air conditioning operation in one casing.
  2. Split air conditioner: This consists of an outside metal cabinet that holds the condenser, fan and compressor. It also includes an indoor assembly that holds the evaporator and air handler. 
  3. Inverter Air Conditioner: In an inverter air conditioner, an inverter controls the speed of the compressor motor, which continuously regulate the temperature. The DC Inverterunits have a variable-frequency drive that comprises an adjustable electrical inverter to control the speed of the electromotor, which means the compressor and the cooling / heating output.

BEE Star Rating and Labelling of Air Conditioners helps us choose an energy efficient air conditioner.

Why are Inverter Air Conditioners in Demand? 

The inverter air conditioner is by far the most energy-efficient. It is more economical and smooth in operation than the fixed speed air conditioner. It consumes less electricity due to its variable speed compressor and is also good for the environment.

Important Brands of Inverter AC

LG, Samsung, Daikin, Carrier, Midea, Haier, Voltas, O General, Hitachi, Blue Star, Mitsubishi Electric, Whirlpool, Toshiba and Panasonic.

What is Cooling Capacity?

Cooling capacity is the measurement of a cooling system and its ability to remove heat from a space. They can also be described in tons to signal how much water at X temperature can be frozen in X amount of time. For reference, 1 ton of refrigeration is equivalent to 211 kJ/min or 200 Btu/min.

How to choose the right capacity?

The capacity of air conditioners is measured in terms of tons. Split and window ACs are available in various capacities, ranging from 1 to 2 tons. The tonnage of an AC does not refer to its weight; it is a unit used to determine the rate at which an AC can cool a room. In simple terms, a larger room requires an air conditioner with a higher tonnage. A single ton is rated at 12000 BTU. As per international standards, it is said that you require about 20 BTU per sq. feet. 

Room size AC capacity
Up to 100 square feet 0.8 ton
Up to 150 square feet 1.0 ton
Up to 250 square feet 1.5 ton
Up to 400 square feet 2.0 ton

The What’s and How’s

What is the inverter technology in air conditioners?

The inverter technology (or DC inverter) is the latest evolution of technology concerning the electromotor of compressors. An inverter is used to control the speed of the compressor motor, so as to continuously regulate the temperature. The DC inverter units have a variable-frequency drive that comprises an adjustable electrical inverter to control the speed of the electromotor, which means the compressor and the cooling/heating output. The drive converts the incoming AC current into DC and then through a modulation in an electrical inverter produces the current of desired frequency. A microcontroller can sample each ambient air temperature and accordingly adjusts the speed of the compressor.

How does an inverter save energy?

The inverter technology eliminates wasted operation in air conditioners by efficiently controlling motor speed. In inverter ACs, temperature is adjusted by changing motor speed without turning the motor on and off. The motor speed in non-inverter ACs remains constant and temperature is adjusted by turning the motor on and off, thereby consuming more energy.

What is the benefit of inverter technology?

Every air conditioner is designed for a maximum peak load – for example, a 1.5 ton AC is designed for a certain room size, a 1 ton AC for a different size, and so on. But not all rooms are of same size. A regular air conditioner of 1.5 ton capacity will always run at peak power requirement when the compressor is running. On the other hand, an air conditioner with inverter technology will run continuously but will draw only that much power that is required to keep the temperature stable at the level desired. It automatically adjusts its capacity based on the requirement of the room it is cooling, thereby drawing much less power and consuming lesser units of electricity.

Are window ACs with inverter technology available in the market?

There is no window AC with inverter technology.

Are there star ratings for inverter ACs?

Bureau of Energy Efficiency (BEE) had notified a new star rating standard for inverter technology ACs. Most of the inverter AC models are in 3, 4 and 5 stars rating range of BEE. The star ratings for energy labelling became mandatory for inverter ACs in January 2018.

