State Consumer Disputes Redressal Commission
Managing Director, Podia Lambpcs vs Susmaya Sarkar, on 11 July, 2023
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STA|E CONSUMER DI SPUTE S REDRE S SAL COMMI S SION,
ODISHA. CUTTACK
FIRST APPEAL NO. 661 of 2011
(From an order dated 31.10.2011 passed by the District
Consumer Disputes Redressal Comrnission/Forum,
Malkangiri in Consumer Complaint No. 35l20ll)
Managing Director, Podia LAMPCS,
At/P.O- Podia, Dist-Malkangiri
Appellant.
-Versus-
1) Susmaya Sarkar, S/o Sri Madhusudan Sarkar,
Vill-MV-6 1, L'}.O-Semilibancha, Dist- Malkangiri
Respondent.
2) Regional Manager, Agricultural Insurance
Company of India Limited, R.O-7, Satyanagar,
Bhubanes w ar-7 5 I 007, Dist-I(hurda.
Proforma Responclent.
Counsel for the Appellant- Sri P.K Rout.
Counsel for the Respondent- None.
Counsel for the Proforma Respondent- Sri S.S. Rao,
Sri B.K. Mohanty.
PRESENT :- Sri I).K. Mohapatra, Mcmber.
Sri H.K.Mohanty, Member.
DATB OF HEAIUNG-0I .03.2023 DATE OF ORDER- 11 - 07 -2023 &r"
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ORD[,R
1) This appeal arises out of Judgment dt.31.10.2011 passed by the leanred DistricL Consumer Disputes Redressal Forum, Malkangiri in Consumer Complaint No.35 12011.
2) The case of the complainant is that the complainant is a small and marginal farmer having Kissan Credit Card T,oan Pass Book in his name and the complainant is also a member of Podia Large Sized Multi 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. Party-1- LAMPCS and got the same insured with the opp. Party No.2- Insurance Company being sponsored by LAMPCS. Due to shortfall 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. Parties, the complainant suffered financial hardship and harassment. Finding no other way out, the complainant filed the complaint petition before the learned For-um below for redressal of his
-\u grievances.
3) The Opp . Party No.l filed its written version stating that the Podia Large Sized Muiti Purpose Cooperative Society is registered under the Orissa Cooperative Societies Act, and as such the LAMPCS used to lend short term and long term loan to the members of the society after getting finance from KCC Bank, Jeypore. Accordingly, the complainant had taken Paclcly Clop T.oen lirr l(truril:99 ancl insured the same by paying the recluired 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 the 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.Parly 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 Forurr/ Commission has no jurisdiction to entefiain the complaint of the compiainant.
4) The Opp. Pafty No.2, Insurance Company in its written version )3'-' 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 2.5o/o for food crops of the sum insured. Sum insured can be either the loan amount or the value of thc 'Threshold Yield' or 'value of I50Yo of average yield' as per the option of 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 compensation on the basis of "Area Approach" i.e. notified area and disburses the amount to the concerned financing institution i.e. Nodal Bank, advising them 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 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 claim amount is more than the gross premium of the crop category, the excess claim amount is to be bome 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, Koraput Central Cooperative Bank, Jeypore to verily 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 Kharif- 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 ll22 Kgs per hectare. Since the 'Actual Yeld' is higher than the 'Threshold Yield', no shortfall was reporled in Podia Block for Paddy crop in Kharif-2009 season. Therefore, no claim was paid to Podia Block for paddy crop for Kharif 2009 Season, as such it is contended by Opp. Party No.2-Insurance Company that there is no deficiency in service on their part.
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 complainant along with 12%o intercst per annum since the date of grant of loan till the payment is made and furlher directed the Opp. Parly No.1 to waive out and credit the entire interest levied on the cornplainant towards grant of Kharif Loan-2009. Learned forum/commission below also directed the parties to pay Rs.5,000/- towards compensation for mentai 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. Party No.1. B) During the course of hearing, the counsel for the Appellant submitted that the Appellant's Society is no way responsible to indemnif,, the Ittss causetl rlue to ilrought and shortlall of yielcl for tl-re year uncler clispLrte. It is the Insurance Company, who is competent to settle the legitimate clairn of the insured fartners 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 loss of yield assessed by the 'Department of E,conomics 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 farmers. Such clairrs have been repudiated since the Respondent no.l/Cornplainant is not covered under the said insurance scheme. It is also stated that the department of Economics and Statistics is to ascertain the affected area and basing upon the said report the claims of the affected farmers are being settled by the Insurance Company. The complainant, who has clairned Insurance benefit by virlue of declaration of drought by Revenue le-' 7 and Disaster Management Department, Govt.of Odisha is not acceptable by the Insurance Company pursuant to the stipulations and instruction given under the scheme. Therefore, the Appellant has no role except depositing the premium amount before the insurance company in due time. Since the same 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 same is liable to be set aside.
