State Consumer Disputes Redressal Commission
Managing Director, Podia Lambpcs vs Rabindranath Dhalli, on 11 July, 2023
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S TA|E C ONSI]MER DISPUTE S REDRES SAL C OMMI S SION,
ODISHA" CUTTACK
(From an order dated 30.09.2011 passed by the District
consumer Disputes Redressal cornmission/Fon,n,
Malkangiri in Consumer Complaint No. 5gl2)l))
Managing Director, podia LAMPCS,
AtlP.O- Podia, Dist-Malkangiri
Appellant.
-Versus-
1) Rabindranath Dhalli, S/o Fanibhusan Dhalli,
Vill-MV-6 l, P.O-Semilibancha, Dist_Malkangiri.
2) Regional Manager, Agricultural Insurance
Company of India Limited, R"O_7, Satyanagar,
Bhubanes war-7 5 I 007, Dist-Khurda.
Respondents.
Counsel for the Appellant- Sri p.K Rout.
counsel for the Respondent No. i- Sri Bijay I(umar Mohanty.
Counsel for the Respondent No. 2- Sri S.S. Rao,
Sri B.I(. Mohantv.
PRESENT :- Sri D.K. Mohapatra, Member.
Sri fl.K.Mohanty, Member.
DATB OF HEARTNG-OI .03.2023
DATE OF ORDER- 11 .07 -2023
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ORDER
1) This appeal arises out of Judgrnent d1.30.09.2011 passed by the learned District consumer Disputes Redressal Forum, Malkangiri in Consumer Cornplaint No.59 12010.
2) The case of the complainant is that the complainant is a small and marginal farmer having Kissan Credit Card Loan Pass Book in his name and the complainant is also a mcmber of Poclia Large Sizc,cl Multi Purpose Credit Cooperative Society(hereinafter referred to as LAMpCS). The LAMPCS used to provide loans to the cultivators by insuring the loan through Agricultural Insttrance Company of India Ltd.(hercinafter refbrred to as Insurance Company). The complainant had taken a loan for the year Kharif- 2009 season from the Opp. Party-1- LAMPCS and got the same insured with the opp. Parly No.2- Insurance cornpany being sponsored by LAMpcs. Due to shortfall in the locality, the crops got damaged for which the complainant sustained heavy loss and remained in hardship and was not able to earn his liveliliood. Subsequently, the Government has declared the locality as drought affected area but the Opp. Parties have not taken any steps for waiving out the loan. Due to non-waiving out of loan dues despite several approaches to the Opp. Pafties, the complainant suffered financial hardship and harassment. Finding no other way out, the complainant filed the cornplaint petition before the learned Forum below for redressal of his )b"
grievances.
r) The opp. Party No.l filed its written version stating that the Podia Large Sized Multi Purpose Cooperative Society is registered under the Orissa Cooperative Societies Act, and as such the LAMPCS used to lencl shorl term and long term loan to the members of the society after getting finance from KCC Bank, Jeypore. Accordingly, the complainant had taken Paddy Crop Loan for Kharif-99 and insured the same by paying the reqgired insrtrance premium. 'lhc O.P No.1-LAN'IPCS has senl Lhe insurance proposals of the complainant to the Head office of K.C.C.Bank Ltd., Jeypore. l.he K'C.C. Bank, Jeypore under its letter No.5413 dated 25.0g.2009 being rhe Nodal Bank sent the insurance proposals of the complainant amongst other members of LAMPCS to Insurance company vide cheque No.215506 dt.
24.09.2009, but the Insurance Company has failed to settle the insurance clairn of the complainant along with other members. In the meantime, clue to over burden of interest, the complainant has squared off the loan account with interest out of his own resources. However, it is contencled by Opp.party No.1 that the complainant being a rnember of the Cooperative Society under the provision of OCS Act, can not be regardecl as a consumer under the provision of C.P.Aot, 1986, hence the Consumer Forum/ Commission has no jurisdiction to enterlain the complaint of the complainant.
