State Consumer Disputes Redressal Commission
Shri Moti Banungar Juth Seva Sahakari ... vs Agriculture Ins. Co Of India & Ors. on 28 February, 2022
Details DD MM YY
Date of disposal 28 02 2022
Date of filing 13 06 2014
Duration 15 08 07
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD.
COURT NO: 01
C.C. No. 182 of 2014 (MAIN)
1. Shri Moti Banungar Seva Sahakari Mandali Ltd.
Village: Moti Banungar, Ta. Jamnagar,
Dist. Jamnagar.
2. Shri Arjanbhai Jasmatbhai,
Village: Moti Banungar, Ta. Jamnagar.
Dist. Jamnagar. ...Complainants.
V/s.
OPPONENTS IN ALL COMPLAINTS
1. Agriculture Insurance Company of India,
Having its Head Office at:
(A) 13th Floor, Ambadeep,
14, Kasturba Gandhi Marg,
Connaught Place, New Delhi.
(B) Regional Office at:
215, Sahajanand Arcade,
132 ft. Ring Road, Memnagar Char Rasta,
Ahmedabad-52.
2. State of Gujarat,
Through the Secretary,
Agriculture and Co-operation Department,
Sachivalaya, Gandhinagar.
3. Union of India,
Through the Secretary to Govt. of India,
Ministry of Agriculture and Co-operation Department,
Krishi Bhavan, New Delhi - 110001.
4. The Jamnagar District Co-operative Bank Ltd.
Sahakar Bhavan, Ranjit Road, Jamnagar. ...Opponents.
FOLLOWING OTHER C.C. CONSOLIDATED WITH
MAIN COMPLAINT NO. 182 OF 2014.
Sr. No. C.C. NO. Name of complainants.
1 183/2014 Shri Falla Seva Sahakari Mandali Ltd
Shri Naran Parsotam
2 184/2014 Shri Moti Banungar Seva Sahakari Mandali Ltd
Shri Narendrabhai Mulajibhai
Page 1 of 36
R.I. DESAI CC/182/2014 (Main)
3 185/2014 Shri Falla Seva Sahakari Mandali Ltd
Shri Chandrakant Khimji
4 187/2014 Shri Rampar Seva Sahakari Mandali Ltd
Shri Hari Jesangbhai Barbasiya
5 200/2014 Shri MotaThavariya Seva Sahakari Mandli Ltd.
Shri Pasaya Seva Sahakari Mandli Ltd.
Shri Moda Seva Sahakari Mandli Ltd.
Shri Gangajada Seva Sahakari Mandli Ltd.
Shri Bareja Seva Sahakari Mandli Ltd.
Shri Bhimjibhai Polabhai Shikhaliya
Shri Murjibhai Nathabhai
Shri Pravinsinh Navalsinh Jadeja
Shri Bhikha bhovan
Shri Harsukh Jeram
6 201/2014 Shri Dhutarpur Seva Sahakari Mandli Ltd.
Shri Jenti Bhika Madhani
7 202/2014 Shri Changa JuthSeva Sahakari Mandli Ltd.
Shri Khijadia Seva Sahakari Mandli Ltd.
Shri Vibhapar Seva Sahakari Mandli Ltd.
Shri Chandragadh Seva Sahakari Mandli Ltd.
Shri Dilipsinh Mansangaji
Shri Shantilal Ambabhai Mangara
Shri NaranBhai Devsibhai Varsani
Shri Devsibhai Shamjibhai
8 203/2014 Shri Sapar Seva Sahakari Mandli Ltd.
Shri Dhanjibhai Madhavjibhai Kagthara
9 205/2014 Shri Vaniyagam Vagadiya Seva Sahakari Mandli Ltd.
Shri Konza Seva Sahakari Mandli Ltd.
Shri Chapaberaja Seva Sahakari Mandli Ltd.
Shri Chandraga Juth Seva Sahakari Mandli Ltd.
Shri Mungani Juth Seva Sahakari Mandli Ltd.
Shri Raj Seva Sahakari Mandli Ltd.
Shri Narotambhai Hirjibhai
Shri Bhagvanji Devjibhai
Shri Rambhai Naranbhai
Shri Bhikhalal Popatbhai
Shri Jagdishsinh Bhikhubha
Smt. Vasantben Karsanbhai
10 207/2014 Shri Kanaiya Seva Sahakari Mandli Ltd.
Shri Jamnagar Seva Sahakari Mandli Ltd.
Shri Shramjivi Seva Sahakari Mandli Ltd.
Shri Karmayogi Seva Sahakari Mandli Ltd.
Shri Hari Tapu
Shri Parshotam Popat
Shri Karshan Shavji
Shri Jiten Karshan
11 208/2014 Shri Dhutarpur Seva Sahakari Mandli Ltd.
Shri Gordhan Bava galani
12 210/2014 Shri Bada Seva Sahakari Mandli Ltd.
Shri Revtubha Motiji Jadeja
Page 2 of 36
R.I. DESAI CC/182/2014 (Main)
BEFORE: Hon'ble Mr. Justice V.P. Patel, President.
Dr. J.G. Mecwan, Member.
APPEARANCE: Smt. Avani S. Mehta, ld. Adv. for the complainants.
Mr. V.P Nanavaty, ld. Adv. for the opponent no. 01.
Mr. B.P. Kakadiya, ld. Adv. for the opponent no. 02.
Mr. P.L. Kariappa, Legal Advisor for opponent no. 03.
Smt. Archna Amin, ld. Adv. for opponent no. 04.
ORDER BY HON'BLE MR. JUSTICE V.P. PATEL, PRESIDENT.
JUDGMENT
1. The common question of law and facts are involved in all these Complaints. Therefore, all Complaints are disposed of by a common judgment. Whenever there is reference about 'complainant' in the judgment it is to be treated as 'complainants' for all farmers. Complaint no. 182 of 2014 is considered as Main Complaint and other complaint bearing Complaint no. 183 to 185/2014, C.C. No. 187/2014, C.C. No. 200 to 203/2014, C.C. 205/2014, C.C. no. 207-208/2014, and C.C. No. 210/2014 are consolidated with the Main Compliant.