e) 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 implementing crop insurance scheme ali over the country. State Governments are given freedom to notify the crops and unit areas of insurance. The scheme is a sorl of social measure. For paddy, a nominal premium @2.5o/o on sum insured is collected from the farmers. The premium for small and marginal farmers is subsidized to the extent of 40oh 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, Cornmercial 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 Y1r-
8aruanges indemnification strictly on the basis of scheme provisions. Whenever a clairn 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 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 further 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 shortfall in yield in the unit area as per the yield data furnished by the "State Deparlment of Econornics 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 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 the declarations, as required under the scheme are supplied by the financing bank, which does not contain the detailed particulars of individual farmers. The financing Bank collects the premium from the farmers of the concerned area as per the Scheme and sends a note of the same to its Nodal Bank Office, the Nodal Bank Office in turn sends a consolidated insurance proposal/ )&4, 9 declaration area wise to the Respondent No.2 stating the month of loan, number of farmers, crop season, year, District, Block of the insured along ivith 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 tirne.
11) It is further submitted that Yield data is provided based on minimum 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 procedure laid down in the scheme only and not by any other method and claims 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 marginal farmer having Kissan Credit Card Loan Pass Book in his name 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 10 probed into the correctness of the scheme going beyond its jurisdiction and the has passed irnpugned judgment by holding that the Respondent No.2 is iiable to pay compensation to the complainant, whereas the Respondent No.2 is no way responsible to indemnify the loss caused due to drought and shortfall 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 below wilhout going through the recorcls to establish the correctness of the data furnished by the Respondent No.2, fixed the liability on Respondent No.2 by directing to credit the sum assured value to individual account 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 parlies, perused the documents, appeal merlo, DFR and written notes of submission filed by the parlies.
14) We find that the complainant is a small and marginal farmer having I(issan Credit Card Loan Pass Book. The complainant obtained a loan of Rs.13,800/- from Appellant -LAMPCS and his crop was insured with the Respondent No.2 on payament of insurance premium of Rs.310/- for the r\rrarrr-zuuv. r nc uornprarnanr Kharif-2009. The complainant clalms claims InaI that Inere shortfall ln there was snortlall in tne 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 #---
11Respondent No.2 has also not paid compensation to him, hence he filed the complaint 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 nrultipurpose cooperative society, which is registered r,mder 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 members. It is adrnitted that the complainant/respondent No.1 availed loan during Kharif-2009 and paid insurance premium as applicable. Thc Appellant/LAMPCS had sent the proposal to the head office of KCC 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. t6) The counsel for the Respondent No.2 categorically contended 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 farmers growing notified crop in the notified area are eligible to be covered and the same is to be implemented on area approach basis and can not enterlain individual claims.
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17) As per the modalities of the scheme, the scheme is applicable area-wise and every year either the Block or the Gram Panchayat or such other area is notified as unit. There will be required number of crop cutting expcriments and an average of pasttl"rree years of the result of the crop cutting experiments will be considered as "Threshold Yields" or "Guaranteed Yields". For the current year on the crop cutting experiment, whatever yield is procured is narned as "Actnal Yield" and in comparison with the threshold yield/guaranteed yield, if the actual yield is less than the guaranteed yield, the colxpensation is payable to the farmers of the entire notified area irrespective of the fact that a particular farmer has sustained loss or not. The said principle is aclopted 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 farmers. In the case of the complainant, Podia Block of Malkangiri District, the actual yield was recorded at 1224 Kglha, whereas the guaranteed/thresl-rold yield for the Kharif-2009 was 1122 Kglha. Since the guaranteed yield being less than the actual yield, it is deemed that there is no loss in the insurance unit and, therefbre, no claim was payable.
18) In our considered opinion and after going through the records jU-
13and arguments made by the respective parties, we find that the learned Forum below without going through the National Agriculture Insurance Scheme ernd the reports regarding loss of yield assessed by Department of Economics and Statistics has passed the impugned order, which is illegal, arbitrary and an out corne of non application ofjudicial mind hence not sustainable in the eyes of law and we hold that the same is liable to be set aside.
Appeal is allowed.
Impugned order is set aside.
Accordingly complaint petition stands dismissed.
No costs.
Send back the DFR.
Statutory amount, if any be refunded on proper identification.
SP- A
(H.K.Mohanty) ( @lpftra; \
Member Membir