State Consumer Disputes Redressal Commission
Managing Director, Podia Lamps, vs Biswajit Malick on 11 July, 2023
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STA|E, C ONSUMER DISPUTE S REDRES SAL COMMI S SI ON,
ODISHA. CUTTACK
FIRST APPEAL NO. 749 of 2011
(Frorn an order dated 30.09.2011 passed by the District
Consumer Disputes Redressal Cornmission/Fortim,
Malkangiri in Consumer Complaint No. 3ll20l0)
Managing Director, Podia LAMPCS,
AtlP.O- Podia, Dist-Malkangiri
Appellant.
-Versus-
1) Biswajit Malick. S/o Biiava Krishna Malick.
Vill-MV-6 1, P.O-Semilibancha, Dist-Malkangiri.
2) Regional Manager, Agricultural Insurance
Company of India Limited, R.O-7, Satyanagar,
Bhubanes w ar-7 5 1 007, Dist-Khurda.
.. 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 H.K.Mohanty, Member.
DATE OF HEARING.OI .03.2023
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DATE OF ORDER. 11 .07 .2023
ORDER
1) This appeal arises out of Judgment dt.30.09.2011 passed by the learned District Consumer Disputes Redressal Forum, Malkangiri in Consumer Complaint No.3 I 12010.
2) The case of the complainant is that the complainant is a small and marginal fanner having Kissan Credit Card Loan Pass Book in his name arrd the uoruplailan[ is also a rnember of Podia Large Sized NIulti Purpose 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 Insurance Company). The complainant had taken a loan for the year Kharif- 2009 season from the Opp. Parly-1- LAMPCS and got the same insured with the Opp. Party No.2- Insurance Company being sponsored by LAMPCS. Due to shorlfall 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 livelihood. Subsequently, the Government has declared the locality as drought affected area but the Opp. Parlies have not taken any steps for waiving out the loan. Due to non-waiving out of loan dues despite several approaches to the Opp. Parlies, 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 )lr.
grievances.
3) The Opp. Pafiy 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 lend shoft 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 required lnsurance premium. The O.P No.1-LAMPCS has sent the insurance proposals of- the cornplainant to the Head office of K.c.c.Bank Ltcl., Jeypore. r.he K'C'C. Bank, Jeypore under its letter No.5413 dated 25.09.2009 being the Nodal Bank sent the insurance proposals of the complainant amongst other tnembers 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 cornplainant along with other members. In the meantirne, clue 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 regardecl as a consumer under the provision of C.P.Act, 1986, hence the Consumer Forum/ Commission has no jurisdiction to entertain the complaint of the cornplainant.
4) The opp. Party No.2, Insurance cornpany in its written versior-r 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. Farmers availing the crop loans for the notified crop from the banks are covered on payment of a nominal premium of 2.5Yo for food crops of the sum insured. Sum insured can be either the loan amount or the value of the ''fhreshold Yield' or 'value of l50oh of average yield' as per lhe option ol farmers. The premium in respect of small and marginal farmers are subsidized by the Central and State Government in a sun-set basis. In the event of any loss, the Insurance Company arranges oompensation on the basis of "Area Approach" i.e. notified area and disburses the amount to the concerned financing institution i.e. Nodal Bank, advising therl to credit the amount to the account of the concerned farmer. It is further stated that Crop Insurance Scheme provides indemnity based on the yield date that wor-rld be ascerlained 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 more than 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 Company sent letters on dt. 25.01.2011 and 10.02.2011 respectively to the Nodal Bank, I(oraput Central Cooperative Bank, Jeypore to verify and to inform whether the complainant has availed crop loan, for which crop and for which season, but no answer was received from the Nodal Bank, Jeypore. It is also stated that for Kharil:
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 tlileslroltl yieltl of Poclia Rloul< oilV{alkarrgiri tlistriul is 1122 Kgs pcr lrecliLre. Since the 'Actual Yield' is higher than the 'Threshold Yeld', no shortfull was reported in Podia Block for Paddy crop in Kharif-2009 season. Therefore, no clairn was paicl to Podia Block for paddy crop for I(rarif 2009 Season, as strcl'r it is contended by Opp. Party No.2-Insurance Company that there is no deficiency in service on their parl.
6) After hearing the case, the learned Forum below passed the impugned order directing the Insurance Company to credit the entire sum assured value in the account of the cornplainant along with 12o/o interest per annum since the date of grant of loan till the payment is rnade and further directed the Opp. Parly 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 coupensation for mental agony and physical harassment and Rs.2,000/-
towards cost of litigation.
7) Challcrrging Lhe irnpugned orcler of Lhe learrrecl Forurrr below, Lhe Appeal has been filed by the Appellant/Opp. Parly No.1. B) During the course of hearing, the counsel for the Appellant subrnitted 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 tlre Insurrance Cornpanl,, u,ho is competent to settle the legitimate clairn 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 Government regarding the ioss of yield assessed by the 'Department of Economics and Statistics'. The respondent no.1/complainant had availed insurance through the Appellant from the Nodal Bank called KCC Bank Ltd. for the Kharif year 2009. Since the Govt. has not declared the notified area i.e. the 'Block area' as drought affected area, the Insurance Company has not proceeded to indemnify/settle the alleged loss caused to the l-arurers. 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 affected fartners are being settled by the Insurance Company. The complainant, who l-ras claitled Insurance benefit by virlue of declaration of drought by Revenue 7 and Disaster ManagemenL Department, Covt.of Odisha is not acceptable by the Insurance Company pursuant to the stipulations and instruction given tunder the scheme. Therefore, the Appellant has no role except depositing the prernium amount before the insurance company in due time. Since the same has been duly cornplied 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 same is liable to be set aside.
