Bombay High Court
The Osmanabad Dist. Central Co-Op. Bank ... vs The State Of Maharashtra And Ors. on 4 April, 2005
Equivalent citations: AIR2006BOM8, AIR 2006 BOMBAY 8, 2003 CRI LJ 175, (1996) 1 KER LJ 192, (1998) 9 JT 390 (SC), (1999) 4 JT 646 (SC), (2003) 1 ALD(CRL) 906, (2003) 2 ANDHLT(CRI) 490
Author: P.V. Hardas
Bench: P.V. Hardas, N.H. Patil
JUDGMENT P.V. Hardas, J.
1. The petitioners in this petition have prayed for issuance of a Writ of Mandamus directing respondents No. 1 to 3 to pay the insurance claim for Kharip season 1991. The petitioners have also prayed that the random system adopted by the respondent to decide the actual yield for a particular season and crop for adjudging the liability of claim be declared as not proper.
2. Facts in brief as are necessary for the decision of this petition can be stated as under :
Petitioner No. 1 is the District Central Cooperative Bank Limited. It is Co-operative society registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960. The petitioner No. 2 is a Deputy General Manager of the petitioner No. 1. Respondent No. 1 has undertaken various schemes for the benefit of agriculturists in Osmanabad District. One of such schemes being the Comprehensive Crop Insurance Scheme, which has been floated by respondent Nos. 1 and 2 at the instance of respondent No. 3. Under the said Comprehensive Crop Insurance Scheme, respondent No. 3 insures the crops of agriculturists in Maharashtra State on the agriculturist paying premium to the primary Co-operative society. The primary Co-operative society in turn pays this premium to the petitioner No. 1, which is the Apex Bank for Osmanabad District. The petitioner No. 1 after collecting premium from the agriculturists through their respective societies, pays the same to respondent No. 3. The said Comprehensive Crop Insurance Scheme was started sometime in the year 1985-86.
3. It is also averred by the petitioners that petitioner No. 1 is providing loans to the farmers through their member society. The insurance scheme is in the interest of agriculturists and therefore, the petitioner society has locus to file the present petition which is espousing the cause of the member societies and the agriculturists who are the members of the primary societies. By a resolution passed on 12-7-1985 the Comprehensive Crop Insurance Scheme was made applicable to the entire State of Maharashtra which included Osmanabad District. A pilot crop insurance scheme had been made applicable earlier in certain selected talukas of Maharashtra since 1981. However, since the pilot scheme was not successful, the scheme was modified and accordingly a modified Comprehensive Crop Insurance Scheme was introduced on 12-7-1985. As per the Comprehensive Crop Insurance Scheme, the sum assured per farmer was 150 per cent of the crop loan disbursed to him and the insurance premium was to be charged on the basis of the sum assured. The petitioners have annexed at Exh. A the Comprehensive Crop Insurance scheme. Annexure 1 to Exh. A sets out in detail the modalities of working of the Crop insurance scheme.
4. The respondent No. 1 by resolution dated 5-3-1991 modified some of the conditions of the scheme which were existing in the earlier scheme at Exh. A. The petitioners have annexed at Exh. B the further modified scheme. It is stated by the petitioners that the major crop in Osmanabad District is grown during the kharip season. The Kharip season starts from April and ends in September of each year. The main crop grown in Osmanabad District is jowar, sunflower, Tur and groundnut. The financing for the major kharip season commences from April and lasts upto 30th September of a calendar year. Petitioners have stated that the petitioner No. 1 through its primary Co-operative society had given kharip loans to the agriculturists for the period from 1st April, 1991 and the petitioner No. 1 Bank has paid premium for the total number of members i.e. 41453 for the agricultural land admeasuring 59397 hectare. The total amount advanced by petitioner No. 1 during kharip season of April, 1991 to September, 1991 was Rs. 7, 57, 42,000.00 Ps. The petitioner No. 1 has paid premium amounting to Rs. 12,93,000.00 Ps. to respondent No. 3.