1.1 Complainant No. 01 is Seva Sahkari Mandali and Complainant No. 02 is farmer. Complainant No. 01 Mandali has filed an application under Section 12(1)(c) of the Consumer Protection Act, 1986 (For short 'C.P. Act, 1986'). The list of the name of other farmers and resolutions of the Mandali for authorization is produced with the Complaint. 1.2 The opponent no. 01 is Insurance Company and implementing agency of the Scheme of the Central Government for crop insurance. The name of the scheme is 'National Agriculture Insurance Scheme' (Rashtriya Krishi Bima Yojna/RKBY). Opponent no. 02 is State Govt. who has given consent for the said scheme. Opponent no. 03 is Central Govt. who has flouted the Scheme for crop insurance for the benefit of the farmers for Page 3 of 36 R.I. DESAI CC/182/2014 (Main) entire country. Opponent no. 02 and 03 are liable for the collection and payment of premium and claim. Opponent no. 04 is Co-operative Bank acting as Nodal Agency in between cultivators and Insurance Company. Case of the complainant:-
2. The facts given rise to the present Complaint in nutshell are as under: It is the case of the complainants that complainant no. 01 is a Primary Agriculture Cooperative Society of village Moti Banungar, Ta. Jamnagar, Dist. Jamnagar, registered under the provision of the Gujarat Cooperative Societies Act, 1961. The area of operation of the complainant no. 01 - Society is village Moti Banungar and as per the bye-laws of complainant no. 01 - Society, all agriculturists being landowners and/or residing tenants within the village of Moti Banungar are eligible to become member of the complainant no. 01 - Society. It is further the case of the complainants that complainant No. 2 is a farmer and Agriculturist and is a member of the complainant no. 01 - Society and an Agriculturist possessing agriculture land at village Moti Banungar, Taluka Jamnagar in Jamnagar District. The complainant no. 02 in his capacity as an Agriculturist had availed crop loan for raising groundnut crop during the Kharif Season of the year 2012 which was insured under the NAIS Scheme as applicable at the relevant time. It is further submitted that complainant no. 02 is a beneficiary of the NAIS Scheme within the meaning of Consumer Protection Act, 1986. It is further submitted that the complainants have filed the present Complaint on their behalf and on behalf of the beneficiary farmers who are members of the complainant no. 01 - Society and who have become eligible to claim the insurance claim. Furthermore the present Complaint relates to the Insurance Claim arising Page 4 of 36 R.I. DESAI CC/182/2014 (Main) under the National Agriculture Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana (RKBY) as declared by the Government of India in the year 2000 and agreed to be continued for the year Kharif 2011-2012 and agreed to be implemented by the Government of Gujarat (Agriculture and Cooperation Department) by its Resolution dated 31/03/2000. It is further submitted that the issue of continuation of RKBY and Declaration of defined area under the Kharif year 2011-12 continued for the Kharif 2012 season and as per the resolution of the State Government dated 07.05.2012 the RKBY Scheme was continued during the Kharif 2012 year. Moreover as per the provisions of the Scheme, an exclusive organization is being set up for implementation of the NAIS scheme and accordingly Agriculture Insurance Company of India Limited- opponent No.1 is established as an implementing agency of the NAIS scheme which is the government sponsored Group Insurance Scheme under implementation in the country since Rabi 1999-2000 season as a part of Risk Management in Agriculture with objectives of providing financial support to the farmers in the event of failure of crops as a result of natural calamities, pests and diseases. It is further submitted that the scheme provides for creation of Corpus Funds to be contributed by the Government of India and State Government on 50:50 basis for the purpose of sharing the risk and payment of insurance claim and under the circumstances both the State of Gujarat and Union of India are joined as Opponent No. 2 and 3 respectively. It is further the case of the complainant that the Jamnagar District Cooperative Bank was appointed as a Nodal Agency under the Comprehensive Group Insurance Scheme from 1985 and continued as nodal agency under NAIS Scheme for the district of Jamnagar and since Page 5 of 36 R.I. DESAI CC/182/2014 (Main) Jamnagar District Cooperative Bank is a nodal agency for the purpose of implementation of the NAIS scheme, the bank is joined as Opponent No.4 in the present Complaint. Furthermore the role of the opponent No.4 bank is to collect the premium and other details, such as area covered, number of small and marginal farmers and other information as per the Proforma prepared by the opponent no. 01 with an object to remit the collected premium and sent the declaration Forms to the opponent no. 01 within the prescribed time limit.
2.1 It is further the case of the complainant that the groundnut crop falls under the category of Oil Seeds and is a crop covered under the NAIS scheme which is known as Insurable Crop. It is submitted that the farmers growing Insurable Crop and availing seasonal agricultural operation loans from the Primary Agriculture Cooperative Societies who in turn known as "Loanee" farmer are compulsorily covered under the scheme and the beneficiary farmers who are members of the complainant no. 01 - Society have paid their premium as required under the scheme through opponent No. 4 to the opponent No. 1. Furthermore the beneficiary farmers have purchased the insurance "Loanee" farmers and they are entitled to be indemnified for the loss suffered during the year. It is submitted that all the farmers who avail agriculture loan for their agriculture activity are compulsorily covered under the scheme and as per the scheme the indemnity under the natural calamity namely drought is covered. It is further the case of the complainant that District of Jamnagar suffered a severe drought in the year 2012 and therefore there was a shortfall in the yield and farmers suffered huge losses because of the drought in the area and the Government decided to make good claim Page 6 of 36 R.I. DESAI CC/182/2014 (Main) however as per say of complainant there is a short payment by the opponent No.1 in the process of disbursing the claims. It is further the case of the complainant that in the year 2011-12 the Jamnagar District witnessed its scanty rainfall due to which the groundnut crop failed in the area and the Government of Gujarat also declared the area of Jamnagar District as a drought area and therefore the complainants have become entitled to claim the Insurance Claim under the NAIS. It is further submitted that all the farmers availing crop loan from the Credit Cooperative Societies within the defined area of Moti Banungar Village, Jamnagar Taluka of Jamnagar District are compulsorily covered under the scheme and the opponent No. 4 was required to submit the declaration Form within the prescribed time limit to the opponent No. 1 for the purpose of covering Insurance Risk for the crop loss and the opponent No. 4 has accordingly collected the amount of premium and probably submitted the declaration forms to the opponent No.1 within the prescribed time limit. Furthermore the complainants call upon the opponent No. 4 to produce the copy of the declaration forms submitted and the receipts of the premium paid by them to the opponent No.1. It is further submitted that opponent No. 1 - Corporation has accepted the declaration forms as well as the amount of premium without any protest and the sum insured on the basis upon the data given in the declaration Form and the amount of premium paid alongwith the declaration forms. Furthermore the opponent No. 1 has accepted the amount of Premium on the basis of the figures given in the declaration form submitted by opponent No. 4 Bank. It is further submitted that acceptance of the declaration forms and the amounts of premium constitute the concluded Page 7 of 36 R.I. DESAI CC/182/2014 (Main) contract between the Insured and the Insurer. It is further the case of the complainant that the opponent No. 1 has paid the insurance amount of Rs. 18,33,659/- instead of Rs. 69,35,100/- as per the declaration submitted for all beneficiary farmers who had availed groundnut crop loan for the village Moti Banungar, Taluka Jamnagar of Jamnagar District, which is erroneous, improper, illegal, unjust and arbitrary and therefore complainants have filed Consumer Complaint before this Commission. 2.2 Being dissatisfied with the deficiency in service by the opponents the complainants have filed present Consumer Compliant before this Commission for getting remaining amount of insurance claim amounting to Rs. 51,01,441/- with interest at the rate of 18% p.a. from December 2012 till the date of payment by the opponent no. 01 to the beneficiary farmers of complainant no. 01 - Society along with compensation of Rs. 5,00,000/- with interest at the rate of 18% p.a for the delay and deficiency in service with necessary cost of Compliant.
3. The State Commission has admitted the Compliant of the complainant and upon service of the notice ld. Adv. Mr. Darshil Parikh has appeared on behalf of Ld. Adv. Mr. V.P. Nanavaty for opponent no. 01, ld. Adv. Mr. B.P. Kakdiya has appeared for the opponent no. 02, Mr. P.L. Kariappa, Legal Advisor for opponent no. 03 and Ld. Adv. Smt. Archna Amin for opponent no. 04.
3.1 The complainants have submitted following documents in the present matter:
Sr. No. Particulars Page no.
1 List of Beneficiary Farmers of Complainant no. 01 - Society 28
2 Resolution of Complainant no. 01 - Society 29
3 Copy of NAIS Scheme 30 to 48
4 Copy of Government Resolution dated 31.03.2000 implementing 49 to 58
the NAIS Scheme
Page 8 of 36
R.I. DESAI CC/182/2014 (Main)
5 Copy of resolution of the State Government dated 07.05.2012 59 to 70
3.2 We have gone through the record of this case. ld. Adv. for the opponent has submitted Evidence Pursis which on record at page no. 468 wherein it has been mentioned that the pleadings and evidences led by the opponent no. 01 by way of affidavits and documents placed on record in C.C. No. 44/2014 and C.C. No. 75/2014 be considered as a part of the subject Consumer Complaints for its adjudication and same has been considered by this Commission.
