State Consumer Disputes Redressal Commission
Managing Director, Podia Lambpcs vs Panchuram Sahadev, on 11 July, 2023
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STA|E CONSUMER DISPUTES REDRESSAL COMMISSION,
ODISHA. CUTTACK
FIRST APPEAL NO. 758 of 2011
(From an order dated 30.09.2011 passed by the District
Consumer Disputes Redressal Cornmission/Forum,
Malkangiri in Consumer Complaint No. 4012010)
Managing Director, Podia LAMPCS,
AtlP.O- Podia, Dist-Malkangiri
Appellant.
-Versus-
1) Panchuram Sahadev, S/o Late Atal Sahadev,
Vill-MV- 6 1, P. O- S erni li banch a, Di st-Malkangiri.
2) Regional Manager, Agricultural Insurance
Company of India Limited, R.O-7, Satyanagar,
Bhubanes w ar -7 5 I 007, Dist-I(hurda.
Respondents.
Counsel for the Appellant- Sri P.K Rout.
Counsel for the Respondent No. 1- Sri Bijay Kumar Mohanty.
Counsel for the Respondent No. 2- Sri S.S. Rao,
Sri B"K. Mohanty.
PRESENT :- Sri D.K. Mohapatra, Member.
Sri I-I.K.Moha nty, Member.
DATE OF HEARTNG-01 .03.2023
DATE OF ORDER- 11 .07 -2023
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ORDER
1) This appeal arises out of Judgment dt.30.09.2011 passed by the learned District Consumer Disputes Redressal Forum, Malkangiri in Consumer Cornplaint No.40 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 cornplainant is also a member of Podia Large Sized Multi Purposc Credit Cooperative Society(hereinafter referred to as LAMPCS). The LAMPCS used to provide loans to the cultivators by insuring the loan through Agricultural Insurance Company of India Ltd.(hereinafter referred to as Ittsuratrtce Company). The complainant had taken a loan lor the year Ktraril- 2009 season from the Opp. Parly-1- LAMPCS and got the same ir-rsured with the Opp. Party No.2- Insurance Company being sponsored by LAMPCS. Due to shorlfall in the locality, the crops got damaged fbr which the cornplainant sustained heavy loss and remained in hardship and was not able to earn his livelihood. 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. Parties, the complainant suffbred financial hardship and harassment. Finding no other way out, the complainant filed the cornplaint petition before the learned Forum below for redressal of his J[, grievances.
3) The Opp. Parly No.1 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 lcnd short 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 recp.rired insurance premium. The O.P No.1-LAMPCS has sent the insurance proposals of the complainant to the Head Office of K.C.C.Bank Ltd., Jeypore. The K.C.C. Bank, Jeypore under its letter No.5413 dated 25.09.2009 being thc 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, due to over burden of interest, the complainant has squared off the loan account with interest out of his own resources. However, it is contended by Opp.Party No.1 that the complainant being a member of the Cooperative Society under the provision of OCS Act, can not be regarded as a consumer under the provision of C.P.Act, 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 version J;-
4has stated that as per the order of thc Government of Odisha, National Agricultural Insurance Scheme is being implemented in the State on behalf of Government of India. A11 the farmers including share croppers and tenant farmers growing the notified crop in notified area are eligible for coverage. Farmers availing the crop loans for the notified crop from the banks are covered on payment of a nominal premium of 2.5o/o for food crops of the sum insured. Sum insured can be either the loan amount or the value of the ''I'hreshold Yield' or 'value of 150% of average yield' as per the option of farmers. The premiurn in respect of small and marginal farmers are subsidizecl by the Central and State Government in a sun-set basis. In the event of any loss, the Insurance Company arranges compensation on the basis of "^."u Approach" i.e. notified area and disburses the amount to the concerned financing institution i.e. Nodal Bank, advising theln to credit the amount to the account of the concerned farmer. It is further stated that Crop Insurance Schcme provides indemnity based on the yield date that would be ascertained scientifically by crop cutting experiments. If the 'actual 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 insured will became eligible to claim compensation as per National Agriculture Insurance Scheme. As per the sharing risk procedure of the scheme, if the clairn amount is rnore than Lhc gross premium of the crop category, the excess claim arrount is to be borne by the State Government and Central Government on 50:50 ratio basis.
It-,-
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5) It is further stated that the Insurance Company sent letters on dt. 25.01.2011 and 10.02.2011 respectively to the Nodal Bank, Koraput Central Cooperative Bank, Jeypore to verify and to inform whether the complainant l-ras availed crop loan, for which crop and for which season, but no answer r,vas received fiom the Nodal Bank, Jeypore. It is also stated that for Kharii'- 2009 season, the actual yield data for Paddy crop for Podia Block of Malkangiri district is recorded to be 1224 Kgs per hectare, whereas the threshold yield of Podia Block of Malkangiri district is II22 Kgs per hectare. Since the 'Actual Yield' is higher than the 'Threshold Yeld', no shortfall was reporled in Podia Block for Paddy crop in Kharif-2009 season. Therefore, no clairn was paid to Podia Block for paddy crop for Kharif 2009 Season, as sucir it is contended by Opp. Parly No.2-Insurance Company that there is no de{lciency in service on their part.
