Karnataka

Tumkur

CC/166/2019

B Mahammed Ali - Complainant(s)

Versus

Manager , State Bank of India - Opp.Party(s)

20 Feb 2021

ORDER

Complaint filed on: 03-10-2019

                                                      Disposed on: 20-02-2021

 

BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, TUMAKURU

 

CC.No.166/2019

DATED THIS THE 20^th DAY OF FEBRUARY, 2021

 

PRESENT

 

SRI.C.V.MARGOOR, B.Com, L.L.M, PRESIDENT

SRI.KUMARA.N, B.Sc., L.L.B, MEMBER

SMT.NIVEDITA RAVISH, B.A., L.L.B, LADY MEMBER

 

Complainant: -

 

B.Mahamad Ali,

S/o late Buden Sab,

Aged about 56 years,

R/at Handanakere

Chikkanayakana halli taluk,

Tumkur district

 

(In person)

 

V/s

 

 

Opposite parties:-    

 

1. The Manager

State Bank of India

Handanakere Branch,

Chikkanayakana halli taluk

Tumakuru district

 

2. Agriculture Insurance Company of

India Ltd, Regional office, No.18,

3^rd Floor, Karnataka Pradesh Krushika Samaja building, Hudson circle, Bengaluru-01

 

(OP No.1-Exparte)

(OP No.2-by Sri.Mohamed Afroze Ahamed, Advocate)

 

 

ORDER

 

SRI.C.V.MARGOOR, PRESIDENT

 

This complaint is filed under Section 12 of the Consumer Protection Act, 1986 to direct the Opposite parties to pay insured amount of Rs.54,920=00 with interest for the loss of crop during the year 2017. The complainant further prayed to award litigation expenses of Rs.20,000=00 and compensation of Rs.10,000=00 for mental agony.

 

2. The 1^st OP is State Bank of India, Handanakere branch and the 2^nd OP is Agricultural Insurance Company of India Ltd. (the OP No.1 hereinafter called as Bank and OP No.2 as Insurer).

 

3. It is the case of complainant that he being the owner of land Sy.No.90/5 measuring 2 acres 18 guntas, Sy.No.90/6 measuring 1 acre 35 guntas, Sy.No.90/7 measuring 4 guntas and Sy.No.90/8 measuring 17 guntas total measurement is 4 acres 34 guntas  situated within the limit of Handanakere village, Chikkanayakana halli taluk, Tumakuru district. The complainant has insured green gram crop grown in the said lands on 4-7-2017 by paying premium amount of Rs.1099=00 through his banker OP No.1. The OP No.1 bank has transferred an amount of Rs.1099=00 to the insurer on 16-8-2017 from the SB account of complainant. The complainant has insured green gram crop for a sum of Rs.54,920=00. It is further case of complainant that during the year 2017 on account of drought he could not get any crop consequently, sustained loss. The complainant did not receive crop insurance amount then he wrote a letter to the bank on 18-3-2019 for release of crop insurance amount. The complainant has made correspondence with the Commissioner of Agriculture Department, Bengaluru and other concerned authority but there was no response hence, he approached this Commission.

 

4. The 2^nd OP-Insurer appeared through its learned counsel in response to notice and filed written version stating that the Pradhan Mantri Fasal Bima Yojana (PMFBY) is being implemented in the country with effect from 23-2-2016. The 2^nd OP submitted that the complainant has demanded for claim settlement in respect of Green gram grown on rainfed basis pertaining to Handanakere hobli for Kharif 2017-18 season. The State Level Coordination Committee on Crop Insurance (SLCCCI) has assessed the loss of crop in Handanakere hobli, Chikkanayakana halli taluk as per the guidelines of PMFBY scheme and claim percentage worked out at 40.32%. It is further case of insurer that the bank has not sent the premium amount to it even after expiry of 14 days cutoff date on making payment of premium amount. Therefore, the insurer has refunded the premium of Rs.5,36,793.54 on 26-7-2018 to the 1^st OP. There is no deficiency in service on the part of insurer nor there is negligence on its part. On the above grounds, the 2^nd OP asked to dismiss the complaint.

 

5. The 1^st OP bank despite the service of notice was proceeded exparte.

      

          6. The complainant has filed his affidavit evidence and got marked Exs-P1 to P16 documents. On behalf of the 2^nd OP its Deputy Manager one J.M.S.Ahmed filed affidavit evidence and produced Exs-R1 to R11.

 

 

 

          7. We have heard the arguments advanced by the complainant and the learned counsel representing the 2^nd OP in addition to written brief submitted by the complainant and the points that would arise for determination are as under:

1)      Whether the complainant proves the deficiency in service on the part of OPs?

2)      Is complainant entitled to the reliefs sought for?