4) The Opp. Party No.2, Insurance Company in its written versior1 $, 4 has stated that as per the order of the Government of Odisha, National Agricultural Insurance Scheme is being implemented in the State on behalf of Government of India. All the farmers including share croppers and tenant farmers growing the notified crop in notified area are eligible for coverage. Fartners availing the crop loans for the notified crop from the balks are covered on paylnent of a nominal premium of 2.5%o for food crops of the sum insured. Surn insured can be either the loan amount or the value of the 'Thrcshold Yeld' or 'value ctf 150%o of average yield' as per the option of farmers. The premiurn in respect of small and marginal farrners al.e subsiclized
b)' the Central and Statc Gov'crnment in a surr-set basis. In the event of any loss, the Insurance Cotnpany arranges compensation on the basis of "Area Approach" i.e. notified area and clisburses the amount to the concenrecl financing institution i.e. Nodal Bank, advising thern to credit the arnount to the account of the concerned farmer. It is further stated that Crop Insurance Scheme provides indemnity based on the yield date that would be ascerlainecl scientifically by crop cutting experiments. If the 'actuai average yield' of a notified crop in the notified area is less than the threshold yield fixed for that area, all insured farmers whose crops have been instrred will becarne eligible to claiffr compensation as per National Agriculture Insurance Scheme. As per the sharing risk procedure of the scheme, if the clairn arnount is more thzrn the gross premium of the crop category, the excess claim amount is to be borne by the State Government and Central Government on 50:50 ratio basis.
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5) It is furlher stated that the Insurance Cornpany sent letters on dt. 25.01.2011 and 10.02.2011 respectively to the Noclal Bank, Koraput Central Cooperative Bank, Jeypore to verify and to inforrn whether the complainant l-ras availed crop loan, for which crop and for which season, but no answer was received fi'orn the Nodal Bank, Jeypore. It is also stated that for Kharif:
2009 season, the actual yield data for Paddy crop for Poclia Block of Malkangiri district is recorded to be 1224 Kgs per hectare, whereas the threshold yicld of Podia Block of Malkangiri district is 1122 Kgs per hectare. Since the 'Actttal Velcf is higher than thc 'Thrcshold Yield', 1o slortl)ll was repor-tcd in Podia Block for Paddy crop in I{rarif-2009 season. 'I'hcretbre, r1o clairn was paid to Podia Block for paddy crop for Kharif 2OOg Season, as s1c6 it is contended by Opp. Party No.2-Insurance Cornpany that there is no clcficiency in service on their part.
6) After hearing the case, the learned Forum below passed the impugned order directing the Insurance Company to creclit the entire sur-r-r assured value in the account of the complainant along with 12% interest per annum since the date of grant of loan till the payrnent is rnade and further directed the Opp. Party No.1 to waive out and credit the entire interest levied on the complainant towards grant of Kharif Loan-2009. Leamed forum/commission below also directed the parties to pay Rs.5,000/- torvards cotnpensation for mental agony and physical harassment and Rs.2,000/-
T,, towards cost of litigation.
7) Challenging the irnpugned order of thc learned Forunr bclow. [he Appeal has been filed by the Appellant/Opp. parly No.1.
8) During the course of hearing, the counsel for the Appellant submitted that the Appellant's Society is no way responsible to indemnify the loss caused due to drought and shortfall of yield for the year under dispute. It is thc Insurance Cornpar-ry, who is cornpetent to settlc the legitimate clairn of thc instrrcd flar-mets lollor.ving the guiclelincs prescribed by t5c National Agricultural Insurance Scheme for that relevant year as wcll as the guidelines and declaration of Government regarding the loss of yielcl assessed by the 'Department of Economics and Statistics'. The respondent no.l/cornplainant had availed insurance through the Appellant from the Nodal Bank called KCC Rank Ltd. for the Kharif year 2009. Since the Govt. has not declarecl tlie notified area i.e. the 'Block area' as drought affected area, the Insuralce Company has not proceeded to indemnify/settle the alleged loss caused to the f-armers. Such clairns have been repudiated since the Respondent no'i/Complainant is not covered under the said insurance scheme. It is also stated that the deparlment of Economics and Statistics is to ascertain the affected area and basing upon the said report the claims of the aff-ectecl farmers are being settled by the Insurance Company. The complainant, r.r,ho has clairned Insurance benefit by virtue of cleclaration of drought by Revenue )[r 7 and Disaster Vlanagement l)epartment, Govt.of Odisha is not acceptable by the Insurance Cotnpany pursuant to the stipulations and instruction given under the scheme. Therefore, the Appellant has no role except depositing the premium amount before the insurance company in due time. Since the sarne has been duly complied by the Appellant in due time, the impr_rgned order directing to pay compensation as well as cost of litigation to complainant is illegal, arbitrary and not sustainable in the eyes of law, as such the sanre is liable to be set aside.