3.3 The affidavit in reply on behalf of the opponent no. 04 - Bank is also on record.
Arguments of the Complainants:-
4 First of all ld. Adv. for the complainants has appeared and vehemently submitted that though opponent Insurance Company accepted about the loss occurred, but paid less amount to the complainants - Farmers. It is further submitted by ld. Adv. that opponent Insurance Company has reduced the area on the basis of the report of July, 2013 which is on record at page no. 162 to 244. Moreover opponent Insurance Company ought to have considered the report of the Mamlatdar instead of considering the report of Director of Agriculture Department and hence less amount of insurance has been paid to the complainant. Ld. Adv. further contended that opponent Insurance Company has reduced the area even though they are not authorized to reduce the same. Furthermore at the time of receiving the premium opponent Insurance Company has accepted all the details shown in the declaration Form but after that on later stage they denied the said details which itself a deficiency in service on the part of the opponent Insurance Company. It is further contended by Page 9 of 36 R.I. DESAI CC/182/2014 (Main) ld. Adv. that in the present case opponent no. 04 - Bank is an agent and all the data concerned are available with Bank and as per the condition of loan complainants are bound to take insurance policy from the opponent Insurance Company. It is further alleged by ld. Adv. that as far as this scheme is concerned, the area cannot be corrected at any stage but opponent Insurance Company has reduced the area and paid less amount of insurance to the complainants. Moreover as per yield payment must be paid to the complainants and on the basis of five year plan threshold yield payment must be paid to the beneficiaries but opponent Insurance Company has not followed this procedure and adopted unfair trade practice.
4.1 It is further asserted by the ld. Adv. that insurance is said to be one of the services under Section 2(1)(o) of the Consumer Protection Act and opponent no. 01 has partly admitted the failure of the groundnut crop and liability to pay the claim of insurance to various farmers under the scheme however opponent no. 01 have unilaterally reduced the claim amount on different counts though they have admitted the liability to pay the claim. It is further urged by ld. Adv. that opponent no. 01 has paid the insurance claim partly and therefore it cannot be said that there is no deficiency in service or unfair trade practice committed by the opponent no. 01. It is further submitted by ld. Adv. that complainants have submitted the sowing declaration specifically showing the actual area sown by Patrak No. 02 as prescribed in the scheme itself and under the sown declaration each farmers have specifically given the verification that they have sown the groundnut crop in the area stated in the declaration which is accepted by the Nodal Bank as well as the Insurance Company and accordingly the Page 10 of 36 R.I. DESAI CC/182/2014 (Main) Insurance Company has collected the premium on the basis of such sowing declaration filed by the farmers at the time of taking crop loan. Furthermore the verification is already done by the farmers while paying the premium and opponent Insurance Company has believed such data submitted by the Nodal Agency and accepted the premium towards the claim and therefore while making the payment under the scheme the Insurance Company could not have made payment on the basis that the area sown is less than declared area in the declaration. It is further contended by ld. Adv. that once the premium is accepted by the Insurance Company data submitted along with such premium is deemed to be accepted by such company and therefore the part payment made by the company is highly erroneous and is deficiency in service as contemplated under the provisions of the Consumer Protection Act, 1986. 4.2 It is further alleged by ld. Adv. that the report is prepared in July, 2013 for the NAIS Coverage under the Kharif 2012 wherein only selected branches in four Talukas are being studied. Moreover the approach and methodology adopted to study and review the documents and literatures of the project is highly erroneous and one-sided. It is further argued out by ld. Adv. that the Study Team as per their report drawn the conclusion and suggestions wherein it has been concluded to indemnify the insurance up to the extent of the eligible area sown keeping in mind the numbers of area approached and claim amount which is highly erroneous and one-sided. Furthermore it is concluded in the report that the insurance company has to calculate the revised claim in areas where the area insured is more than the area sown. It has been submitted that the report is bulky report which does not specify or give any reason as to why the claim has to be settled by Page 11 of 36 R.I. DESAI CC/182/2014 (Main) applying area reduction factor. It is further contended that the Investigation Report merely mentions modalities of the scheme and methodology adopted, however it does not mention anything about the sowing declaration submitted by the farmers along with the details of the area sown and accordingly making the payment of premium to the opponents. Furthermore nowhere in the report it is mentioned that there is a discrepancy in the area actually sown and actually the area declared to the opponents and therefore the opponent no. 01 has grossly erred in relying upon such report and unilaterally revising the claim of the farmers for the purpose of indemnity and payment of insurance money. 4.3 It is further contended by ld. Adv. that financial institution is a nodal agency appointed under the scheme by the opponent no. 01 and the Government and therefore nodal agency is an agent of the opponent no. 01 who acts on behalf of the opponent no. 01 and therefore the farmers cannot be made the suffers for any guidelines not adhered to by the financial institution and hence any wrong doing on the part of the financial institution which is their own agent is not binding on the complainant - Farmers. Furthermore all documentary evidences as well as oral evidence are already with the opponents and they have already carried out the detailed inquiry and on that basis they have short-paid the insurance claim amount and such short payment is a deficiency in service as contemplated under the C.P. Act. Moreover opponent no. 01 has reduced the insurance claim unilaterally without any consultation from any farmers. It is further submitted by ld. Adv. that action of appointing the professional agency to prepare the report was unilateral act wherein the beneficiary farmers were not given any representation of such Page 12 of 36 R.I. DESAI CC/182/2014 (Main) committee nor they were given any opportunity to have their say before such committee and methodology adopted for computation of claim which is arbitrary, unilateral, irrational and unjust and is nowhere binding to the complainants. Furthermore opponent no. 01 has no authority, power or jurisdiction to alter the methodology for the insurance claim under the scheme unilaterally without consent of the beneficiary farmers and also the revised methodology is unreasonable, arbitrary and unjust since there is no justification to adopt the different methodology for the insured crop as the premium is charged against the full insurance claim. It is further contended by ld. Adv. that the premium is charged and collected against the full insurance claim on the crop loan disbursed along with the sowing declaration and therefore any alternation in disbursement of the claim is highly erroneous and illegal.
4.4 Ld. Adv. further argued out that the Government of India has directed appointment of the committee and appointed consultants like Agriculture Finance Corporation, Mumbai and no representation was given to the beneficiary farmers or Nodal Agency. Furthermore the whole scheme pertains to contingency to provide insurance coverage and financial support to the farmers in the event of failure of crops as a result of natural calamity and therefore the question with regard to 'unsown areas' does not arise. It is further submitted by ld. Adv. that once the declarations are accepted, the opponent no. 01 could not have unilaterally changed and revised the claim and it is not true to say that opponents have unilaterally followed the provisions of NAIS. It has been further argued out that the plot/field of the crop cutting experiments were selected by the office of the Revenue without verifying as to whether the said plots were for cultivation Page 13 of 36 R.I. DESAI CC/182/2014 (Main) of groundnut crop and therefore naturally the crop cutting experiments have to be changed from the originally selected plot and the plot where cultivation of groundnut crop as taken place. Furthermore as per the report also and as per their own say the data of the area sown in the records of the State Government are not based on actual verification in field survey and therefore relying upon the data of the State Government is highly erroneous and illegal. In support of her arguments ld. Adv. has submitted following judgments of this State Commission:
(I) C.C. no. 803 to 868/2002 and C.C. no. 28 to 62/2003,
(II) C.C. no. 67 to 68/2003
(III) C.C. no. 79 to 81/2003.
(IV) C.C. no. 95/2003.
