Madras High Court
M/S The New India Assurance Company Ltd vs S.Sumathy on 7 January, 2025
2025:MHC:4326
W.P.No.18695 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 07.01.2025
CORAM
THE HONOURABLE MR.JUSTICE S.SOUNTHAR
W.P.No.18695 of 2020
and W.M.P.No.23212 of 2020
M/s The New India Assurance Company Ltd.
Represented by its Regional Manager
Regional Office
'Dewa Towers'
No. 770-A Anna Salai
Chennai 600 002 ... Petitioner
vs.
1.S.Sumathy
2.Nambivayal Primary Agricultural
Cooperative Credit Society (PACCS)
Nambivayal and Post
Pudukottai Taluk
Thanjavur District – 614 615.
3.The Insurance Ombudsman
Fathima Akhtar Court
4th Floor, 453 Anna Salai
Teynampet
Chennai 600 018 ... Respondents
PRAYER: Writ Petition is filed under Article 226 of the Constitution of
India, to issue a Writ of Certiorarified Mandamus, calling for the records on
1/18
https://www.mhc.tn.gov.in/judis
W.P.No.18695 of 2020
the file of the 3rd Respondent by quashing the award dated 31.08.2020
received on 05.10.2020 in Award No.10/CHN/A/G-1/0016/2020/2021
which is contrary to the policy of contract and PMFBY scheme and
consequently hold that the 2nd Respondent is liable for the claim and other
consequences as claimed by the 1st Respondent.
For Petitioner : Mr.S.R.Sundar
For R1 : M/s.M.E.Raniselvam
For R2 : Mr.L.P.Shanmugasundaram
For R3 : M/s.M.B.Gopalan Associates
ORDER
The Writ Petition is filed challenging the award passed by the 3rd respondent directing the petitioner to pay a sum of Rs.1,28,575/- to the 1 st respondent herein towards crop damage suffered by her in respect of crops raised by her in Veppankadu Ukkadai Village during the Rabi season of the year 2018-2019, which was covered by petitioner's insurance scheme under Pradhan Mantri Fasal Bima Yojana (hereinafter referred to as 'PMFBY' for brevity).
2. The 1st respondent is a non-loanee farmer, insured her crop raised in the Village of Veppankadu Ukkadai through the 2 nd respondent, 2/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 Nambivayal Primary Agricultural Cooperative Credit Society (hereinafter referred to as 'Nambivayal PACCS' for brevity). The 1st respondent suffered crop damage and at the time of settlement of her claim, it came to her knowledge that at the time of submission of application through 2nd respondent, the name of the Village in which crop was raised was wrongly mentioned as 'Veppankadu' instead of 'Veppankadu Ukkadai'. Under the Crop Assessment Scheme, the loss to the crop in Veppankadu Village was assessed as 14.48% and whereas, the loss to the crops in 'Veppankadu Ukkadai' was assessed as 55.55%. Since the 1st respondent's Village name was wrongly entered by the 2nd respondent employees at the time of submission of the application as if, 1st respondent raised crops in Veppankadu, she was paid insurance compensation amount only at the rate of 14.48% instead of 55.55% which she is really entitled to. The 1st respondent approached the petitioner/insurer for settlement of balance amount due to her at the rate of 55.55%, on the basis of the letter issued by the Secretary of PACCS, explaining the mistake while entering the data in the portal. Since the grievance of the 1st respondent was not attended to by the petitioner, the 1st respondent was constrained to raise a complaint before the 3rd respondent.
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3. It was argued by the petitioner before the 3rd respondent that at the time of uploading the insurance details on the National Crop Insurance Portal (hereinafter referred to as 'NCIP'), the employees of 2nd respondent had committed a mistake and mentioned the Village name as 'Veppankadu' instead of 'Veppankadu Ukkadai'. Therefore, it is the case of the petitioner that it was no way responsible for the settlement of lesser claim for the 1st respondent and it was due to the wrong entry made by the 2nd respondent/bank. It is also stated by the petitioner that the obligations of the petitioner under the contract of insurance is guided by the entries made in NCIP by the 2nd respondent/bank, which is the terminal service point for the farmers and over which, the petitioner/insurance company has no control. It is also stated that the petitioner/insurance company has no wherewithals to verify the correctness of datas entered by the facilitating bank. It is also stated by the petitioner that the claim calculations had been done as per the data downloaded from NCIP, which was in turn uploaded by facilitating bank branch namely the 2nd respondent. The change with regard to the entry of Village name cannot be considered at this distinct point of time after settlement of the claim amount. It is also stated by the petitioner that under Clause 30 of revised operational guidelines of PMFBY Scheme, there is a 4/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 Grievance Redressal Mechanism in the name of District Level Grievance Redressal Committee and State Level Grievance Redressal Committee. The complaint made by the petitioner before the 3rd respondent without approaching the Grievance Redressal Mechanism under the PMFBY Scheme is not at all maintainable.