9) The learned counsel for Respondent No.2 submitted that the Natiorral Agricultural lnsurance Schcmc(NAIS) has beerr irrl.roclucecl by Governtnent of India w.e.f. 01.10. 1g9g for irnplementing crop insurance scheme all over the country. State Governments are given lreedom to notify the crops and unit areas of insurance. The scheme is a sort of social ,easure. For paddy, a nominal premium @2.5o/o on sum insured is collected frorn the l'arn-rers. The prernium for srnall and rnarginal falmers is subsiclizecl to the extent of 40Yo which is shared by Central and Stiite Government on 50:50 basis. All the farmers availing crop loans for the insured crop liom the financial institutions like Cooperative Banks, Commercial Banks ancl Societies are covered, provided the loans are disbursed as per the norrns laicl clown by RBI/NABARD. The farmers, who do not avail finance can also join the scheme at their own option. In the event of any crop loss, the Appellant $r 8 arranges indernnification strictly on the basis of scheme provisions. Whenever a claim is found payable as per the scheme and its rnodalitjes, Respondent No'2 disburses the claim amount to the concemed financial institLrtions i'e. Banks, advising them to credit the same to the loan accounts of respective farmers as per their declarations. No amount is credited dilectly to the farmers' accounts if no claim is payable in the notifiecl area.
10) It is further submitted that as per the scheme, indemnification is made on the basis of "Area Approach" and, therefore, all the farmers in the unit of insurance compensation is payable due to shorlfall in yielcl in the unit al'ea as per the yield data fumished by the "State Depar-trncnt of Econornics arnd Statistics". The State department of Econon-rics and Stntistics at the encl of the crop season also lurnishes the actual yield data. If there is shortfall in the yield, loss thus occasioned is indemnified by calcr-rlating with reference to the sum insured and the indemnity amount is disbursed to the nodal bank and the bank in turn adjusts the amount to the loan accounts of lbrmers. There is llo scope for the Respondent No.2 to know the details of individual fanncrs as the declarations, as required under the scheme are supplied by the financing bank, which does not contain the detailed particulars of individual farmcrs. The financing Bank collects the premium frorn the farmers of the concenrecl area as per the Scheme and sends a note of the same to its Nodal Bank Office, the Nodal Bank Office in turn sends a consoliclated insurance proposal/ )t-
9declaration area wise to the Respondent No.2 stating the month of loan, number of farnrers, crop season, year, District, Block of the insured along rvith the prernium. The insurance of the crop is clone area wise as per the notification made by the Government of Orissa. Governrnent of Orissa rlaintains the records regarding yield date of the notilled crops ancl selds information regarding the same to the Responclent No.2 from time to tirne. t1) It is fi-rther submitted that yeld data is provided based or-r rnininlum 16 6 number of Crop cutting experiments in notified area or insurance unit provided by Deparlment of Economics and Statistics, Govt. of Orissa for paddy crop. The crop loss is decided as per the procecl-rre laicl clown in the scheme only and not by any other method and claims as payable are disbursed to the Nodal Bank for disbursement tl-rrough the financing Bank by crediting to the respective accounts of the fanners. It was emphasizecl that the said process is automatic and no one needs to claim and no individual claitns are considered by the Appellant.
12) In the present case of the complainant, who is a small and lrarginal fartner l-raving I(issan Credit Card Loan Pass Book in his narle is a member of LAMPCS. He bor:rowed loan and has paid insurance premiurl for the season Kharif-2009. There was no short fall of crop for the concernecl year under dispute, therefore, the claim was not settled in favour of the cornplainant as per the scheme. But the learnecl Forum below strangely }-
10probed into the correctness of the scherne going beyond its juriscliction and the has passed irnpugned judgment by holding that the Respondent No.2 is liable to pay compensation to the complainant, whereas the Respondent No.2 is no way responsible to indemnify the loss caused due to drought ancl shortfall of product for the relevant year. No parl of the alleged deficiency in service can be attributed to Respondent No.2. Fufiher, the learned Forunr below without going through the rccords to cstablisl'r the con.ectness of thc data furnished by the Respondent No.2, fixed the liability on Respondent No.2 by directing to credit the sum assured value to individual account of cornplainant amongst others with interest, which is illegal, arbitrary and not sustainable under law, as such the same is liable to be set aside.
