Person Of Sound Mind Is Bound By Their Signature Regardless Of Not Reading Of Understanding Document: Delhi State Commission

Brief Facts of the Case

The complainant deposited Rs. 50,000 with the ICICI Bank, based on the advice of the branch manager and a bank clerk, who assured him that the amount would double in five years. They provided the necessary forms, which the complainant signed in good faith, trusting them because they were from his native place. The officials reportedly wrote an incorrect mobile number on the documents, preventing the complainant from receiving information about his deposit. In 2014, when the complainant needed to withdraw the money for his wife's treatment, he was informed that his funds had been placed in a Pension Plan. Being a senior citizen already receiving a pension from the Indian Air Force, he did not want this plan. The complainant requested that his money be returned with interest but was denied from the bank. Consequently the complainant filed a complaint before the District Forum which allowed the complaint. It directed the bank to refund the complainant's Rs. 50,000 deposit with interest applicable to an FDR deposit along with Rs. 20,000 for mental agony, harassment, and litigation expenses. Aggrieved by this, the bank appealed to the State Commission.

Contentions of the bank

The bank argued that the complainant had applied for an “ICICI Prudential Life Insurance Policy” by signing the requisite form. Therefore, the complainant's allegations of being misled and misinformed were deemed baseless. The bank emphasized that the complainant, a retired gazetted officer of the Indian Air Force, entered into the contract fully aware of the plan's terms and conditions. It was argued that the complainant was given ample opportunity for a free look period but did not approach the bank for cancellation of the policy during that time. The bank requested the dismissal of the complaint.

Observations by the State Commission

The State Commission observed that the primary issue was whether there was any material illegality or irregularity in the District Forum's order. The commission highlighted that since the complainant took the policy from ICICI Prudential Life Insurance Company Ltd and paid the yearly premiums, the insurance company was deemed a necessary party. The commission noted that the complaint was flawed due to the non-joinder of this necessary party, and the complainant did not approach the insurance company to cancel the policy during the free look period. The commission further referred to the judgment of the High Court of Madras in the case of K.M. Madhavakrishnan vs. S.R. Sami and Ors., which stated that a party of full age and understanding is normally bound by their signature to a document, regardless of whether they read or understood it, unless victimized by others.

Consequently, the State Commission allowed the appeal and remanded the case back to the District Forum with instructions to decide it afresh on merits after including ICICI Prudential Life Insurance Company Ltd as a party.

Case Title: ICICI Bank Ltd. Vs. Ramashray Bhakta

Case Number: F.A. No. 343/2019