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Policy Conflict

Legal advice on insurance policy conflict

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aakarshrajsrivastava4
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18 views3 pages

Policy Conflict

Legal advice on insurance policy conflict

Uploaded by

aakarshrajsrivastava4
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Dear Arun Sir, Date: 15/10/24

I wanted to take a moment to express my appreciation for our insightful discussion


during the BNI meeting this morning. It was great connecting with you, and I truly value
the opportunity to collaborate on the legal matters we addressed.
The legal advice related to this situation is provided below for your consideration:

Brief Summary of Facts as discussed:


 An agent from Kotak bank approached the client with an insurance/investment
policy offer. During the discussion, the agent represented that the policy
required a one-time payment of ₹20 lakhs.
 The client, based on this verbal representation, believed the policy involved a
single instalment and did not thoroughly review the written terms and
conditions. The client signed the policy documents in a hurry, relying on the
agent’s assurances.
 After one year, the bank deducted another ₹20 lakhs from the client’s bank
account. This came as a surprise to the client, who had assumed that no further
payments would be required.
 Upon inquiry, the client discovered that the policy was, in fact, structured for
recurring annual payments, not a one-time premium, as was initially understood
from the agent's verbal explanation.
 When the client approached the bank to cancel the policy and request a refund,
the bank declined both requests. The bank maintained that the client had signed
the policy and was therefore bound by its terms, irrespective of any
misunderstanding.
 The client asserts that he was misled by the agent’s verbal statements and did
not intend to enter into a long-term policy with recurring payments.
Key Legal Issues and Observations (Prima Facie):
1. Misrepresentation:
o The agent allegedly led the client to believe that the payment was a one-
time instalment of ₹20 lakhs. This is a form of misrepresentation if the
policy terms differ significantly from what was verbally communicated.
o There are three types of misrepresentation in law: fraudulent, negligent,
and innocent. The agent's conduct may be classified as fraudulent or
negligent as it was deliberate on his part with an intention to deceive the
client.
2. Unfair Trade Practices:
o The bank's refusal to cancel the policy or issue a refund, despite the
client's genuine misunderstanding, might also be a violation under
Consumer Protection Laws, especially if the policy was sold through
misleading information.
o The Consumer Protection Act, 2019, defines unfair practices, including
misrepresentation of the nature of services or misleading consumers
about the terms of a product.
3. Contractual Disputes:
o Although the client signed the policy, contracts signed under undue
influence, coercion, or misrepresentation may be voidable under the
Indian Contract Act, 1872 (Sections 18 and 19).
Legal Remedies Available:
1. Legal Notice:
o First and foremost, sending a legal notice to the bank demanding the
cancellation of the policy, refund of the premium, and damages for the
financial and emotional stress caused. This may prompt the bank to settle
the matter out of court.
2. Consumer Forum Complaint:
o We can file a complaint with the Consumer Forum under the Consumer
Protection Act, 2019. We may seek relief for unfair trade practices and
misrepresentation. Relief can include cancellation of the policy, refund of
the money, and possibly compensation for mental agony and legal costs.
o Since the sum involved is significant, this may fall under the State
Consumer Disputes Redressal Commission jurisdiction (for claims above
₹20 lakhs).
3. Filing a Suit for Misrepresentation:
o If the bank remains uncooperative, we can file a civil suit for
misrepresentation and seek to void the contract under the Indian
Contract Act, 1872.
4. Insurance Ombudsman:
o We can simultaneously approach the Insurance Ombudsman if the bank's
behaviour violates the regulations of the Insurance Regulatory and
Development Authority of India (IRDAI). This is a quicker, more informal
process and can provide relief if there's evidence of mis-selling.
Suggested Next Steps:
1. Gather Evidence: Collect any written communication, emails, and policy
documents to prove that the agent misrepresented the terms. If there were
witnesses to the discussions, they could help establish the client's understanding
of the terms.
2. Legal Notice: Drafting and serving of a legal notice to the bank, detailing the
misrepresentation and requesting immediate cancellation and refund.
3. Consumer Forum: If the bank fails to resolve the issue, a complaint can be filed
with the Consumer Forum for redressal.

For any further information/clarification, please feel free to contact/write


to us

Thanks, and Regards


Aakarsh Raj Srivastava
LEXACORP LEGAL LLP
Advocates, Solicitors & Corporate Consultants
http://www.lexacorplegal.com/
NEWDELHI
N-3, Lower ground floor, Malviya Nagar, New Delhi, India-110017
Phone: |+919953615219|
Email: [email protected]
RANCHI
48-C, Park Road no. 1C, Road no.1, Ashok Nagar, Ranchi-834002
Phone: |+919082340751||+917060463178|
Email: [email protected]

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