Advantages of an Inverter AC

  • About 30 per cent to 50 per cent cheaper to run as it consumes less power compared to a conventional AC
  • No voltage fluctuation caused by compressor
  • Maintains constant room temperature
  • Efficient cooling and heating
  • Can be run on solar panels
  • Apart from savings in monthly electricity bill, there is huge savings on fuel if run on backup generator
  • The additional price paid for an inverter AC gets recovered in electricity bills within a few months
  • Environment-friendly due to the use of better refrigerants
  • Safe for household wiring due to lower power consumption
  • Suitable for large and small rooms

 Disadvantages of an Inverter AC

  • If room is not insulated, power consumption increases and so does the electricity bill
  • Efficiency decreases at noon if weather is extremely hot (over 45 degrees C)
  • Relatively expensive repair and maintenance due to the expensive service support and the components used
  • Models too powerful for the room size may run frequent short cycles to achieve the target temperature. This can result in the room getting too cold or too hot; inadequate dehumidification (that is, not drying the air enough, making the room feel less comfortable); increased power usage and running costs; and wear and tear on the system
  • Underpowered models may have to run more often at maximum output and dry the air too much
Although an air conditioner with inverter technology adjusts its capacity based on the room requirement, it is very important to install a right-sized air conditioner in a room. Make sure that you assess the room size and the AC capacity before going ahead with the purchase.

Keep Your Checklist Handy

  • Noise

Check the air conditioner’s noise levels; these can be found in the specifications. Some models have a quiet mode for the indoor unit, and sometimes the outdoor unit too. This may reduce the cooling/heating power or airflow, but will keep the air conditioner running at a very quiet level.

A noisy indoor unit may interfere with your activities, conversation, or sleep. A noisy outdoor unit can disturb you or your neighbours.

  • Capacity

The capacity of the air conditioner should be considered depending on the floor size of the room where it will be installed. A rough measure is that an area in the range of 120 ~140 sq. ft area will need a 1 ton AC, 150 ~180 sq. ft area will need 1.5 ton, and 180 ~240 sq. ft area will need 2 tons.

  • Star-rating labels

Once you have worked out what capacity you need, compare the star ratings of models of similar capacity. The more the stars (from 1 star to 5 stars), the lower the running costs and greenhouse gas emissions. Air conditioners come with star-rated energy-efficiency ratings; these have been standardized/implemented by the Bureau of Energy Efficiency (BEE), Govt of India. Therefore, any AC with more stars will consume less electricity than one with a lower star rating. Therefore, any unit with more stars will consume lesser electricity than one with a lower star rating. If the regular usage of ACs are more than 4 hrs/day, go for higher star rated (4-5) AC, else 3 star can serve your purpose. 3 star ACs are most popular as mid-range power saving gives consumers a great price advantage as compared to 5 star.

  • After-sales services

After-sales service and other add-on features like warranty will certainly be a plus for your purchase. Look for longer warranty and a service-oriented brand that has the capabilities and good network to meet the servicing need of your product.

→What is done in AC servicing?

AC condenser and evaporator coil cleaning. Dust and dirt are core enemies of your air conditioning or AC system as they cause overheating of the system. During AC service, the technician cleans the dust and debris from the condenser coil and evaporator coil and other key components of the system. Air conditioners should be inspected, cleaned, and serviced at least once a year.

→Copper Vs Aluminium coils: Since few years, ACs also come in aluminium coils (Condenser coils) where the cost is slightly lower but has much lesser life/durability. So do not compromise on the cost and always insist for copper coil ACs. They have much longer life and less leakage complaints.

→Installation & cartage: While placing order, clear terms of payment (cash or cheque/draft) installation charges if any as it is generally included in the unit cost. Also, do insist for free home delivery while placing the order.

→Slow down the running costs

Heating and cooling appliances account for about 40 per cent of the energy usage. To save money when running your air conditioner, there are several things you can do.

  • Size:Having the correct AC size is an important first step.
  • Star ratings:A model with more stars will be more efficient and use less power than a model with fewer stars.
  • Make your home as energy-efficientas possible.
  • Use economy mode(‘Eco mode’) if your air conditioner has one.
  • Set the thermostat (target temperature) to a reasonable temperatureso the system doesn’t have to work too hard and use more power than really necessary.

Keeping a Reasonable Temperature

On a hot day, say 43 degrees C, you may be tempted to put the air conditioner way down to 20 degrees C to get the room cool as quickly as possible. But if you can cope with setting the temperature at 25 degrees C, you will not only save on wear and tear on the AC’s motor, you will also save big on your energy bill. Each degree cooler, or warmer in winter, can add about 10 per cent to the running cost. The same principle applies in winter. If it’s 10 degrees C outside, try setting the indoor temperature to 18 degrees C rather than 25 degrees C. 

