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A petition has been filed in the Supreme Court alleging mass cheating by Life Insurance Corporation of India (LIC) through its Jeevan Saral policy.
The plea, filed as a Public Interest Litigation petition by Moneylife Foundation, has sought an immediate recall of the Jeevan Saral Policy.
It is the petitioner’s contention that the Jeevan Saral Policy holders have been misled and cheated by LIC. The policy holders get less than half of what they paid as premium for ten or more years. The policy gives negative returns in the higher age group although the person would have purchased the policy for investment purpose, the petitioner has contended.
The policy was designed in an arbitrary manner without proper due diligence and it was sold with inaccurate, faulty and misleading proposal forms, the petitioner alleges. The policy holders were misled into investing Rs. 73,000 crore to Rs. 1 lakh crore.
Though various complaints and representations were made, LIC termed the “gross irregularity” as a “discrepancy” and has been trying to cover up the wrongdoing by writing letters to Zonal Office/ Managers to correct the discrepancies, the petition alleges.
The petition also states that the Insurance Regulatory Development Authority (IRDA) is empowered under Section 33 of the Insurance Act read with the Insurance Amendment Act, 2015 and the IRDA Act, 1999 to investigate the malpractices. However, it has remained a silent spectator of “mass cheating by LIC”, Moneylife alleges.
The unfair, arbitrary and discriminatory manner in which the Jeevan Saral Policy holders have been misled and cheated by LIC has resulted in violation of their fundamental rights and is in the teeth of Articles 14 and 21 of the Constitution, the petitioner contends.
Regarding its locus to agitate the matter as a PIL, Moneylife has stated that the policy holders are not organised and that they are not in a position to raise the dispute individually.
The petitioner has prayed that a direction be issued to IRDA to immediately recall the Jeevan Saral Policy.
A prayer has also been made to direct LIC and IRDA to amend the policy maturity to repay all the premium paid along with the bank saving rate at 8 per cent to all existing Jeevan Saral Policy holders.
Senior Advocate Arvind Datar appeared for the petitioner today before a Bench headed by Chief Justice of India Ranjan Gogoi. However, the matter was deferred at the request of the petitioner and will now be heard on July 15.