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Agricultural Insurance 
Submit Complaint..
Hanumanthappa s/o. Konappa,
Aged about 75 years,
R/o. Hanumanthanahalli village,
Y.N.Hosakote hobli,
Pavagada Taluk, Tumkur district
2. CC.No.30/2009
Narasamma dead by LRs Complainants
T.Mohankumar s/o. late Thippaiah,
Aged about years,
R/o. Bommathanahalli village,
Kasaba Hobli,
Pavagada Taluk, Tumkur district
(The complainants represented
By advocate Sri.Raghavendra.Y.)
AND
1. The General Manager,
Agricultural Insurance Co. Ltd,
Indian Regional office (Karnataka) Opposite Parties
1st Floor, No.25, Shankaranarayana building,
2nd Cross, MG Road, Bangalore
2. The General Manager,
Agricultural Finance Corporation of India Ltd,
No.2/4, Aragini Bhavan, 4th Floor,
Dr.Rajkumar Road, Rajajinagar,
Bangalore-560 010
3. The Secretary,
VSSN, Maridasanahalli,
Pavagada taluk
(OP-1- by advocate Sri.Mohamed Afroze Ahamed)
(OP-2- Authorised Person)
(OP-3- Exparte)
ORDER
In these complaints, since common questions of facts and law are involved; the parties to the proceedings more particularly the OPs being one and same; in order to avoid confusion and repetition of the facts, they have consolidated and disposed off under a common order.
2. These are the complaints filed Under Section 12 of the Consumer Protection Act, 1986 (hereinafter called as Act for short)
3. Through these complaints, the complainants pray for an award and order against the Opposite Parties (hereinafter called as the OPs for short) to pay the “A+B” part insured amount of Rs.33,331/- and “A” balance insured amount of Rs.33,331/- respectively with interest at 18% per annum from the date of proposal till payment together with damages and negligence of service Rs.10,000/- respectively and also the costs of the proceedings.
4. The facts given rise to institute the complaints may be summarized as thus:
The Complainants being farmers are entirely depending upon the agricultural income for livelihood. It is claimed that, they being the owners of dry lands bearing Sy.Nos.1/1, 14/2, 14/4 and Sy.No.188/1A situated at Maridasanahalli and Bommathanahalli villages, Pavagada taluk, had insured their crops with the 1st OP on payment of requisite premium of Rs.3,080/-, Rs.3,270 and Rs.3,080/- respectively through the 3rd OP on 31-7-2003. They had insured their crops for Khariff season (Mungaru) 2003.
5. It is alleged that, on account of failure of rains during 2003, the entire groundnut crops were dried up and as a result, they have suffered heavy loss. They brought this fact to the notice of the OPs and requested them to make good of the loss. However, the OPs have not taken any steps and gave a deaf ear to their requests. Thus, they alleged that there is a deficiency in service on their part. Accordingly they pray for suitable award as stated supra.
6. Among the OPs who have been notified of the complaints, the 1st OP put in his appearance through his counsel and the 2nd OP appeared in person. The 3rd OP has failed to appear before the forum, hence, placed exparte.
7. In the objection filed by the 1st OP, it is contended that, the complaints are neither maintainable in law nor on facts. The allegations made against this OP are highly imaginary and it is liable to be dismissed in limine. It is contended that, National Agricultural Insurance Scheme (NAIS), Rastriya Krushi Bhima Yojana (RKBY) have been implemented in the county as per the orders of the Government of India and in active participation of State Governments. Therefore, it is contended that the Governments are necessary parties to the cases and when they have not been impleaded as parties, the complainants are liable to be rejected for non-joinder of necessary parties.
8. It is contended, that under the policy, all the banks (Co-operative, Commercial, Regional Rural banks) which extend short term production crop loan for the notified crops in the notified area are required to debit the premium of amount compulsorily to the crop loan. Being nodal banks, have collected service charges of 2.5% of the premium in respect of the both loanee and non-loanee farmers for the said season. Therefore, if there is any omission or commission or errors committed by them, they are liable to shoulder of their responsibility of paying the insurance claim.
9. It is also contended that, the crop insurance by its nature has to be done on the basis of “AREA” Approach. The crop insurance scheme provides indemnity based on the yield data that would be ascertained scientifically by crop cutting experiments. If the actual average yield of a notified crop in a notified crop in a notified area is less than the threshold yield fixed for the area, all insured farmers whose crops have been insured will become eligible for claim compensation as per NAIS. Eligible sum insured limits, as per Ha. under Part-A and B for groundnut crop during Kharif-2003 was fixed.
The compensation, if any, is calculated on the eligible sum insured as here under:-
Shortfall in Yield/Threshold Yield X sum insured = Indemnity claims
(Whereas the shortfall in yield = Threshold yield – Actual yield and sum insured is the amount of eligible coverage in the certified declaration.
10. It is contended that in hoblis of Pavagada taluk, Tumkur district the insurance company has settled the claims for ground nut crops on eligible claims on the following data received from the state Government during Khariff 2003.
