BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:HYDERABAD.
F.A.No.635/2005 AGAINST C.D.No.124/2004, DISTRICT CONSUMER FORUM, PRAKASAM AT ONGOLE.
Between:
1. The General Manager,
The Prakasam District Co-operative
Central bank Ltd., Governor Road,
Ongole, Prakasam District.
2. The Branch Manager, The Prakasam
District Co-operative Central Bank Ltd.,
Municipal High School Road, Chirala,
Prakasam District. Appellants/
Opp.parties 1 & 2
And
1. The Chirala Primary Agricultural
Co-operative Society Limited,
Rep. by its President, Vutukurivari
Street, Perala, Chirala-523 157.
Prakasam District. ..Respondent/
Complainant.
2. The General Insurance Corporation
of India, rep. by its General Manager,
8th floor, United India Towers,
Basheerbagh, Hyderabad-500 029 Respondent/
Opp.party No.3
Counsel for the Appellant: Sri R.V.Nagabhushana Rao
Counsel for the Respondents:K.N.Vijaya Lakshmi-R1.
M/s.Deepak Bhattacharjee-R2
F.A.No.938/2005 AGAINST C.D.No.124/2004, DISTRICT CONSUMER FORUM, PRAKASAM AT ONGOLE.
Between:
The General Insurance Corporation
of India, rep. by its General Manager,
8th floor, UII Building, Basheerbagh,
Hyderabad-500 029. Appellant/
Opp.party No.3 And
1. The Chirala Primary Agricultural
Co-operative Society Limited,
Rep. by its President, Vutukurivari
Street, Perala, Chirala-523 157.
Prakasam District. ..Respondent/
Complainant.
2. The General Manager,
The Prakasam District Co-operative
Central bank Ltd., Governor Road,
Ongole, Prakasam District.
3. The Branch Manager, The Prakasam
District Co-operative Central Bank Ltd.,
Municipal High School Road, Chirala,
Prakasam District. Respondents/
Opp.parties 1 & 2
QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT.
AND
SMT.M.SHREESHA, MEMBER.
WEDNESDAY, THE TWENTY EIGHTH DAY OF JANUARY,
TWO THOUSAND NINE
Oral Order:(Per Smt.M.Shreesha, Hon’ble Member)
***
Aggrieved by the order in C.D.No.124/2004 on the file of District Forum, Prakasam at Ongole, opposite parties 1 and 2 preferred F.A.No.635/2005 and opposite party No.3 preferred F.A.No.938/2005. Since both these matters arise out of the same C.D., they are being disposed of by a common order.
The brief facts as set out in the complaint are that the complainant i.e. Chirala P.A.C.S. Ltd., was a society registered under A.P.Co-operative Societies Act with an object to obtain funds from the financing Bank, namely, Prakasam District Co-operative Central Bank Ltd., and lend finance to its members for Agricultural operations. In the course of its business, the society has collected premium and got insured the crops to be raised by the members and has been remitting the premium on behalf of its members in Chirala P.D.C.C. Bank Ltd., i.e. second opposite party, who has been issuing declaration Forum as authorized signatory of Nodel Bank. The complainant society had received insurance claim amount sanctioned by the 3rd opposite party through opposite party No.1 compensating the crops failed during June, 2002 Karif. The complainant society had disbursed an amount of Rs.22,03,350/- for paddy crops to 242 members during June, 2002 Karif. The complainant society had received insurance claim in respect of 205 members against 242 members during June, 2002 Karif for whom the insurance premium was paid by the complainant’s society. On verification, it was found that the claim in respect of 37 members to whom an amount of Rs.2,88,400/- was disbursed for paddy crop on 17-6-2002 at the rate of 41.27% amounts to Rs.1,19,023/- was not received though it paid the premium of Rs.5,047/- on 27-6-2002 to the insurance company through P.D.C.C. Bank, Chirala Branch i.e. opposite party No.2.