9) The learned counsel for Respondent No.2 submitted that the National Agricultural Insurance Scheme(NAIS) has been introduced by Government of India w.e.f. 01.10.1999 for implernenting crop insurance scheme all over the country. State Governments are given freedom to notify the crops and unit areas of insurance. The scheme is a sort of social measure. For paddy, a nominal premium @2.5oh on sum insured is collected frorn the farmers. The premium for small and marginal farmers is subsidized to the extent of 40Yo 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 norms laid down 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 )\,.
8affanges indemnification striotly 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 concerned financial institutions i.e. Banks, advising them to credit the sarne 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 lurther submitted that as per thc schcmc, indemnification is made on the basis of "Area Approach" and, therefore, all the farmers in the r-rnit of insurance compensation is payable due to shor1fall in yield in the unit area as per the yield data furnished by the "State Deparlmcnt of Economics and Statistics". The State deparlment of Economics and Statistics at the enci of the crop season also furnishes the actual yield data. If there is shortfall 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 farmers. There is no scope for the Respondent No.2 to know the details of individual farmers as tire declarations, as required under the scheme are supplied by the financing bank, which does not contain the detailed particulars of individual farmers. Tl-re financing Bank collects the premium from tl-re farmers of the concerned area as per the Scheme and sends a note of the sarre to its Nodal Bank Office, the Nodal Bank Office in turn sends a consolidated insurance proposal/ 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 made by the Government of Orissa. Government 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 time. I l) It is firrllrer suhrritted that Yield data is providcd bssed on rninimurn 16 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 procedr-rre laid down in the scheme only and not by any other method and claims as payable are disbursed to the Nodal Bank for disbursernent through the f-rnancing Bank by crediting to the respective accounts of the farmers. It was empl-rasized 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 srnall and marginal fanner having Kissan Credit Card Loan Pass Book in his name is it member of LAMPCS. He borrowed loan and has paid insurance premium for the season Kharif-2009. There was no shorl fall of crop for the concenrecl year under dispute, therefore, the claim was not settled in favour of the cornplainant as per the scheme. But the learned Forum below strangely )v-
l0 probed into the correctness of the scheme going beyond its jurisdiction ancl 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 and shor1fall of product for the relevant year. No parl of the alleged deficiency in service can be attributed to Respondent No.2. Further, the learned Forum helow without going through the records to estahlish the correctness of the clata l-urnished by the Respondent No.2, l-rxcd thc liability on Respondent No.2 by directing to credit the sum assured value to individual accot"rnt of complainant 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 for the parties, perusecl the clocuments, appeal lremo, DFR and written notes of submission filed by the parties.
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.21,000/- from Appeilant -LAMPCS and his crop was insured with thc Respondent No.2 on payament of insurance premium of Rs.474l- for the Kharif-2009. The complainant claims that there was shofifall 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 and the jt-
11Respondent No.2 has also not paid compensation to him, hencc he filed the cotnplaint petition before the learned Forum below inter alia with a prayet'ttt waive 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 lends money for agricultural and non agricultural purposes to its mentbers. It is adrnitted that the complainant/respondent No.1 availed loan during I(harif-2009 and paid insurance prernium 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 Respondent 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 irnplementing agency of the scheme promulgated by the Govt. of India viz.National Agricultural Insurance Scheme(NAIS) adopted by Govt. of Odisha since the year 1999-2000. As per the scheme, all the fanners growing notified crop in the notified area are eligible to be covered and thc same is to be implemented on area approach basis and can not entertain individual claims.
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17) As per the modalities of the scheme, the scheme is applicablc area-wise and every year either the Block or the Gram Panchayat or sttcl-t other area is notified as unit. There will be required number of crop cutting experiments and an average of past three years of the result of the crop cutting experiments will be considered as "Threshold Velds" or "Guaranteed Yielcis". For the current year on the crop cutting experiment, whatever yield is procured is narned as "Actual Y'ield" and in comparison lr,ith the tl-rresholcl yield/guaranteed yield, if the actual yield is less than the guaranteed yield, thc compensation is payable to the fanners of the entire notified area irrespective of the fact that a particular farmer has sustained loss or not. fhe said principle is adopted in respect of notified crop and in the instant case, the paddy being the crop, is notified and it is covered. The compensation/Loss (if any) is payable by the Government of India and the State Government in the ratio of 50:50. The Proforma Respondent is to disburse the same to the Nodal Bank rvho in turn will deposit money in the account of the respective larrners. In the case of tl-re complainant, Podia Block of Malkangiri District, the actual yield was recorded at 1224 Kglha, whereas the guaranteed/tlrreshold yield lor the Kharif-2009 was 1122 Kglha. Since the guaranteed yield beir-rg less than the actual yield, it is deemed that there is no loss in the insurance unit and, therefore, no clairn was payable.
18) In our considered opinion and after going through the records \, 4-
-t' 13 and arguments made by the respective parties, we find that the learned Forutn below without going through the National Agriculture Insurance Scheme and the reporls regarding loss of yield assessed by Department of Economics and Statistics has passed the irnpugned order, which is illegal, arbitrary and an out corne of non application of judicial mind hence not sustainable in the eyes of law ar-rd we hold that the same is liable to be set aside.
Appeal is allowed.
hnpugned order is set aside.
Accordingly complaint petition stands clismissecl. No costs.
Send back the DFR.
Statutory amount, if any be refunded on proper identification.
( tI.K.Mohanty )
Member Member