4. The contentions raised by the petitioner were repelled by 3rd respondent and an award was passed against the petitioner directing it to pay the above said amount to the 1st respondent. Aggrieved by the same, the petitioner has come before this Court.
5. The learned counsel appearing for the petitioner mainly raised the following points:-
(i) the complaint made by the petitioner against the Insurance Ombudsman was not at all maintainable as the 1st respondent failed to approach the Grievance Redressal Mechanism available under the PMFBY Scheme.
(ii) The learned counsel further submitted that the claim amount payable to the petitioner is calculated based on the details uploaded in NCIP 5/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 by the 2nd respondent. In the case on hand, there is no omission or negligence on the part of the petitioner and it paid the amount applicable to the Veppankadu Village as per the details entered in NCIP. The employees of the 2nd respondent were negligent in entering the wrong Village name as 'Veppankadu' instead of 'Veppankadu Ukkadai' and therefore, any loss caused to the 1st respondent due to negligence or error committed by the 2nd respondent shall be borne by them as per Clause XXIV of PMFBY Operational Guidelines.
6. The learned counsel appearing for the 1st respondent submitted that the 3rd respondent rightly considered the objection raised by the petitioner and came to the conclusion that the 1st respondent was entitled to the amount mentioned in the award and therefore, the impugned order requires no interference by this Court.
7. The learned counsel appearing for the 2nd respondent submitted that only in case of compulsory farmers coverage (loanee farmers), the nodal bank is liable for misreporting and in case of non-loanee farmers like 1st respondent, the 2nd respondent cannot be held liable. 6/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020
8. The narration of facts as mentioned above would indicate that there is no dispute with regard to the fact the 1st respondent raised crop in Veppankadu Ukkadai Village and name of the Village was wrongly entered at the time of uploading the details by the facilitating bank/2nd respondent. It is also not in dispute that the damage caused to the crops in respect of the Veppankadu Village was assessed at 14.48% and in respect of the crop damage in Veppankadu Ukkadai Village was assessed at 55.55%. In view of the undisputed facts, there is no doubt the 1st respondent raised crops in Veppankadu Ukkadai Village and she is entitled to crop damage compensation at the rate of 55.55%. However, the petitioner settled the compensation to the 1st respondent only at the rate of 14.48%, in view of the fact that the name of the Village was wrongly entered in NCIP Portal as 'Veppankadu' instead of 'Veppankadu Ukkadai'.
9. The main question to be decided is who is responsible for wrong entry of Village name in the Official Portal. In this regard, a reference to the letter by Secretary of the 2nd respondent addressed to the petitioner dated 05.11.2019 enclosed in Page No.84 of the typed-set of papers assumes significance. The same reads as follows:-
7/18
https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 “T.1455 ek;gptay; bjhlf;f ntshz;ik Tl;Lwt[ fld; r';fj;jpw;Fl;gl;l ntg;g';fhL cf;fil tUtha; fpuhkj;jpw;f;F gjpyhf 2018?2019 Mk; Mz;oy; gaph; fhg;gPL bra;j tptrhapfSf;F bgah; gl;oay; nghh;lypy; gjpt[ bra;a[k;nghJ ntg;g';fhL vd;W jtWjyhf gjpt[ bra;ag;gl;L cs;sJ/ vdnt ntg;g';fhL cf;fil fpuhkj;jpw;Fz;lhd gaph; fhg;gPL ,Hg;gPL rjtpfpjj;jpwF ; z;lhd bjhifia tH';fpl Mtz bra;ak[ hW md;gl[ d; nfl;Lf; bfhs;fpnwd;/”
10. The Clause XXIV of PMFBY Operational Guidelines reads as follows:-
“c) Ensure that all service (subordinate) bank branches within their jurisdictional area serve all non-loanee farmers desiring and eligible to take insurance cover under PMFBY. Such service will include opening bank account of non- loanee farmers, guiding them to fill up proposal forms, accepting premium from them and maintaining records etc.
