Moneylife Foundation, a Mumbai-based charity, in the past few years has received several complaints from policy holders, especially from senior citizens. "This scam is nearly or probably more than Rs 1 lakh crore. There are a large number of complaints against this policy. This prompted us to file a Public Interest Litigation in the top court. It is a clear case of cheating by LIC", said Yogesh Sapkale, a senior official in the management of Moneylife Foundation, who sought return of the premium of policy-holders with 8% interest.
After hearing the foundation's counsel, a bench headed by Chief Justice Ranjan Gogoi scheduled the matter on July 15 for a detailed hearing.
Senior Advocate Arvind Datar appeared for the foundation. The petitioner alleges that policy holders have been cheated in the garb of huge returns on the policy. The policy was arbitrarily designed, therefore, there was no emphasis on the due diligence aspect associated and gullible customers were misled through proposal forms, which were not correct. After several allegations, the LIC recalled the policy in 2014, but the Insurance Regulatory and Development Authority of India (IRDAI) and the Finance Ministry are yet to recall it, as the policy-holders have been running from pillar to post for redress, contended the petition.
According to the foundation, the policy has gobbled up the hard-earned savings of crores of policy holders, and it also left the LIC agents and their association infuriated. There have been many protests and complaints against the LIC, but it has not yet decided about returning the premium of the policy holders. Although, a few customers moved the consumer courts and got favorable orders, but this whole process of litigation is extremely time-consuming, said an official in the foundation.
As a consequence of the the policy, senior citizens received negative returns on their investment. The foundation's officer cited an example a senior citizen who invested nearly Rs 10 lakh in ten years at the end of the tenure of the policy received merely Rs 3 lakh.
The petition alleges several complaints and representations have been made to the LIC highlighting the gross irregularity in their system, but it has not acted.
"The 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", added Sapkale, clarifying it locus on the matter, as policy-holders are not organized under a body.
(Sumit saxena can be contacted at sumit.s@.in)
( With inputs from IANS )