5. At para No. 11 of the petition it is stated by the petitioners that respondent No. 3 has sanctioned total claim for Jowar to the extent of Rs. 22.22 Lacs for Bhoom Taluka. However, claim for jowar is not sanctioned for in other talukas of Osmanabad District. According to the petitioners the claims sanctioned for groundnut for Osmanabad, Tuljapur, Omerga, Kallamb is Rs. 12,01,000.00 only. The claim sanctioned for Sunflower is Rs. 7,000.00 for Bhoom Taluka only. Similarly, respondent No. 3 has sanctioned claim for Tur crop amounting to Rs. 13,83,000.00 for Osmanabad, Tuljapur, Omerga, Paranda and Bhoom talukas. According to the petitioners the total claim sanctioned comes to Rs. 48, 13,000.00 whereas the total insurance claim comes to Rs. 7.57 crores.
6. It is also averred by the petitioners that the reasons for not granting the total claim in respect of a particular crop in other talukas has not been communicated in writing. The petitioners aver that the basis for granting the claim is arbitrary and against the principles of natural justice. It is averred by the petitioners that the basis for sanctioning the claim of the farmers of particular area is based on the crop cutting experiment and if the actual yield per hectare of the insured crop falls short of the specified threshold yield, the farmers would be entitled to coverage of the insurance scheme.
7. The petitioners have taken exception to the random system followed for crop cutting experiment. According to the petitioners the said experiment always gives an approximate figure and is not based on the actual information collected on the spot. So according to the petitioners the Maharashtra State Co-operative Bank by its letter dated 25-7-1986 had intimated the respondent No. 4 that a representative of the Bank should be invited to be present at the time of crop cutting experiment but no action thereon was taken by the respondents.
8. According to the petitioners for the year 1991 the Collector of Osmanabad had declared "paisewari" on 31-12-1991 for the said year. The Collector, Osmanabad had also issued paisewari certificate i.e. data certificate showing cropwise damage in the Osmanabad District for the year 1991. According to the petitioners crop failure was more than 50 per cent of the normal yield due to drought in the year 1991-92. According to the petitioners the quality of land, water sources, rainfall and other natural conditions are similar in all the talukas of Osmanabad district and therefore there was hardly any difference in the crop yield in the different falukas. The petitioners therefore suggest that granting of insurance coverage in certain talukas alone was not correct. Petitioners have also challenged the crop cutting experiment as being wholly unjust and improper and violative of Article 14 of the Constitution of India.
9. The respondents have filed their affidavit in reply. In the affidavit filed on behalf of respondent No. 2-Union of India, the reasons for introduction of the Comprehensive Crop Insurance Scheme have been set out. It is also stated that the act of the petitioners amounts to approbation and reprobation. It is also stated that this petition has been filed by the petitioners who is one of the implementing agency of the scheme and not by persons who are affected directly by the alleged methodology of Crop Cutting Experiment. It is also stated that the claims for compensation are individual rights under general law of contract, which are governed by privity and by terms of contract. Such disputes cannot be agitated in a representative capacity.
10. The respondent No. 3 has filed the reply of one Dattatraya Govind Halve, Assistant Manager of respondent No. 3. In the said reply it is stated that the Finance Minister of Government of India in his budget speech delivered before the Parliament on 28-2-1985 announced the introduction of Comprehensive Crop Insurance Scheme. The Comprehensive Crop Insurance Scheme has been formulated by the Government of India on the basis of the recommendations of the various Expert Committees and reports of Specialists on the subject. The said scheme is purely a social welfare measure and in the interest of farmers applying for agricultural loans and the scheme has been formulated with the following objectives.
(i) to provide a measure of financial support to farmers in the event of crop failure as a result of drought, flood, etc.
(ii) to restore the credit eligibility of farmers, after a crop failure, for the next crop season and
(iii) to support and stimulate production of cereals, pulses and oilseeds.
11. It is further stated that before loan advanced for the kharip season 1990-91, the loaness fulfil the prerequisite condition necessary for any loans to be covered under the crop insurance scheme is also stated that the crop insurance scheme is all in a commercial proposition and for this reason crops insurance companies by and large had not come forward underwriting crop insurance on a large scale preliminary objection is raised that this writ petition is not maintainable for the reason that the said insurance did not create any fundamental right/ legal right or statutory right in favour of the farmers, therefore stated that there is no violation of either fundamental right or legal right or statutory right of the farmers. It is also stated that the petitioner has no locus standi to file the present petition. Respondents therefore submit that the petition is dismissed on these preliminary objections. We will examine the preliminary objections first and then refer to the other submissions advanced before merits of the matter.