The complainant by letter dated 29-8-2003 addressed the third opposite party to arrange payment of crop insurance to the said “37” members under copy of the first and second opposite parties. The same was received by first opposite party and the complainant has again addressed the first and third opposite parties for settlement of the claim by letters dt.18-10-2003 which was also sent by R.P. Acknowledgement due. The third opposite party by letter dt.3-11-2003 and addressed the first opposite party to advise the complainant suitably but no intimation was received from first opposite party. The complainant dt.16-4-2004 had addressed the first opposite party for settlement of the claim relating to 37 members for whom Rs.5,047/- towards insurance premium was paid and copy of the said letter was submitted to the District Co-operative Officer, Ongole and Deputy Registrar of Co-operative Societies, Ongole and copy was sent to the General Manager of third opposite party. The third opposite party by letter dated 29-4-2004 has addressed the first opposite party to settle the matter but the first opposite party has not chosen to settle the claim nor intimate anything to the complainant till date. Hence the complaint for a direction to the opposite parties to pay compensation to the 37 members of the complainant’s society to whom loan of Rs.2,88,400/- was disbursed for Kharif 2002 paddy crop at the rate of 41.27% which comes to Rs.1,19,023/- and costs.
Opposite parties 1 and 2 filed counter contending that opposite party No.1 did not receive the premium before cut off date to enable opposite parties 1 and 2 to remit the same to opposite party No.3. From out o 242 insured holders, premium relating to 205 members was received by opposite party No.1 which was remitted to opposite party No.3 and the premium relating to remaining 37 members was not received in time to enable opposite party No.1 to arrange compensation amount to which they are entitled from opposite party No.3. The resulting delay is the subject of enquiry by an Enquiry Officer appointed by opposite party No.1, who is inspected to submit the final report and based on the said report, opposite party No.1 will place the same before the Managing Committee of the bank to get appropriate relief for the remaining 37 members. None of the insurers, who have not received the insurance amount complained to opposite party Nos.1 and 2 prior to filing the petition and the complainant has been advancing the claim in the absence of 37 members and submitted that there is no deficiency in service on their behalf and prayed to dismiss the complaint.
Opposite party No.3 filed counter contending that they have settled the claim of those members of the society, whose premiums have been duly paid and received. As regards 37 members on whose behalf of the complainant filed the complainant, they did not receive any instructions from opposite party No.1 inspite of several reminders and the latest being 29-4-2004 and submitted that they are not liable to pay the amount and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A12 and B1 to B5 and the pleadings put forward, the District Forum allowed the complaint directing opposite parties to pay an amount of Rs.1,19,023/- with interest at 9% p.a. from the date of letter dated 29-8-2003 till the date of realization together with compensation of Rs.5,000/- and costs of Rs.1,000/-.
Aggrieved by the said order, opposite parties 1 and 2 preferred F.A.No.635/2005 and opposite party No.3 preferred F.A.No.938/2005.
It is the complainant’s case that the complainant society has received insurance claim amount sanctioned by third opposite party through opposite party No.1 compensating the Karif crop during June, 2002. The complainant society has disbursed an amount of Rs.22,03,350/- for paddy crop to 242 members during June, 2002 Karif. The society received insurance claim in respect of 205 members against 242 members and on verification, it was found that the claim in respect of 37 members to whom an amount of Rs.2,88,400/- was disbursed on 17-6-2002 at the rate of 41.27% amounts to Rs.1,19,023/- was not received though the society paid premium of Rs.5,047/- on 27-6-2002 to the insurance company through opposite party No.2. It is the complainant’s case that the society had addressed several letters to first and third opposite parties for settlement of the claim and the third opposite party by letter dated 3-11-2003 and 29-4-2004 also advised the first opposite party to settle the matter.
It is the case of opposite parties 1 and 2 that the premiums were received from 205 members as against 242 members and the premium for the remaining 37 members was not received by opposite party No.1 and an enquiry was also ordered against the Branch Manager and clerks of opposite party No.2 to find out if there were any latches on behalf of opposite party No.2. The learned counsel for the appellants/opposite parties 1 and 2 in F.A.No.635/2005 submitted that the complainant society alone is at fault for not sending the premium amount in time and that in the absence of payment of any premium by the society, the appellants are not liable to pay the same to the insurance company and that the complainant society has no locus standi to maintain the application since there is no individual claims made by these 37 members.
