State Consumer Disputes Redressal Commission
Sbi Gen Ins Co Ltd vs Bharatsinhji R Zala on 30 July, 2022
A/21/339 A-21-438
Details DD MM YY Details DD MM YY
Date of Judgment 30 07 2022 Date of Judgment 30 07 2022
Date of filling 11 06 2021 Date of filling 09 07 2021
Duration 19 01 01 Duration 21 - 01
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD.
A/2021/339
Court No. 1
1.SBI General Ins. Co. Ltd.
1st Floor, Krishna Baug, A wing, New Maneklal Est, Above Bank of Baroda, S. N. Mehta Marg, Ghatkopar, West Mumbai-400086. ...Appellant Vs
1. Bharatsinhji Ramsinhji Zala,
2. Rajkuvarba Ramsinhji Zala
3. Dipendrasinh Ramsinhji Zala
4. Sushilaba Ramsinhji Zala All are legal heirs of Ramsinhji Zala and residing at: C/81, Madhuvan Park Society, Payalnagar Road, Saurastranagar, Naroda Road, Ahmedabad.
Address of Village: Khambhav, Ta. Limbdi, Dist. Surendranagar.
5. State Bank of India Panshina Branch, Ta. Limbdi. ...Respondents APPEARANCE:
Ms. K. S. Pathak, Ld. Adv. for the appellant Mr. S. G Mathur, Ld. advocate for the respondents no. 1 to 4. Mr. Rituraj Meena, ld. advocate for the respondent no.5.
A/2021/438 Court No. 1
1. Bharatsinhji Ramsinhji Zala,
2. Rajkuvarba Ramsinhji Zala
3. Dipendrasinh Ramsinhji Zala
4. Sushilaba Ramsinhji Zala All are legal heirs of Ramsinhji Zala and residing at: C/81, Madhuvan Park Society, Payalnagar Road, Saurastranagar, Naroda Road, Ahmedabad.
Village residence: Khambhav, Ta. Limbdi, Dist. Surendranagar. ...Appellant M. B. Desai A-21-339, A-21-438 Page 1 of 14 Vs
1. The Manager, State Bank of India Panshina Branch, Ta. Limbdi.
2. Regional Manager, State Bank of India Ashram Road, Ahmedabad.
3. State Bank of General Insurance Sukan Business Center, Swastik Char Rasta, Naranpura, Ahmedabad. ...Respondents APPEARANCE:
Ms. Sachi Mathur, Ld. Adv. for the appellant Mr. Rituraj Meena, Ld. advocate for the respondent no. 1 and 2. Ms. K. S. Pathak, Ld. advocate for the respondent no. 3.
Order: (By Hon'ble Mr. Justice V. P. Patel, President)
1. The appellant has filed appeal No. A/2021/339 under Section 41 of the Consumer Protection Act, 2019, being aggrieved by and dissatisfied with the judgment and order passed by the learned District Consumer Disputes Redressal Commission, Surendranagar dated 26.3.2021 in complaint No. 194 of 2018.
1.1 The appellants have filed appeal No. A/2021/438 under Section 41 of the Consumer Protection Act, 2019, being aggrieved by and dissatisfied with the judgment and order passed by the learned District Consumer Disputes Redressal Commission, Surendranagar dated 26.3.2021 in complaint No. 194 of 2018.
2. Both the appeals are filed against the common judgment and order dated 26.03.2021 passed by Learned District Commission Surendranagar, therefore this Commission has considered to dispose of these two appeals by common judgment. This case is pertaining crop compensation under Pradhan Mantri Fasal Bima Yojna-2017 (hereinafter referred as PMFBY). With consent of ld. advocates of both the parties, the appeal is heard and finally decided on merits at the stage of admission.M. B. Desai A-21-339, A-21-438 Page 2 of 14
2.1 The first appeal was filed by the original opponent/insurance company and second appeal filed by the original complainants.
Hereinafter the parties will be referred as per their original status.
