AGRICULTURAL INSURANCE CO. OF INDIA LTD. vs HEM SHANKAR & ANR.

These 9 revision petitions have been filed against the impugned order dated 15.05.2012, passed by the Rajasthan State Consumer Disputes Redressal Commission (hereinafter referred to as the ''State Commission'') in FAs No. 494 to 502 / 2012 filed by the present petitioner, vide which, while dismissing the said appeals, the orders dated 31.01.2012 passed by the District Forum Dungarpur, Rajasthan in Consumer Complaints No. 34 to 41/2011 and 52/2011 were ordered to be confirmed.

This single order shall dispose of all nine revision petitions and a copy of the same be placed on each file.

Since the issue involved in all these revision petitions is the same/common, the facts in RP No. 2971/2012 are taken for adjudicating the matter. The brief facts are that the complainants in question, are farmers in Mauza Talora, Tehsil Aaspur, District Dungarpur, Rajasthan and they had grown maize crop on their lands after raising loan of 35,000/- under Kisan Credit Scheme from the Bank of Baroda. The said crop was covered under compulsory insurance provided by the petitioner, Agriculture Insurance Company of India Limited, under the scheme known as National Agricultural Insurance Scheme (NAIS), also known as the ''Rashtriya Krishi Bima Yojana''. The said scheme NAIS was the joint venture of the Central and State Governments/Union Territories and the farmers growing notified crops and availing Seasonal Agricultural Operations (SAO) loans from the financial institutions, known as ''Loanee Farmers'' were covered under the scheme. For other farmers who had not taken the loans, the scheme was optional. A 50% subsidy in the premium was also allowed to small and marginal farmers under the scheme to be shared equally by the Government of India/respective State Governments. The scheme was operated on the basis of area approach, i.e., for defined areas for each notified crop for widespread calamities, and on individual basis for localised calamities such as hailstorm, landslide, cyclone and flood etc. At the beginning of each crop season, each State Government/UT notified the crops and the defined areas. It has been stated by the complainants that the insured crop sown in July 2009 got damaged due to less rains and insects etc. The damaged crop was surveyed by the concerned revenue officials in consultation with the local Sarpanchs of the Gram Panchayats and as per the survey, there was 71% damage to the crop. The complainant demanded compensation under the insurance cover from the petitioner. However, when the compensation was not given, they filed the consumer complaints in question, seeking directions to the petitioner/OP to pay a sum of 35,000/- towards shortfall in the crop yield due to the damage to crop and also certain compensation on various other grounds.

The complaints were resisted by the petitioner/OP-2, Agricultural Insurance Corporation of India by filing written replies before the District Forum, in which they stated that the District Forum at Dungarpur had no jurisdiction to decide the consumer complaints, as the petitioner had no branch office at that place. The petitioner/OP-2 took the main plea that the scheme was implemented in selected notified areas on unit area basis. Under the scheme, the average crop yield was to be determined based on minimum 16 crop-cutting experiments. As per the report of these experiments, the actual yield of the crop during the period in question, was found to be more than the guaranteed yield, and hence the claims were not payable. The OP-2 stated that the whole Tehsil was to be considered as a single unit, and a decision about paying compensation was to be taken, considering all the farmers as one unit, regardless of the fact whether an individual farmer would have suffered loss or not.

The District Forum after taking into account the averments of the parties, dismissed the complaints against the Bank of Baroda, holding that there was no deficiency in service on the part of the Bank. However, they allowed the complaints against the petitioner Agricultural Insurance Corporation of India, based on the report of the Revenue Department and directed payment of 24,850/- to the complainant alongwith interest @9% p.a. from 03.03.2011 till payment. A sum of 5,000/- was also allowed as compensation for mental harassment etc.

Being aggrieved against the order of the District Forum, the petitioner/OP-2 challenged the same by way of appeals before the State Commission and the said appeals having been dismissed vide impugned order, the petitioner/OP-2 is before this Commission by way of the present revision petitions.

