LIC Jeevan Saral: Supreme Court Asks Petitioners To Seek Recourse under Article 226
Moneylife Digital Team 15 July 2019
The Supreme Court on Monday dismissed a public interest litigation (PIL) petition by Moneylife Foundation against Jeevan Saral policy sold by Life Insurance Corp of India (LIC) on the ground of maintainability. 
 
A Bench of Chief Justice Ranjan Gogoi and Justice Deepak Gupta, said, "We are not inclined to entertain the present petition as a PIL, in which event the maintainability of the petition under Article 32 at the instance of the petitioner nos. 3 and 4 will be in serious doubts as they have an alternative remedy under Article 226 of the Constitution or to initiate proceedings before the appropriate forum. The writ petition is dismissed, leaving the petitioners with the option to avail other remedies in law. We make it clear that we have not expressed any opinion on the merits of the case."
 
Petitioner no. 3 and 4 in this case are individual policyholders, who have suffered a loss in the Jeevan Saral policies.
 
Senior advocate Arvind Datar, representing Moneylife Foundation told the bench that lakhs of LIC Jeevan Saral policyholders are not in a position to raise the issue individually and had thus joined hands with the NGO to pursue their legal battle.
 
The bench, however, did not express satisfaction on the locus standi of Moneylife Foundation.  
 
Solicitor General Tushar Mehta had appeared for Central government in this case.
 
Article 226 of the Constitution of India, gives powers to high courts to issue certain writs…
 
(1) Notwithstanding anything in Article 32, every High Court shall have powers, throughout the territories in relation to which it exercise jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose
 
(4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme Court by clause (2) of Article 32
 
The PIL, filed on behalf of thousands policyholders of Jeevan Saral, sought to have LIC and Insurance Regulatory Development Authority of India (IRDAI) to "amend to Jeevan Saral Plan 165 policy maturity to repay all the premium paid along with bank saving rate at 8% per annum to all the existing Policy holders of the Jeevan Saral Policy."
 
The petition also sought recall of LIC Jeevan Saral by IRDAI.
 
As highlighted by Moneylife, LIC's Jeevan Saral, which used to be a hot-selling insurance product for agents, until it was withdrawn, is a controversial product. In fact, Jeevan Saral was a traditional product that could make your premium (money paid) disappear! This can happen in many policies during surrender or making it ‘paid-up’, but, in the case of Jeevan Saral, it has happened even at policy maturity. 
 
A senior citizen couple got just one-third of the premiums paid over the years. 
 
The Jeevan Saral product, which has gobbled up hard-earned savings of policyholders (especially senior citizens) has also agitated LIC agents and their association. Despite innumerable letters, protests and objections, LIC has not budged so far. 
 
Moneylife Foundation sent a memorandum to IRDAI on 18 August 2018, pointing out that Jeevan Saral (with profit), a traditional policy, has caused senior citizens to lose as much as 65% to 70% loss of the money invested over 10 years. 
 
From the Memorandum, IRDAI, had highlighted four points in its letter to LIC and termed them as being of a 'serious nature'. These are:
 
1. The proposal form did not have any provision to mention the (lower) maturity sum assured; instead it had a provision only for the higher death benefit.
 
2. The maturity benefit was not printed on even the policy documents.
 
3. The agents, as well as some LIC officers were not aware of the plan in general, and the fact that customers may get lesser money than the total premium paid.
 
4. The prospective customers were not informed at the time of sale that the higher insurance coverage provided by the product would lead to poor (negative for those in the higher age group) returns. 
 
Moneylife Foundation also sent copies of the Memorandum to the finance minister as well as the insurance regulator. The financial services department in the ministry, which looks after insurance matters, on 28 September 2018, forwarded the Memorandum to IRDAI asking its chairman to take appropriate action. 
 
It has also asked IRDAI to inform the ministry about action taken (on the Memorandum) with regard to the Jeevan Saral policy and inform both, Moneylife Foundation and the ministry. 
 
Moneylife Foundation has received a one-line reply to its memorandum from the LIC chairman VK Sharma, which says, "We appreciate the concerns raised by you in your letter dated 1 October 2018. It will be dutifully looked into."
 
However, there is no further response from either LIC or the insurance regulator, which had forced Moneylife Foundation to approach the highest court seeking justice for crores of policyholders.
 
NOTE for LIC Jeevan Saral Policyholders
 
Moneylife Foundation is reviewing the SC order and intends to pursue the interests of Jeevan Saral policyholders, who have been short-changed. If you are interested in joining the battle, then please send an email to [email protected] with a subject line "Attn- Aditya/Yogesh for LIC Jeevan Saral". Kindly provide following details in the email (Please do not share these as comment below

Name of Policyholder:
Address:
PAN No:
Income: Rs
Email ID:
Occupation:

Policy Details:
Name of Policyholder:
Policy No. & Date:
Premium Paid (with number of years)
Maturity value received/offered by LIC:     

Individual story (brief):
 
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Comments
Girish Bhat
3 years ago
While Jeevan Saral Product from LIc of india came in the Market no body knows about the Mortality Funda,they have taken a canvassing camp for each agent & Do & othe superior of lic for saling this product telling that this product is having bonus at last & a "with Profit" product" .All this things telling to All agent & Do & as per LIC 's Marketing this product sold by the Agent.
there are several comments came already no use of giving more & it is mis-leading saling product by LIC
tapan sur
3 years ago
Every financial instrument other than the meager interest banks pay, are there only to cheat the buyers of those instrument in the longterm. So better would be to look for monthly returns & then save these returns for compounding benefits in the long term. Your money in others hand will surely be misused as it is not earned by them whether they are individuals or institutions. Though we have regulations which are much better than what we had 10 years back, they still need more corrections, or else keep losing your hard-earned money to financial sharks out there to pounce on you and dispossess you.
Harish
3 years ago
Hope you find a legal way out to continue the fight against LIC's exploitations.
jaisheelg g
3 years ago
I will recommend moneylife to everyone citizen of this country to fight against corruption in financial sector
Arun Kumbhar
3 years ago
Moneylife as so called Financially enlightened group under the pretext of PIL has mislead the people about LIC a brand much taller than it.
In the first place moneylife cant present insurance as saving and investment product and ask for 8% interest.
If it is really bothered it should take true efforts to make people aware of insurance needs in a nation which people are uninsured and highly underinsured..
The word premium disappeared is highly irrelevant. The money was allocated to insurance expenses.
Moneylife must have the same concern about MF equity and MLM where poor citizens have lost trillions.

Venugopal Reddy B
Replied to Arun Kumbhar comment 3 years ago
Even though I sympathise with the people feeling the pinch, I kind of agree with Arun's comment here. I didn't expect this kind of commentary from Money line. If we extend this argument little further, some one in future might file a case on Term Life insurance products also saying they absolutely gobbled up entire premium paid and gave 0 on maturity. There could be some mis selling from Agents , but I don't see a problem with LIC. Product is more like a hybrid Term Insurance with more importance to Insurance.
ROHIT SAXENA
Replied to Arun Kumbhar comment 3 years ago
It's the duty of government to provide education.
Satish Chand Bhadwal
3 years ago
I AM IN.
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