It also depends on the external temperature. Generally you’ll get better efficiency by aiming for a maximum temperature differential of about 8 degrees C. So, on a 35 degrees C day, set your indoor thermostat to 27 degrees C. Realistically, most people will still go for a cooler temperature. You can probably aim for a bigger differential if your house is very thermally efficient (well-insulated, double-glazed, etc.).

The central government and the Bureau of Energy Efficiency (BEE) have set new energy performance standards for room air conditioners and have mandated that the default temperature must be set at 24° Celsius (75.2° Fahrenheit). This is to promote energy efficiency and reduce power demand.

Comparison at a Glance: Inverter Air Conditioners

For our survey, we shortlisted regular-selling models of inverter air conditioners. We conducted the survey during March 2022.

 

S No. Brand Capacity, Ton Model

Condenser Coil

Material

ISEER (Wh) BEE Star Rating

Noise Level,

dB

Price in Rs. Warrantee, yrs.
1 IFB  2.0 IACI24SA3G3C Copper 3.89 3 38 45290 1+5
2 Voltas 2.0 SAC_245V_ADZ Copper 4.75 5 49 48990 1+5
3 LG 2.0 JW-Q24WUZA Copper 3.5 5 44 51314 1+10
4 Panasonic 2.0 CS/CU-XU24YKYF Copper 4.60 5 40 61990 1+10
5 IFB 2.0 IACI24SA3G3C Copper 3.89 3 38 45990 1+10
6 LG 1.5 PS-Q19YNZE Copper 4.73 5 31 44490 1+10
7 Panasonic 1.5 CS/CU-NU18XKYWA Copper 4.70 5 39 42990 1+10
8 LG 1.5 JW-Q18WUZA Copper 3.5 5 44 37179 1+10
9 Voltas 1.5 SAC_185V_JZJ Copper 4.51 5 43 38958 1+5
10 Sanyo 1.5 SI/SO-15T5SCIC Copper 4.70 5 43 31990 1+5
11 Blue star 1.5 IC318EBTU Copper 3.85 3   35480 1+10
12 Blue star 1.5 IC518DBTX Alloy 4.60 5 41 40000 1+10
13 Daikin 1.5 MTKL50TV Copper 3.7 3 35 40990 1+10
14 Hitachi 1.5 RSOG518HDEA Copper 4.55 5 34 45500 2+10
15 IFB 1.5 IACI18GB5G3C Copper 4.72 5 38 39590 1+10
16 Voltas 1.5 183VCZT/183VCZT Copper 3.70 3   34440 1+10
17 Carrier 1.5 ‎CAI18ES5R30F1 Copper 4.60 5 38 43000 1+10
18 Daikin 1.5 JTKJ50TV Copper 5.20 5   50300 1+5
19 Voltas 1.5 185V ADS Copper 4.51 5 44  39490 1+5
20 Hitachi 1.5 RSD317HBEA Copper 3.80 3 36 35000 1+5
21 Blue Star 1.5 IC518EBT Copper 4.66 5   40990 1+10
22 Voltas 1.5 185V JZJT Copper 4.51 5 46 37900 1+10
23 IFB 1.5 IACI183E5G3C Copper 4.62 5 39 37990 1+10
24 Samsung 1.5 AR18AYLYATBNNA Copper 3.71 3 45 33990 1+10
25 Godrej 1.0 GIC 12YTC3-WTA Copper 3.52 3 38 29490 1+10
26 LG 1.0 MS-Q12YNZA Copper 4.70 5 21 36990 1+10
27 Samsung 1.0 AR12AYMYATBNNA Copper 4.02 4 40 31990 1+10
28 Voltas 1.0 123V CZT3 (R32) Copper 3.80 3   34990 1+5
29 Sanyo 1.0 SI/SO-10T3SCIC Copper 3.95 3 40 25990 1+10
Note: Prices may vary. Please check latest prices at amazon.in or flipkart.com.

