What is the legal tangle between Nippon Mutual Fund and the IRDA over pledging of shares?

This is a recent case of pledge of insurance company shares that are currently unlisited. Nippon India Mutual Fund has taken IRDA (the insurance regulator) to SAT challenging IRDA’s order that the pledge off shares of Reliance General Insurance with the fund house was in violation of the law. IRDA has contended that this pledge amounts to ownership of insurance company shares by the MF shareholders, which is against the extant laws. Nippon Fund has, however, contended that the pledge was purely created to protect the interests of the investors and unit holders of the AMC. IRDA had issued an ex-parte order to the effect, which is issued without giving the aggrieved party a hearing. This is an important issue which may have a bearing in future cases of similar nature also.