The appellant/opposite party No.3 filed written submissions in F.A.No.938/2005 stating that the appellant is only an implementing agency of the Central and State Governments and that the District Forum erred in holding that opposite parties 1 and 2 act as agents of opposite party No.3. The learned counsel for opposite party No.3 contended that there are no remittances of any premium in respect of 37 farmers to the complainant society and that there is no privity of contract under the scheme and relied on the judgement of the Division bench of Hon’ble High Court of A.P. reported in 2002 (2) ALD PAGE 486.
First we address ourselves to the contention of opposite parties 1 and 2 that the complainant society has no locus standi to file the complaint since there were no individual claims made by the 37 members. This contention is unsustainable since Section 2(b) (4) of Consumer Protection Act, 1986 states that:
One or more consumers can be represented in a single complaint who
have the same interest.
Ex.A1 is the original challan dated 27-6-2002 remitting premium of Rs.5,047/- by the complainant society towards crop insurance amount to opposite party No.2, Chirala branch. It is apparent on the face of record that Ex.A1 for an amount of Rs.5,041/- was paid on 27-6-2002 by the complainant society to opposite party No.2. Ex.A11 is the challan dated 28-6-2002 for Rs.42,000/- and Ex.A12 is the list of claim particulars for the Karif crop, 2002. It is an admitted fact by opposite parties that the societies have received the insurance claim in respect of 69 members on 18-7-2003. It is the case of opposite party No.3 that premiums have been not remitted to it by opposite party no.2 for 37 members. The contention of opposite party No.1 that an enquiry has been ordered against the Branch Manager and the clerks of opposite party No.2 branch with respect to the premium amount of Rs.5,047/- collected on behalf of 37 members, and therefore, there is no deficiency of service on their behalf is unsustainable on the ground that Ex.A1 clearly shows that the complainant society had remitted the insurance premium of Rs.5,047/- for 37 members and for any latches on behalf of opposite party No.2, the complainant society representing 37 members cannot be made to suffer. In Exs.B1 to B5 filed by opposite party No.3 in W.P.No.20650/2000, Hon’ble High Court of A.P. has elicited about this welfare scheme as follows:
‘This is a social security measure meant for the benefit of rural
population and benefits only those who take loans from the
financial institutions. In other words, it is limited to the class of
people who are getting subsidized loans from such institutions who
themselves have got to be saved against ruin by general calamities
affecting the area in question. Such a scheme cannot be said to be
in any manner unreasonable or arbitrary”.
In all the citations filed by opposite party No.3, it is clear that the duties of opposite party No.3 are not of commercial nature but for the welfare of the society and therefore, we reiterate that for any latches committed by opposite party No.2, the complainant society cannot be made to suffer. However, we rely on the decision of the Apex Court in DELHI ELECTRICITY SUPPLY UNDERTAKING v.BASANTHI DEVI 1998 (8) Supreme Court cases page 538 wherein it was clearly held that where the employer deducts the premium but fails to remit the same to the insurance company than the employer is liable for payment of the amounts covered under the policies likewise is the principal i.e. the insurance company.
We also rely on the decision of the National Commission reported in II (2006) CPJ 295 (NC) in which the National Commission held that the welfare scheme for the poor would be frustrated if the government did not pay the premium guaranteed by it under the scheme and any unexplained delay on the part of the Central Government, the weavers cannot be made to suffer. The Commission directed the insurance company to first pay the amount as per the loss assessed and then recover the same from the Central Government.
In the instant case the facts are similar in the sense that the premiums were collected by opposite parties 1 and 2 and not remitted to opposite party No.3, insurance company. Based on the aforementioned judgement, we are of the considered view that the complainant cannot be made to suffer, since the complainant society has paid the premium vide Ex.A1 and it was opposite party No.2, who did not remit to opposite party No.3 while we confirm the order of the District Forum, it is open to opposite party No.3 to recover these amounts from opposite party No.2.
In the result these appeals i.e. F.A.No.635/2005 and F.A.No.938/2005 are dismissed with the aforementioned direction. Time for compliance four weeks.
PRESIDENT. LADY MEMBER.
Dated 28-1-2009