6) After hearing the case, the learned lrorum below passed the impugned order directing the Insurance Company to credit the entire sum assured value in the account of the complainant along with 12o/o interest per annum since the date of grant of loan till the payment is made and further directed the Opp. Parly No" I to waive out and credit the entire interest leviecl on the complainant towards grant of Kharif Loan-2009. Leamed lbrurn/commissior-r below also directed the parties to pay Rs.5,000/- towards cotnpensation for mental agony and physical harassment and Rs.2,000/- towards cost of litigation.
7) Challenging the impugned order of the learned Forum below, the 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 shorlfall of yield for the year under dispute. It is the Insurance Compan1,, 'uvho is compctcnt to settle the legitimate claitn of the insured farmers following the guidelines prescribed by the National Agricultural Insurance Scheme for that relevant year as well as the guidelines and declaration of Governtnent regarding the loss of yield assessed by the 'Department of Economics and Statistics'. The respondent no.1/complainant l-rad availed insurance through the Appellant from the Nodal Bank called KCC Ilank Ltd. for the Kharif year 2009. Since the Govt. has not declared the notifled area i.e. the 'Block area' as drought affected area, the Insurance Company has not proceeded to indernnify/settle the alleged loss caused to the farmers. Such clairns have been repudiated since the Respondent no.1/Complainant is not covered under the said insurance scheme. It is also stated that the deparlment of Economics and Statistics is to ascerlain the affected area and basing upon the said reporl the claims of the aff-ected farmers are being settled by the Insurance Company. The cornplainant, u,hct has claimed Insurance benefit by virlue of declaration of drought by Revenue s,-
7and Disaster Management Department, Govt.of Odisha is not acceptable by the lnsurance Company pursuant to the stipulations and instrr-rction given under the scheme. Therefore, the Appellant has no role except depositing the prernium amount before the insurance company in due time. Since the samc has been duly complied by the Appellant in due time, the impugned 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 sarne is liable to be set aside.
e) The learned counsel for Respondent No.2 submitted tl-rat the National Agricrrltrrral Insurancc Scheme(NAfS) has heen introdr-rced hy Government of India w.e.f. 01.10.1999 for implementing crop insurance scheme all over the country. State Governments are given treedom to notify the crops and unit areas of insurance. The scheme is a sorl of social measure. For paddy, a nominal premium @2.5oh on sum insured is collected frorn the fbnners. The prernium for small and rnarginal farmers is subsidized to the extent of 40o/o which is shared by Central and State Government on 50:50 basis. All the farmers availing crop loans for the insured crop from the financial institutions like Cooperative Banks, Commercial Banks and Societies are covered, provided the loans are disbursed as per the norrns laid down by RBIAIABARD. 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 8 arranges indernnification strictly on the basis of scheme provisions. Whenever a claim is found payable as per the scheme and its modalities, Respondent No.2 disburses the claim amount to the concemed financial institutions i.e. Banks, advising them to credit the same to the loan accounts of respective farmers as per their declarations. No amount is credited directly to the farmers' accounts if no claim is payable in the notified area.
10) It is furlher 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 yield in the unit area as per the yield data furnished by the "State Deparlment of Economics and Statistics". The State deparlment of Economics and Statistics at the end of the crop season also furnishes the actual yield data. If there is shorlfall in the yield, loss thus occasioned is indemnified by calculating 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 l1o scope for the Respondent No.2 to know the details of individr-ral farmers as the declarations, as required under the scheme are supplied by the finar-rcing banl<, which does not contain the detailed par-ticulars of individtral farmers. The financing Bank collects the premium from the farmers of the concerned area as per the Scheme and sends a note of the salre to its Nodal Bank Office, the Nodal Bank Office in turn sends a consolidated insurance proposal/ Jr, 9 declaration area wise to the Respondent No.2 stating the rnonth of loan, number of farmers, crop season, year, District, Block of the insured along with the premium. The insurance of the crop is done area wise as per the notification tnade by the Government of Orissa. Goverument of Orissa maintains the records regarding yield date of the notified crops and sends information regarding the same to the Respondent No.2 from time to tinre.
11) It is further submitted that Yield data is provided based on rninimum 16 number of Crop cutting experiments in notified area or insurance unit provided by Department of Economics and Statistics, Govt. of Orissa for paddy crop. The crop loss is decided as per the proceclure laid clown in the schetle only and not by any other method and clain-rs as payable are disbursed to the Nodal Bank for disbursement through the financing Bank by crediting to the respective accounts of the farmers. It was emphasized that the said process is automatic and no one needs to claim and no individual clairns are considered by the Appellant.
