State Consumer Disputes Redressal Commission
Managing Director, Podia Lamps, vs Naresh Haldar, on 11 July, 2023
I
STA|E C ON S UMER DI SPUTE S REDRES SAL C OMMI S SION,
ODISHA, CUTTACK
FIRST APPEAL NO. 747 of 2011
(Frorn an order dated 30.09.2011 passed by the District
Consumer Disputes Redressal Commission/Forum,
Malkangiri in Consumer Complaint No. 2912010)
Managing Director, Podia LAMPCS ,
AtiP.O- Podia, Dist-Ivlalkangiri
Appellant.
-Versus-
1) Naresh Haldar, S/o Rajeswar Haldar,
Vi ll-MV- 6 i, P. O- S erni libancha, Di st-Malkangiri.
2) Regional Manager, Agricultural Insurance
Company of India Limited, It.O-7, Satyanagar,
Bhubanes war-7 5 I 007, Dist-Khurda.
.. Respondents.
Counsel for the Appellant- Sri P.K Rout.
Counsel for the Respondent No. 1- None.
Counsel for the Itespondent No. 2- Sri S.S. Rao,
Sri B.K. Mohanty.
PRESENT :- Sri D.K. Mohapatra, Member.
Sri tI.K.Mohanty, Member.
DATE OF HEARING-0I .03.2023
DATE OF ORDER- 11 .07 -2023
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ORDER
1) This appeal arises out of Judgment dt.31 .10.2011 passed by the learned District Consumer Disputes Redressal Forum, Malkangiri in Consnmer Complaint No.29 12010.
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 complainant is also a member of Podia Large Sized Multi Purpose Credit Cooperative Society(hereinafter ref'erred to as LAMPCS). The LAMPCS used to provide loans to the cultivators by insuring the loan through Agricrrltrrral lnsurancc (-)ompany of lndia Ltd.(hereinaftcr ref-crrcd to as Insurance Company). The complainant had taken a loan for the year Kharif-- 2009 season frorn the Opp. Parly-1- LAMPCS and got the same insured u,ith the Opp. Party No.2- Insurance Company being sponsored by LAMPCS" Due to shorlfall in the locality, the crops got damaged for which the complainant sustained heavy loss and remained in hardship and was not able to earn his livelihood. Subsequently, the Government has declared the locality as drought affected area but the Opp. Parties have not taken any steps for waiving out the loan. Due to non-waiving out of loan dues despite several approaches to the Opp. Parties, the complainant suffered financial hardship and harassment. Finding no other way out, the complainant flled tl-re complaint petition before the learned Fon:m below for redressal of his grievances.
3) The Opp. Party No.1 filcd its writtcn version stating that tlie Podia Large Sized Multi Purpose Cooperative Society is registered under the Orissa Cooperative Societies Act, and as such the LAMPCS used to lend sliort term and long term loan to the members of the society after getting I'rnance from KCC Bank, Jeypore. Accordingly, the complainant had taken Paddy Crop Loan fbr I(iarif--99 and insured [hc sarne by paying Lhe recprirecl insurance premium. The O.P No.1-LAMPCS has sent the insurance proposals of the complainant to the Head office of K.C.C.Bank Ltd., Jeypore. l'he K.C.C. Bank, Jeypore under its letter No.5413 dated 25.09.2009 being the Nodal Bank sent the insurance proposals of the complainant amongst other tlembers of LAMPCS to Insurance Company vide Cheque No.215506 dt. 24.09.2009, but the Insurance Company has failed to settle the insurance clairn of the cornplainant along with other members. In the rneantime, clue to over burden of interest, the complainant has squared off the loan account witl-r interest out of his own resources. However, it is contended by Opp.Party No.1 that the complainant being a member of the Cooperative Society under the provision of OCS Act, can not be regarded as a consumer under the provision of C.P.Act, 1986, hence the Consumer Forum/ Commission has no jurisdiction to enterlain the complaint of the complainant.
4) The Opp. Party 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 implernented in the State on behall of Govetnment 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 2.5oh for food crops of the sum insured. Sum insured can be either the loan amount or the value of the 'Threshold Yield' or 'value of 150% of average yield' as per the option of farmers. The premiurn in respect of small and marginal farmr:rs 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 thern to credit the amount to the account of the concerned fanner. It is further stated that Crop Insurance Scheme provides indemnity based on the yield date tl-rat wor-rld be ascertainecl scientifically by crop cutting experiments. If the 'actual average yield' of a notitled crop in the notified area is less than the threshold yield fixec1 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 botne by the State Government and Central Government on 50:50 ratio basis. 5
5) It is further stated that the lnsurance Company sent letters on dt. 25.01.2011 and 10.02.2011 respectively to the Nodal Bank, I(oraput Central Cooperative Bank, Jeypore to verify and to inforrn whether the cornplainant has availed crop loan, for which crop and for which season, but no answer was received fiom the Nodal Bank, Jeypore. It is also stated that for Kharil. 2009 season, the actual yield data for Paddy crop for Podia Block of Malkangiri district is recorded to be 1224 Kgs per hectare, whereas the threshold yield of Podia Block of Malkangiri district is Il22 Kgs per hectare. Since the 'Actual Veld' is higher than the 'Threshold Veld', no shortfbll was repofted in Podia Block for Paddy crop in Kharif-2009 season. Therefore, no clairn was paid to Podia Block for paddy crop for I(harif 2009 Season, as sucl'r it is contended by Opp. Parly No.2-Insurance Company that there is no cleficiency in service on their part.