d) Ensure that, for both loanee and non-loanee farmers separately, premium and related data is remitted to nodal bank within the prescribed time.
e) Lead bank/Nodal Banks should ensure that all the eligible crop loans/seasonal operational loans taken for notified crop(s) are fully insured and the conditions stated in the declarations submitted have been complied with. No farmer 8/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 should be deprived from insurance cover. Nodal banks therefore, should make all out efforts and pursue their branches for enrolling all eligible loanee farmers and interested non-loanee farmers under crop insurance. In case, claims have arisen during crop season then respective bank and its branches would be responsible to make payment of the admissible claims to loanee farmers who were deprived from insurance cover to their crops.
f) Concerned Bank and it’s branches should ensure submission to insurance companies within stipulated time the notified crop-wise, insurance unit-wise Declarations in prescribed format, along with consolidated Premium payable separately for both loanee farmers and non-loanee farmers.
If Concerned Bank and it’s branches keep the amount of premium collected beyond the defined timelines then they will be liable to pay interest (at prevailing rate of interest for saving account) for the delay period to the insurance company.
g) Nodal bank/Branches will also arrange for onward transmission to service (subordinate) bank branches / PACS, compensation amounts as received from insurance companies with all details, to be credited to beneficiary accounts.
h) The Nodal Banks/Administrative offices may also collect the list of individual insured farmers with requisite details like 9/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 name, fathers’ name, Bank Account number, village, categories –Small and Marginal /SC /ST /Women, insured acreage, insured crop(s), sum insured, premium collected, Government subsidy etc from concerned PACS/ Bank Branch in soft copy for further reconciliation and send the same to the concerned insurance company within 15 days after final cut-off date for submission of proposal to insurance company.
i) The insurance company shall acknowledge all the declarations submitted by the banks mentioning the details of crop, area, sum insured etc. The banks should cross check with their records and aberrations, if any, should be brought to the notice of the insurance company immediately. If no response is received from banks within 15 days, the details given in the acknowledgement shall be considered final and no changes would be accepted later on.
j) To credit the claim proceeds of PMFBY received from insurance company to respective beneficiary bank account within seven days. If Bank Branches/Nodal banks keep the claims amount beyond the defined timelines then they will be liable to pay interest (at prevailing rate of interest for saving account) for the delay period to the eligible farmers. The list of beneficiary cultivators with claim amount shall be displayed by the Branch/ Primary Agricultural 10/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 Cooperative Society (PACS) and a copy shall also be provided to the Chairman/ Sarpanch/ Pradhan of the village Panchayat. The Banks shall issue a certificate to the insurer that entire money received for settlement of claims has already been credited into the account of beneficiaries.
k) Soft copy of the beneficiary’ farmers may also be uploaded directly on Crop Insurance portal by bank branch/ PACS through Nodal Bank to concerned Insurance companies for uploading the same in their web-site.
l) To permit insurance company with access to all relevant records / ledgers at the Nodal Bank/ Branch/ PACS at all times for the purpose of implementation of the scheme.
m) Banks should ensure that cultivator may not be deprived of any benefit under the Scheme due to errors/ omissions/ commissions of the concerned branch/ PACS, and in case of such errors, the concerned institutions shall only make good all such losses.
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Under administrative mechanism, banks are designated as terminal service points for farmers. Hence, it is their duty to ensure compulsory coverage of all eligible loanee farmers and all interested non-loanee farmers. In case of any misreporting by Nodal Bank / branch / PACS in case of farmers coverage, concerned bank only will be liable for such misreporting and 11/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 its consequences.”
11. A perusal of the above provision would make it clear that it is the responsibility of Nodal Bank/2nd Respondent to ensure soft copy of the details of the individual insured farmers like name, bank account number, village, categories, insured acreage, insured crop, sum insured and premium collected and Government Subsidy etc., reach the Insurance Company, within 15 days after the final cut of date for submission of proposal. The Insurance Company shall acknowledge the details submitted by the Bank and the same shall be cross checked by the concerned Bank and any discrepancy shall be brought to the notice of the Insurance Company immediately.