12. Mr. V.D. Salunke, learned Counsel appearing on behalf of the petitioners has submitted before us the question of maintainability of the petition no longer res Integra and stands concluded by the Division Bench judgment, of this Court. According to Mr. Saiunke learned Counsel appearing on behalf of the petitioner that in similar circumstances a Division Bench of this Court had held a petition at the instance of a society espousing the cause of farmers as maintainable. Mr. Salunke, learned Counsel for the petitioners has therefore placed reliance on the judgment of the Division Bench of this Court in Vividh Karyakari Seva Sahakari Society Ltd. v. Union of India and Ors. 2001 (2) Mb LJ 740. The Division Bench in response to the point of maintainability which is referred to at para No. 15 of the judgment has held such a petition to be maintainable as per the reasons which are set out in para Nos. 16 and 17 of the judgment which are reproduced below:
16. However, we do not find any substance in this particular stand taken by the Respondents. The option is given to the farmers to avail of the loans from the Cooperative credit institutes, commercial banks and regional rural banks and it becomes the duty of the banks to deduct the amount of premium from the loans so advanced and to credit the same to GIC. So, on one hand, the Banks and the Primary Co-operative Societies are working as agents for the farmery, who are being covered under the CCIS; and at the same time, they are also acting as agents for the Respondents, who have sponsored the CCIS. The amount of loan is advanced by the Banks from their funds and, therefore, the Banks are very much interested in seeing that the amounts of loans are repaid. This has two facets; one, the Bank should not suffer financial losses because of the non-repayment of the loan; and the farmers should be financially capable of taking loan for the next season and should not be deprived of loan facility for the next season on the ground that they were defaulters in repayment of the previous loan. The banking business can progress only if the loans are paid in time and are recovered in time. If this cycle is broken, then, both, the banks and the farmers, will suffer. So, the banks, the Primary Co-operative Societies and the farmers have common interest in the CCIS. If all these circumstances are taken into consideration, then, there is no doubt that the Banks and the Primary Co-operative Societies have locus standi to file and maintain the present writ petitions for the farmers, who are the ultimate beneficiaries of the CCIS, whose interests are being protected by the Banks and the Primary Co-operative Societies.
17. One more aspect in this respect has to be taken into consideration. Under the CCIS, there is no provision of any direct contract of insurance between the farmer and any of the Respondents. The entire CCIS is being implemented through the GIC and the Primary Co-operative Societies and the Banks. Naturally, in such circumstances, it is not necessary for the farmers to come forward to claim the amount of insurance. The Respondents and the Petitioner-Societies have to take care of this aspect of the matter. So, it is not at all proper on the part of the Respondents to challenge the locus standi of the Petitioners.
In view of this judgment, we therefore hold that the present petition is maintainable and overrule the preliminary objection regarding the maintainability of petition raised on behalf of respondents.
13. Respondent No. 3, in its reply, has stated that the threshold yield and actual yield data is generated through an established scientific and statistical procedure of Crop Cutting Experiments. Settlement of claim under the Comprehensive Crop Insurance Scheme has no connection whatsoever with declaration of "annewari or paisewari" Crop Cutting Experiments are of the general crop estimation surveys and the Crop Cutting Experiments are supervised by various responsible officials of State Government and National Sample Survey Organization to ensure quality of data. It is also stated that the petitioner has no role under Comprehensive Crop Insurance Scheme as regards the Crop Cutting Experiments and the role of financial institutions is to collect insurance charges from farmers and remit the same to the implementing agency. In the reply it is also denied that the farmers have sown the crops as stated in Exh. C to the petition. According to the respondents the claims under Comprehensive Crop Insurance Scheme are settled as per the formula which is reproduced below :
Shortfall in the yield (Threshold Yield-Average yield) Claim = Threshold yield x Sum insured.
