2G spectrum case: SC issues notice to Unitech MD Sanjay Chandra

The CBI’s petition alleged that Chandra had approached the then CBI prosecutor AK Singh and tried to “materially interfere” with the prosecution and outcome of the trial

The Supreme Court today agreed to hear the CBI’s (Central Bureau of Investigation) plea for cancellation of bail granted to Sanjay Chandra, MD of Unitech, in 2G case for allegedly trying to “sabotage the trial” and issued a notice to him.


A Bench headed by justice GS Singhvi granted two weeks time to Chandra to file his response on the CBI’s petition alleging that he had misused the relief given to him by approaching the then CBI prosecutor AK Singh and trying to “materially interfere” with the prosecution in an “attempt to influence” the conduct and outcome of the trial.


The CBI has sought recall of the apex court’s 23 November 2011 order by which he was granted bail.


It has alleged that the conduct of Chandra was questionable during the period of bail as he was found holding discussion with the prosecutor about crucial witnesses.


“It is apparent the freedom granted to accused by means of enlargement from custody has been misused by him and that allowing him to continue unabated will be detrimental to the conduct of this trial and to the greater public interest,” CBI has said in its application.


His conversation with the prosecutor, who was removed from the case, reflected that the entire strategy of CBI in dealing with the case was compromised, the agency has said.


The probe agency said that it had registered a preliminary enquiry report which named Chandra and prosecutor Singh.


The investigation also suggested that the conversation took place between the two when the statement of crucial witness AK Srivastava, Department of Telecom’s former Deputy Director General (AS), was being recorded in the court, it has said.


The agency has also stated that the CFSL report has also confirmed that the recorded conversation was neither tampered with nor any editing was done and it was the voice of Chandra and Singh.


Personal Finance Exclusive
HDFC Life child plan sold to senior citizen erodes 96% of investment amount!

Another example of how a toxic product, manufactured by an insurer, sanctioned by the insurance regulator, bought through a crooked agent can destroy your savings

Moneylife Foundation Insurance Helpline got a mail from Satish Shah (name changed) who complained, “I was sold HDFC Life Young Star policy for sum assured of Rs2.5 lakh. After paying them Rs3.2 lakh for 6.25 years @Rs12,500 per quarter from June 2006, they have closed the policy and have offered me a total return of Rs11,678.17 as the value of the policy. The benefit illustration shows a return between Rs2.8 lakh and Rs3.2 lakh @6% and 10% respectively in their table of indicative return attached to the policy.” The customer relied on the misleading benefit illustration that conveniently ignored the steep mortality charges, which made up for 80% of the premium.


How did the insurance-cum-investment lose so much of value? Because of 100% loading of mortality charges due to medical condition of coronary artery disease. He says, “They wanted me to go through some tests. After the test results, they agreed to the policy with the stipulation that the mortality charges would be increased a bit - no clarity as to what the new charges would be and what would be the impact in clear terms.”


In short, the insurance company benefits by keeping the customer in the dark about how much part of the premium really goes towards mortality charges. Do you think Mr Shah would have purchased the policy if the agent had simply disclosed that out of Rs50,000 yearly premium, more than Rs41,000 would go toward risk cover charges? Instead, the agent presents deceptive benefit illustration, sanctioned by the regulator, Insurance Regulatory and Development Authority to seal the deal.


It is certainly an ingenious way for a life insurance company as they benefit with hefty mortality charges due to higher age of the insured as well as from the expensive Waiver of Premium (WoP) feature. After all the other charges of premium allocation and policy administration charges are deducted, what goes into investment is negligible and hence the corpus after seven years is dismal.


The WoP feature, which is what differentiates a child plan, is an expensive affair due to the insurer taking additional risk of paying the premium each year till maturity in the event of insured’s death. So, instead of accumulating wealth for retirement purposes, the senior citizen destroys own savings handing it over to insurance companies. After the fund value becomes smaller than the mortality charges that have to be recovered, the insurance company closes the policy and returns the remaining peanuts to customer. The game is over.


HDFC Life cooked up this product when Deepak Satwalekar was the managing director. Mr Satwalekar, himself a highly risk-averse person, was always a vocal defender of such toxic products, the majority of them sold aggressively through HDFC Bank at enormous commission to the bank, revenues to the insurer and huge losses to the customer.


The question that begs asking is “Why do senior citizens even think about buying an insurance plan and why is insurance company selling it to them?” Life insurance needs should be nil at retirement, else your retirement planning needs to be re-looked at. It is the lure of purported product returns along with hard sell of agents for their commissions that sets the trap. Customers seldom try to find out the risk cover charges. The mortality rates vary with insurers, they are allowed to charge without any cap. They rely on past claims’ experience as one of the factors.


Want to know the fastest way of losing your money quickly? Buy a child plan when you are a senior citizen. That’s the only way insurers make money quickly?