12. As mentioned earlier, the letter submitted by the 2nd respondent/bank makes it clear that the wrong Village name was uploaded by the 2nd respondent in the Portal and the same resulted in lesser payment of crop damage compensation to the 1st respondent.
13. The PMFBY is a novel scheme aimed at supporting the farmers 12/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 suffering crop loss/damage due to unforeseen circumstances. Food is the essential requirement to sustain life. Right to food is one of the essential facets of right to life guaranteed under the Constitution. Sustainable production in agriculture is essential to ensure food security. It is a common knowledge that Indian Agricultural production depends on behaviour of monsoon. Both the excess rainfall and deficit rainfall during monsoon season will have adverse impact on the agricultural production. The rainfall due to monsoon is unpredictable inspite of various development in the field of meteorological science. Therefore, the poor farmers of this Country, who are counting on the behaviour of unpredictable monsoon often suffer crop damage due to either excess rainfall or deficit rainfall. A severe crop damage in one agriculture season will cripple the ability of farmers, whose financial health is fragile, to raise new crops in the forthcoming agricultural season. In order to alleviate the sufferings of the poor farmers and to empower them to overcome the loss suffered by them due to crop damage, a Novel Insurance Scheme called PMFBY was introduced with sole aim of supporting sustainable production in Agriculture Sector. In the light of the uncontroverted fact situation, it is clear that the 1st respondent raised crops in Veppankadu Ukkadai Village and whose crops damage was assessed at 13/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 55.55%. The 1st respondent is entitled to crop damage compensation at the rate of 55.55%. Since majority of the farmers in India are illiterate, unable to utilise the online services, Nodal Banks like 2nd respondent are envisaged to facilitate uploading of correct particulars by the farmers. In case of any misreporting by the Nodal Bank/Branch, the concerned Bank shall be liable for its misreporting and consequences. The 3rd respondent after taking into consideration the undisputed fact came to the conclusion that the 1 st respondent is entitled to crop damage compensation at the rate of 55.55% and directed the petitioner to pay the said amount.
14. The Writ Jurisdiction is a discretionary one guided by equitable principles. Mere availability of alternative remedy is not a ground to refuse issue of Writ. In the case on hand, even though there is a separate Redressal Mechanism under the Operating Guidelines of the Scheme, the 1st respondent approached the 3rd respondent as the petitioner herein has obligation under the contract of insurance.
15. In the light of the undisputed fact with regard to the entitlement 14/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 of the 1st respondent, the 3rd respondent also entertained the complaint and passed an award in favour of the 1st respondent. In the facts and circumstances of the case, this Court feels justice has been done by impugned award of 3rd respondent and therefore, the award passed by the 3rd respondent need not be interfered with except to the following extent.
16. In view of the discussion made earlier, the impugned award by the 3rd respondent dated 31.08.2020 is affirmed with a modification that the petitioner is entitled to move the District Level Grievance Redressal Committee/State Level Grievance Redressal Committee for recovery of the amount paid by it to the 1st respondent from the 2nd respondent whose default/omission in uploading Village name resulted in denial of just compensation to the 1st respondent.
17. Therefore, the petitioner is directed to pay a sum of Rs.1,28,575/- to the 1st respondent within a period of 30 days from the date of receipt of copy of this order, together with interest as ordered by the 3rd respondent in the impugned award. On payment of the amount, the petitioner is entitled to move the District Level Grievance Redressal Committee/State Level 15/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 Grievance Redressal Committee for recovery of the amount from the 2nd respondent in view of the Clause XXIV of Operational Guidelines issued under the scheme, which fastened liability on the concerned bank in case of misreporting.
18. With these directions, the Writ Petition stands disposed of. No costs. Consequently, the connected writ miscellaneous petition is closed.
07.01.2025 Index : Yes Speaking order:Yes Neutral Citation:Yes dm 16/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 To
1.Nambivayal Primary Agricultural Cooperative Credit Society (PACCS) Nambivayal and Post Pudukottai Taluk Thanjavur District – 614 615.
2.The Insurance Ombudsman Fathima Akhtar Court 4th Floor, 453 Anna Salai Teynampet Chennai 600 018 17/18 https://www.mhc.tn.gov.in/judis W.P.No.18695 of 2020 S.SOUNTHAR, J.
dm W.P.No.18695 of 2020 07.01.2025 18/18 https://www.mhc.tn.gov.in/judis