3. Heard ld. Senior Advocate Mr. Sanjanwala with ld. advocate Ms. K. S. Pathak, for the SBI Gen. Ins. Co. Ltd. (for short Insurance Company) and Ms. Sachi Mathur, ld. advocate for the original complainants. Perused the record of the case and impugned judgment and order.
4. Facts of the case of the complainant:
The complainants are farmers and they possess agriculture land in their village. The complainants have their land in Village-Khambhlav, Ta. Limbdi, Dist. Surendranagar.
It is the case of the complainants that the Central Government has introduced PMFBY 2017 across the country. Under this scheme the farmers who get the loan from the financial institution are compulsory covered under the insurance. The complainants have been granted the loan from the Bank and the Bank has deducted the premium at the time of disbursement of the loan. The said premium was deposited with the ins. co. The description of the loan and insurance are as under.
Crop Farmers Loan AC loan Survey Premium
Area/hector/sq.mt.
No. amount No. paid
Irrigated
32429929438 2,70,000 290 15,467 1-85-55
cotton
Irrigated
32342306078 1,25,000 314 8,695 1-02-43
cotton
Irrigated
32342198084 2,00,000 1226 8,641 1-54-95
cotton
4.1 As per the scheme the lonee farmers are covered under the compulsory insurance. It is the case of the complainants that if the crop is failed, the ins. co. is liable for payment of compensation. It is further stated that complainants have made tremendous efforts for cultivating their crops. That the rain came during the season 2016 was very less, drought was declared in the Surendranagar District the crops were failed. The government has declared the District drought area vide letter dated 7.7.16. That the complainants are illiterate and they are maintaining their family with very less income.M. B. Desai A-21-339, A-21-438 Page 3 of 14
That the government has not informed the details of scheme to the farmers. That the government officers like, Talati-cum-mantri, Gram Sevak, Gram Rakshak, Mamlatdar, D.D.O, Collector have not taken care to inform about the scheme to the farmers. It is further stated that due to drought in the area more than 75% famers have committed suicide during 2016-2017-2018.
4.2 It is further stated that one of the judgment of Hon‟ble Supreme Court, wherein it is observed that the scheme is in favour of the farmers. Famers get full insurance as the insured amount is required to be equal to the scale of finance which is determine in each District, so that the farmers do not take for insurance for the value less than their cost of production. That the loanee farmers are mandatorily covered under the scheme and the premium is automatically deducted from their loan account.
4.3 Due to heavy rain during the season the crop for the year 2017 the but the ins. co. has not paid any compensation. Therefore, the complainants have issued the notice to the ins. co. to recover the amount of compensation as stated in the notice. The ins. co. has not provided the copy of policy to the complainants. The complainants have also made representation on 29.9.17 through Kranti Kishan Adhikar Manch, Ahmendabad to the Collector of Surendranagar and District Agriculture Officer, Surendranagar but Government has not paid any compensation. The complainant has filed consumer complaint before the ld. District Commission, Surendranagar for the amount of Rs. 6,56,175/- as damaged of the crop. It is also prayed Rs. 5,00,000/- for mental agony and Rs. 10,000/- for cost of the litigation.
Order under challenged:
5. The ld. District Commission has partly allowed the complaint and held that opponent no. 3 insurance company is ordered to pay Rs. 47,748/- to the complainants with 7% interest from the date of filing of the complaint i.e. 14.12.2018 within 30 days. It is further ordered to pay Rs. 2,000/- towards mental agony and Rs. 1,000/- as cost of litigation. The claim against opponent no. 1 and 2 is dismissed.
