Gujarat High Court
Akshaya Kanubhai Patel & vs Branch Manager & on 7 February, 2013
Equivalent citations: AIR 2013 GUJARAT 236
Author: Jayant Patel
Bench: Jayant Patel
AKSHAYA KANUBHAI PATELV/SBRANCH MANAGER C/SCA/17806/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 17806 of 2003 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE JAYANT PATEL ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ AKSHAYA KANUBHAI PATEL & 17....Petitioner(s) Versus BRANCH MANAGER & 4....Respondent(s) ================================================================ Appearance: MR NIKHIL S KARIEL, ADVOCATE for the Petitioner(s) No. 1 - 9 , 11 - 13 , 15 , 17 - 18 MR TARESH J BHATTJI, ADVOCATE for the Petitioner(s) No. 10 , 14 , 16 NOTICE SERVED for the Petitioner(s) No. 1 - 13 , 15 - 18 UNSERVED-EXPIRED (N) for the Petitioner(s) No. 14 GOVERNMENT PLEADER for the Respondent(s) No. 3 - 4 MR PRANAV G DESAI, ADVOCATE for the Respondent(s) No. 1 - 2 MR VIBHUTI NANAVATI, ADVOCATE for the Respondent(s) No. 5 ================================================================ CORAM: HONOURABLE MR.JUSTICE JAYANT PATEL Date : 07/02/2013 ORAL JUDGMENT
1. The petitioners by this petition have prayed for the appropriate writ to direct the respondents to pay the petitioners the amount of crop insurance and/or claim fixed by the respondents for the year 2001 for the failure of hybrid crop in the Karjan Taluka of Vadodara District and it is also prayed to direct the respondents to adjust the loan account of the petitioners upon the claim so received by the Insurance Company.
2. The short facts of the case appear to be that the petitioners are the agriculturist having agricultural land located at Karjan Taluka, District:
Vadodara. The petitioners had shown Kharif Crop of hybrid cotton in the year 2001 and they were also granted loan by Bank of Baroda as per the scheme known as Rashtriya Krushi Bima Yojna (RKBY) (herein after referred to as the Scheme for the sake of convenience). As per the scheme, when any farmer is granted agricultural loan for crop by any Nationalized Bank, the premium is being deducted from the loan account and is to be forwarded to respondent No.5 by the concerned Bank with the declaration. Thereafter, if there is failure of the crop in the respective area, which has been so covered under the scheme, the claims are being processed and amount to the extent of insurance are being given by crediting the same in the loan account of the respective farmers as per the scheme. It is the case of the petitioners that they had taken loan and the premium was deducted by respondent No.1-Bank of Baroda located at Palaj Branch because the area for the operation for Karjan Taluka was under the Bank of Baroda, Palaj Branch. As per the petitioners, the premium amount was deducted and Bank of Baroda, Palaj Branch together with the declaration, had forwarded the amount of premium to respondent No.5. Thereafter, there was failure of the cotton crop and as a result thereof, the claims of all agriculturist, who had contributed for the premium in Karjan Taluka, were processed. However, no amount was paid to the petitioners nor credited in their loan account and therefore, they had issued legal notice but as nothing came out, hence, the petitioners have preferred the present petition for the above referred relief.
3. I have heard Mr.Kariel, learned counsel appearing for the petitioners, Mr.Pranav Desai, learned counsel for respondent Nos. 1 and 2, Mr.Rakesh Patel, learned AGP, for respondent Nos. 3 and 4 and Mr.Vibhuti Nanavati for respondent No.5.
4. Following aspects are undisputed:
The area of Karjan Taluka was covered under the scheme at the relevant point of time.
The cotton crop was also covered by the scheme at the relevant point of time.
The loans for the Kharif Cotton Crop were granted by Bank of Baroda to the petitioners.
The amount of premium towards coverage of crop insurance scheme was deducted from the loan amount.
The amount of premium with the declaration was forwarded by Bank of Baroda, Palaj Branch to respondent No.5.
The respondent No.5 has received the premium through Bank of Baroda.
For the area, in question, of Karjan Taluka, the yield had failed to the extent notified and the agriculturist of the area of Karjan Taluka, who were covered by the scheme, have been paid the amount of insurance by the respondent No.5 except the petitioners herein.