According to the respondents the indemnity claims under the schemes are payable when there is a shortfall in yield. The threshold yield and the actual yield table are filed at Exh. F and these tables are based on yield data made available to the respondents by the Government of Maharashtra. According to the respondents the petitioner has received 100 per cent claims for crops other than Tur. According to the respondents the petitioners under their signature have accepted full and final claims for Kharip 1991 season where Tur claims amounting to Rs. 13,83,031.92 ps. were paid. At Exh. E, respondents have annexed the discharged vouchers signed by the officials of the petitioner Bank. According to the respondents the threshold yield is based on actual yield for the last five years of the same crop in the same area. The claims are not payable based on similar geographical area or on the petitioners own assessment.
14. The State of Maharashtra has filed the affidavit of Madhukar Keshavrao Pogulwar, Divisional Joint Director of Agriculture, Division Latur, According to para 4 of the affidavit, the Agriculture Department collected basic data for calculation of threshold yield and the average of the current year's yield is made available to General Insurance Corporation of India based on Crop Cutting Experiments. At para 4, the table of the compensation awarded to the farmers in Osmanabad district is produced. It is also reiterated that the reports and the recommendations of the Collector based on paisewari basis is not applicable and is not made any basis for awarding compensation under the scheme. At para 9 it is stated that the field workers selected a plot by random sampling method and the plot is harvested in the presence of the Village Committees. Village Committee comprises of Agriculture Extension Officer/Revenue Circle Inspector, Grarnsevak, Sarpanch and Police Paul Responsible Government Officers like Deputy Collector, Tahsildar, Naib-Tahsildar, Agriculture Development Officer. Comparing Officer, Block Development Officer etc. are each allotted two villages for supervision at the harvesting stage of the Crop Cutting Experiments. It is stated that the association of the representatives of the Bank was objected as the representative of the Bank may influence the yield record and as a result of which the respondent No. 3 had objected to the inclusion of the representative of the Bank in the Village Committee. It is stated that the guidelines for declaration of paisewari are totally different than those for crop insurance claim settlement.
15. Mr. Salunke, the learned Counsel appearing on behalf of the petitioners has urged before us that:
(i) No Crop Cutting Experiment was carried out.
(ii) No representative of the Bank was associated with the experiment and therefore the report of Crop Cutting Experiment stands vitiated.
(iii) In the absence of report, the other data, namely, declaration of "paisewari-annewari" should be relied upon for awarding and settlement of the insurance claims.
16. The respondents in their affidavits have pointedly stated that the insurance claims of the farmers were settled on the basis of the Crop Cutting Experiments. In fact, settlement of the claims is to be made on the basis of Crop Cutting Experiments and this is the only method which is contemplated under the scheme. Merely because either the report is not available or that a representative of the petitioner bank was not associated would not mean that no Crop Cutting Experiment was carried out. In any event, this is highly disputed question of fact which cannot be gone into and decided while exercising writ jurisdiction. Settlement of the claims under the Comprehensive Crop Insurance Scheme cannot be directed to be made on the basis of annewari-paisewari. The respondents have pointed out the basic difference between the Crop Cutting Experiment and the declaration of annewari and paisewari. The scheme contemplates settlement of claims only on the basis of Crop Cutting Experiments. It would be wholly impermissible for us to go behind the scheme and direct the respondents to settle the insurance claims on a procedure which is completely alien to the scheme. Respondent No. 3 has settled various claims of the farmers based on the Crop Cutting Experiments. It would be wholly impermissible for us to either question the Crop Cutting Experiments or to direct respondent No. 3 to settle the insurance claims on the premise that in 1991 there was a general drought as a result of which there was overall shortfall in the yield of various crops. To do so would be substituting our opinion to that of the Experts and completely deviating from the various provisions of the scheme. In our opinion therefore no case has been made out by the petitioners for interfering and granting the reliefs, which are prayed for in this petition. Though we have held that the petition is maintainable, according to us, on merits no case is made out for interference.
17. Accordingly, Writ Petition is dismissed. Rule stands discharged. In the circumstances however there shall be no order as to costs.