The notices of the revision petitions were sent to the respondents, but they did not put in appearance despite service. Hence, they were proceeded against exparte.

During hearing before me, the learned counsel for the petitioner submitted that the Government of Rajasthan had issued a notification vide endorsement P-1(2)Agriculture-1/MC/2008 dated 05.06.2009, regarding the implementation of the Scheme of Crop Insurance for the crop Kharif 2009. It was stated in the said notification that the scheme was compulsory for Loanee farmers, but optional for non-loanee farmers. It was also stated that the guaranteed threshold yield in tehsil Aaspur for maize crop was 463 kg/hectare for kharif 2009. Further, as per letter No.F6(iii)C.Ag./NAIS/20(3)/2009-10/2163-66 dated 29.01.2010, the yield of maize realised was 540 kg/per hectare in Tehsil Aaspur, District Dungarpur, which was evidently more than the threshold yield.

The learned counsel pointed out that it had been stated very clearly in the National Agricultural Insurance Scheme (NAIS) itself at clause 13, as follows:-

" 13. 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."

Further, clause 9 of the said scheme says as follows:-

"9. AREA APPROACH AND UNIT OF INSURANCE :

The Scheme would operate on the basis of ''Area Approach'' i.e., Defined Areas for each notified crop for widespread calamities and on an individual basis for localised calamities such as hailstorm, landslide, cyclone and flood. The Defined Area (i.e., Unit area of insurance) may be a Gram Panchayat, Mandal, Hobli, Circle, Phirka, Block, Taluka, etc. to be decided by the State/UT Govt. However, each participating State/UT Govt. will be required to reach the level of Gram Panchayat as the unit in a maximum period of three years."

The documentary evidence placed on record by the petitioner in the shape of letter dated 29.01.2010 from the Government of Rajasthan, Commissionerate of Agriculture, says it clearly that based on the data form the crop-cutting experiments for Kharif 2009 season, the average yield of maize in the area of the complainants was more than the guaranteed or the threshold yield. In the guidelines to financial institutions attached with the scheme, it has been stated in clause 20 that claims under the scheme will be settled only on the basis of data received from crop-cutting experiments and not on any other basis such as annavari, declaration of drought etc. It is made out, therefore, that the orders passed by the Consumer Fora below which are based on the figures of the damage to the crop given by the Revenue Department, cannot be made the basis for determining the compensation payable to the farmers. The orders passed by the consumer fora below are, therefore, perverse in the eyes of law.

Similar view has been taken in a number of cases already decided by this Commission. In a case recently decided by this Commission in FA No. 264/2010, " Agriculture Insurance Co. of India vs. Farmers'' Service Co-op. Society Limited " and allied matters, an order was made on 31.05.2016, and it was held as follows:-

"It is very clear, therefore, that the declaration made by the Revenue Department of the State Government, saying that it was a drought affected area is of no consequence, in so far as the outcome of the present case is concerned. The farmers in question have been got insured under the provisions of the National Agriculture Insurance Scheme and hence, the decision is to be taken, based on the provisions of the Scheme. The Department of Agriculture and Cooperation of the State Government have also taken this plea in their appeal filed before this Commission that the decision has to be based on the guidelines issued in the Scheme."

In another case decided on 06.10.2016 in RP No. 2574/2012, "Agriculture Insurance Co. of India Ltd. vs. Agriculture Service Cooperative Bank Ltd. & Ors." and allied matters as well, it has been held that decision about payment of compensation to the farmers insured under the National Agricultural Insurance Scheme has to be taken in accordance with the provisions laid down under the scheme.

Based on the foregoing discussion, it is held that both the consumer fora below have taken an erroneous view by not placing reliance on the provisions of the scheme under which the farmers were insured. The orders passed by the consumer fora below are, therefore, set aside. The present revision petitions are allowed and the consumer complaints in question, are dismissed. There shall be no order as to costs.