Arguments of opponent no. 01:-
5. Upon service of the notice ld. Adv. has appeared for the opponent no. 01 and vehemently contested that as per the NAIS the farmers who are growing notified crops and availing Seasonal Agricultural Operations (SAO) loans from the Financial Institutions i.e., Loanee Farmers, are compulsorily covered and the scheme is also extended to the non-loanee farmers on voluntary basis. It is further submitted that the sum insured under the scheme may extend to the value of the threshold yield however, in case of loanee farmer, the sum insured would at least be equal to the amount of crop loan advanced by the Financial Institution. It is further contended by ld. Adv. that the scheme is extended to all the States and UTS and Government of Gujarat had been opting for and implementing the NAIS in the State since year 2000 and the Government of Gujarat in the year 2012 has also opted for the NAIS in the State and vide its resolution dated 07.05.2012 implemented the NAIS for Kharif - 2012, the Government of Gujarat has taken into consideration the guidelines of NAIS Page 14 of 36 R.I. DESAI CC/182/2014 (Main) alongwith the Operation Modalities and implemented the NAIS in State. It is further argued out by ld. Adv. that the NAIS involves several agencies and authorities for its implementation and operation, which includes the Bank Branches, Primary Agricultural Credit Society, Nodal Bank, Insurance Company, State Government and Central Government. Furthermore the insurance company is the implementing agency under the NAIS who plays an important role for the implementation of the scheme and the Complainant is part of the implementing agency. Moreover it is no locus standi to file present complaint alleging deficiency service against itself also. It is further contended by ld. Adv. that the complainant has prima facie failed to set out in the complaint any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which was required to be maintained by and under the National Agriculture Insurance Scheme and on that ground itself the present complaint is liable to be dismissed. It is further submitted by ld. Adv. that as per the scheme and the guidelines notified, the banks will collect the sowing declarations from the each loanee farmers, declared by the individual farmer themselves, after sowing of crop in prescribed format. Furthermore these basic details would be provided by the Complainant Primary Agriculture Society and the banks based on such declarations would have to prepare the declarations forms based on the crop wise survey number and crop sown details, for its submission to the opponent no. 1. It is further argued by ld. Adv. that the consolidated declarations are to be submitted to the opponent no. 1 alongwith the draft for premium and the opponent no. 1 based on the declarations submitted by the banks would cover the risk under the scheme.
Page 15 of 36
R.I. DESAI CC/182/2014 (Main) 5.1 It is further contended by ld. Adv. that the subject NAIS is based on the insurance principles of utmost good faith and indemnity. Moreover it is required to be considered by the banks while issuing crop loans to the farmers that it follows the guidelines in regards to the crop loan issued by RBI/NABARD and such guidelines are complied with. Moreover, the banks have also to consider that the loans over and above the scale of finance as notified by the State Government are not to be issued to the farmers. It is further submitted that since the loan amount issued to the farmers would be the basis for the sum insured the banks are required to consider the scale of finance. However it is required to be considered that the maximum amount of sum insured would not go beyond the ceiling limit given in the scale of finance by the State Level Committee as stated in the resolution dated 07.05.2012 and for groundnut crop the ceiling limit for scale of finance was Rs. 29,000/- per hectare and accordingly the sum insured per hectare for groundnut crop could not be more than Rs. 29,000/-. It is further argued out by ld. Adv. that there is an important condition applicable for the coverage of risk under NAIS that lands declared for unsown areas will not be covered under the scheme because indemnity claim will arise under the scheme only after the crop has been sown and in the event of crop failure. Furthermore as per the NAIS, all the loanee farmers are covered but the claims are to be based on the actual area sown by the farmer and not by the amount of loan disbursed. It is further asserted by ld. Adv. that the members of the complainant no. 1 in order to make a claim through legal recourse are required to establish beyond doubt that each and every member/farmer has cultivated the insured crop i.e. groundnut crop for Kharif 2012 season in the area declared while Page 16 of 36 R.I. DESAI CC/182/2014 (Main) insuring the crop and the primary burden lies upon the complainant to prove that the crop was actually sown in the area as declared and complainant has failed to produce any evidence on record to prove that the farmers had sown as per the declaration. It is further argued that the complainants have neither produced any documentary evidence of having availed crop loan as well as premium having debited from their account in terms of the contract of insurance nor they have produced whether the loans are actually disbursed or not and nor they have produced any revenue record to substantiate the acreage and also having cultivated the insured crop in that acreage.
5.2 It is further contended by ld. Adv. that it was unanimously decided during the SLCCCI (State Level Coordination Committee on Crop Insurance) meeting that the area insured ought to be reduced while calculating the amount of indemnity for payment of claims on the basis of actual yield and threshold yield for Kharif 2012 season. Furthermore the principle of Indemnity states that the insured shall be compensated appropriately for the losses caused to him by the insurer, only to the extent that the insured does not make a profit out of the loss that occurred. Moreover in view of the meeting held with the Union Agriculture Minister with group of Members of Parliament from Gujarat whereby the Managing Director of the opponent no. 1 was also present, the report of the AFC India Ltd. was accepted and therefore it would not be incorrect to state that there were in reality discrepancies related to the area sown and area declared by the farmers. It is further argued out that as per the directions of the Ministry of Agriculture, Government of India, the claims were processed by the opponent no. 1 after considering the area factor as suggested by the AFC Page 17 of 36 R.I. DESAI CC/182/2014 (Main) India Ltd. in its report. The area factor was to be considered as : "Area Factor = (Area Sown/Area Insured)" and it was suggested by the AFC India Ltd. in its report that the area factor may be used to calculate revised claim in areas where area insured is more than area sown and in areas where area Insured is less than area sown, claims as calculated as per scheme provisions may be paid. Furthermore after considering the area factor, as per the calculation the opponent no. 1 accordingly disbursed the amount of Rs. 18,33,659/- to the opponent no. 4 towards the claim of the complainant no. 1, as per the NAIS. It is further asserted by ld. Adv. that the Director of Agriculture has sent data vide letter dated 21.03.2013 and informed that the data which was sent earlier should be replaced by the data attached in this letter. Furthermore it is alleged by the complainant that the opponent no. 1 has accepted the details provided by the opponent no. 4 and has also accepted the premium and has not raised any dispute at the time of submission of declarations by the opponent no. 4 and therefore it cannot dispute the said declaration at the time of payment of the claims but under the scheme the opponent no. 1 has no right to reject the declaration submitted by the Bank alongwith the premium and accordingly the opponent no. 1 has to consider the declarations submitted by the Bank.
5.3 Furthermore the insurance coverage provided by the insurer is based on the basic principle of utmost good faith and the opponent no. 1 accordingly has considered declarations tendered by the opponent no. 4 which are consolidated declarations made by the farmers availing loans to be true and correct. Moreover it is abundantly made clear in the NAIS that the farmers are required to declare only the area in which they have Page 18 of 36 R.I. DESAI CC/182/2014 (Main) actually carried out the sowing however it appears that the farmers or the PACs have not declared the true and correct sowing data and therefore there was breach of the principle of utmost good faith and when there is breach of principle of utmostgood faith, the claims are not payable at all however considering the nature of the scheme and opting a approach the opponent no. 1 has considered the claims after considering the area factor. It is further argued out by ld. Adv. that the complainant has failed to follow the provisions of utmost good faith and accordingly are taking undue advantage of the scheme for and on behalf of its members and therefore, to provide correct amount of indemnity under the scheme, the opponent had no other option but to reduce the area to the extent of unsown area and pay indemnity amount for actual area sown. It is argued out that the principle of Indemnity states that the insured shall be compensated appropriately for the losses caused to him by the insurer, only to the extent that the insured does not make a profit out of the loss that occurred and thus the opponent no. 1 scrupulously followed the provisions of NAIS and therefore there was no deficiency in service on the part of opponent no. 1 as alleged by the complainant.