It is in light of the aforesaid factual background and admitted position, the matter is further be examined. It appears that as per the respondent No.5, though premium had been deducted from the loan account of the petitioners through Bank of Baroda, the declarations were required to be forwarded by the Bank of Baroda to respondent No.5 by showing correct details of the Taluka: Karjan, District: Vadodara instead of that in the common declaration, it was mentioned as Bharuch and as per the respondent No.5 for area Bharuch, no claims are settled since there was no failure of the yield of that particular area of Bharuch Taluka. It is on account of the said mistake in the declaration filed by Bank of Baroda, the claims of the petitioners, though their lands are located at Karjan Taluka where there was failure of the yield, were not processed and the amount of insurance has not been paid.
5. Whereas, as per the Bank of Baroda, it was a mistake in submitting the declaration form and the same was bona-fide because the area of Karjan Taluka for the purpose of banking operation was falling under Palaj Branch of Bank of Baroda which is in Bharuch District. Since the loans were given by Palaj Branch of Bank of Baroda, in the declaration form, instead of Karjan Taluka, it was wrongly mentioned as Bharuch. It was submitted on behalf of the Bank of Baroda that in fact, the loans were given and the premiums were deducted for Kharif Cotton Crop shown by the petitioners concerned over the land at Karjan Taluka, which is falling under Vadodara revenue district and not Bharuch.
6. The contention of Mr.Nanavati for respondent No.5 is that there is no liability of respondent No.5 and liability, if any, could be said of Bank of Baroda since Bank of Baroda had committed mistake in filing declaration. However, he fairly conceded that Bank of Baroda was Nodal Agent to collect the premium on behalf of respondent No.5 but in his submission, such is a part of mechanism of the scheme and the scheme itself provides that if there is any mistake by any Nodal Agency, the liability will be of that Nodal Agency. Therefore, it was submitted that claims are not paid by the respondent No.5. Whereas, the contention of Mr.Desai for Bank of Baroda is that the premium was deducted and has been forwarded for the loanee farmers to the respondent No.5 and respondent No.5 has received the premium. Merely because, there was some mistake in mentioning the area of Bharuch Taluka, respondent No.5 cannot get away from its liability to pay the insured amount by throwing away the liability upon Bank of Baroda. It was submitted that Bank of Baroda has acted as an agent and respondent No.5 in capacity has recovered premium, hence, it could be said that the liability if any, is that of respondent No.5.
7. In my view, so far as petitioners, who are loanee farmers, are concerned, they are third party to the internal arrangement of the collection of premium by any Nationalized Bank to be transmitted and forwarded to respondent No.5 who has principally received the premium and is principally liable to pay the amount of crop insurance. It is not a matter where the premium is not collected from the loanee farmers but rather, it is an admitted position that premium was deducted from the loan amount of the loanee farmers and has been forwarded by the Bank of Baroda to respondent No.5 and the same is received by the respondent No.5. Therefore, if the contract of insurance is considered between the loanee farmers, merely because, there was any mistake by the Agent i.e. Bank of Baroda in filing declaration, respondent No.5 cannot disown the liability to pay crop insurance. The aspects of entitlement of respondent No.5 to recover the amount from Bank of Baroda on account of its mistake or otherwise is a separate aspect altogether.
8. Mr.Nanavati learned counsel appearing for respondent No.5 has taken me to the entire scheme and nowhere in the scheme, it has been provided that if the premium is received, there will not be any liability to pay the crop insurance provided the crop has failed and the yield has not realized and the said area is so declared for such purpose. It is true that, as per the scheme, copy whereof is produced at Annexure-G collectively, Condition No.5 provides for the liability to make good of losses by the respective Nodal Agency but in my view, the same is a matter between Insurance Company, respondent No.5, and Bank of Bardoa its agent. So far as insured who are loanee farmers are concerned, the liability to pay crop insurance must be owned by respondent No.5 and thereafter, if it finds legally permissible, it may recover the amount from Bank of Baroda who has acted as the Nodal Bank for such purpose.
