::BEFORE THE DISTRICT CONSUMER DISPUTES  REDRESSAL FORUM, AT BIDAR::

                                                               C.C. No.99 /2016.

                                                            Date of filing: 08.11.2016.

                                                                   Date of disposal: 26.12.2017.

P R E S E N T:-    

                              (1) Shri. Jagannath Prasad Udgata,                                                                                                                                    B.A., LL.B.,

                                                                                                President

                             (2) Shri. Shankrappa (Halipurgi),

                                                                                 B.A.LL.B.,

                                                                                           Member.

COMPLAINANT/S:           CC.No.99/2016.

                                                  Ramesh S/o Rajendra,

                                                  Age: 61years, Occ: Agriculture,

                                                  R/o Dabka(c), Tq. Aurad, Dist: Bidar.

                                                  (By Sri. Narayan Ganesh, Adv.)

                                                                 VERSUS

OPPONENT/S:        1)         Chairman/MD, Agriculture Insurance Company, 

                                                3^rdFloor, Karnataka Pradesh Krishik Samaj,

                                                No.18, Nruptung Road, Hudson Circle,

                                                Bangaluru-560001.

                                    2)        The Branch Manager of

                                                Prathmik Krashik Pattin Sahakar Sang Niyamit,

                                                Village Dabaka (c), Tq. Aurad, Dist. Bidar.

                                         (By R1.Sri. V.S. Zalki, & R2.Sanjay Patil, Adv.)

::   J UD G M E N T  : :

By Shri. Jagannath Prasad Udgata, President.

1. Many agriculturists of different villages of Bidar District are before this Forum to assuage their grievances alleging deficiency of service in the part of the O.Ps.1 and 2, by filing a complaint U/s.12 of the C.P. Act., 1986.  Their land holdings, premium payments, crop patterns being dissimilar, cases being filed individually and some where jointly we propose to proceed case by case.  However in ColNo.2 of the order the derails of farmers are reflected.
2. Their Case number, acreage of land holding  Insurance Coverage amount, premiums paid and respective dates are as follows:-

3. The sum total of the case of the complainants/ complainant is as hereunder:

            Tthe farmers have filed the complaint stating that, the Govt. of India introduced the scheme starting for Rabi 1999-2000 season to protect the farmers against loss suffered by them due to crop failure on account of natural calamities.   The scheme is available to the farmers who were loanees and non-loanees.    The complainants and other 39 farmers have insured the Soya crop for the year 2015-16 (Khariff) under the scheme of National agricultural insurance (NIAS) of O.P.1 and paid the premium through O.P.2, as per para-5 of the complaint.    Due to lack of rainfall in the year 2015-16, the entire Soya crop was damaged, for which the complainants suffered heavy loss.  The State Government had declared the year 2015-16 as drought affected  and released funds to the farmers of Bidar district.   The complainants and other farmers of the village Dabka, Chikli, GanganBhid and Aknapur have made request to settle the claim to the Deputy Commissioner, Bidar, District Incharge Minister and Union Agricultural Minister.  In spite of request of the complainants, the O.Ps have not settled the genuine claim of the complainant.   The O.Ps. wilfully, deliberately and intentionally have not settled the claim, which resulted in deficiency in service on the part of the O.Ps.   Hence, the complaint for compensation as prayed in the complaint.

4. The Opponents entering into defence on receipt of Court notice, O.P.1 filed version contending that, the complaint is not maintainable as there is an insufficient, improper and inconsistent pleading.    The O.P.1 denied that, the complainants are the absolute owners and possessors of the alleged insured lands situated at Chikli (U) of Dabka(C) hobli in Auradtaluk.   It is submitted that, as per the scheme, payment of premium, sum insured, insured area and other details of the individual farmers are to be confirmed by the Nodal Bank only, by producing the relevant documents.   The role of the banks is to receive the premium amount, with concerned documents and send them to Nodal Banks to prepare and forward the consolidated declaration to the AIC for conclusion of contract.   The Govt. of India, the Govt of Karnataka and Nodal Bank are not made parties, hence the complaint is bad for non-joinder of necessary parties.   The rights and liabilities of the insured are strictly governed by the terms and conditions of the scheme and all such terms and conditions are binding upon the insurer also.   The scheme NAIS is being implemented on the basis of “Area approach”, which means if the actual yield per hectre of the insured crop for the notified crop area on the basis of requisite number of Crop Cutting Experiments in the insured season falls short of the specified “Threshold Yield”, all the insured farmers growing that crop in the notified area are deemed to have suffered shortfall in their yield.   The compensation if any is calculated as per the following formula,