  

8. Our findings on the aforesaid points are as follows:

Point No.1: In the affirmative    

Point No.2: In the partly affirmative for the below

 

REASONS

 

          9. Point No.1 to 2: The complainant submitted that though he has paid the insurance premium amount before cutoff date in the 1^st OP bank but it has failed to remit to the insurer before the expiry of 14 days fixed i.e. end of cutoff date was on 15-7-2017. The complainant further submitted that due to negligence on the part of the 1^st OP bank he could not get crop insurance compensation though the drought prevailed in Handanakere hobli, Chikkanayakana halli taluk. As against this the learned counsel representing the 2^nd OP urged that there is no fault on the part of insurer since the bank has sent the premium amount to the insurance company 14 days after the expiry of cutoff date.

 

          10. The PMFBY aims at supporting sustainable production in agriculture sector by way of providing financial support to farmers suffering crop loss or damage arising out of unforeseen events and stabilizing the income of farmers to ensure their continuance in farming. Weather Based Crop Insurance Scheme (WBCIS) aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from adverse weather conditions relating to rainfall, temperature, wind, humidity etc. The insurer has not disputed the insurance premium paid by the complainant for green gram crop raised in his lands during the year 2017-18.

 

11. Under PMFBY the State Government has formed the State Level Co-ordination Committee on crop insurance and District Level committee to assess the loss suffered by farmers by using Crop Cutting Experiments (CCE) method.  On the basis of report submitted by committee loss yield report is updated in the State Samrakshane portal.

 

12. The complainant has produced Ex-P11 acknowledgement issued by the 1^st OP bank dated 4-7-2017. Ex.P11 indicates that the complainant has remitted Rs.1086.40 as premium for green gram crop grown in the area of 4 acres 34 guntas within the limit of Handanakere village for the year 2017-18. Ex-P12 is the copy of bank pass book of complainant and it shows that the 1^st OP has transferred a sum of Rs.1099.00 on 16-8-2017 and entry reads as crop insurance transfer to parking account SBM HA. Exs-P16 and P9 are the material documents in respect of payment of premium by the farmers. Ex-P16 notification issued by the Joint Director of Agriculture department, Tumakuru and according to this cutoff date for payment of insurance premium is 15-7-2017. Ex-R9 is another letter issued by the 2^nd OP to the Deputy Commissioners of all districts and Joint Directors of Agriculture, Deputy Directors of Horticulture in the state of Karnataka and it contained terms and conditions of Kharif-2017 Pradhan Mantri Fasal Bima Yojana. According to Ex.R9 cutoff date for payment of premium by non loanee farmers is 7-7-2017 and for loanee farmers is 15-7-2017. The bank shall remit the premium amount to the insurer within 15 days from the date of cutoff date of loanee farmers and 7 days for non loanee farmers i.e. after farmers enrolment cutoff date. The complainant has paid premium on 4-7-2017 vide Ex-11 receipt (non loanee) though the cutoff date was 15-7-2017. The 1^st OP bank has sent the premium amount of complainant on 16-8-2017 more than one month after the cutoff date and that can be found in Ex-P12 account extract of complainant. The concerned department has rejected the proposal application of complainant vide Ex-R10 check status of Samrakshane portal.

 

13. The complainant has made correspondence with the bank and agriculture department and he has produced Exs.P7 and P8 resolution passed by the Chief Executive officer, Zilla Panchayath, Tumakuru and Joint Director of Agriculture, Tumakuru dated 20-12-2018 and 25-9-2019 holding that the persons who have not followed the guidelines of Pradhan Mantri Fasal Bima Yojana shall liable to answer to the complaints of complainants and further the bank and insurer are liable to pay the claim amount. Ex.P9 is the list of farmers whose proposals are rejected of the crop insurance compensation. The complainant’s application No.is 330814 and reason for rejection of his application mentioned in Ex.P9 as proposal forwarded to insurer beyond 14 days delay. On perusal of bank statement of complainant the 1^st OP has sent the proposal on 16-8-2017 though he had paid the premium amount along with proposal application prior to cutoff date. As already stated the cutoff date was on 15-7-2017 but the complainant has paid the premium on 4-7-2017 vide Ex.P11 acknowledgement.

 

14. Clause Nos.24.1 and 24.2 of Pradhan Mantri Fasal Bima Yojaya operational guidelines reads as under:

“24.1 Insurance companies should have received the premium for coverage either from bank, channel partner, insurance intermediary or directly. In case of any loss in transit due to negligence by these agencies or non remittance of premium by these agencies, the concerned bank/intermediaries shall be liable for payment of claims.

 

24.2 In case of any substantial misreporting by nodal bank /branch in case of compulsory farmers coverage, the concerned bank only shall be liable for such mis-reporting”.

 

 

          15. Further Clause No.35.5.2.1 of Pradhan Mantri Fasal Bima Yojana scheme deals with the role of lead bank/Administrative office of commercial bank, DCCBs, RRBs. Clause No.35.5.2.2 to 7 reads as under:

“35.5.2.2 Communicate Notification, as well as other directives, guidelines, etc. to all agencies within their jurisdictional area.

 

35.5.2.3 Ensure that all agencies within their jurisdictional area sanction additional loan component to loanee farmers towards premium payable by them.