ISEER: ISEER stands for Indian Seasonal Energy Efficiency Ratio. It is the ratio of total annual amount of heat that the equipment can remove from the indoor air when operated for cooling in active mode to the total annual amount of energy consumed by the equipment during the same period. Higher ISEER rating means a more energy-efficient air conditioner that can help you save on your energy bills in the long run.

10 Tips for Optimum Use of ACs

  1. Do not install AC units on walls that are exposed to direct sunlight through a major part of the day during summers.
  2. Reduce air-conditioning energy use by as much as 40 per cent by shading your home as windows and walls. Plant trees to keep the day’s hottest sun off your house.
  3. Try turning your AC down at night and utilize the “sleep mode” which lowers the output on a timer.
  4. One will use 3 to 5 per cent less energy for each degree air conditioner is set above 25 degrees C to provide the most comfort at the least cost. Keeping ACs at (24–26 degrees C) can save electricity.
  5. Using ceiling fans allows you to set the temperature higher because the air movement will cool the room.
  6. Clean the air-conditioner filter every month. Clean filters enable the unit to cool down quickly and use less energy.
  7. Have your air conditioning unit checked if the Freon gas level is not correct, you will waste a lot of energy and your home will never be as cool as you want it.
  8. The gaps around the windows and doors leads to energy loss.
  9. Buy inverter or split ACs instead of window ACs. They cost more, but they are more energy efficient and consume lesser electricity.
  10. Switch to evaporative coolers from air conditioners during hot/dry summer days.

Some Energy Saving Tips for Air Conditioners

  • Use a ceiling fan to protect yourself from heat because at the cost of running one AC unit you can operate approx. 25 fans.
  • Keep the windows and doors of an air-conditioned room closed.
  • Avoid outer air inflow, because the outdoor air is hotter and holds more heat and
    moisture than the modified air and thus it raises electricity usage.
  • Eliminate blockage to air passage unit. AC works most efficiently when intake and release airflows are free from nearby restrictions.
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Mistakes to Avoid While Buying Life Insurance Policy

Mistakes to Avoid While Buying Life Insurance Policy

Mistakes to Avoid While Buying Life Insurance Policy

After the advent of Covid-19, buying life insurance has become a priority for many people. This epidemic has killed lakhs of people in the country. Financial strain has made people understand the value of life insurance. However, people often make common mistakes in buying it. Today, we will be discussing this mistakes and how to avoid them.

                                                                                                                              Subas Tiwari

It is good for people to be aware about life insurance and taking steps to protect themselves and their loved ones from any financial worry. Given below are some of the most common mistakes people make.

  1. Delay in decision making-People postpone the decision to buy life insurance for many reasons. People of 30-35 years do not understand the need to spend on this. The reason is that they do not see any threat to life. Experts say that the longer you do not buy life insurance, the longer the risk remains.
  2. Not taking term plan- In a regular term plan, the sum assured is paid to the nominee if the policyholder dies during the policy term. However, no maturity benefit is available if the policyholder survives the policy term. Most of the people do not take a term plan because of this. Most of the life insurance policies are taken by looking at the investment aspect with insurance.
  3. Hiding important information- Many people hide important information while buying a policy. These include pre-existing diseases, medical history in the family, smoking, etc. Concealment of such information or providing forged documents at the time of purchase of the policy may result in rejection of the claim.
  4. Taking a long term policy- Some insurance companies offer policies of 100 years or more. Experts say to avoid such policies. In this, a higher premium has to be paid for the increased cover.
  5. Buy short term policy-Buying a policy for too short a term is also a mistake. Buying life insurance for 45-50 years of age can be cheap. But, after the term of the policy is over, the risk comes on the family.
  6. Opting for return of premium- In such policies, if the policyholder survives the policy term, the entire premium is returned. This might sound like a good deal. But, this is nothing but bait to trap the fish. In this you pay more premium.
  7. Not reviewing life insurance- There are many such phases in life when the responsibility of the people increases. Marriage or the birth of a child in the family are such stages. At that time the need for life insurance increases.
  8. Choosing the wrong payment option- Most life insurance policies come with different payment options. On the death of the policyholder, the payment is made to the nominee based on the option chosen. It is important to choose the right payment option.
  9. Selecting limited pay mode- In the regular payment option, the premium has to be paid annually for the entire term of the policy. But, you can also choose the ‘Limited Pay’ option. In this, you have to pay only for a few years. However, experts will ask you to be wary of its benefits.
  10. Family not knowing about the policy- This is the biggest mistake made in buying life insurance. When many people buy policies, they do not inform their family members about it. They are not able to get its benefit when needed. Therefore, not only should family members should be informed about the policy, they should also be made aware of its features.