M. B. Desai A-21-339, A-21-438 Page 4 of 14Argument of the Appellant:
6. Learned senior Advocate for the ins. co. has argued that the order passed by the ld. District Commission is against the law, facts and evidence on record. That the ld. District Commission has grossly failed to consider the defense raised by the appellant. That the ld. District Commission has failed to consider that it is duty of the respondent/complainants to plead and prove their case. That the ld. District Commission has failed to appreciate the provision of scheme for calculation of compensation and calculation of Actual Yield (AY) and Threshold Yield (TY). That the crop insured was taken under the PMFBY scheme which operates on area approach basis. The ld. District Commission has erred brushing aside the ground that the Actual Yield (AY) is greater than the Threshold Yield (TY) hence, the claim is not admissible under the scheme. That the complaint is barred by non-joinder of party i.e. State Government. That the ld. District Commission has grossly erred in considering the Mid Season Adversity and held that the immediate relief to insurer farmers is to be provided. That the ld. District Commission has awarded compensation by complete ignoring the settle legal position of law and not appreciating the evidence on record. That the Threshold Yield (TY) kg/hector is fix for every insured unit and Actual Yield (AY) kg/hector is calculated by the Government taking samples from respective insured units at the time of harvesting to crop through Crop Cutting Experiments. The evidence regarding Actual Yield and Threshold Yield of the relevant crop are produced on record. That the ld. District Commission has not considered the documentary evidence, defense raised in the written statement in a proper perspective. That the ld. District Commission has arrived at conclusion which is against the provision of scheme.
6.1 That the ld. District Commission has failed to consider that insurance company is not been provided with the pivotal details by the State Government such as list of affected insured farmers with the application numbers, based on survey numbers and village as also geo-tagged photographs of damaged fields. That the complainants have not joined the State Government as a necessary party. That the M. B. Desai A-21-339, A-21-438 Page 5 of 14 ld. District Commission has failed to consider that clause 12 „mid term adversity‟ itself invokes involvement of the State Government for "joint survey" between the ins. co. and State Government.
6.2 That the ld. District Commission has failed to consider that there was no deficiency of service on the part of appellant. It is vehemently argued that the Actual Yield for the notified are of the relevant taluka was higher than the Threshold Yield for the crop in question and therefore, there is no loss to the insured farmers. He has requested to admit and allow the appeal and quash and set aside the judgment and order passed by the Ld. District Commission.
Argument of the original complainants:
7. Ld. advocate for the orig. complainants has argued that the order passed by the Ld. District Commission is legal, valid and correct in eye of law. That the Ld. District Commission has appreciated the evidence produced on record in proper perspective and come to right conclusion. It is further argued that due to heavy rain crops were failed therefore, ins. co. is bound to pay the compensation. That terms and conditions were not provided by the insurance company.
7.2 It is further argued that ld. District Commission has awarded inadequate compensation, ld. District Commission has not considered the actual loss suffered by the complainants. The amount awarded is meager, which below the annual wages of the agriculture labourers in Gujarat.
7.3 It is further argued that the ld. District Commission has materially erred in determining quantum of loss suffered by the complainants. Ld. District Commission has not considered clause 7 of the PMFBY-2017. The value of the crop and the amount of crop are the same. That the crop loan is to be sanctioned equal to the value of the crop loan. The premium was charged and deducted from the loan amount therefore, in case of failure of crop no further assessment or inquiry is required to be determine the amount of loss suffered by the farmers.
M. B. Desai A-21-339, A-21-438 Page 6 of 147.4 It is further argued that ld. District Commission has materially erred in applying method of threshold yield and actual yield. That the insurance company has not produced any evidence that after the crop failure, the concerned farmers had in reality sold any crop or any produce. That in absence of any evidence produced by the respondent entire loan amount which is the crop value should be considered as loss suffered by the farmer.
7.5 It is also argued that the ld. District Commission has wrongly exonerated the respondent no. 1 and 2 from the liability of indemnifying the loss suffered by the farmers. That the liability of the respondents should be jointly and severally. That the judgment of the ld. District Commission would frustrate the entire object of the PMFBY scheme. That the farmer have submitted the detail statement of their account and other supporting documents. She has requested to modify the order passed by the ld. District Commission and enhance the compensation as per sum insured. Ld. advocate for the respondent has relied upon certain judgments which will be discussed hereinafter. She has further requested to dismiss the appeal of the insurance company at the stage of admission.
Merits of the case:
8. The Government of Gujarat has issued notification No. G. R. No.PFB-102016-875-K-7 dated 1.4.2017 for implementation of Pradhan Mantri Fasal Bima Yojna (PMFBY) Kharif-2017 and Rabi- summar-2017-18. The said notification is provided by the insurance company at page 86-120.