5.4 Ld. Adv. concluded that in view of the above the complainant has failed to prove and establish that the settlement of the claims under the NAIS by the opponent no. 1 was not justified and therefore there was no deficiency in service or unfair trade practice on the part of the opponent insurance company and consequently the present complaint filed by the complainant may be dismissed with cost.
Arguments of opponent no. 02:-
6. Upon service of the notice ld. Adv. Mr. B.P. Kakadia has appeared on behalf of opponent no. 02 - State of Gujarat. Ld. Adv. urged before us that Page 19 of 36 R.I. DESAI CC/182/2014 (Main) being a formal party in the present case opponent no. 02 has filed affidavit in reply on date 10.12.2014 which contains all the concern elements in the context of the present matter and requested that the same may be considered as a written arguments in the case on hand and the same may be given due consideration by this Commission. It is submitted by opponent no. 02 that there is no cogent reason has been appeared to file the present complaint by the complainant and the facts are also erroneous and arbitrary. It is further submitted that present complainant doesn't fall under the Consumer as per Section 2(1)(d) of C.P. Act, 1986 and therefore as it is not maintainable it deserves to be dismissed. It has been submitted that NAIS scheme was introduced by the Central Government from Rabi season 1999-2000 and from the same period it was implemented in the State of Gujarat too and as per the guidelines of the scheme it was also continued in Kharif, 2012 by the Agricultural Insurance Company of India (AIC). Furthermore under this scheme, farmers are compulsorily covered for obtaining farm loan from the financial institutions, banks, etc. within the stipulated time for particular crops in the defined areas (Talukas) and the said scheme is optional for the farmers who are not willing to do so. Moreover as per scheme financial institutions/banks send the premium amount and declaration form to the Agricultural Insurance Co. of India ltd. (AIC) within the stipulated time. It is further submitted that as per the Resolution dated 07.05.2012 -CIS-102012-685-ક.7 for the year 2012-13 during the Kharif season-2012 for the groundnut crop, the defined areas in district Jamnagar were - Bhanvad, Dhrol, Jamjodhpur, Jamnagar, Jodiya, Kalavad, Kalyanpura, Khambhalia, Lalpur and okhamandal and for the crop of cotton the areas were - Bhanvad, Dhrol, Jamjodhpur, Page 20 of 36 R.I. DESAI CC/182/2014 (Main) Jamnagar, Jodiya, Kalavad, Kalyanpura, Khambhalia and Lalpur talukas were defined under the NAIS scheme.
6.1 It is further submitted that the unit of crop insurance is a defined area (Taluka) and the information except the scarcity or rainfall figures, the average yield per hectare based on crop harvesting experiments which usually arranged randomly in the entire Taluka sent to the Agricultural Insurance Co. of India ltd. in due course. Furthermore the information provided from the office of Director of Agriculture about the yield per hectare is compared with the threshold yield which prepared on the basis of average of last three or five years by the Agricultural Insurance Co. of India ltd. and on the basis of the such figures after necessary verification Insurance Company approves the claims accordingly. It is further submitted that as per the guidelines of Central Government the claims are payable on basis of a particular ratio i.e. in defined Talukas as much as the average yield per hectare of a crop of a particular year in proportion, showing less than its prescribed threshold yield and thereafter according to the sanctioned claims Insurance Company demand the needed amount of paid claims from the State or Central Government and State and Central Government disbursed the amount to the Insurance Company from the Budget of the Government.
6.2 It is further submitted that Agricultural Insurance Co. of India ltd. is implementing institution of this scheme and under this scheme financial institutions/banks sent the premium amount and declaration form to the Agricultural Insurance Co. of India ltd. within due course and thus Agricultural Insurance Co. of India ltd. collects the said premiums and after calculating claims, the approval proceeding has been carried out and Page 21 of 36 R.I. DESAI CC/182/2014 (Main) consequently through Nodal banks the amount of claim will be credited in the accounts of concerned farmers. It is further submitted that as per the guidelines of the said scheme the claims has been already paid which arisen out from the groundnut crop in the Jamnagar, Dhrol and Jodiya Talukas for the Kharif season, 2012 and therefore the present Complaint needs to be dismissed.
Arguments of opponent no. 03:-
7. Upon service of the notice to opponent no. 03, Mr. P.L. Kariappa - Legal Advisor of opponent no. 03 has attended a few hearing of this matter through video conferencing but today when the matter come up for hearing though the video link was sent to him, he remained absent today and therefore in the absence of opponent no. 03 this Commission has decided to proceed this matter ex-parte as per the provision of Consumer Protection Act.
Arguments of opponent no. 04:-
8. We have also given audience to officials of Bank who have appeared on behalf of opponent no. 04 - Bank and it has been vehemently argued out that at the outlet the present complaint is not maintainable against the opponent no. 4 in as much as the opponent no. 4 is only a nodal agency appointed under the National Agriculture Insurance Scheme Kharif-2012 for the purpose of execution for the Scheme. It is submitted by opponent Bank that since the role of the opponent no. 4 is to advance loans for crop to the farmers and collecting premium is also upon the banks under the Scheme. Furthermore sum insured under the scheme is on the basis of the loan amounts disbursed by the banks and moreover as the crop loans advanced to the farmers is linked with the crop insurance scheme, the role of the bank is only qua collection of premium towards the area sown and Page 22 of 36 R.I. DESAI CC/182/2014 (Main) to submit the same to the opponent no.1-Insurance Companies. It is further argued out that the opponent no.4 is the bank registered under the provisions of the Gujarat Co-operative Societies Act, 1961 and running under the Cooperative societies Act, Rules and Bylaws and is also a settled financing agency, so far as Jamnagar and Devbhumi Dwarka Districts are concerned and therefore the bank functions as a Nodal Agency for the crop insurance and also for other policies introduced by the State Government for upliftment and movement of both the Districts of Jamnagar and Devbhumi Dwarka. Moreover there is no privity of contract between the farmers and opponent no.4-Bank and therefore there is no relief sought for against the bank in the complaint and therefore the present complaint qua opponent no.4 is not maintainable and deserves to be dismissed. It is further argued out by opponent Bank that under the Scheme the opponent no.4-Bank has to act as an agent between the farmers and the opponent no. 01 - Insurance Company wherein the bank collects the amount of premium along with and in addition to the crop loan and therefore the bank is not liable or responsible to pay the crop insurance since the bank has acted as a Nodal Agency.