Choose Your Life Insurance Company Based on this Criteria

  • Persistency Ratio-This number reflects the number of people who renew their policies with the insurance company every year. It reflects the company’s retention capability and trustworthiness. The higher the persistency ratio, the more the customers trust the brand. When looking at persistency ratio, look for two numbers-people who have renewed their policy after one year and after five years. Ideally, both should be high.
  • Premium Rates- Today, you can compare rates for term plans on various life insurance-related websites. While a lower premium rate is always welcome, since you would be paying it for a long time, let that not be the sole criteria. The company offering the lowest premium may have a lot of exclusions. Ideally, you should choose a company whose rate is around the industry average. Also, check the amount of commission that you pay for your insurance — the lower the commission, the lower the premium.
  • Claims Settlement Ratio (CSR)– This indicates the percentage of claims settled by the company. The CSR is one of the most important numbers that you should look at before you buy insurance. The higher the CSR, the higher the number of claims settled. According to experts, in the life insurance business, any CSR less than 95% should be a red flag. Again, do not look at just the current year’s figures. Look at data for the last five years at least.
  • Percentage of Grievances Solved– This is the number of grievances solved as against the number of complaints received by the insurance company. The higher the percentage of grievances solved, the better it is. You can also check the number of pending claims at the end of each year. It shows how responsive the company is towards customer complaints. Hence, it is an important metric, especially since life insurance is a long-term product.
  • Company Size and Solvency Ratio– A life insurance contract is a long-term commitment. Therefore you want to be sure that the company you buy the cover from will be around, say, 25-30 years down the line when a claim on your policy is likely to be made. There are two ways to check this. First is the size of a company, in terms of its total assets, profitability, market share and growth. The second is the Solvency Ratio. This is an assessment of an insurance company’s financial capabilities. IRDAI (Insurance Regulatory and Development Authority of India) norms dictate that each company should maintain a solvency ratio of 150% to minimize risk and avoid bankruptcy. The higher the solvency ratio, the greater the chances of your insurance claims being honoured. When you look at a company’s solvency ratio, don’t just go by the current number. Check out for at least the last five years.

Keep These Things in Mind While Buying Life Insurance Policy

If you are looking to buy life insurance, are you doing so without having a clear financial or life goal in mind? Sure, it is vital to look at external features such as the life insurance coverage amount offered or the premiums required. But these are not the only factors to consider when buying life insurance. Take a look at what you must consider before you decide on a life insurance plan.

  1. Assess the amount of life insurance coverage needed

The first step before scouting for life insurance plans is to assess the amount of life insurance coverage you and your family members will need in your presence and absence. For this, you will need to calculate the actual monthly and annual expenses of your family. Consider:

  • Monthly day-to-day expenses (household groceries, utilities, bills)
  • Any pending loans or investments (and the money that goes towards them)
  • Any future goals and liabilities (such as a child’s higher education or marriage costs)
  • A rainy-day fund (for unforeseen events such as illness, accident, early retirement)

Add the approximate costs of all these needs and multiply it by the inflation rate 10 to 20 years from now. Factoring in the inflation rate is essential as the price of goods and services goes up every year, but the value of money stays the same. Based on this sum value, you should select the life insurance coverage amount.

  1. Understand the type of risk involved in the life insurance plan

Life insurance plans fall into two broad categories. One kind is a non-linked plan whose benefits/returns are not associated with the equity and debt market performance. Such plans give guaranteed returns and benefits to the buyer and carry very low risk. The other kind is the market-linked insurance plan. In such plans, a portion of the premiums paid by the buyer goes towards making investments in the equity, debt or hybrid market products. The remaining part goes into guaranteeing the life insurance coverage to the policyholder. These plans and the returns accrued under them depend on the performance of the invested premiums and carry a mid-level to a high-level risk. Depending on your appetite for risk (profit and loss), you can choose a suitable life insurance plan.

