2017(3) ALL MR 514
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (AURANGABAD BENCH)
S. V. GANGAPURWALA AND K. L. WADANE, JJ.
Vivid Karyakari Seva Sahakari Society Limited Vs. The Union of India & Ors.
Writ Petition No.2353 of 2003
1st February, 2017.
Petitioner Counsel: Mr. S.B. GASTGAR
Respondent Counsel: Mrs. M.A. DESHPANDE, Mrs. D.S. KULKARNI
National Agricultural Insurance Scheme (NAIS) - Claim for damage caused to sugarcane crop of members of petitioner Society due to natural calamity - Scheme provides that State department will plan and conduct requisite number of Crop Cutting Experiments (CCEs) for all notified insurance units in order to assess crop yield - Petitioner contending that there was failure of crop in the area and State Govt. had declared scaling down of Annewari in the area and recognised that percentage of crops in area is below 50% - The Scheme prescribes different modes of assessing shortfall in the yield - Same is equivalent to threshold yield and actual yield during relevant period - Respondents on basis of crop cutting experiments did not find that there is any shortfall in the yield - Held, Annewari cannot be the basis for assessing claims - Methodology for working out shortfall in production is based on crop cutting experiments of relevant year - Therefore, contention of petitioner liable to be rejected - Claim not allowed. 2005 BCI 76 Foll. (Paras 15, 16, 17, 18, 19, 20)
Osmanabad District Central Cooperative Bank Ltd. Vs. State of Maharashtra and others, 2005 BCI 76 [Para 20]
"(B) It be held and declared that members of the petitioner society whose names are mentioned in Exhibits B and C herein are entitled to receive compensation under the National Agricultural Insurance Scheme (NAIS) from Respondents No.1 to 5 because of loss and damage suffered by them to their sugarcane crop on the night intervening between 5th and 6th January 2002 due to icicle and cyclone which occurred in Hosur village in Nilanga Taluka of Latur District.
(C) By a writ of mandamus or any other appropriate writ, order or direction, this Hon'ble High court be pleased to direct the respondents No. 1 to 5 and more particularly respondent No. 3 to calculate and pay the members of the petitioner society compensation for the loss and damage caused to their sugarcane crop due to icicle and cyclone which occurred on the night intervening between 5th and 6th January, 2002, forthwith."
4. The petitioner is a village level Society engaged in providing loan facilities to its members/ farmers. Respondent No.1 has evolved and brought out National Agricultural Insurance Scheme (for brevity 'NAIS'). As per Clause 1 of the NAIS, insurance protection and financial assistance is provided to the farmers in the event of loss or damage caused to their crops due to natural calamities and other reasons. As per Clause 2(1) of the NAIS, the farmers who are taking crop loan from financial institutions have to be compulsory members of this Scheme. As per Clause 2(3) of the Scheme, rates of of crop wise insurance premium are prescribed. In the said clause, at Serial No.3, for annual cash crop taken for Kharip and Rabbi seasons, the rate of insurance premium is fixed at actual rate. In Clause 2(4) of the Scheme, it is provided that Central Government and the State Government would give 50% subsidy in the payment of insurance premium to the farmers at the rate of 25% each. As per clause 2(56) it is provided that crop protection would be granted to the farmers under the scheme, if the damage caused to the crop is due to circumstances and reasons beyond the control of the farmers. Reasons of storm, icicle and cyclone are mentioned as those reasons due to which insurance protection is available. As per clause 2(7), formula by which the insurance compensation is payable is prescribed.
5. The petitioner had advanced crop loans to its members/farmers by taking cash credit from respondent Nos. 4 and 5. Accordingly, all the members of the petitioner society who were granted crop loan for sugarcane crop in January 2001 were required to compulsorily contribute insurance premium as per the rate prescribed in the Scheme. It is contended by the petitioner that deduction of insurance premium under the scheme was made from the crop loans granted to the members of the petitioner society in the month of February and March, 2001. So, the members of the petitioner society have already paid the necessary premiums for the insurance of their crop.
6. On the night intervening 5th and 6th January, 2002, in the entire geographical area of village Hosur, icicle and cyclone occurred, due to which, there was damage to the crops of the members of the petitioner society to the extent of cores of rupees including loss to the sugarcane crops.
7. Representatives from the office of the District Superintending Agricultural Officer, Latur conducted survey about the damage caused to the crops of the area hit by icicle and drew panchanamas of such damage. Such Panchanamas were forwarded to the concerned Tahsil Office and this fact was also informed to the members of the petitioner society. The sugarcane crop raised by the members of the petitioner society in Rabbi season, 2001 suffered extensive damage therefore, as per terms and conditions of the above mentioned scheme, the respondents are liable to pay compensation for the damage of the crops. The damage caused to the crops of the members of the petitioner society was due to natural calamities beyond the control of the members of the petitioner society. However, respondents have not taken any steps to pay compensation.
8. On 15th May, 2002, respondent No.6 declared final crop Annewari below 50 paise of village Hosur, mentioned at Serial No.118. The members of the petitioner, therefore, entitled for compensation under the Scheme due to loss and damage suffered to their sugarcane crop.
9. Affidavit in reply is filed on behalf of respondent No.3. It is stated that NAIS is now being implemented by the Agricultural Insurance Co. of India Ltd (AIC). It is further stated that no fundamental rights are created in favour of the farmers. It is submitted that the matter is relating to the contract between the parties and there is efficacious remedy under the provisions of Civil Procedure Code.