9. It is not in dispute that the complainants are farmer they have received the loanee from the District Bank. As per the PMFBY scheme the lonee farmers are covered under the compulsory insurance. The amount of premium was deducted by the bank at the time of disbursement of the loan. There is no dispute about the sum insured and premium paid by the complainant.
10. Ld. advocate for the complainants has not produced complete operational guidelines on record. She has produced from page 144- 161 the some of the portion of the guidelines on which she has relied.
M. B. Desai A-21-339, A-21-438 Page 7 of 14Against this the ld. advocate for the insurance company has placed on record the entire operational guidelines-2017 from page 129-194 in Appeal No. 339/2021.
11. The appellant ins. co. is implementing agency for payment of compensation under the PMFBY scheme introduced by the Central Government for whole India. Under the scheme provision regarding which crop are covered, compulsory and voluntarily coverage, risk to be covered and exclusion, premium rates, mode of collection of premium, procedure for assessment of loss and process and approval of claim, etc. are specifically provided. It was also placed on website for general information. There is no provision of policy and terms and conditions of policy to be issued to each and every farmer therefore, the question of not providing the terms and conditions does not arise.
12. The State Government has to notify Threshold Yield (TY) as per para 9 of the resolution dated 1.4.2017 read with Clause VI para 7 and 8 of the scheme. The Government has to further issue notification declaring the Actual Yield (AY) under the Clause XI para 10 and 11 of the scheme by adopting Crop Cutting Experiments as suggested in para 10 of the resolution dated 1.4.2017 read with Clause XI para 2 to 8 of the scheme for a defined area.
13. Ld. District Commission has relied upon the Clause XII of the scheme for purpose of calculation of compensation but this clause XII is not applicable to the case on hand. It is beneficial to refer hereunder some of the relevant Provision of Clause XII which are reads as under:
XII. On Account Payment of Claims due to Mid-Season Adversity
1. It is proposed to provide immediate relief to insured farmers in case of adverse seasonal conditions during the crop season viz.
floods, prolonged dry spells, severe drought etc., wherein expected yield during the season is likely to be less than 50% of Threshold yield.
a) Eligibility Criteria:
i. All notified Insurance Units would be eligible for "ON ACCOUNT" payment only if the expected Yield of the affected crop during the season is less than 50% of threshold yield.M. B. Desai A-21-339, A-21-438 Page 8 of 14
ii. The provision is invoked by the State Government through damage notification based on the proxy Indicators. iv. Insurance company may decide the quantum of likely losses and the amount of „on-account‟ payment based on the joint survey of Insurance Company and state government officials.
vii. If adversity occurs within 15 days before the normal harvest time, this provision will not be invoked.
c) Loss assessment procedure:
i. Joint committee of State Government and the insurer for assessment of crop damage, has to be formed and notified before start of the crop season by the SLCCCI for each district.
e) Conditions:
i. Mere disbursement/ sanction of loan without receipt/ debit of premium before the notification of calamity would not make a farmer eligible for the claim.
ii. The On-account payment would be disbursed by the insurance company only after the receipt of Government share of premium subsidy.
iv. These claims would be adjusted from the end season area approach yield based claims.
13.1 Clause XII is not applicable in the present case for the following reasons.
a) As per the (ii) of the eligibility criteria: The State Government has not issued any notification of damage based on proxy indicators.
b) No joint survey by insurance company and State Government officials have been conducted as per Clause XII (a)(iv) of the scheme.
c) There is no proof of adversity occurs within 15 days before the normally harvest time under Clause XII (a)(vii) of the eligibility criteria.
d) No loss assessment procedure has been adopted by joint committee of the State Government and the insured for the assessment of the crop damage under Clause (C) (i) of Clause XII of the scheme.