Shortfall in Yield / Threshold Yield X Sum Insured for the farmer

(Shortfall in Yield = ‘Threshold yield – Actual yield’ for the Defined Area)

5. As per the decision taken in the SLCCCI meeting during 2015-Kharif season, “Threshold Yields” for rain fed crops the moving average yield i.e., 998.2 kg / Hectre based on 5 years average yield multiplied by 80% level of indemnity working out to 799 kg / Hectre were fixed respectively in Dabka (C) Hobli during 2015-kharif season.   The O.P.1 denied that, during 2015-kharif season, there was complete drought and as a result of drought itself, the complainants lost their insured crops, because as per the yield data based on crop cutting experiments conducted by the Karnataka State Govt., in respect of rain fed Soyabean crops during 2015-kharif season is as follows;

            As per the above data, there was no shortfall in yield in respect of rainfed Soyabean crop.  The O.P.1 has already settled the eligible claims as per the declaration sent by Nodal Banks, hence, there was no claim pending to be settled as alleged by the complainant.   The claims under NAIS if any will be settled only on the basis of yield data furnished by Directorate of Economics and Statistics arrived at regular thorough crop estimation surveys for crop insurance as well as production of estimates and not on any other basis such as Annavari, declaration of drought, declaration of floods, Gazette notification etc., by any department or authority.    In case, a farmer is deprived of any benefit under the scheme due to errors/omissions/commissions of the Nodal Bank/Branch/PACS, the concerned institution shall only make good all such losses.   The O.P.1 further submitted that, as there was no eligible claims to be settled in the area of complainant’s in respect of rain fed Soyabean Khariff crop during 2015-kharif season, there was no question of settling the claim as contended by the complainants and since the O.P has acted as per the mandatory scheme provisions of the scheme, the service of the O.P. is not at all deficient.   There is no cause of action arose to file the complaint.  Therefore, the complaint is devoid of merits and substances.  Hence, O.P.1 prays to dismiss the complaint with costs. The O.P.No.2 and 3 duly represented have never denied, disputed the complaint averments.

6. The complainants have filed documents, detailed at the end of this order, so also the complainants have filed evidence affidavit justifying their sides.  On the other hand, the O.P has filed documents, detailed at the end of this order, so also the O.P. has filed evidence affidavit justifying his side.  Both the complainant and O.P. filed their written arguments respectively.

7.         Considering contention of the complainant, the following points arise for our consideration:-

1. Whether the complainants have proved that there is deficiency in service on the part of the O.P.s?
2. What order?

8.         Our answers to the points stated above are as follows:-

1. In the affirmative.
2. As per final orders owing to the following:

:: REASONS ::

9.      Point No.1 :- In all these cases, we are really perplexed with the divergent approaches adopted by the Govt. authorities.  The Revenue authorities, through the nodal officer i.e. Dy. Commissioner of the District, declares the area as drought hit, resultant crop loss and passes two resolutions on 20.01.2016 and 12.05.2016, recommending/ requisitioning funds for grants to the affected farmers. The same authorities also release RAIN FALL CHART for the year 2015, from which it is evident that, during the khariff season of 2015, there were nominal rain falls on 05.06.2015, 09.06.2015, 13.06.2015, 14.06.2015, 17.06.2015, 18.06.2015, 02.07.2015, 18.07.2015, 23.07.2015, 02.08.2015, 10.08.2015, 11.08.2015, 12.08.2015, 20.08.2015, 21.08.2015, 01.09.2015, 04.09.2015, 06.09.2015, 07.09.2015, 11.09.2015, 14.09.2015, 15.09.2015, 17.09.2015, and after a long gap only on 2^nd of October 2015.  Another organ of the Govt. i.e. Directorate of Economics and Statistics per contra (Ex R.8) shows a fair average yield of Soyabean in respect of different villages.  The question to ponder here is, with  scanty rain falls read out from the data prepared by the local basic authorities i.e. Revenue, how could there be a growth of the crop and yield there from?  Further, what was the basis of data collection of the Directorate of Economics and Statistics? Whether it was by appropriate field and contour survey in tandem with the Revenue authorities or by any other means? Therefore, the entire datas put forward and relied upon by the opponent No.1 are shrouded with mystery and prima facie appear unreliable.  The contesting opponent has never bothered to examine any official of the above said Directorate to drive in his point that, there was satisfactory average yield in the villages under caption.