10. The NAIS is to operate in 'defined area' as may be notified by the State Government from time to time. The basis of settlement of claim is result of crop cutting experiment. The scheme was implemented till Kharip-99 season. The nature of coverage is, if the actual average yield per hectare of the insured crop for defined area determined on the basis of crop cutting experiments in the insured season falls short of the specified threshold yield, all the insured farmers growing that crop in the defined areas deemed to have suffered shortfall in their respective yields and the scheme seeks to provide coverage against such contingency. The claims are not tenable on the basis of declaration of Annewari but on the basis of the actual yield data generated on the basis of crop cutting experiments.
11. On behalf of respondent No.6, affidavit in reply is filed by one Rajkumar Tukaram More who states that crop insurance is given on the yield obtained from crop cutting experiment conducted in Taluka and in natural calamities, the State Government gives direction to conduct Panchanamas of crop for giving assistance to the farmers. In this case, assistance is given to the farmers for foodgrains and horticulture crop. Sugarcane crop was not included in the Government Resolution for giving assistance in natural calamities but this crop insurance is given as per guidelines given by the central Government to those farmers who obtained loan. It is further stated that if at all at the time of natural calamities, a particular village suffers loss then no assistance is given as per the Central Government guidelines. The assistance is given only as per the crop cutting method conducted in selected village in the taluka. Hence, there is no nexus of the panchanamas done at the time of natural calamity for payment of crop insurance.
13. Mr. Gastgar, learned counsel for the petitioner has argued that from the Panchanama conducted by the concerned authority, it is very much clear that there was extensive damage to the sugarcane crop of the members of the petitioner. Such crop being ensured with respondent No.3, the respondents are liable to pay for the damage caused to the sugarcane crop. The learned counsel further argued that since the members of the petitioner have obtained loan from the petitioner. The petitioner advanced such loan by taking cash credit from respondents 4 and 5. Premium of insurance of the crop was deducted from the loan advanced to the members of the petitioner as per the scheme. The members of the petitioner have made representations to the appropriate authorities to consider their claim for compensation, however, no steps were taken to pay such compensation.
14. As against this, Mrs. Kulkarni, the learned counsel appearing for respondent No.3 has argued that the compensation of insured crop is not payable on the basis of Annewari but such compensation is payable on the basis of actual yield data generated on the basis of crop cutting experiment.
15. Dispute between the parties is in regard to the payment of compensation for the damage caused to the crops of the members of the petitioner society. To resolve the controversy, it is material to refer to the object of the scheme.
16. The object of the scheme is to provide insurance coverage and financial support to the farmers in the event of loss to their crops due to natural calamities. The crops covered under the scheme are sugarcane, cotton etc. The petitioner is concerned with the disbursement of claims of its members under the NAIS on account of damage of sugarcane crop. The scheme covers group of farmers i.e.:
(i) On compulsory basis: All farmers growing notified crops and availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions i.e. Loanee Farmers. (ii) On a voluntary basis: All other farmers growing notified crops (i.e. Non Loanee farmers) who opt for the Scheme. Under the scheme, risks covered are on account various reasons including cyclone.
17. The provisions made in the scheme are that, the State Department will plan and conduct requisite number of Crop Cutting Experiments (CCEs) for all notified crops in the notified insurance units in order to assess crop yield. The number of crop cutting experiments required to be conducted in Taluka, Tahsil, Mandal or Gram Panchayat area are also noted in the scheme. The claims are settled on the basis of yield data received from the State Government on the basis of crop cutting experiments. The damages are required to be worked out on consideration of data received in respect of crop cutting experiments and threshold yield in respect of a particular crop.
18. It is the contention of petitioner that there was failure of crop in the area and as such, the State Government, through the Revenue Department, had declared Aanewari in the area below fifty paise, which is an indicative of the fact that there is failure of the crop. The petitioner, thus, contend that although there is a failure of crop and even though the State Government, through Agricultural Department, recognized that the percentage of crops in the area is below 50%. Respondent No.3-Insurance Company herein failed to compensate the farmers.
19. The argument of the petitioner, based on scaling down of annewari by the State, which according to the petitioner, is less than 50 paise, for consideration of claim towards recovery of insurance claim, cannot be accepted. As stated above, the scheme prescribes different modes of assessing shortfall in the yield. The shortfall in the yield is equivalent to threshold yield and actual yield during relevant period. The Respondents, on the basis of crop cutting experiments, did not find that there is any shortfall in the yield. Thus, the contention raised by the petitioner that its members are entitled to be indemnified, as there is scaling down of Annewari by the State Government, which itself is indicative of the shortfall of yield, cannot be accepted.
20. Useful reference can be made to the judgment in the case of Osmanabad District Central Cooperative Bank Ltd. vs. State of Maharashtra and others, reported in 2005 BCI 76. In the reported matter, the argument was advanced by the petitioner therein that the farmers / agriculturists are entitled to be indemnified on account of scaling down of revenue assessment by the State and that the Aannewari was below 50 paise. However, the Division Bench, on consideration of the claim, found that the Annewari cannot be the basis for assessing the claims and the methodology for working out the shortfall in production is based on the threshold yield and data of actual yield based on crop cutting experiments of the relevant years. The view adopted by the Division Bench in the reported matter can be followed and adopted in the instant matter also.