6) After hearing the case, the learned Forum below passed the impugned order directing the Insurance Company to credit the entire sum assured value in the account of the cornplainant along with 12oh interest per annum since the date of grant of loan till the payrnent is rnade and further directed the Opp. Party No.1 to waive out and credit the entire interest levied on the complainant towards grant of I(harif Loan-2009. Learned forum/commissior-r below also directed the parlies to pay Rs.5,000/- towards compensation for rnental agony and physical harassment and Rs.2,000/- towards cost of litigation.
7) Challenging the impugned order of the learned Forum below, the Appeal has been filed by the Appellant/Opp. Parly No.1.
8) During the course of hearing, the counsel for the Appellant submitted that the Appellant's Society is no way responsible to indemnily the ioss caused due to drought and shorlfall of yield for the year under dispute. It is the Insltrance Company, who is competent to settle the legitimate clairn of the insured farmers following the guidelines prescribed by the National Agricrrltural Inslrrance Scheme forthat relevant year as v,ell as the gr.ridelines and declaration of Government regarding the loss of yielcl assessed by rhc 'Department of Economics and Statistics'. The respondent no.1/complainant had availed insurance through the Appellant from the Nodal Bank called KCC Bank Ltd. for the Kharif year 2009. Since the Govt. has not declared the notified area i.e. the 'Block area' as drought affected area, the Insurance Company has not proceeded to indemnify/settle the alleged loss caused to the farmers. Such clairns have been repudiated since the Respondent no.1/Complainant is not covered under the said insurance scheme. It is also stated that the deparlment of Economics and Statistics is to ascertain the affected area and basing upon the said reporl the claims of the affected farmers are being settled by the Insurance Company. The complainant, w,ho has clairned Insurance benefit by virlue of declaration of drought by Revenue 7 and Disaster Management Deparlment, Govt.of Odisha is not acceptable by the [nsurance Company pursuant to the stipulations and instruction given under the scheme. Therefore, the Appellant has no role except depositing the premium amount before the insurance company in due time. Since the sarne has been duly complied by the Appellant in due time, the irnpugned order directing to pay compensation as well as cost of litigation to cornplainant is illegal, arbitrary atrd ttt-rl sustainable in lhe 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 Governtnent of India w.e.f. 01.10.1999 for implementing crop insurance scheme all over the country. State Governments are given freedom to notify the crops and unit areas of insurance. The scherne is a sort of social measrlre. For paddy, a norninal premium @2.5oh on sum insured is collected frorn tl"re farmers. The premium for small and marginal farmers is subsidized to the extent of 40o/o which is shared by Central and State Government on 50:50 basis. All the farmers availing crop loans for the insured crop from the flnancial institutions like Cooperative Banks, Commercial Banks and Societies are covered, provided the loans are disbursed as per the nonns laicl down by RBI/NABARD. The farmers, who do not avail finance can also joir-r the scheme at their own option. In the event of any crop loss, the Appellant 8 aranges 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 concemed linancial instittrtions i.e. Banks, advising them to credit the sarne to the loan accounts of respective farmers as per their declarations. No amount is credited directly to tl-re farmers' accounts if no claim is payable in the notified area.
10) It is further submitted that as per the scheme, indemnification is made on the basis of "Area Approach" and, therefore, all the farmers in the unit of insurance compensation is payable due to shortfall in yield in the unit area as per the yield data furnished by the "State Departrnent of Econornics and Statistics". The State deparlment of Economics and Statistics at the end of the crop season also furnishes the actual yield data. If there is 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 ancl the banl< in turn adjusts the amount to the loan accounts of f-armers. There is no scope for the Respondent No.2 to know the details of individual farmers as the declarations, as required under the scheme are supplied by the financing bank, which does not contain the detailed parliculars of individual farmcrs. The financing Bank collects the premium from the farmers of the concerned area as per the Scl"reme and sends a note of the same to its Nodal Bank Office, the Nodal Bank Office in turn sends a consoliclated insurance proposal/ 9 declaration area wise to the Respondent No.2 stating the month of loan, number of farmers, crop season, year, District, Block of the insured along with the premium. The insurance of the crop is done area wise as per the notification made by the Government of Orissa. Government of Orissa maintains the records regarding yield date of the notifled crops and sends information regarding the same to the Respondent No.2 frotn tirne to tirne.