8.1 It is further asserted by opponent Bank that since the amount of premium is collected by the bank and forwarded to the insurance company along with a format of declaration form (Patrak No.2) as given under the Scheme, bank accordingly submits such declaration form along with details month wise, crop wise, notified area, district etc. and submits the same to the insurance company. The copies of such declaration forms further Season Kharif-2012 for crop of groundnut and the crop of cotton are submitted to the opponent no.1-Insurance Company giving the details with regard to Page 23 of 36 R.I. DESAI CC/182/2014 (Main) the number of farmers covered, area sown, amount of loan disbursed, premium paid etc. Furthermore the parts of the claims are received by us which have been disbursed to the beneficiary of farmers on the same day. It is further argued out by opponent Bank that with the result of the farmers who have taken crop insurance, may have suffered a tremendous short fall of payment as they have paid huge amount of premium against the crop loan taken and that the crop insurance claim is unilaterally reduced and paid without any reasons. Moreover since there was no enough rain and due to draught, the crops are weathered away and the farmers have suffered a lot with the result, the farmers are not in position to pay back the amount to the opponent no.4-Bank as the amount of crop insurance is not fully paid to the beneficiary farmers and after the amount of premium is paid and the declaration (Patrak No.2) and sowing declaration (Patrak No.3) are taken and submitted to the insurance company and the same is accepted by insurance company and there is no query to any discrepancy with regards to area sown and sowing declaration is raised by the opponent no.1-Insurance Company with opponent no.4-Bank. It is further submitted by opponent Bank that while disbursing the crop loans to the farmers in the Jamnagar District areas, the banks have taken the details with regards to the survey number of the land, crop sown i.e. groundnut and cotton and the name of the farmers in the area and after verifying such details the loan is being advanced and disbursed to the farmers and premium collected by insurance company. Moreover it is mandatory to take the insurance qua such loan which is being advanced to the farmers and therefore the bank while advancing loans and taking the details and particulars of each farmers have also Page 24 of 36 R.I. DESAI CC/182/2014 (Main) collected premium as directed in the scheme and the same is submitted to the opponent no.1-Insurance Company and hence the opponent no.4- Bank is only post office since they are advancing loans to the farmers. 8.2 It is further asserted by opponent Bank that bank had participated in a Meeting of the DLMC (District Level Monitoring Committee) dated 08-08- 2013 at Jamnagar and in the aforesaid meeting a table showing Kharif Season Acreage statement was handed over to bank by the Officer of Insurance Company and on perusal it was found that the figures mentioned in the table were not correct and therefore Bank by letter dated 21-08-2013 addressed to the Insurance Company pointed out that the figures mentioned were not correct.
8.3 Furthermore in regard to the above contradiction figures mentioned in the aforesaid report is concerned, opponent Bank made us understand the procedure of advancing loan to the farmers and briefly stated that first of all the needy farmers have filed an application for seeking loan before the Bank in between the month of January to March and in such application the 'area sown' and the 'crop to be sown' were specifically mentioned and therefore there is no room for doubt arises about the differentiation about the area sown. Thereafter the said applications were placed before the concerned farmer committee for seeking approval and after the approval it was sent to concern branches of bank for seeking loan and after necessary verification of the said applications it was sent to Head Office and then it was placed before the Board Meeting of Bank.
Merit of the case:-
9. We have given our anxious and thoughtful consideration to the rival contentions made by both the sides. Perused the record of the case. In the Page 25 of 36 R.I. DESAI CC/182/2014 (Main) present case the main averment of the opponent no. 01 is that there is no any deficiency in service has been committed by the opponent Insurance Company as opponent no. 01 has tackled the claim of the complainant on the basis of the instruction of Govt. of India and as per the provision of the NAIS scheme. In support of his argument ld. Adv. has submitted following judgments:
(i) Civil Appeal no. 9050/2018 (SC) - Khatema Fibres Ltd. Vs. New India Assurance Co. Ltd. & Anr. Judgment reported in IV (2001) CPJ 1 SC
(ii) Civil Appeal no. 5759/2009 (SC) - SGS India Ltd. Vs. Dolphin International Ltd. - AIR 2021 SC 4849
10. We have scrutinized the above judgments of Hon'ble Supreme Court in the context of deficiency in service. Hon'ble Supreme Court in the case of Civil Appeal no. 9050/2018 (SC) - Khatema Fibres Ltd. Vs. New India Assurance Co. Ltd. & Anr. observed as under:
"32. It is true that even any inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law or which has been undertaken to be performed pursuant to a contract, will fall within the definition of the expression 'deficiency'. But to come within the said parameter, the appellant should be able to establish (i) either that the Surveyor did not comply with the code of conduct in respect of his duties, responsibilities and other professional requirements as specified by the regulations made under the Act, in terms of Section 64UM(1A) of the Insurance Act, 1938, as it stood then; or (ii) that the insurer acted arbitrarily in rejecting the whole or a part of the Surveyor's Report in exercise of the discretion available under the Proviso to section 64UM(2) of the Insurance Act, 1938."
11. In Civil Appeal no. 5759/2009 (SC) - SGS India Ltd. Vs. Dolphin International Ltd. Hon'ble Supreme Court has observed as under:
"19. The onus of proof of deficiency in service is on the complainant in the complaints under the Consumer Protection Act, 1986. It is the complainant who had approached the Commission, therefore, without any proof of deficiency, the opposite party cannot be held responsible for deficiency in service. In a judgment of this Court reported as Ravneet Singh Bagga v. KLM Royal Dutch Airlines & Anr. 4, this court held that the burden of proving the deficiency in ser-vice is upon the person who alleges it.Page 26 of 36
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6. The deficiency in service cannot be alleged without 4 (2000) 1 SCC 66 attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person who alleges it. The complainant has, on facts, been found to have not established any willful fault, imperfection, shortcoming or inadequacy in the service of the respondent. ............."
20. This Court in a Judgment reported as Indigo Airlines v. Kalpana Rani Debbarma & Ors.5, held the initial onus to substantiate the factum of deficiency in service committed by the opposite party was primarily on the complaint. This Court held as under:-
"28. In our opinion, the approach of the Consumer Fora is in complete disregard of the principles of pleadings and burden of proof. First, the material facts constituting deficiency in service are blissfully absent in the complaint as filed. Second, the initial onus to substantiate the factum of deficiency in service committed by the ground staff of the Airlines at the airport after issuing boarding passes was primarily on the respondents. That has not been discharged by them. The Consumer Fora, however, went on to unjustly shift the onus on the appellants because of their failure to produce any evidence. In law, the burden of proof would shift on the appellants only after the respondents/complainants had discharged their initial burden in establishing the factum of deficiency in service."
22. The onus of proof that there was deficiency in service is on the complainant. If the complainant is able to discharge its initial onus, the burden would then shift to the respondent in the complaint. The rule of evidence before the civil proceedings is that the onus would lie on the person who would fail if no evidence is led by the other side. Therefore, the initial burden of proof of deficiency in service was on the complainant, but having failed to prove that the result of the sample retained by the appellant at the time of consignment was materially different than what was certified by the appellant, the burden of proof would not shift on the appellant. Thus, the Commission has erred in law to draw adverse inference against the appellant.
12. It would be beneficial to mentioned here the provision regarding deficiency in service as per the Consumer Protection Act, 1986:
Section 2(1)(g) in the Consumer Protection Act, 1986
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
Looking to the above observation of the Hon'ble Apex Court and the above provision of the C.P. Act it is crystal clear that onus of proof of deficiency in service is on the complainant in the complaints under the C.P. Act, 1986. It is the complainant who had approached the Commission Page 27 of 36 R.I. DESAI CC/182/2014 (Main) and therefore in the opinion of this Commission in the case on hand the burden of proof of deficiency in service is upon the complainants who have alleged. Furthermore as per Section 2(1)(g) of C.P. Act deficiency should be considered on the basis any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
13. In the present case following issues (A) and (B) are required to be determined:
(A) Whether there is any deficiency in service has been adopted by the opponent Insurance Company or not?
14. As far as issue (A) is concerned, we have scrutinized the NAIS scheme from which it appears that under the 'OPERATIONAL MODALITIES' - Clause 04 of the scheme reads thus:
4) IMPORTANT CONDITIONS APPLICABLE FOR COVERAGE OF RISK
1) Loans given for unsown areas will not be covered by the Scheme, because, indemnity claims will arise under the Scheme, only after the crop has been sown and in the event of crop failure. Mere disbursement of loans by the financial institutions/submission of Proposal by a Non-loanee farmer will not entitle him for compensation under the scheme.
2) In the areas where crop is sown but, withered away/ damaged on account of adverse seasonal conditions/pest and / or diseases and also where there is no possibility of reviving the crop, no further loaning should be made by the financing institutions. Any further loaning in such cases shall not be covered by the Scheme.