12) In the present case of the complainant, who is a small and rlarginal farmer having Kissan Credit Card Loan Pass Book in his nalne is a member of LAMPCS. He borrowed loan and has paid insurance premium for the season Kharif-2009. There was no short fall of crop for the concerned year under dispute, therefore, the claim was not settled in favour of the complainant as per the scheme. But the learned Forum below strangely Jb-' 10 probed into the correctness of the scheme going beyond its jurisdiction and the has passed impugned judgment hy holdin g 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 car-rsed due to dror.rght and shortfall of product for the relevant year. No parl ol'the alleged dehciency in service can be attributed to Respondent No.2. Furlher, the learned Forum below without going through the records to establish the corectness of the data lurnished by the Respondent No.2, fixed the liability on Respondent No.2 hy directing to credit the sr-rm assured valuc to individual account of coruplaittattt atirutrgsl" others iviLh ilrLcrcsL, rvhich is illegal, arbiLrary ancl noL sustainable under law, as such the sarle is liable to be set aside.
13) We have heard the counsels appearing 1br the parlies, perused the docttments, appeal rrerlo, DFR and written notes of submission filed by the parlies.
14) We find that the complainant is a srnall and marginal farmer having Kissan Credit Card Loan Pass Book. The complainant obtained a loan of Rs.20,000/- from Appellant -LAMPCS and his crop was insured with the Respondent No.2 on payament of insurance premium of Rs.225l- for the Kharif-2009. The complainant claims tl-rat there was 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 j$' 11 Respondent No.2 has also not paid compensation to him, hence he filed the cornplaint petition before the learned Forum below inter alia with a prayer to rvaive out the loan and to pay compensation for financial loss, mental agony and harassment.
1s) The Appellant contended that LAMPCS is a large sized multipurpose cooperative society, which is registered under the Orissa Cooperative Societies Act. The society get finance from the KCC Bank, Jeypore and ler-rds money for agricultural and non agricultural purposes to its members. It is admitted that the complainant/respondent No.1 availed loan during Kharif:2009 and paid insurancc premium as applicable. l-he Appellant/LAMPCS had sent the proposal to the head office of I(CC Bank, Jeypore and the said bank vide letter No.5413 dated 25.09.2009 sent the proposal to the Itespondent No.2, Insurance Company but the Respondent No.2, Insurance Company has not settled the claim of the cornplainant.
16) The counsel for the Respondent No.2 categorically contencled that they are only an implementing agency of the scheme promulgated by the Govt. of India viz.National Agricultural Insurance Scheme(NAlS) adopted by Govt. of Odisha since the year 1999-2000. As per the scheme, all the lanners grorving notified crop in the notified area are eligible to be covered and the same is to be implernented on area approach basis and can not enterlain individual claims.
)h-'
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17) As per the rnodarities
of the scheme, the
scheme is appricabre
area_rvise and
every year either
the Blocl< or the
G.anr panchayat or such
other area is notified
as unit' There
wilr be required number
of crop cutting
experiments and
an average ofpast
three years of the
resurt of the crop
experiments wirl c,tting
be considered
as ,,Threshord yie.rds,,
or ,,Guaranteed yiercrs,,"
For the current year
on the crop cutting
experiment, whatever
procut'ed is narned yierd is
as "Actual Yield"
and in cornparison
with the threshorcr
yield/guaranteed
yield' if t'e actualyield
is ress than the guaranteed
colnpensation is yiercr, the
payable to the
fanrers of the entire
notifiecr area iu.espective
of the fact that a
par.,icr-rlar farnrer'has
sustained ross or
not. The said principre
is adopted in respect
of notified crop and
in the instant case,
the paddy being
the crop' is notified
a,d it is covered.
The cornpensation/Loss
payable by the (if any) is
Government of Ind
ia andthe state Government
50:50' The Profbrrna in the ratio of
Respondent is to
disburse the same
to trre Nodar Bank
who in tum will
deposit lroney in
the account of the
respective fhnners.
t^e case of the
cornplainant, podia
I,
Block of Maka,giri
District, the actual
yield was recorded
at 1224 Kg/ha,whereas
the guar.anteed/trrreshord
the I(harif-200g yierd for
was I 122 Kg/ha'
since the guaranteed
yierd being less trra,
the actual yieid'
it is deerned that there
is no 10ss in the insurance
therefore, no clainr unit and,
was payable.
1B)
In our considered
opinion and after
going through the
records
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and arguments made by the respective pafties, we find that the learned Forum below without going through the National Agriculture Insurance Scheme and the reports regarding loss of yield assessed by Deparlment of Econornics and Statistics has passed the impugned order, which is illegal, arbitrary and an out come of non application of judicial rnind hence not sustainable in the eyes of law and we hold that the same is liable to be set aside.
Appeal is allowed.
Lnpugned order is set aside.
Accordingly complaint petition stands dismissed.
No costs.
Send back the DFR.
Statutory amount, if any be refunded on proper identification.
( H.K.Mohanty )
Member Member