State Consumer Disputes Redressal Commission
Managing Director, Podia Lambpcs vs Nirapada Biswas, on 11 July, 2023
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S TATE C ONSUMER DISPUTE S REDRES SAL C OMMI S SION,
ODISHA. CT]TTACK
First Appeal No.660/2011
(From an order dated 30.09.2011 passed by the District
Consumer Disputes Redressal Forum, Malkangiri in
Consumer Complaint No. 2512010)
Managing Director, podia LAMPS,
AtlPo-Podia, Di st-Malkanagiri .
Appellant
Versus-
1- Nirapada Biswas, S/o. Nilakanta Biswas,
Village-Mv-61, PO- Semili Bancha, p.S-MV-79,
Dist- Malkanagiri. Respondent
2- Regional Manager, Agricultural Insurance
Company of India Ltd., R.O- 7, Satyanagar,
Bhubaneswar-7 5 1007, Dist- Khurda.
Proforma Respon<Ient
counsel ficr the Appellant:- Sri pradeep Kurnar Rout
Counsel for the Respondent:- None
counsel fbr Proforma Respondent:- Sri S. S. Rao & Associates.
PITESEN'I' :- Sri Dillip Kumar Mohapntra, Mcmber.
Sri Hemant Kumar Mohanty, Membcr.
DATE OF HEARING - OI. 03. 2023
DATE OF ORDER- II- 07- 2023
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ORDER
1) This appeal arises out of Judgment d1.30.09.2011 passed by the learned District consumer Disputes Redressal Forurn, Malkangiri in Consumer Complaint No.28 /2010.
2) The case of the complainant is that the complainant is a small and marginal farmer having Kissan Credit Card Loan Pass Book in his name and the cornplainant 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 I(harif- 2009 season frorn the Opp. Pafty-l- LAMPCS and got the same insured with the opp. Party No.2- Insurance Company being sponsored by LAMpCS. Due to shoftfall in the locality, the crops got damaged for which the complainant sustained heavy loss and rernained in hardship and was not able to earn his livelihood. Subsequently, the Government has declared the locality as drought affected area but thc Opp. Partics have not taken any steps frrr waiving out the loan. Due to non-waiving out of loan clues despite several approaches to the Opp. Pafties, the complainant suffered financial hardship and harassment. Finding no other way out, the complainant filed the complaint petition before the learned Forum below for redressal of his F-^_' grievances.
3) The Opp. Party No.1 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 shorl term and long term loan to the mernbers 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 insurance premium. The O.P No.1-LAMPCS has sent the insurance proposals of the cornplainant to the Head office of K.C.C.Bank Ltd., Jeypore. The K.C.C. Bank, Jeypore under its letter No.5413 dated 25.Og.2OOg being the Nodal Bank sent the insurance proposals of the cornplainant 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 claim of the complainant along with other members. In the meantime, due to over burden of interest, the complainant has squared offthe loan account with interest out of his own resources. I{owever, it is contended by Opp. party No.1 that the cornplainant 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 Forum/ Commission has no jurisdiction to entertain the complaint of the complainant.
4) The Opp. Parly No.2, Insurance Company in its written version 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 prernium of 2.5o/o for food crops of the sum insured. Sum insured can be either the loan amount or the value of the "Threshoid Yield" or "value of 150% 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 furlher 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 borne by the State Government and Central Government on 50:50 ratio basis.
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5) It is firr:ther 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 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 I(harif- 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 lI22 Kgs per hectare. Since the 'Actual yield' is higher than the 'Threshold Yeld', no shorlfall was reporled in Podia Block for Paddy crop in Kharif-2009 season. Therefore, no clairn was paid to Podia Block for paddy crop for Kharif 2O0g Season, as such it is contended by Opp. Parly 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 Conrpany to creclit the entire sum atssured value in the account of the cornplainant along with l 2oA irirerest per annum since the date of grant of loan till the payment is made and fufther 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/cotnmission below also directed the parlies to pay Rs.5,000/- towards compensation for mental agony and physical harassment and Rs.2,000/-
&.
6towards cost of litigation.
7) Challenging the impugned order of the learned Forum below, the 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 shoftfall of yield for the year under dispute. It is the Insurance Cornpany, who is cornpetent to settle the legitirnate 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 loss of yield assessed by the 'Department of Economics and Statistics'. The respondent no.1/cornplainant 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 inden-rnify/settle the alleged loss caused to the farmers. Such claims 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 ascertain the afTected area and basing upon the said reporl the claims of the affected farmers are being settled by the Insurance Company. The complainant, who has claimed Insurance benefit by virlue of declaration of drought by Revenue I and Disaster Managernent Department, Govt. of Odisha is not acceptable by the Insurance Company pursuant to the stipulations and instruction given under the scherne. 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.