  1. Check the type of life insurance plan and extra riders offered with it

Life insurance plans are of various types. There are:

  • Term Insurance Plansthat offer a base death benefit to your loved ones on your demise
  • Unit-Linked Insurance Plansthat give the dual advantage of a guaranteed death benefit and income growth
  • Child education plansthat give the death benefit and the option to save and grow your income at the same time for fulfilling your child’s life needs
  • Retirement plansthat give a guaranteed death benefit and the choice to receive monthly income payouts post-retirement
  • Group insurance plansthat give life and health insurance coverage to corporate employees

Selecting the type of life insurance plan should be second on your checklist as the wrong plan can give you only inadequate financial protection. Furthermore, life insurance plans offer extra riders (additional coverage) for an added layer of protection against unforeseen events. These include:

  • A critical illness riderthat gives a fixed lump-sum amount on the diagnosis of a critical illness
  • A waiver of premium riderthat waives off the payment of premiums on the diagnosis of a critical illness
  • An accidental death benefit riderthat pays a fixed lump-sum amount in case the insured dies due to an accident
  • An accident disability riderthat waives off the payment of future premiums or gives a fixed benefit amount in case the insured develops a permanent injury due to an accident

So, before you settle on a life insurance plan, be sure to see the riders offered and the premiums charged for them.

  1. Check the insurers claim settlement ratio and record

This is a step that can be easy to miss before buying a life insurance policy. The hallmark of a reliable and exceptional insurance company is not only its claim settlement ratio but also its claim history. The claim settlement ratio is the number of insurance claims settled by an insurer during a given financial year. While it is crucial to account for that, you should also see the insurer’s performance in the industry, the consistency of their claim settlement ratio, financial strength, persistency and their turnaround time for settling claims. Buying a life insurance plan without receiving assurance that you will get the benefits promised under it on time nullifies the entire purchase.

  1. Read the life insurance plan in its entirety before buying it

Life insurance plans cover several scenarios but not every single one of them. Each life insurance plan has a specific set of exclusions (events that they do not cover) that you can find mentioned in detail in the policy wordings or plan brochures. Moreover, irrespective of the life insurance coverage and benefits the insurance company claims to provide – always check the policy wordings to see whether there are any limitations on the benefits provided. Some of the general policy exclusions include:

  • Death due to engaging in an adventure sports activity
  • Death under the influence of alcohol/drugs/narcotics
  • Death due to a terrorist attack/riot activity
  • Death due to suicide within 12 months of purchasing the life insurance policy
  • Death due to engaging in harmful activities/self-harm

Points to Remember

  • Before searching for a life insurance plan, it is essential to know what you are looking for and do the necessary research.
  • You are also advised to consult your financial advisor before investing to know if the plan is suitable or not.

Keeping these factors in mind will not only help you save your hard-earned money but also lead you to the right life insurance plan.

Home Buyers Interests Put Above All

Home Buyers Interests Put Above All

Home Buyers Interests Put Above All

In civil appeal No. 3778 of 2020 in the Supreme Court, the bench of Judges M.R. Shah and B.V. Nagarathna, in case of Amit Katyal V/S Meera Ahuja & others, allowed the withdrawal of Corporate Insolvency Resolution Process (CIRP) against a builder in an application filed by three homebuyers in view of a settlement plan agreed upon by the majority of them. In the larger interest of the homebuyers, the apex court exercised power under article 142 to permit withdrawal of the CIRP proceedings and set aside all matters pending between the parties. This order was passed on March 03, 2022.

Apex Court held the Insolvency and Bankruptcy Code (IBC), 2016 – The object and purpose of the IBC is not to kill the company and stop/stall the project, but to ensure that the business of the company runs as a going concern.

                                 Dr Prem Lata

What is Article 142 of the Constitution of India?

The Indian Judiciary and the Constitution of India believe that every citizen of India must get “complete justice”. The Constitution of India under Article 142 grants the power to the Supreme Court for passing any decree to do “complete justice”  Further, there is no specific guideline or rule provided by the law which explains when, where and under which circumstances the Apex Court can invoke the said article to do “complete justice”.