11) rt is further submitted that Yield data is provided based on minimum 16 number of Crop cutting experirnents in notified areil of insurance unit provided by Department of Economics and Statistics, Govt. of Orissa for paddy crop. The crop loss is decided as per the procedure laid clown in the scheme only and not by any other method and claims as payable are disbursed to the Nodal Bank for disbursement through the financing Bank by crediting to the respective accounts of the farmers. It was empl-rasized that the said process is automatic and no one needs to claim and no individual claims are considered by the Appellant.
12) In tl-re present case of the complainant, who is a srnall and rrarginal farmer having Kissan Credit Card Loan Pass Book in his name is a tnember of LAMPCS. FIe borrowed loan and has paid insurance premium for the season Kharif-2009. There was no shoft fall of crop lbr the concerned year under dispute, therefore, the claim was not settled in favour of the cornplainant as per the scheme. But the learned Forum below strangelv 10 the has passed impugned judgment by holding that the Respondent No.2 is liable to pay compensation to the complainant, whereas the Respondent No.2 is no way responsible to indemnify the loss caused due to drought and shortfall of product for the relevant year. No parl of the alleged deficiency in service can be attributed to Respondent No.2. Fufther, the learned Forum below without going through the records to establish the correctness of the data furnished by the Respondent No.2, fixed the liability on Respondent No.2 by directing to credit the sum assured value to individual accor-rnt of complainant antongst others with interest, which is illegal, arbitrary and not sustainable under law, as such the same is liable to be set aside.
13) We have heard the counsels appearing for the parties, perusecl the documents, appeal memo, DFR and written notes of submission filed by the parlies.
14) We find that the complainant is a srnall and marginal farmer having Kissan Credit Card Loan Pass Book. The complainant obtained a loan of Rs.20,9701- from Appellant -LAMPCS and his crop was insured with the Respondent No.2 on payament of insurance premium of Rs.472l- for the Kharif-2009. The complainant clairns that there was shortfall 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 I{espondent No.2 has also not paid compensation to him, hence he filed the 11 Respondent No.2 has also not paid compensation to him, hence he filed the cornplaint petition before the learned Forum below inter alia with a prayer to waive out the loan and to pay colnpensation for financial loss, rnental agony and harassment.
1s) The Appellant contended that LAMPCS is a large sized multipurpose cooperative society, which is registered under the Orissa Cooperative Societies Act. The society get finance from the KCC Barrk, Jeypore and lends money for agricultural and non agricultural purposes to its t'nembers. It is adrnitted that the complainant/respondent No.1 availed loan dr.rring Kharif,-2009 and paicl insuranr:e premium as applicable. l'he Appellant/LAMPCS had sent the proposal to the head office of I(CC Bank, Jeypore and the said bank vide letter No.5413 dated 25.09.2009 sent the proposal to the Respondent No.2, Insurance Company but the Respor-rdent No.2, Insurance Company has not settled the claim of the cornplainant.
16) The counsel for the Respondent No.2 categorically contenclecl that they are only an implementing agency of the scheme promulgated by the Govt. of India viz.National Agricultural Insurance Scheme(NAIS) adopted by Govt. of Odisha since the year 1999-2000. As per the scheme, all the furmers growing notified crop in the notified area are eligible to be covered and the same is to be implemented on area approach basis and can not enterlair-r 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 pastthree years of the result of the crop cutting experiments will be considered as "Threshold Yields" or "Guaranteed Yeicls". For the current year on the crop cutting experiment, whatever yield is procured is narned as "Actual Yield" and in cornparison with tl"re threshold ),ieldigrraranteed 1,ield, if the actual yield is less than the guaranteed ),ield, thc compensation is payable to the farmers of the entire r-rotified area irrespective of the fact that a particular 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 cornpensation/Loss (if any) is payable by the Government of India and the State Government in thc ratio of 50:50. The Proforma Respondent is to disburse the same to the Nodal Rank i.vho in tum will deposit money in the account of the respective farmers. In the case of the cornplainant, Podia Block of Malkangiri District, the actual )'ield was recorded at 1224 Kglha, whereas the gr-raranteed/threshold yielci lor the I(harif-2009 was 1122 Kglha. Since the guaranteed yield being less thar-r 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 13 and arguments made by the respective parties, we find that the leamed 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 tl-re impugned order, which is illegal, arbitrary and an out corre of non application ofjudicial mind hence not sustainable inthe eyes of law and we hold that the same is liable to be set aside.
Appeal is allowed.
Impugned order is set aside.
Accordingly complaint petition stands dismissed.
No costs.
Send back the DFR.
Statutory amount, if any be refunded on proper identification.
er--_
( H.K.Mohanty ) (D.
Member