10.      Further, We have a gut feeling that the canvassment of the contesting opponent is in-corrigible per se.  We feel that, the insurance Company has created an ambiguity in turning the situation as is at present.  The question which looms large in our mind and perfectly pointed out by the complainants counsel is that, whether the insurance company or the Nodal Bank at any point of time, during the acceptance of insurance premium, ever made known, to the proposer that, a formula of average yield data of preceeding 7 years would be adopted in future to calculate compensation for crop loss?   If so, when and how?  Had the insurer or its’ associates have ever thrived to appraise the proposer in that regard?

11.       Nothing is in the record to prove the honest deliberations of the opponents and the sum total is, the opponents together are out to deny the gullible farmers of this country just claims, driving them to further woes and desperations in contradiction of the policy of the National Government.  The media is agog with news of farmers’ suicide, sufferance of their families, and loss of basic requirements of the family due to the death of the sole bread winner.  Alas, the institutions but are apathetic to the situation.  Engrossed in weaving legal cob webs.

12.       As discussed earlier, the insurance company creating an ambiguous situation in misleading the proposer to fall for a policy we propose to clear the legality in the approach of the insurer first.  In a landmark judgement reported in Vol. IV. CPJ-2016 IPICOL Ltd. v/s New India Insurance Company Ltd. the Hon’ble  Apex Court has been pleased to hold in paragraph 09 as follows.

“It is well-settled law that there is no difference between a contract of insurance and any other contract, and that it should be construed strictly without adding or deleting anything from the terms thereof”.

13.                   Going a step further ahead the Hon’ble Apex Court has discussed the doctrine of “contra proferentem” in paragraph 10 and 11 of the judgement as follows, which can be benevolently applied in favour of the insured.

            “We proceed to deal with the submission made by Counsel for the Appellant regarding the rule of contra proferentem.  The common Law rule of construction “verba chartarum forties accipiuntur contra proferentem” means that ambiguity  in the wording of the policy is to be resolved against the party who prepared it.  Macgillivray on Insurance Law (9^th ed., 1997) (Nicholas Legh-Jones et al, eds.) at p.280, deals with the rule of contra proferentem as follows:

            “The contra proferentem rule of construction, arises only where there is a wording employed by those drafting the clause which leaves the Court unable to decide by ordinary principles of interpretation which of two meanings is the right one.  “One must not use the rule to create the ambiguity one must find the ambiguity first.”  The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity rather appearing on the face of the policy or, possibly, by extrinsic evidence of surrounding circumstances”. (footnotes omitted).  Colinvaux’s  Law of Insurance, (6^th ed., 1990) (Robert and Merkin, eds.) at p.42. propounds the contra proferentem rule as under:

            “Quite apart from contradictory clauses in policies, ambiguities are common in them and it is often very uncertain what the parties to them mean.

            In such cases the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them.  It is construed contra proferentes, against those who offer it.  In a doubtful case the turn of the scale ought to be given against the speaker, because he has not clearly and fully expressed himself.  Nothing is easier than for the insurers to express themselves in plain terms.  The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be construed in the sense in which he might reasonably have understood it.  If the insurers wish to escape liability under given circumstances, they must use words admitting of no possible doubt.

