Andhra HC (Pre-Telangana)
Andhra Pradesh Rythu Sangham vs Union Of India (Uoi) And Ors. on 18 February, 2002
Equivalent citations: 2002(2)ALD486, 2002(2)ALT696, [2003]114COMPCAS554(AP), AIR 2002 ANDHRA PRADESH 476, (2002) 2 ANDH LT 696, (2002) 2 ANDHLD 486, (2003) 114 COMCAS 554
Author: I. Venkatanarayana
Bench: Ar. Lakshmanan, I. Venkatanarayana
JUDGMENT I. Venkatanarayana, J.
1. Andhra Pradesh Rythu Sangham, which claims to be the largest Farmers' Union, has invoked Article 226 of the Constitution of India seeking for a declaration that the 'National Agricultural Insurance Scheme' is an arbitrary, capricious and unlawful Scheme and also seeks a direction from this Court to direct the first respondent-Union of India to formulate Insurance Scheme suitable for dry land farmers.
2. The factual matrix leading to the filing of this writ petition is briefly set out as hereunder : The petitioner-Organisation submits that the National Agricultural Insurance Scheme ('Scheme' for short) was devised and adopted without consultation with or even without giving notice to farmers. The farmers in the Districts of Ananthapur, Cuddapah, Kurnool, Chittoor and Mahabubnagar are constantly affected by drought during Kharif season resulting in the loss of groundnut and paddy crops. Fanners in these semiarid regions have taken groundnut as their professional crop and they cannot cultivate the land unless they receive the insurance loan which is compulsorily insurable and pay the premium ranging from 1.5% of the loan and in the case of Rabi and wheat it is 3.5% of the loan. In short, it is the submission of the petitioner that this loan is of no use for the arid and semiarid areas where there is drought almost every year. Ultimately it is submitted that the entire Scheme is unscientific, arbitrary and capricious having no nexus with the object.
3. A detailed counter-affidavit was filed by the General Insurance Corporation of India (Implementing Agency,) which is the second respondent herein. It is submitted that the second respondent is the Implementing Agency of the Scheme formulated by the Ministry of Agriculture, Government of India. The National Agricultural Insurance Scheme has been formulated based on the experience gained in implementing comprehensive Crop Insurance Scheme. The Scheme is a welfare measure where losses suffered by a few are met from the funds accumulated through small contributions made by many who are exposed to similar risks. Crop Insurance is an Insurance Scheme aiming at mitigating losses suffered by the fanners on account of uncertain risks. The Crop Insurance has to be done on the basis of 'Area Approach' and it indemnifies the insured in terms of money for loss or damage from the common pool of funds created by contributions from a large group of similarly exposed farmers. The Crop Insurance Scheme provides indemnity based on the yield data of the area. It is also stated that the 'Scheme' was questioned in various High Courts including High Court of Andhra Pradesh and High Court of Kerala. The Division Bench of this Court has confirmed and upheld the validity of the Scheme in WP No. 11882. 13115 to 13119 of 1987 dated 23-8-1988. It is further submitted that the High Court of Kerala in OP Nos. 11380 of 1985, 368, and 1768 of 1986 has upheld that validity of the Scheme.
4. The 4th respondent i.e., Director, Bureau of Statistics of Economics filed a counter-affidavit opposing the issuance of writ. It is submitted in the counter-affidavit that a crop cutting experiment has been conducted in the State as per the guidelines of the National Sample Survey Organization. To meet the requirements of the National Agricultural Insurance Scheme, crop cutting experiments are being planned, monitored and conducted on all the insured crops with the assistance of the Agricultural Department. In short, it is submitted that this respondent has not exhibited any bias in undertaking the crop cutting experiments.
5. The first respondent-Union of India filed a detailed counter-affidavit. In the counter-affidavit it is submitted that the writ petition is liable to be dismissed on the sole ground that no statutory right has been violated. The Crop Insurance Scheme has been in vogue from 1985 and the Scheme has been formulated in consultation with the State Governments and Union Territories. The Scheme is a protection against the crop losses and the losses suffered by few are met from the funds accumulated through the small contributions made by many who are exposed to similar risks. The counter in detail explains the objectives of the Scheme, parameters and other details. The counter-affidavit further states that the validity of the Scheme was upheld by the High Court of Andhra Pradesh and the High Court of Kerala.
6. Taking into consideration the rival submissions, the only question that falls for consideration is whether the petitioner-Organization is entitled to seek a declaration that the National Agricultural Insurance Scheme is arbitrary and unlawful.
7. Sri K. Balagopal, learned Counsel appearing for the petitioner submits that the Scheme is not at all beneficial to the farmers, more particularly to the farmers who raise arid and semiarid crops. It is also submitted that the Scheme was devised and adopted without consultation with or notice to the fanners. The thrust of his argument is that for the farmers in the dry belt the Insurance Scheme is not beneficial and it is not worth the premium paid. He further submits that though it is called 'Crop Insurance Scheme', in reality it is crop loan insurance.