3) The Scheme covers notified crops until harvesting stage only. Losses caused to crops which are spread in the field for drying after cutting/harvesting are excluded from the scope of the scheme.
Looking to the above Clause, as mentioned in point (1) - "loans given for unsown areas will not be covered by the scheme because indemnity claims will arise under the scheme only after the crop has been sown and in the event of crop failure" which per se clarifies that for the coverage of risk Page 28 of 36 R.I. DESAI CC/182/2014 (Main) the said scheme is only applicable for sown areas and not for unsown/another areas. Furthermore claim is only admissible in the event of crop failure however in the instant case complainant has not produce iota of evidence which can establish that how much area are unsown or how much loss caused to crop concerned.
15. Ld. Adv. Smt. Mehta has submitted judgments of this State Commission in which following has been observed by this Commission:
As the deduction made by the opponent Insurance Company is against the basic concept of the scheme, opponent Ins. Co. has committed deficiency in service. As far as State- Central Govt. are concerned they have accepted the report of the opponent Insurance Company in toto and they have also not justified the said report and involved deduction are totally against the specific and express provisions of the scheme, however it was not taken into account by the opponent no. 02 and 03 which indicates the deficiency in service of the State Govt. and Central Govt. As far as opponent Bank is concerned it was the duty of the bank to verify and scrutinize the total claim paid as per the declaration but Nodal Agency did not raise any objection against the payment of less claim nor informed the farmers about such less payment by opponent no. 01 Insurance Company which is the act of deficiency in service on the part of the opponent Bank.
16. This State Commission has delivered the above judgment on the basis of the observation of Hon'ble Apex Court however in the present case the terms and condition of the present policy are totally different than the CCIS scheme. We have gone through the judgment delivered by this Commission which has been submitted by the complainant herein in C.C. no. 803/2002 Page 29 of 36 R.I. DESAI CC/182/2014 (Main) (Main). In such case this Commission has relied upon the judgment of Hon'ble National Commission in the case of Gujarat Sate Consumer's Protection Centre & Anr. Vs. General Insurance Corporation of India & Anr. reported in III (2005) CPJ 1 (NC) wherein Hon'ble Apex Court has observed as under:
"30. In our view, the entire exercise of reducing the assured sum is without any basis. firstly. it is to be reiterated that insurance coverage is given to each and every farmer who has taken loan from the Primary Agricultural Credit Cooperative society for cultivation of groundnut. Further, it is to be stated that groundnut is sown in the month of August and not in the month of June of the year. Further, if GIC had any information that in the month of June there was failure of rain and a drought situation was prevailing. it ought to have taken care at least in not accepting the insurance premium' from thousands of farmers. If that was done, at least some of them could have saved amounts spent by them for cultivation of the groundnut and of taking water from other sources. The chart produced by the respondent reveals that there was cultivation of groundnut in various districts. For calculating the loss suffered by the agriculturist and for payment of insurance amount, the scheme makes a specific provisions. There is no provisions in the entire scheme that if some or few loanees have committed default in cultivating the groundnut despite taking loan for cultivation of groundnut, all other loanees could be penalized by reducing the sum assured on an average basis. At the time of taking loan as per the scheme there is built-in insurance coverage to each and every farmer who takes the loan.
31. The scheme nowhere provides such a procedure for settling insurance claim. The procedure prescribed for assessment of the loss is provided in the scheme. Firstly, it provides the nature of coverage as per Clause 7 quoted above. There is a deeming provision in Clause 7 (1), which, inter alia, provides that on the basis crop cutting experiments in the insured season, if the actual average yield, falls short of the specific threshold yield, them all the insured farmers growing that crop are deemed to have suffered the shortfall in their respective yields and the scheme provides coverage against such contingency,. It was sought to be argued that for paying insurance coverage, the scheme provides average yield basis for determination of ne loss suffered by the farmer. If this average yield basis is applied. then, the farmer who has suffered total loss, would be getting only 50 % of the sum assured. Hence, the learned Counsel submitted that the scheme farmer for CCIS (Comprehensive Crop Insurance Scheme) is on the basis of area sown in a particular village or Taluka. This submission and approach by the GIC. is without any basis. For determining the loss average yield is to be taken into and the loss of crop is to be patio each farmer individually. However, there is no provision that a few loanees commit default in cultivation of groundnut after taking loans in a particular village or primary Agricultural Credit Cooperative Societies commit some irregularity while granting loan, all other farmers who have taken loan for cultivation of groundnut should be penalized and the sum assured in their favor could be reduced. The scheme nowhere provides for such an exercise by the GIC. On the contrary, under Clause (10)there is a specific provision that after determination of shortfall in the actual average yield per hectare of the insured crop each of the insured farmers growing that crop in the defined area will be eligible for indemnity calculated as per the formula provided therein.
32. The aforesaid provisions leave no doubt that under the Comprehensive Credit Insurance Scheme insured farmer is the basis and not the Credit Societies, Suffer is the farmer because of the drought. Such farmers cannot be penalized because the credit society commits some alleged irregularities, such as (a) while disbursing credit loan deducts the share capital and crop insurance premium; (b) adjustment towards share capital etc ;(c) reporting of loan is for groundnut alone, while cultivation in villages is for several crops; (d) mistake or error in Page 30 of 36 R.I. DESAI CC/182/2014 (Main) classification of big farmers under small and marginal farmers for getting benefits of subsidy. Further it's to be clearly understood that under the scheme the insurance charge has to be calculated on the sum assured and there insurance premium is an additionality to the scale of finance. This has been specifically provided in the scheme quoted above. The insurance charge is to be deducted from crop loan at the time of disbursement of the loan.
33. In any case, for such mistake or irregularities assured farmer is not responsible. If Government wants to penalize, it may penalize the primary agricultural Credit Cooperative Society or the nodal Society - the district level Society, but it cannot penalize the farmer by reducing the sum assured, which is meant for his benefit. Poor farmer who has suffered the natural calamity cannot be made to suffer further for the mistakes or irregularities committed by the office bearers of the society or some other farmers.
34. Further, insurance premium is paid by each and every loanee separately. It is not recovered on basis village wise loanee or loanees of a particular Primary Agricultural Credit Society. Clause (10) of the scheme also provides the basis of indemnity to each farmer by giving the following formula:
Claim = Shortfall in yield × Sum Insured of Farmer Threshold yield (* Threshold yield of a crop for 'defined area') Hence in a case of drought where there is a total failure of crop the entire assured sum is required to be paid to the loanee farmer.
In light of the above judgment this State Commission has delivered judgment in C.C. no. 803/2002(Main). However looking to the terms and conditions of the CCIS scheme Hon'ble Apex Court has made observation in that particular case but as far as the present case is concerned the terms and condition of the present policy were totally different than the CCIS scheme and also in the policy of the case on hand, it is specifically mentioned that "loans given for unsown areas will not be covered by the scheme because indemnity claims will arise under the scheme only after the crop has been sown and in the event of crop failure" and therefore in the considered opinion of this Commission judgment of Hon'ble Apex Court is not applicable to the present case.
17. At this juncture it would be opt and appropriate to mention that Hon'ble Supreme Court in the case of Civil Appeal no. 1375/2003 - Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Ins. Co. Ltd. in regard to contract of insurance has observed as under:
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22. Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the 16 (2008) 14 SCC 598 17 (2004) 8 SCC 644 18 (2009) 5 SCC 599 rights and obligations are governed by the terms of the said contract.Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity. In General Assurance Society Ltd. (supra), a Constitution Bench of this Court had observed that:
"In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves." (See also: Oriental Insurance Co. Ltd. Vs. Sony Cheriyan19; Vikram Greentech (supra); Sikka Papers Limited Vs. National Insurance Company Limited & Ors.20; New India Assurance Company Limited Vs. Zuari Industries Limited & Ors.21; Amravati District Central Cooperative Bank Limited Vs. United India Fire and General Insurance Company Limited.22)
23. Similarly, in Harchand Rai Chandan Lal's case (supra), this Court held that:
"The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended."
24. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.
Looking to the above observation of the Hon'ble Supreme Court and in the opinion of this Commission the Consumer Commission should always interpret the words in which the contract is expressed by the parties. Furthermore in the instant case as the scheme of NAIS contains various conditions, we are of the view that the conditions of contract of the scheme/policy should be strictly construed and therefore opponent Insurance Company has paid the claim amount on the basis of data received by Government and as per the provisions of contract then in the considered opinion of this Commission there is no deficiency in service has been appeared on the part of the opponent no. 01.
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18. Furthermore we have carefully examined the 'National Agriculture Insurance Scheme' which is produced herewith wherein in Clause 13 following has been mentioned:
NATURE OF COVERAGE AND INDEMNITY.
If the 'Actual Yield' (AY) per hectare of the insured crop for the defined area [on the basis of requisite number of Crop Cutting Experiments (CCES)] in the insured season, falls short of the specified 'Threshold Yield' (TY), all the insured farmers growing that crop in the defined area are deemed to have suffered shortfall in their yield. The Scheme seeks to provide coverage against such contingency.
'Indemnity' shall be calculated as per the following formula:
(Shortfall in Yield/Threshold yield) x Sum Insured for the farmer (Shortfall in Yield = 'Threshold Yield - Actual Yield' for the Defined Area} Looking to the above Clause of the Scheme it is palpably transpires that in case of insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases, all the farmers growing that crop in the defined area are deemed to have suffered shortfall in their yield on the basis of the above formula and therefore in the opinion of this Commission in the instant case it is the responsibility of the insured farmers to establish the Shortfall and the concerned claim amount on the same basis but these are not provided to opponent Insurance Company and hence in that case in the absence of any documentary evidence it cannot be said that opponent Ins. Co. has committed deficiency in service. (B) Whether the complainant has produced necessary evidences to establish the deficiency in service of the opponent Insurance Company or not?
19. As far as issue (B) is concerned we have gone through the Statement produced by complainant which is on record at page no. 29, 28/1, 28/2 wherein the figures of 'Amount of crop loan availed', 'Amount of claim received' and 'Not claim received' have been mentioned but there is no any Page 33 of 36 R.I. DESAI CC/182/2014 (Main) information or figures have been mentioned about the actual loss suffered by the farmers or any cogent figures of loss which obtained on the basis of the formula stated in the scheme and therefore this Commission is of the view that it is the duty of the complainants to provide actual shortfall and actual loss caused to them as per the provision of the said scheme. Furthermore as per observation of the Hon'ble Supreme Court burden of proving the deficiency in service is upon the person who alleged it but in the instant case complainant has not produced any evidence which can establish the deficiency in service of the opponent no. 01.
20. Moreover when Clause 4(1) of the Operational Modalities specifically says that the loans given for unsown areas will not be covered by the scheme because indemnity claims will arise under the scheme only after the crop has been sown and in the event of crop failure then in the considered opinion of this Commission claim cannot be paid for the unsown area while in the event of crop failure complainants are entitled for the same as per the provision of scheme.
21. As far as indemnity is concerned, Hon'ble National Commission in Harsolia Motors Vs. M/s. National Ins. Co. Ltd has observed as under:
"Policy is only for indemnification and actual loss. It is not intended to generate profit."
22. Looking to the above observation of the Hon'ble National Commission in the considered opinion of this Commission complainants are entitled to get the claim amount only after the crop has been sown and in the event of crop failure while unsown areas are not covered under the said scheme and therefore when complainant has not provided any data about how much amount of crop has been failed or how much loss has been caused Page 34 of 36 R.I. DESAI CC/182/2014 (Main) to the farmers then we are of the view that complainants are not entitled to get claim amount simply on the basis of the insured amount.
23. As per the provision of the Scheme "State Level Coordination Committee On Crop Insurance" (SLCCI) shall be formed in all the implementing States/UTs for the purpose of overseeing implementation of the Scheme. The committee will be headed by the Agriculture Production Commissioner (APC) or by an Official of equal rank of the State and will include senior Officer of the State, viz. Secretary (Agriculture), Secretary (Co-operation), Secretary (Finance), Director, Bureau of Statistics and Economics, Registrar of Co-operative Societies, representative of Ministry of Agriculture, Financial Institution including NABARD, RBI, State Apex Coop. Bank, Convener, State Level Bankers Committee (SLBC) and implementing Agency (IA).
24. We have also gone through the Resolution of District Level Monitoring Committee (DLMC) held on 04.09.2013 in the Chamber of Collector, Jamnagar which is on record at page no. 442 to 444 wherein following has been decided:
મુદ્દા નઁ. ૫ ડિસ્ટ્રીક્ટ કો.ઓપરે ટીવ બેંક તથા લીિ બેંક ના પ્રતતતનધી તરફથી ગત વર્ષ ખરીફ ૨૦૧૨ સીઝનમાાં જામનગર જિલ્લાના તમામ તાલુકાઓમા વાવેતર તવસ્ટ્તાર તથા ધીરાણ હેઠળના તવસ્ટ્તારમાાં િોવા મળતી તવસાંગતતા બાબતે રજુઆત કરે લ .અને મામલતદારશ્રી ધ્રોલ તથા મામલતદારશ્રી િોડિયા નો ગામવાર વાવેતર રીપોટષ રજુ કરે લ અને જિલ્લાના તમામ તાલુકાઓના ખરીફ ૨૦૦૨ સીઝનના વાવેતરના આંકિા માટે મામલતદારશ્રીઓનો રીપોટષ ધ્યાને લેવા સુચન કરે લ જે અન્વયે માનનીય અધ્યક્ષશ્રી તરફથી જિલ્લા ખેતીવાિી અતધકારીશ્રીને આ બાબત Rectify કરવા િણાવેલ તેમિ આ બાબતને SLCCI માાં મુકવા ખેતી તનયામકશ્રી ગાાંધીનગરને િરૂરી તવગતો મોકલી આપવા િણાવેલ.
In the above report it has been suggested to take into consideration the report of Mamlatdar for the statistics of Kharif 2009 season of all the talukas of the district. Pursuant to which the Hon'ble Chairman asked the District Agriculture Officer to rectify the matter and also to send the Page 35 of 36 R.I. DESAI CC/182/2014 (Main) necessary details to the Director of Agriculture, Gandhinagar to put the matter before SLCC but it is pertinent to note that there is no iota of evidence has been produced on record which can prove that the said data/information was put before the SLCCI.
25. In view of the above conspectus, facts and circumstance of the case and after carefully consideration of materials on record we come to the conclusion that complainants are failed to establish the deficiency in service on the part of the opponent Ins. Company however though "State Level Coordination Committee On Crop Insurance" (SLCCI) is formed for the purpose of overseeing implementation of the Scheme but necessary data was not put before the SLCCI and therefore we are of the view to dismiss the present Complaint and hence in the interest of justice following final order is passed.
ORDER
1. Present Complaint No. 182 of 2014 (Main) and all the consolidated Complaints with the Main Compliant are hereby dismissed.
2. No order as to cost.
3. Office is directed to place the copy of this judgment in all other Complaints consolidated with the Main Complaint.
4. Office is directed to provide free of cost certified copy of this judgment and order to the respective parties.
Pronounced in the open Court today on 28th February, 2022.
[Dr. J.G. Mecwan] [Justice V.P. Patel]
Member President
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R.I. DESAI CC/182/2014 (Main)