( In RP No. 1588 to 1597 of 2022 )

For the Petitioner :                              Mr. Arun Aggarwal, Advocate

( Bank of Baroda)                               Mr.Shivam Saini, Advocate

                                                          Mr.Pratul Rawat, Advocate

                                                          Mr. Tushar Tyagi, Advocate

For the Respondent                            Mr. Rana Mukherjee, Sr. Advocate

(Agriculture Insurance Co.)                 Mr. Arun Sinha, Advocate

                                                          Ms. Surabhi Guleria, Advocate

                                                          Mr. Rohan Goel, Advocate

(In RP No. 118 of 2023,

RP Nos. 249 to 253 of 2023

& RP No. 258 to 261 of 2023)

For the Petitioner                                                    Mr. Rana Mukherjee, Sr. Advocate

(Agriculture Insurance Co.)                 Mr. Arun Sinha, Advocate

                                                          Ms. Surabhi Guleria, Advocate

                                                          Mr. Rohan Goel, Advocate

For the Respondent                            Mr. Arun Aggarwal, Advocate

( Bank of Baroda)                               Mr.Shivam Saini, Advocate

                                                          Mr.Pratul Rawat, Advocate

                                                          Mr. Tushar Tyagi, Advocate

For the Complainants /                        None

Respondents

ORDER

  RP No. 1588 of 2022 and RP No. 118 of 2023 and 18 connected cases

1.       Introduction

1.1.    There are 20 RPs under consideration in this order, out of which 10 have been filed by Agriculture Insurance Company of India ( hereinafter Insurance Co.), who was one of the OP before District Forum in various CCs filed by various Complainants ( farmers) and Appellant before State Commission in various appeals filed by them, challenging various orders of the District Forum.  10 RPs have been filed by Bank of Baroda ( hereinafter  Bank / BOB , who was one of the OP before District Forum in various CCs filed by various Complainants  (farmers) and one of the Respondent before State Commission in various appeals filed by Insurance Co.  These 20 RPs were heard together on various dates and judgment reserved on 14.03.2024.    All the farmers covered in cases were loanee farmers.   List of RPs covered under this order, covering basic details, is given at Annexure-I.

1.2.    These RPs listed on various dates, were heard at length from both sides.  Hearing concluded on 14.03.2024, when judgment was reserved in all these cases. Both sides were given liberty to file additional brief of written arguments. Accordingly, Bank of Baroda filed additional brief notes of written arguments on 21.03.2024.  These have  been duly taken into account in this judgment.  Delay in filing the RPs, wherever applicable, was condoned after considering the reasons stated in the condonation of delay application wherever filed, and those adduced during the hearing in other cases, especially considering that these large numbers of cases involve common issues pertaining to various farmers and both Insurance Company and Bank have filed RPs with delay in many cases.  Before District Forum, BOB was OP No.1 and Insurance Company was OP No.2.  Wherever considered necessary, for sake of convenience, parties will also be referred to as they were arrayed before District Forum. 

1.3.    As these RPs have been filed against various common orders of State Commission ( as detailed in Annexure-I), parties are same, and common issues / law points are involved, these are taken up together with RP No. 1588 of 2022 filed by Bank and corresponding RP No. 118 of 2023 filed by Insurance Company taken as lead case (s).

2.       Brief facts of the case ( common facts broadly applicable to all the cases)

2.1.    The issue pertains to insurance claims under Pradhan Mantri Fasal Bima Yojana ( PMFBY) issued by Government of India,  Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture and Farmer’s Welfare ( hereinafter Department of ACFW / Central Government).

2.2.    Agricultural Insurance Company of India was selected as insurer( Implementing Agency) under the PMFBY.  Govt. of M.P. issued a notification(s) under the scheme for the insurance of Kharif 2017 crops in District Khandwa on 22.04.2016.  This notification specified the Tehsil, Revenue Circle, ‘Patwari Halka Number’ and Halka name and names of the crops  within the respective Districts which were to be covered under the scheme.  The operational guidelines of the scheme delineate the roles and responsibilities of each involved entity, in particular the Insurance Company and financial institution concerned. 

2.3.    Complainants before the District Forum were various farmers of  Khandwa District of Madhya Pradesh having agricultural land of various extents who participated in the PMFBY of Central Government for insurance of their crops.  There are two categories of farmers ( a) loanee farmers i.e. who availed seasonal agricultural loans from banks / financial institutions, for whom it was compulsory to participate in the PMFBY and ( b) non-loanee farmers i.e. who did not avail agricultural credit facilities from the banks / financial institutions, for whom it was optional to participate in the PMFBY.   All the farmers covered in these  20 RPs are loanee farmers.

2.4.    Due to natural calamity, the crop of these farmers / complainants got destroyed.  As the Insurance Co. who was the designated Insurance Company, did not pay the requisite insurance claims, these farmers / complainants approached the District Forum concerned.  District Forum vide various orders allowed the complaints holding Insurance Company solely liable, directing Insurance Co. to pay the claims / compensation.  Aggrieved by the orders of District Forum, Insurance Co. filed appeals before the State Commission.  State Commission vide various orders, modified the orders of the State Commission, holding both Insurance Co. and BOB liable jointly and severally in equal proportion.  Aggrieved by the orders of the State Commission, both Insurance Company and BOB are before this Commission in various RPs covered under this order.