14. Clause XI (10) of the scheme provides how to assess, process and approve the claim if raised by the insured farmers which reads as under:
Assessment of Claims (Wide Spread Calamities)
10. If „Actual Yield‟ (AY) per hectare of insured crop for the insurance unit (calculated on basis of requisite number of CCEs) in insured M. B. Desai A-21-339, A-21-438 Page 9 of 14 season, falls short of specified „Threshold Yield‟ (TY), all insured farmers growing that crop in the defined area are deemed to have suffered shortfall in yield of similar magnitude. PMFBY seeks to provide coverage against such contingency. „Claim‟ shall be calculated as per the following formula:
(Threshold Yield - Actual Yield)
------------------------------ X Sum Insured Threshold Yield Where, Threshold yield for a crop in a notified insurance unit is the average yield of past seven years (excluding a maximum of two calamity year(s) as notified by State Government/ UT) multiplied by applicable indemnity level for that crop.
15. The appellant insurance company has produced resolution dated 15.6.2018 issued by Agriculture, Farmers welfare and Co-operation department at page 245 to 407. By this notification the Threshold Yield (TY) for all Kharif-2017 season crops for whole Gujarat are notified. On perusing the same and considering the crop area (Taluka) following facts are emerged.
Sr. Taluka Page No. Crop Threshold Yield
1 Limbdi 305 Irrigated Cotton 1315
16. The appellant insurance company has produced letter dated 22.5.18 issued by Deputy Agriculture Collector wherein at page 218- 244, the Average Yield (AY) value of kharif-2017 season for the crop of irrigated cotton of Surendranagar District is mentioned. On perusing the same following facts are emerged.
Sr. Taluka Page No. Crop Threshold Yield
1 Limbdi 220 Irrigated Cotton 1682.60
17. We have calculated the compensation as per provision of Clause XI (10) of the scheme 2017 as under: Crop-Irrigated Cotton. In this case sum insured is Rs. 70,000/-
M. B. Desai A-21-339, A-21-438 Page 10 of 14Shortfall Yield = (Threshold Yield (TY)-Actual Yield (AY)) = (1315 - 1683) = - 368 Claims Payment = Shortfall in Yield *Sum Insured Threshold Yield (TY) = - 368 * 70,000/- ÷ 1315 = -19589.36/-
The figure comes in minus. Therefore, compensation is not required to be paid by the insurance company.
18. Ld. advocate for the appellant insurance company has relied upon the judgment delivered in Revision Petition NO. 2971 OF 2012 dated 1.2.2017 in case of Agricultural Insurance Co. of India Ltd. vs. Hem Shankar & anr. wherein, it is held as under:
"11. The documentary evidence placed on record by the petitioner in the shape of letter dated 29.01.2010 from the Government of Rajasthan, Commissionerate of Agriculture, says it clearly that based on the data form the crop-cutting experiments for Kharif 2009 season, the average yield of maize in the area of the complainants was more than the guaranteed or the threshold yield. In the guidelines to financial institutions attached with the scheme, it has been stated in clause 20 that claims under the scheme will be settled only on the basis of data received from crop-cutting experiments and not on any other basis such as annavari, declaration of drought etc. It is made out, therefore, that the orders passed by the Consumer Fora below which are based on the figures of the damage to the crop given by the Revenue Department, cannot be made the basis for determining the compensation payable to the farmers. The orders passed by the consumer fora below are, therefore, perverse in the eyes of law.
12. Similar view has been taken in a number of cases already decided by this Commission. In a case recently decided by this Commission in FA No. 264/2010, "Agriculture Insurance Co. of India vs. Farmers‟ Service Co-op. Society Limited" and allied matters, an order was made on 31.05.2016, and it was held as follows:-
"It is very clear, therefore, that the declaration made by the Revenue Department of the State Government, saying that it was a drought affected area is of no consequence, in so far as the outcome of the present case is concerned. The farmers in question have been got insured under the provisions of the National Agriculture Insurance Scheme and hence, the decision is to be taken, based on the provisions of the Scheme. The Department of Agriculture and Cooperation of the State Government have also taken this plea in their appeal filed before M. B. Desai A-21-339, A-21-438 Page 11 of 14 this Commission that the decision has to be based on the guidelines issued in the Scheme."
13. In another case decided on 06.10.2016 in RP No. 2574/2012, "Agriculture Insurance Co. of India Ltd. vs. Agriculture Service Cooperative Bank Ltd. & Ors." and allied matters as well, it has been held that decision about payment of compensation to the farmers insured under the National Agricultural Insurance Scheme has to be taken in accordance with the provisions laid down under the scheme.