Moral of the story: Never mix you insurance and investment needs. You will get the worst of both.


Moneylife contacted HDFC Life regarding the case. Here is their response:- “We would like to bring to your notice that since Mr. Shah has already approached the Insurance Ombudsman, Delhi and Rajasthan with his complaint and the same is still pending before the Hon'ble Forum, hence we would not be in a position to provide any comment on the instant complaint, which is subsequent to the complaint before the Forum.”



yateen sheth

4 years ago

i being an investment cosultant myself,i understand that i would first blame the company who introduced the plan before givig a proper training to the agent to sell it and the i would blame the agent who sold the plan before telling the coustomer the truth about the product


4 years ago

I am very sure that companies like HDFC LIFE intentionally do this .I wonder if actually the "agent " even knew this was going to be the case .Surely with this coming out people have a responsibility to know what can happen if you are not careful with whom you end deal with

Krishnaswami CVR

4 years ago

please read as : insurance is a process of transferring...

Krishnaswami CVR

4 years ago

It is time we educate investors about two in one products. Insurance and mutual fund concepts do not go together, as the insurance if process of transferring risk to the insurer and mutual fund is the concept of risk borne by the investor. How these two diamatrically opposite concepts can be sold together as a spackage. It is high time to stop selling of this product.


4 years ago

HDFC Life Insurance: Sir utha ke jiyo!!! 9Jine k liye kuchh bacha ho to...!!!


4 years ago




Ajoy Saxena

In Reply to PRABHAT 4 years ago

redeem it as fast as u can


4 years ago

irda was a part of this loot.b`cos who approve this product? see a bajaj Alliaz plan new Family gain in this plan allocation charges was 70% i again ask who approve this product?
it mean IRDA & cos nexus did this job to kill indian investment industry

S K Gupta

4 years ago

These guys are thugs that the reason they keep posting great profits all the time.People In IRDA are intelligent so the don't bother what common sense says. God Bless India!!!

pannag kamat

4 years ago

According to me govt. of India or IRDA should first stop such kind of policies. Because 95% of cases it wont benefit the customer but the company and its agent. Now a days most of the people are talking about the insurence and investment, in which they suggest not to mix both. So keeping in mind the govt. of india should take some bold steps to stop these kind mis sellings by putting an end to such schemes.
One day the national pension scheme will also do the same kind of problem. Because there is no guaranty in money return. This shows the policy makers are fooling the people of india.

ramanathan dwarakanathan

4 years ago

This is beyond mis selling. I am equally surprised as to how did the customer sign up,when the scheme name was so glaring that it was not meant for a sr citizen.


4 years ago

The problematic company with huge losses has no other options to do such crooked things and cheat the people.When will people realize
and act accordingly?


4 years ago

I am a similar victim of the Canara Bank-HSBC Life Insurance Policy. the only democracy in India is the license granted by Govt to "non state actors" to loot and plunder in competition with themselves.


4 years ago

You should always buy insurance via a term plan. If you are interested in an insurance cum investment product just research Swiss annuities. They have a better history and more investor protection. Since Switzerland has been under fire from the US for tax evasion, they have reduced the account minimums.

Insurance companies are going the way of the toxic Mortgage Backed Securities scam espoused by the large New York banks in 2007. They foisted the losses on buyers of these securities and ultimately asked the Government to bail them out while executives earned massive bonuses and commissions. This Indian Insurance industry is working on the same principles. No wonder insurance product sales are trending down due to loss of reputation. Insurance in India is a scam and very soon these companies will lose more business as well as the entire sector will lose reputation and the entire industry will shaken out. It is a matter of time. Market forces are more powerful than the regulators (who are non existent in India due to their enormous penchant for corruption). I already see people who have heard horror stories from word of mouth and have resolved never to buy an insurance product outside of a term plan. Even term plans when purchased are being done very carefully by doing a proper medical checkup and filling the form correctly and reporting any material change in circumstances to the insurer. Personally I would never deploy capital in India, especially in Insurance products where the rule of law is non existant.



In Reply to Naresh 4 years ago

Before 1950 there were more than 240insurance companies in India.The wise man C D Deshmukh realized the
problem and shut down all these fraudsters. It was Congress Government. The wheels have turned fully and the so called Congress government is repeating the mistake
of bringing back n number of players again and when competition
increases in our country,malpractice also shoots up
to meet the targets.The irony of the situation is the Government does not care as they want to introduce dollars by hook or crook.


In Reply to milind 4 years ago

C D Deshmukh was John Maynard Keynes choice to lead the International Monetary Fund. He was a great man. Insurance has always been to protect yourself against risks by paying a premium. However the concept of insurance has been bastardised. Who on earth wants insurance for investment sake? If you want to earn returns, you invest, not buy insurance! For God's sake insurance is to indemnify yourself against potential losses. I think this insurance industry should be banned from creating anything remotely connected to investments. That's not their core business. Their core business is to INSURE against LOSSES!