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. 1.10.1999 for implementing crop insurance scheme all over the country. State Government are given freedom to notify the crops and unit areas of insurance. The scherne is a sort of social measure. For paddy, a nominal premium @2.5o/o on sum insured is collected from the fbnners. The premium for sn-rall and rnarginal farrners is subsidized to the extent of 40oA which is shared by Central and State Government on 50:50 basis. All the farmers availing crop loans for the insured crop frorn the financial institutions like Cooperative Banks, Commercial Banks and Societies are covered, provided the loans are disbursed as per the norms laid down by RBIAIABARD. The fanners, who do not avail finance can also join the scheme at their own option. In the event of any crop loss, the Appellant 8 affanges indemnification strictly 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 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 scherne, 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 Departrnent of Economics and Statistics". The State department of Economics and Statistics at the end of the crop season also furnishes the actual yield data. If there is shorlfall 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 ad.justs 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 batrk, udric:h cloes not contain the detailed particulars of individual famrcrs. 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 Oftrce in turn sends a consolidated insurance proposal/ ,&.
9declaration area wise to the Respondent No.2 stating the month 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 tnade by tl-re Government of Orissa. Governrnent of Orissa maintains the records regarding yield data of the notified crops and sends inforrnation regarding the same to the Respondent No.2 from time to time.
11) It is furlher submitted that Yield data is provided based on minimum 16 number of Crop cutting experiments in notified area or insurance unit provided by Deparlrnent 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 b1, any other rnethod 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 claims are considered by the Appellant.
12) In the present case of the complainant, who is a small and rnarginal farmer having Kissan Credit Card Loan Pass Book in his name is a member of LAMPCS. He borrowed loan and has paid insurance prernium for the season Kharif-2009. There was no shorl 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 &-
10probed into the correctness of the scheme going beyond its jurisdiction and has passed the impugned judgment by holding that the Respondent No.2 is liable to pay compensation to the cornplainant, whereas the Respondent No.2 is no way responsible to indemnify the loss caused due to drought and shorlfall of product for the relevant year. No parl of the alleged deficiency in service can be attributed to Itesponclent No.2. Fufther, the learned Forurn below without going through the records to establish the coruectness 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 atnongst others with interest, which is illegal, arbitrary and not sustainable under law, as such the sarre is liable to be set aside.
13) We have heard the counsels appearing for the parlies, perused the documents, appeal rlemo, DFR and written notes of subrnission filed by the parties.
t4) We find that the complainant is a small and marginal farmer having Kissan Credit Card Loan Pass Book. The complainant obtained a loan of Rs.14,0001- fi'orn Appellant -LAMPCS and his crop was insured with the Respondent No.2 on payment of insurance premium of Rs.315/- for the Kharif-2009. The complainant claims that there was shoftfall 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 3- 11 Respondent No.2 has also not paid compensation to hirn, hence he filed the complaint petition before the learned Forum below inter alia with a prayer to 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 n'rultipurpose cooperative society, which is registered under the Orissa Cooperative Societies Act. The society get f-rnance from the KCC Bank, Jeypore and lends money for agricultural and non agricultural purposes to its members. It is admitted that the complainant/respondent No.1 availed loan during Kharif-2009 and paid insurance premium as applicable. The 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 br-rt the Respondent No.2, Insttrantte Cr-rmpany has not settlecl the clairn of thc cr>rnplainant. i6) The counsel for the Respondent No.2 categorically contended that they are only an irnplernenting agenoy of the scheme promulgated by the Govt. of India viz. National Agricultural Insurance Scherne(NAIS) aclopted 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 sarle is to be irnplemented 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 experiments and an average of past three years of the result of the crop cutting experiments wiil be considered as "Threshold Yields" or rr "Guaranteed Yields". For the current year on the crop cutting experiment, whatever yield is procured is named as actual yield and in comparison with the threshold yield/guaranteed yield, if the "Actual Yield" is less than the guaranteed yield, the compensation is payable to the farmers of the entire notif-red area irrespective of the fact that a parlicular farmer has sustained loss or not. The 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 thc same to the Nodal Bank who in turn will deposit lnoney in the account of the respective farmers. In the case of the cornplainant, Podia Block of Malkangiri District, the actual yield was recorded at 1224 Kglha, whereas the guaranteed/threshold yield for the Kharif-2009 was ll22 Kglha. Since the guaranteed yield being less than the actual yield, it is deemed that there is no loss in the insurance unit and, therefore, no claim was payable.
18) In our considered opinion and after going through the records ,&?
13and arguments made by the respective parties, we find that the learned Forum below without going through the National Agriculture Insurance Scheme and the reports regarding loss of yield assessed by Deparlment of Economics and Statistics has passed the impugned order, which is illegal, arbitrary and an out come of non application of judicial 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 arnount, if any be refunded on proper identification. ( H.K.Mohanty IVIemher ,rm.*4 Mem ber