19. Ld. advocate for the respondent-complainants has relied upon the judgment delivered by the Hon‟ble Gujarat High Court in Special Civil Application No. 19390/2018 in case of Vinod Bhagwan Chavda & 9 ors. vs. The Manager, SBI Gen. Ins. Co. Ltd. & 5 ors. The cited judgment is not applicable to the present case as the Hon‟ble Gujarat High Court has granted time to resolve the problems of the farmer.
19.1 She has also relied upon the judgment delivered by Bombay High Court in Public Interest Litigation No. 91/2021. This judgment is not applicable to the present case because as the judgment is related to Soyabin Corp in Kharif-2020 season where the present case is for the Kharif Season-2017.
19.2 Ld. advocate for the respondent has also relied upon the judgment reported in Madras High Court in W. P. (MD) No. 22629 of 2017. The said judgment is not applicable to the present case because there is ratio decidency in this judgment.
20. This Commission has considered the judgment of Hon‟ble Supreme Court delivered in Civil Appeal No(s). 6040-6041/2011 in case of Ajitsinh Malubhai Ghummad Etc. vs. Union of India & Ors. wherein, Hon‟ble Supreme Court held as under:
"The learned District Forum, inter alia found that the Threshold Yield (TY) i.e. assured produce is 1124 kilogram per hector 2 whereas actual produce per hector of paddy crop is 1507 kilogram. Therefore, the appellants have not suffered any loss. The complaint was thus dismissed. Such order of the District Forum was not interfered with in appeal by the State Consumer Dispute Redressal Commission and later in revision by the Commission.
The appellants could not refer to any clause in the scheme that if the yield is less due to insufficient rains, that deficiency would be covered under the scheme of insurance. Still further, the Actual Yield M. B. Desai A-21-339, A-21-438 Page 12 of 14 (AY) was more than the Threshold Yield (TY) in the area in question, still further, all the three forums have taken a concurrent view that the appellants have failed to prove any loss, which is covered by the scheme of insurance.
In view of the said fact, we do not find any error in the order passed by the Fora under the Consumer Protection Act, 1986."
21. This Commission has considered the grounds stated in memo of appeal, reasons stated in judgment and order passed by the Ld. District Commission, documentary evidence produced on record, argument advanced by the ld. advocate of both the parties, ratio laid down in above referred judgments and facts and circumstances of the case. In this case the Threshold Yield (TY) is less than the Actual Yield (AY) therefore, the complainants are not entitled for the compensation. The complainant has failed to prove any loss, which is covered under the scheme of PMFBY. In view of the above deliberations we are of the opinion that judgment and order passed by the Ld. District Commission is not legal, correct and valid in eye of law. It is further appeared that the ld. District Commission has not considered the factual aspect and provision of scheme in proper way. Therefore, the appeal is required to be allowed. Hence, following final order is passed.
ORDER I) The appeal No. 339 of 2021 is hereby allowed and Appeal No. 438 of 2021 is hereby dismissed at the admission stage.
II) The order dated 26.3.2021 passed by the Ld. District Commission, Surendranagar in Complaint No. 194/2018 is hereby quashed and set aside.
III) No order as to costs.
IV) The appellant-insurance company is directed to apply to the Account section of the State Commission with all details of Appeal No.339/2021. Xerox copy of the receipt to withdraw the amount deposited in the State Commission. The office is hereby ordered to pay deposited amount with accrued interest on proper verification to the appellant by Account payee cheque and the cheque be handed M. B. Desai A-21-339, A-21-438 Page 13 of 14 over to the learned advocate for the appellant after obtaining receipt.
V) Copy of this order to be provided free of costs to the parties. Registry is directed to send a copy this order to the District Commission Surendrangar through E-mail in PDF format for taking necessary action.
Pronounced in the open Court today on 30th July, 2022.
[Justice V. P. Patel] President M. B. Desai A-21-339, A-21-438 Page 14 of 14