9. As per the scheme, it appears that there is State Level Co-ordination Committee on Crop Insurance functioning and implementing of the scheme. Therefore, the dispute between the respondent No.5 Insurance Company and Bank of Baroda may be examined by said Committee but in any case, the liability to pay claims of the loanee agriculturist cannot be disowned by respondent No.5 on the ground as sought to be canvassed. It is hardly required to be stated that once the premium is received, the Insurance Company has to own the liability and indemnify to the insured. Had it been a case of committing mistake or the fraud by the insured, it may stand on different footing but if any mistake is committed by the agent of Insurance Company, irrespective of the fact that the Insurance Company may have remedy against the agent, it must honor its liability to indemnify the insured.
10. Mr.Nanavati learned counsel appearing for the respondent No.5 submitted that even if the claims are to be processed for honoring the liability of the petitioners, who were loanee farmers, each case will have to be examined for the location of the land, the area covered by the scheme, etc. and thereafter, the matter can be finalized by disbursement of the loan amount. In my view, such aspect is in the arena of procedure to be followed once the liability is fastened by the appropriate orders, respondent No.5 has to follow the procedure accordingly.
11. Learned counsel for the petitioners has submitted that the petitioners farmers have been waiting for their claim since 2001 and the interest on the loan amount is mounted and there were compelling circumstances and number of petitioners had to pay back the loan amount with interest. As against the same, they have been deprived of their legitimate claim to get the crop insurance amount. Had it been paid well in time, the liability to pay interest could be avoided. In any case, they have been deprived of the enjoyment of the period of about 10 years. Therefore, it was submitted that Court may consider the aspects of directing the payment of interest reasonably on the finalized amount of the claim by respondent No.5.
12. In my view, such appears to be reasonable if the interest is to be awarded on compensatory basis. The fact remains that the farmers have been deprived of their legitimate amount of insurance and the money has remained with respondent No.5. Therefore, by way of compensatory measure, it would be just and proper to award interest @ 8% per annum from the date on which the amount of claims were payable at par with other similarly situated persons until, the same is actually paid or credited in their respective bank account.
13. Further, clause-5 under the Head of Special Conditions for FIs / Nodal Banks/ Loan Disburing Points.
which is part of the scheme, reads as under:
5. In case a farmer is deprived of any benefit under the Scheme due to errors / omissions/ commissions of the Nodal Bank/ Branch/ PACS, the concerned institutions only shall make good all such losses.
14. Therefore it may be a case ultimately to be finalized about the liability to make good of losses on account of the errors / omissions/ commissions of mistake by any of the Nodal bank or the agency. As per the scheme, there is State Level co-ordination committee comprising of Various officers. Therefore, respondent No.5 may approach before such Committee for recovery of any amount from Bank of Baroda in future and at that stage, Bank of Baroda may raise all defence which may be available in law but in my view, at this stage, such aspect neither has arisen nor is subject matter of the present petition, hence, no concluding observations deserves to be made and the matter is left for appropriate examination by the Committee at the appropriate time, subject to the rights of respondent No.5 as well as Bank of Baroda in accordance with law.
15. In view of the aforesaid observations and discussions, respondent No.5 is directed to process all the claims of the respective petitioners for Kharif Crop 2001 for the land located at Karjan Taluka, District: Vadodara at par with other agriculturist of Karjan Taluka who covered under the scheme. It will be open to respondent No.5 to verify the original record of Bank of Baroda, Palaj Branch and thereafter, to process the claim further and finalize the same. However, in any case, the claim shall be processed and finalized within a period of 3 months from the date of receipt of the order of this Court. Thereafter, within a period of 2 weeks, respective amount with interest at the rate of 8% p.a., from September, 2002 until the actual payment, shall be disbursed by the respondent No.5 to respondent Bank of Baroda who in turn within one week there-from shall get the amount with interest credited in the bank account of respective petitioners-farmers. It would be open for the Bank to adjust the amount towards outstanding loan, if any, and if the loan amount is already paid or there is no outstanding loan, farmers shall be at liberty to utilize in accordance with law.
16. It would also be open to respondent No.5 to approach before the State Level Co-Ordination Committee (Gujarat State) on crop insurance for ventilating the grievance including by making claim for asserting the right to recover the amount from Bank of Baroda which was Nodal Agency and at that stage, Bank of Baroda shall also be at liberty to raise all defence as may be available in law. The matter may be decided by the said Committee in accordance with law.
17. The petition is allowed to the aforesaid extent. Rule made absolute. Considering the facts and circumstances, no order as to cost. Direct service is permitted.
(JAYANT PATEL, J.) ashish Page 10 of 10