            But a clause is only to be contra proferentes in cases of real ambiguity.  One must not use the rule to create an ambiguity.  On must find the ambiguity first.  Even where a Clause by itself is ambiguous if, by looking at the whole policy, its meaning becomes clear, there is o room for the application of the doctrine.  So also where if one meaning is given to a clause, the rest of the policy becomes clear, the policy should be construed accordingly”.  (footnotes omitted)

            This court in General Assurance society Ltd. V.Chandmull Jain and anr., reported in 1966 (SLT soft) 184=[1966] 3 SCR 500, held that there is a difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberima fides, i.e., good faith on the part of the insured and the contract is likely to be construed contra proferentes, i.e., against the company in case of ambiguity or doubt.  It was further held in the said judgment that the duty of the Court is to interpret the words in which the contract is expressed by the parties and it is not for the Court to make a new contract, however reasonable”.

14.                   Further  we may put hear that the insurance Company directly or impliedly putting a belief in the mind of the farmer that, his crops if destroyed due to natural calamities in the relevant year, would be indemnified would be estopped to claim otherwise at a later stage.  The Hon’ble A.P. High Court in a case between N. Bhuwaneshwar Rao v/s Principal Osmania Medical college reported in A.I.R. 1986 Page 196 (at page 2021) has been pleased to hold as described here under.

            “The doctrine off equitable estoppels applies to case where a person  is given an unequivocal assurance and on the faith thereof, he acted detrimental to his interest and he suffered an irretrievable injury in that pursuit.  In such an event having made such a promise the maker there of is precluded to resist there from and pass an order detrimental to the interest of the person who believed the promise; placed reliance thereof, acted on that basis to his detriment and he cannot adequately be compensated”.

15.       Albeit the opponent No.1 has painstakingly produced before us the judgements of higher foras detailed below:-

1.         Revision petition No. 2393-2394 of 2008 A.I.C. of India Ltd. and
           others v/s B.Narayan Swamy.

2.         Appeals No.2924/2009 to3004/2009, M.D.G.I.C. of India v/s
            Somanagouda and others of Karnataka State Commission.

3.         W.P. Nos. 16457/2007 to 16461/2007 (G.M-conv) v/s
           Dyavanagouda and others of Hon’ble High Court of Karnataka.
4.         W.P. Nos. 31701 to 31703/2008 Sri Virupakshappa and others v/s     
          M.D.A.I.C. of India Ltd. of Hon’ble High Court of Karnataka.

16.       The opponent No.1 undoubtedly tried to justify its’ in action of not awarding any compensation for which the premium amount was received by it.

17        Contritely, none of the judgements quoted above has dealt with the doctrines of “ESTOPPEL” and none had pleaded.  The higher foras also had not thought regarding the aspect as discussed and hence we are not inclined to consider the canvassments of the opponents.  Additionally, even though, there may be name sake yield as canvassed bytheO.P.No.1, for which no effective proof was led before us, the Hon’ble Apex court in a far fetching judgement reported in III (2007) CPJ 3 (S.C.)- United India Insurance Co. Ltd. V/S Great Eastern Shipping Co. Ltd. in Paras 7, 8, & 9 has been pleased to hold as follows:-

“We have bestowed our best of consideration to the rival submissions of the parties.  Mr. Divan, learned Senior counsel for the respondent submitted that as per the Institute Cargo clause, the English law and practice covers the dispute and in that connection, Mr. Divan invited our attention to a decision in Bayview Motors Ltd. v.  Mitsui Marine And fire Insurance Co. Ltd. and Ors., reported in [2003] 1 Lloyd’s List Law Lexicon, so as to give the meaning of the words, ‘extension’ and ‘renewal’ and also invited our attention to various interpretation of the word, ‘extension’ and in that connection, he has also invited our attention to a decision of this Court in Provash Chandra Dalui and Anr. V. Biswanath Banerjee and Anr., 1989  Supp. (1) SCC 487, and in that connection our attention was invited at paragraph 14 which reads as under:

“14. It is pertinent to note that the word used is ‘extension’ and not ‘renewal’.  To extend means to enlarge, expand, lengthen, prolong, to carry out further than its original limit.  Extension, according to Black’s law Dictionary, means enlargement of the main body addition of something smaller than that to which it is attached; to lengthen or prolong.  Thus extension ordinarily implies the continued existence of something to be extended.  The distinction between ‘extension’ and  ‘renewal’ is chiefly that in the case  of renewal, is new lease is required, while in the case of extension the same lease continues in force during additional period by the performance of the stipulated act.  In other words, the word ‘extension’ when used in its proper and usual sense in connection with a lease means a prolongation of the lease.  Construction of this stipulation in the lease in the above manner will also be consistent when the lease is taken as a whole”.