Pradeep R Hattangadi

4 years ago

We keep receiving calls from these banks to sell insurance products to my mother who is 71 years old. When she tell them her age, the same persons immediately start peddling the same policy as investment.


4 years ago

My widow sister-in-law can be added to the list of victims that too with the same institution. She was falsely coaxed into buying a ULIP scheme, investing her last income that came after her husband's demise. She has lost half of the principal amount that she invested!

RTI Judgement Series: PIO refused to accept postal order made in the name of accounts officer

The PIO first erred in refusing to accept an IPO in the name of accounts officer and later refused to provide the information stating that investigation was not over. The CIC refused both the claims. This is the 147th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing a complaint, directed the Public Information Officer (PIO) at the Vigilance Directorate in Employees' Provident Fund Organization (EPFO) to provide the preliminary inquiry report to the appellant. The Bench also directed the Chief Vigilance Officer (CVO) to assess whether an inquiry, which should be completed one month, according to his assessment, should be allowed to drag on indefinitely.


While giving this judgement on 18 May 2011, Shailesh Gandhi, the then Central Information Commissioner said, “...after nine months, the PIO states that the investigation is not over as yet. This means that the CVO's direction to complete the investigation in one month was being completely flouted.”


Attingal (Trivandrum, Kerala) resident Suresh Kumar Mishal, on 22 September 2010, sought information copy of the vigilance report, all statements, action taken, discrepancies found based on a complaint filed by Shimna P from the PIO. Here is the information he sought under the Right to Information (RTI) Act...


A complaint had been filed by Ms Shimna P, before Rajeev Kumar, Chief Vigilance Officer (CVO) and K Ganesh Babu, Vigilance Division, RPFC-I. Santosh Kumar, assistant director of Vigilance on behalf of the CVO by a letter of 27 July 2010, directed K Gurumurthy, deputy director, ZVD (South Zone) to investigate and submit a report within a month. With regard to this, Mishal sought information on 11 points, seeking the copy of the vigilance report, all statements, action taken and discrepancies found.


The PIO said since Mishal's Indian postal order (IPO) was not in favour of Central PF Commissioner, New Delhi, the RTI application was not valid. Mishal then sent a fresh IPO as per the PIO's demand. After that the PIO, on 16 November 2010, replied saying that information in the matter can be provided only after completion of investigation or enquiry.


Citing no reply from the PIO, the appellant filed his first appeal. In his order the First Appellate Authority (FAA) said, "The case is reported to be under investigation by ZVD South Zone and any divulgence of information at this stage may impede the process of investigation."


Mishal then approached the CIC with his second appeal. He stated, the order from the CVO on 27 July 2010 had directed to submit the investigation report within one month; therefore, the investigation should have been completed by August.


During the hearing, Mr Gandhi, the then CIC, noted that Mishal was seeking  information regarding an investigation order by the CVO on 27 July 2010, based on a complaint lodged by Ms Shimna and the CVO had clearly ordered that the investigation should be completed within one month and the report should be sent.


He said, the PIO first erred in refusing to accept an IPO in the name of accounts officer and asked Mishal to send another IPO in the name of Central PF Commissioner, New Delhi. "This is contrary to the rules framed by the Central Government under the RTI Act. The rules clearly provide that applicants should send drafts or IPOs favouring accounts officer of the public authority," Mr Gandhi said.


The Bench noted that even after the appellant sent the fresh IPO, the PIO informed him that information would not be supplied to him until the investigation was over. "This is clearly violation of the law as no claim had been made (by the PIO) as to how providing the information would impede the process of investigation," it said.


Mr Gandhi said, "The CVO had ordered in July that investigation should be over in one month i.e. by end-August. However, after nine months the respondent states that the investigation is not over as yet. This means that the CVO's direction to complete the investigation in one month is being completely flouted."


While allowing the appeal, the Bench directed the PIO to provide the preliminary inquiry report and whatever information is presently available on the records to the appellant before 5 June 2011. The Bench also directed the CVO to assess whether an inquiry, which should be completed in one month, according to his assessment, should be allowed to drag on indefinitely, and send his findings to the CIC and Mishal before 20 June 2011.




Decision No. CIC/SG/A/2011/000452/12429

Appeal No. CIC/SG/A/2011/000452


Appellant                                         : Suresh Kumar Mishal,

                                                            Attingal, PO Trivandrum,  

                                                            Kerala 695101                                                                                        

Respondent                                      : Sharad Singh

                                                            Public Information Officer & RPFC-I

                                                            Vigilance Directorate,

                                                            EPFO, Ministry of Labour,

                                                            14, Bikaji Cama Place,

                                                            New Delhi 110066


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