This was yet another way by which homebuyer’s interest is protected by making an arrangement to settle their disputes in a very short procedure before National Company Law Tribunal (NCLT). For years, home buyers were dependant on Consumer Commissions only for the redressal of their grievance and refund of their hard earned money invested with builders. Then came the RERA (Real Estate Regulation and Development) Act 2016, which came as an additional remedy to home buyers and made a remarkable change in the real estate sector. The amendment in section 5 of IBC 2016 made home buyers financial creditors which was another boost for consumers. With this, yet another window opened for investors in developers’ projects and now NCLT also came ahead in settling accounts between disputing parties.

The courts are creating history by adopting very positive approach towards the aggrieved consumers through number of judgments during the last decade which is a big relief to the general public at large. In the above case, the Hon’ble Supreme court has exercised its power under Art 142 of the constitution (which is done in rare cases) and given relief to both the parties, home buyers as well as the developers and brought an end to the litigation.

Details of the Case

Home buyers in the housing project, Krrish Provence Estate at Gurgaon had gone against Jasmine Buildmart Pvt and invoked Section 7 of IBC 2016 before the Adjudicating Authority/NCLT, Delhi in CP No. 1722/ND/2018 seeking initiation of CIRP against Builder, the Corporate Debtor and obtained order in their favour. NCLT/Adjudicating Authority admitted Section 7 application on 28.11.2019 and appointed the Interim Resolution Professional ‘IRP’ and declared a moratorium. The original applicants had sought refund of an amount of Rs.6, 93, 02,755/- due to an inordinate delay in the completion of the project and failure to handover possession within the stipulated time and could not complete the project even after a period of eight years. Builders knocked at Supreme Court’s door for stay on the insolvency proceeding against them as ordered by NCLT, in view of the fact that parties have settled the matter between themselves and the petitioner/home buyers be allowed to withdraw their application under section 7 of IBC 2016.

How was the Matter Resolved?

It was revealed before the Court that out of 128 home buyers of 176 units, 82 home buyers have settled the dispute with the corporate debtor including the original applicants/respondent nos. 1 to 3 who had initiated the IBC proceedings. It was reported that the original applicants/ respondent Nos.1 to 3 as well as 79 home buyers have settled the dispute with the corporate debtor in terms that the corporate debtor shall complete the entire project and hand over the possession to the home buyers who wanted possession within a period of one year from today. In view of this development and pursuant to order dated 4.2.2022, 1 to 3 original applicants before the NCLT who has initiated the proceedings under Section 7, filed an application for withdrawal of the proceedings. However, there is no provision in the Code or the CIRP Rules in relation to permissibility of withdrawal post admission of a CIRP application. In the present case, although the COC was constituted on 23.11.2020, there has been a stay of CIRP proceedings on 3.12.2020 (within ten days) and no proceedings have taken place before the COC. It is to be noted that the COC comprises 91 members, of which 70% are the members of the Flat Buyers Association who are willing for the CIRP proceedings being set aside, subject to the appellant and the Corporate Debtor – company honouring its undertaking given to this Court as per the settlement plan dated 3.2.2022.  Therefore, in the peculiar facts and circumstances of the case, where out of 128 home buyers, 82 home buyers will get the possession within a period of one year, as undertaken by the appellant and respondent No.4 – Corporate Debtor, coupled with the fact that original applicants have also settled the dispute with the appellant, we are of the opinion that this is a fit case to exercise the powers under Article 142 of the Constitution of India read with Rule 11 of the NCLT rules, 2016 and to permit the original applicants to withdraw the CIRP proceedings.

The Jasmine Buildmart Pvt. Ltd. were directed to file separate undertakings before this Court, within a period of one week, specifically stating and undertaking that:

  1. They shall complete the entire project within one year from 01.03.2022 and offer the possession to the respective home buyers.
  2. They shall complete the entire project including all the apartments, common areas, amenities, etc.
  • All demands be raised and timely paid.
  1. Company shall continue the provisions of all maintenance services.
  2. Company will make the application for obtaining Occupancy Certificate within six months, before the competent authority.

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