He has also submitted that in case of interpretation of policy if two views are possible, then the one which favours the policy-holder should be accepted as the same serves the purpose for which the policy is taken and would be inconsonance with the object to be achieved for the lives assured.

In support of his contention, learned Counsel relied on a decision of this Court in Shashi Gupta (Smt) v. Life Insurance Corporation of India and Anr., I (1996) CPJ 15 (SC)=1995 Supp. (1) SCC 754, in which it has been held as follows:

“As both the aforesaid interpretations are reasonably possible, we would accept the one which favours the policy-holder, as the same advances the purpose for which a policy is taken and would be consonance with the object to be achieved for getting lives assured”.

Our attention was also invited to a decision of this Court in Life Insurance Corporation of India v. Raj Kumar Rajgarhia & Anr., II (1999) SLT 362=(1999) 3 SCC 465, wherein it has been held as follows:

“It is not always possible to be guided by the meaning of the words as found in the dictionary while resorting to interpret the actual meaning of a word found in an agreement between the parties.  While construing the meaning of a particular word found in an agreement between the parties the intention of the parties to the document in question will have to be given necessary weightage and it is not possible to give a wider and liberal meaning merely because one of the parties to the said agreement is a public authority.  While interpreting the terms of the insurance policies if two views are possible, Courts will accept the one which favours the policy-holders.”

The above ruling of the highest court of the land binds us under Article 141 of Constitution of India and thereby we rule that, there has been a deficiency of service perpetrated upon the complainants and accordingly we proceed to pass the following:

                                                       ::ORDER:: 

1. The complaint is allowed in part.
2. The O.P.No.1 is hereby directed to reimburse the sum Insured together with an interest @ p.a.6% calculated from the dates of the individual complaint till the date of realisation.
3. The O.P.No.1 is further directed the pay a compensation of 5000/- towards damages, mental shock  and agonies together with a litigation expenses of Rs.2000/-.
4. Four weeks time granted to comply this order.

(Typed to our dictation then corrected, signed by us and then pronounced in the open Forum on this 26^th  day of December-2017).

   Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                  

Member.                                                                President.                  

Documents produced by the complainant

1. Ex.P.1-  Certified copy of national agricultural insurance company  

              scheme list.

2. Ex.P.2 – Rain fall report in the year-2015.
3. Ex.P.3- Representation to Central Agriculture Minister.
4. Ex.P.4-  Representations to the District Deputy Commissioner Bidar.
5. Ex.P.5-  Proceedings of the office of the Deputy Commissioner Bidar  
                 date:20.01.2016.
6. Ex.P.6- Proceedings of the office of the Deputy Commissioner Bidar  
                 date:12.05.2016.
7. Ex.P.7-Proceedings of theGovernment of Karnataka
                Date: 17.08.2015.
8. Ex.P.8- C.C. Of Proceedings of theGovernment of Karnataka date:     
               01.10.2014.   

Document produced by the Opponent.

1. Ex.R.1-  Booklet of NAIS Scheme and guidelines.
2. Ex.R.2- Attested copy of instructions to Nodal Banks by NAIS.
3. Ex.R.3- Attested copy of purported yield data for Khariff-2010.
4. Ex.R.4-Attested copy of letter of Government of Karnataka 
               (Directorate of Economics) and Statistics) date: 10.01.2011.
5. Ex.R.5- Actual yield data (attested) of NAIS for Khariff-2012.
6. Ex.R.6- Actual yield data (attested) of NAIS for Khariff-2013.
7. Ex.R.7- Actual yield data (attested) of NAIS for Khariff-2014.
8. Ex.R.8- Attested copy of Government of Karnataka (directorate of 
                 Economics and Statistics) date: 29.03.2016.
9. Ex.R.9- Copy of G.P.A. instrument.
10. Ex.R.10- Statistical data prepared by NAIS.

Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                  

       Member.                                                                      President.