8. Sri Deepak Bhattacharjee, learned Counsel appearing for the General Insurance Corporation of India (2nd respondent) questioned the bona fides of the petitioner-organisation and submits that it has no locus standi to file the present writ petition. It is contended by the learned Counsel that the petitioner has not disclosed about the specialized knowledge or concern in the subject-matter in the writ petition. The petitioner has not placed any material for establishing the bona fides of the petitioner in filing this writ petition. In other words, the petitioners is a busy body and meddlesome interloper. The learned Counsel reiterated his submissions made in the counter-affidavit filed by the 2nd respondent and submitted that the Scheme is a social security measure for the benefit of rural population and visits only those who take loans from the financial institution. It is limited to that class of people who are getting subsidised loans from such institutions who have to be saved against general calamities affecting the area in question. Such a Scheme meant for the benefit of rural population and for the benefit of the agriculturists cannot be said to be unreasonable or arbitrary.
9. There is no denial of the fact that the 'Scheme' is devised for the welfare of the farmers. We have gone through the provisions relating to the Scheme carefully. The concept has been succinctly stated in the counter-affidavit filed by the General Insurance Corporation of India we are in agreement with the explanation provided. A broad principle of equity has been adopted in formulating the Scheme. The agriculturists are dealt within a group basis to provide compensation on the basis of average production in a defined area. Hence it has become necessary to formulate a notified area and devise a system of establishing the actual average yield in the defined area through the crop cutting experiments, which are scientifically designed to reflect the average yield of the area with fair degree of accuracy. The averages are worked out by the method adopted by Bureau of Economics (4th respondent) and nothing is placed before us to establish that the statistics are erroneous. It is also relevant to state that the farmer is not compelled to take crop insurance. It is only for the farmers who obtain the loan the insurance is mandatory which is intended to indemnify the farmer from the possible loss of crop or calamities. It is only those who avail of the loans from financial institutions they have to insure their crops. It is, therefore, not obligatory.
10. The validity of the 'Scheme' was challenged before this Court, as well as before other High Courts. The Court in WP No. 11882 of 1987 and Batch, dated 23-8-1988 after considering the salient features of the Scheme and also the various aspects, its applicability to the farmers, delivered a detailed judgment upholding the validity of the Scheme. Following the aforementioned judgment, another learned Judge of this Court disposed of another writ petition, viz., WP No. 1351 of 1987 dated 23-4-1991 on similar lines. Even a Division Bench of this Court in Writ Appeal No. 346 of 1992 dated 5-2-1997 has confirmed the judgment of the learned single Judge of this Court upholding the Crop Insurance Scheme. This Court in WP No. 11882 of 1987 and Batch dated 23-8-1988 has held as follows:-
"There is no denial of the fact that Scheme is devised for the welfare of agriculturists, but then the Scheme does not operate in favour of each individual agriculturist. In very nature of things, it is impossible to devise a Scheme whereunder the loss suffered by any single agriculturist could be quantified and reimbursed. I have gone through the provisions relating to the Scheme carefully. The concept has been succinctly stated in Para 9 of the counter filed by the General Insurance Corporation of India and I am in full agreement with the explanation provided. A broad principle of equity has been adopted in formulating the Scheme. The agriculturists are dealt with in a group basis to provide compensation on the basis of average production in a defined area that is why it has become necessary to formulate an average yield in a defined area which are scientifically designed to reflect the average of the area with a fair degree of accuracy. It is possible that the compensation paid on the above basis may fall short of the loss suffered by individual farmer. But, then by and large, when the average worked out on the basis provided in the Scheme, it provides a reasonable compensation to the farmers as a group in the notified area. The averages are worked out by the method adopted by the Directorate of Economic and Statistics and unless it is established that the average worked out on the basis of information furnished is correct. It may be true that if a smaller defined area is notified taking into consideration the peculiar characteristics of each area, it may provide more authenticated results. While the State Government has to undertake the exercise of notifying smaller defined areas, the results eventually arrived at may accord in a larger measure with the loss suffered by an agriculturist. But then on that ground it is not possible to question the validity of the Scheme or to come to a conclusion that the Scheme is arbitrary."
The validity of the Scheme was also upheld by the High Court of Kerala by its order dated 8-9-1989 passed in OP No. 11380 of 1985 and Batch.
11. We are of the opinion that the Scheme benefits the farmer indemnifying him against the crop loss. The amount of loan will be recovered from the insurance amount thereby a double purpose is served. The poor cultivator is indemnified against loss and the financial institutions which are Co-operative Banks are indemnified against loss by the General Insurance Corporation. This is a social security measure meant for the benefit of rural population and benefits only those who taken loans from the financial institutions. In other words, it is limited to the class of people who are getting subsidized loans from such institutions who themselves have got to be saved against ruin by general calamities affecting the area in question. Such a Scheme cannot be said to be in any manner, unreasonable or arbitrary.
12. For the afore-mentioned discussions, we upheld the validity of 'Scheme' and we do not see any grounds to exercise the power of judicial review under Article 226 of the Constitution of India. The writ petition is devoid of merits and is, therefore, dismissed. No order as to costs.