11. It is further contended that, as per these complaints, the complainants have insured groundnut crop during Kharif -2003 seasons by paying eligible premium, however, this OP is not aware, of details, as this OP had received only consolidated crop-wise declaration from the nodal banks. It is also contended that, this OP verified the records, bank records, AFC investigation report and thereafter settled full eligible claims during Khariff-2003. It is further contended that, it was found that, due to typographical error, Part-B sum insured was wrongly typed. This OP has recommended all such errors/omissions cases to their H.O. for sanction from competent authorities. As and when this OP receives sanction and funds, he will be settling the balance eligible claims of Rs.33,331/- respectively for groundnut crop to these complainants. It is further contended that, any change in the notified area made by the bank/complainants, after settlement of claims for a season/after closing of a season, this OP is not liable to pay any additional claims.
12. It is further contended that, as per the declaration and bank records, AIC have already disbursed eligible and legitimate claims for the season. Therefore, there is no deficiency on the part of AIC. Accordingly, he prays for rejection of the complaints.
13. The 2nd OP in his objections has contended that, the Agriculture Finance Corporation (AFC) Ltd. is an Independent Premier Professional Public Sector firm rending its service in agriculture and rural development. It is contended that, the AIC (Agricultural Insurance Company of India) had entrusted AFC (Agricultural Finance Corporation) Bangalore to hold a concurrent field investigation study on temporary contract basis. Accordingly, the study was undertaken in the year 2003 and report was submitted to AIC in the year 2004. Therefore, they conducted the investigation and submitted their report. Thus, it is contended that, the AFC is no way responsible for the settlement of the claims. Accordingly, he prays for rejection of the complaints.
14. In support of the cases of the parties, the complainants have filed their affidavits. They have also pressed into service relevant documents. We have heard the learned counsels appearing for the parties. We have also examined the materials available on record.
15. The questions that arise for our considerations are:
1) Are the complaints bad for non-joinder of the necessary parties?
2) Is there any deficiency in service by the part of the OPs?
3) Are the complainants entitled to relief as prays for?
16. Our findings on the above questions are here under.
Point No.1: No
Point No.2: Yes
Point No.3: As per the order
REASONS
17. It is contended by the 1st OP that, the Insurance scheme has been sponsored by the Central Government and monitored by State Government. Therefore, it is contended that, the Governments are necessary parties. It is pertinent to note that the concluded and enforceable contract was between the complainants and the 1st OP. Though, the scheme was sponsored by the Union Government and monitored by the State Government, there was no privity of contract between the complainants and Governments. Therefore, in our view, the Governments are not necessary parties. This view of ours gains support from the decision of the Hon’ble National Commission reported in 2006 CPJ 4. Accordingly the point No.1 is answered.
18. The Point No.2 and 3: Since these two points are inter-connected, they have been discussed under a common head.
19. In so far as the concluded and enforceable contract between the complainants and the 1st OP is concerned there is no dispute. It is also not in dispute that the 3rd OP has acted as an agent in negotiating the contract between the complainants and the 1st OP. This opponent has promptly and diligently done his duties as an agent. Therefore we do not find any reasons to hold that there is a deficiency in service on their part. Likewise the 2nd OP has conducted investigation about the loss of crops as per the directions of the 1st OP. Therefore, he can not be saddled with the responsibility of sharing the burden of award. According we hold that there is no deficiency in service on the part of the 2nd OP and 3rd OP.
20. Coming to the responsibility of the 1st OP it is established that the 1st OP had entered into a contract with farmers to make good of the loss of crops in the event of account of any unfore-seen eventualities. It is also not in dispute that the crops for Khariff-2003 have been failed due to scarcity of water. When the complainants had insured their Khariff crops 2003 with the 1st OP on payment of requisite premium and the 1st OP had agreed to indemnify to the complainants in the event of any loss inrespect of insured crops, it is the bounden duty of the 1st OP to make good of the loss. However, instead of honouring the legitimate claims of the complainants, they have protected the issue on reason or other. It is pertinent to note that, the OP while admitting that, claim of the complainants has categorically contended that, they had recommended all the cases their H.O. for sanction and as and when they receive sanction and fund, they will be settling the eligible claim of the claimant at Rs.33,331/- respectively. Therefore, there is clear admission from the 1st OP above is liable to pay the amount. If the sanction and funds were not received, they should have taken prompt action to do the needful. But, there is nothing on record to demonstrate their prompt action. This, itself amounts to deficiency in service.
21. When the 1st OP had not shown any legitimate reason to repudiate the claim of the complainants and when there is nothing to suggest that the claims of the complainants are illegal, we are of the opinion that the 1st OP is liable to make good of the loss. The documentary evidence produced by the complainants does substantiate their claims. Therefore, we hold that the 1st OP is liable to make good of the loss.
22. The 1st OP instead of adhering to the terms of the concluded contract has postponed the payment without any tenable or legitimate reasons. Thereby, the 1st OP has caused mental agony and harassment to the poor farmers. Therefore we feel it is just and proper to award a reasonable amount of compensation under the head of mental agony and harassment. However, under the circumstance of the cases we quantify it at Rs.1000/- each.
23. Being that opinion we proceed to pass the following:
ORDER
The complaints are allowed in part with costs of Rs.500/- each directing the 1st OP to pay Rs.33,331/- each with a compensation of Rs.1000/- each in the above said complaints within 8 weeks from the date of this order, failing which, the said amount shall carry an interest at 10% per annum from the date of the complaints. The complaints against OPs No.2 and 3 are hereby rejected but without costs.