 

35.5.2.4 Ensure that all service (subordinate) bank branches within their jurisdictional area serve all non-loanee farmers desiring and eligible to take insurance cover under PMFBY. Such service will include opening bank account of non-loanee farmers, guiding them to fill up proposal forms, accepting premium from them and maintaining records etc.

 

35.5.2.5 Ensure that the premium for both loanee and non-loanee farmers shall be remitted to concerned Insurance Companies and the related data uploaded on National Crop Insurance Portal within the prescribed time.

 

35.5.2.6 Lead bank/Administrative Offices of Banks should ensure that all farmers sanctioned crop loans/seasonal operational loans/KCC loan for notified crop(s) are compulsorily insured and the conditions stated in the Operational Guidelines of the Scheme have been complied with. No farmer should be deprived of insurance cover. Lead banks/ Administrative Offices of Banks therefore, should make all efforts and pursue their branches for enrolling all eligible loanee farmers and interested non-loanee farmers under crop insurance. In case, claims have arisen during crop season then respective bank and its branches would be made responsible to make payment of the admissible claims to loanee farmers who were deprived from insurance cover to their crops.

 

35.5.2.7 Concerned Bank and its branches should ensure upload/submission of notified crop-wise, insurance unitwise Declarations in prescribed format on National Crop Insurance Portal along with details of remittance of premium within stipulated time. A copy/print out of declaration uploaded on Portal may also be submitted to concerned Insurance Companies, if so desired by them. The consolidated premium of farmers’ share will be remitted electronically either through payment gateway of National Crop Insurance Portal or RTGS/NEFT to Insurance Companies followed by compulsory entry of payment details on Portal for proper and timely reconciliation by ICs. If Concerned Bank and its branches are not able to remit the amount of premium collected to Insurance Companies or submit declaration in prescribed format by the defined timelines then they will be liable to pay admissible claims to farmers who are deprived from insurance cover to their crops”.

 

          16. From the perusal of these clauses No.24 and 35 it can be said that in case the concerned bank failed to remit the premium amount within the defined time line then it is liable to pay the admissible claims to loanee or non loanee farmers who were deprived of insurance cover to their crops. In this case on account of negligence of the 1^st OP bank the complainant application came to be rejected as the bank has sent the application and premium amount on 16-8-2017 after expiry of dead line time i.e. 31-7-2017.

 

17. Topic Sl.No.XVI of Operational Guidelines of PMFBY says with regard to procedure for settlement of claim to the farmers. Under this topic Clause-6 says that the insurance company shall resolve all the grievances of the insured farmers and other stakeholders in the shortest possible time. Clause 7 says disputed claims / sub standard claims, if any will be referred within three months of claim disbursement through State Level Coordination Committee on Crop Insurance (SLCCCI)/State Government to Department of Agriculture Cooperation and Famers Welfare (DAC & FW) for consideration and decision of DAC & FW in case of any interpretation of provisions of scheme or disputes will be binding on State Government /Insurance Company /Banks and the farmers.

 

18. The 2^nd OP insurer has not disputed the payment of premium by the complainant to cover the green gram crop for the year 2017 season. The assessing authority has calculated the loss of green gram crop by taking into average of past 5 years assessed yield and it arrived average yield as 262.56 kg. According to Pradhan Mantri Fasal Bima Yojana scheme level of indemnity for the year 2017 season is 80% then the threshold yield comes to 210.04 kg.  Assessed yield for the year 2017 is 36.604 kg then short fall of yield comes to 173.44 kg. The OP has taken into Area Correction Factor as per paragraph no.27.4 of Pradhan Mantri Fasal Bima Yojana scheme then claim percentage comes to 40.32%. The actual loss of yield for the year 2017 arrives at Rs.22,144=00 i.e.40.32% of insured amount.

 

19. The 1^st OP bank shall liable to pay the said amount since it has failed to send the premium amount along with proposal to the insurer within the cutoff date time line. Due to negligence on the part of 1^st OP the complainant has deprived of the insurance amount for the year 2017 and to seek compensation he has approached the bank and agriculture department etc. and for that he suffered mentally. Therefore, the 1^st OP shall pay a sum of Rs.5,000=00 as compensation towards mental agony and Rs.5,000=00 towards litigation expenses. For the above reasons, we proceed to pass the following;

 

ORDER

 

The complaint is partly allowed directing the 1^st OP bank to pay a sum of Rs.22,144=00 as crop insurance compensation with interest @ 8% p.a. from 1-1-2018 till the date of payment.

 

It is further ordered that the 1^st OP shall pay Rs.5,000=00 as compensation and Rs.5,000=00 as litigation expenses to the complainant within 45 days from the date of this order otherwise, it carries interest @ 8% p.a. from the date of filing the complaint till the date of payment.

 

The case against the 2^nd OP insurer is dismissed.  

 

Furnish the copy of order to the complainant and opposite parties at free of cost.