13) We have heard the counsels appearing lbr the parties, perused the documents, appeal rremo, DFR and written notes of submission filed by the parties.
14) we find that the complainant is a srnall and rnarginal farmer having I(issan Credit Card Loan Pass Book. The complainant obtained a loan of Rs.16,2601- from Appellant -LAMPCS and his crop was insured with the Itespondent No.2 on payament of insurance prenriurn of Rs.366/- for the Kharif-2009' The cornplainant clairns that there rvas shortfall in the crop, therefore, he is entitled to get compensation for such loss, as the area was affected by drought. But the Appellant declined to waive out the loan ancl the .$, 11 Respondent No.2 has also not paid compensation to him, hence he filed the complaint petition before the learned Forum below inter alia with a prayer to rvaivc out the loan attd tt-r pay compensation for flnancial loss, mental agony and harassment.
ls) The Appellant contended that LAMpcs is a large sized multipurpose cooPeralive society, rvhich is registered undcr the Orissa Cooperative Societies Act. The society get finance from the I(CC Bank, Jeypore and lends money for agricultural and non agricultural purposes to its tnembers. It is adrnitted that the complainant/respondent No.1 availecl loal during Kharif-2009 and paid insurance prernium as applicable. The Appellant/LAMPCS had sent the proposal to the head office of I(CC Bank, Jeypore and the said bank vide letter No.5413 dated 25.0g.2009 sent tho proposal to the Respondent No.2, Insurance Company but the Respopdent No'2, Insurance Company has not settled the claim of the cornplainant.
16) The counsel for the Respondent No.2 categorically contenclecl that they are only an implementing agency of the scheme prornulgated by the Govt. of India viz.National Agricultural Insurance Scheme(NAIS) adopted by Govt. of Odisha since the year lggg-2000. As per the scheme, all the falners growing notified crop in the notified area are eligible to be covered ancl t5e same is to be implemented on area approach basis and can not enterlain individual clairns.
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17) As per the modalities of the scherne, the scheme is applicable area-rvise and every year either the Block or the Gram panchayat or sucl-r other area is notified as unit. There will be required number of crop cutting experiments and an average ofpastthree years of the result of the crop cLrtting experiments will be considered as "Threshold Yields" or "Guaranteed yielcls,,.
For the current year on the crop cutting experiment, whatever yield is procured is narned as "Actual Yield" ancl in cornparison with the threshold yield/guraranteed yield, if the actual yield is less than the guaranteecl yield, the colxpensation is payable to the farmers of the entire notifiecl area ir.respective of the fact that a particular farmer has sustained loss or not. The said prilciple is adopted in respect of notified crop ancl in the instant case, the paclcly being the crop, is notilled and it is covered. The cornpensation/Loss (if any) is payable by the Government of India and the State Government in the ratio of 50:50. The Profomra Respondent is to disburse the same to the Nodal Bank r'vho in turn will deposit money in the account of the respective lapners. I1 the case of the cornplainant, Podia Block of Malkangiri District, the actual yield was recorded at 1224 Kglha, whereas the guaranteed/threshold yielcl for tlre Khari f-2009 was 1 122 Kglha. Since the guaranteed yield being less than the actual yield, it is deemed that there is no loss in the insurance unit ancl, therefore, no ciaim was payable.
18) In our considered opinion and after going through the records \r"
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and al8ulnents made by the respective parties, we flnd that the learned Forum below without going through the National Agriculture Insurance Scherne and the reporls regarding loss of yield assessed by Department of Econornics ancl Statistics has passed the irnpugned order, which is illegal, arbitrary and an out colrle o1'non application ofjudicial rnind hence not sustainable in the eves of law a,d we hold that the same is liable to be set aside.
Appeal is allowed.
Impugned orclcr is set aside.
Accordingly corlplaint peLiLion stands dismissed. No costs.
Send back the DFR.
Statutory amount, if any be refunded on proper identification.
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( tl.K.Mohanty ) (D.
Membcr Member