 2.5.   Learned counsels of  both sides were heard at length on various dates with final hearing concluding on 14.03.2024.  Both sides also filed written notes of arguments  / additional notes of arguments and case laws in support of their case / contentions. 

2.6.    On 19.01.2024, Insurance Co. and BOB categorically stated that they are contesting the present RPs filed by them with regard to their liabilities against each other and not contesting the entitlement of the complainants – respondents to the benefits under the Pradhan Mantri Fasal Bima Yojna ( PMFBY).  According to Bank, it is the Insurance Company who is liable for the claims with respect to the losses suffered by the farmers while according to Insurance Company, it is the bank who is liable for the losses suffered by the farmers.  Hence, the main issue for consideration in the present RPs is with regard to respective liabilities of Insurance Co. and Bank only and not whether the ‘Complainants – Respondents’ are entitled to insurance claims / compensation for their crop losses under PMFBY as ordered by District Forum and State Commission.

2.7.    The thrust of the argument of the learned counsel representing the Insurance Company is that details sent by the Bank were incomplete / incorrect and sent after the prescribed timeline.  In many cases, even the names of the farmers were missing.  Accordingly, Insurance Company on 19.01.2024 was directed to file, a chart showing details of all the 10 cases and also clearly showing the nature and extent of incompleteness / incorrectness of information sent by Bank.  In addition, the Insurance Company was directed to file copies of correspondence which they made with the Bank, after receipt  of such so-called incomplete / incorrect details and whether they got any reply from the Bank. If yes, copies of that also.  Insurance Company was directed to exchange all such details being filed before the Commission with the Bank and learned counsel for complainants also simultaneously, who were directed to file response, if they so desire.  The Insurance Company was directed to state the date of receipt of premium and date of refund in these 10 cases.  As the premium was stated to have been paid in bulk, alongwith other cases, parties were directed to indicate the dates of those bulks which include these 10 cases. In compliance of these order, Insurance Company filed the requisite details on 30.01.2024 through an affidavit. 

3.       Brief facts of Lead Cases

3.1.    RP No. 1588 of 2022 filed by BOB  (corresponding RP No. 118 of 2023 filed by Insurance Co.)

3.1.1.           ( Facts as narrated by BOB in the RP filed by them)

          KCC Agricultural loan was availed by the respondent ( complainant) for soyabean crop from the petitioner which was insured by Insurance Company under PMGBY.   On 21.08.2017, the consolidated insurance premium amount was remitted to Insurance Company by BOB in respect of 512 farmers.  As per the claim of the complainant, 43.79 % of crop was destroyed due to the natural calamity.  On 31.08.2017 email with details of farmers insured under PMFBY according to 34 coloumn excel sheet format was provided by the BOB to Insurance Company.  Various communications were sent to Insurance Company regarding premium amount having been received and remitted but the claim amount was not issued by the Insurance Company even after reminders being sent on various dates.  Even letters regarding uploading of details in 34 column sheet and other information was also sent on various dates.  Further, email received from Insurance Company for details of farmers insured under PMFBY was to be uploaded in 34 column excel sheet by 30.11.2018 was extended on account of non functional of portal.  Last date to upload the details in 34 column sheet was 30.11.2018.  Details of farmers insured under PMFBY were submitted once again by the Petitioner to the Insurance Company. 

3.2.    RP No. 118 of 2023 filed by Insurance Company ( same case as RP No. 1588 of 2022 filed by BOB)

          ( Facts as narrated by Insurance Company in the RP filed by them)

On 18.02.2016 Government of India launched PMFBY for the farmers and to ensure proper implementation of the scheme, Department of Agriculture, Cooperation and Farmers Welfare issued operational guidelines and clause XXIV deals with the role and responsibilities of various agencies including the Petitioner / Insurance Company , Respondent ( Bank).  According to the sub clause ( 1) of Clause X, Bank or its branches will collect proposals and premiums and submit the consolidated proposal to Insurance Companies and also upload the soft copy of insured details in crop insurance portal.  It is the further the case of the Insurance Company that as per sub-clause 7, it is the Bank who will collect insurance proposals from farmers and while accepting the proposals and premium, Banks / PACs will be responsible for verification of eligible sum insured, applicable premium rate etc.  Sub clause 13 of clause X further provided that Bank/ PACs must also ensure that consolidated statement alongwith the premium amount is remitted to the insurance company within the stipulated time, failing which they shall be responsible for payment claims, if any to the farmers. 

That for the Kharif 2017 crops, the Bank had to upload the details of declarations / proposal received on the insurance portal within the stipulated time but was not uploaded due to some technical problems faced by the Bank.  The Central Government extended the cut off date to upload the details on the insurance portal till 02.07.2018 and directed the bank to submit details in 34 coloumns excel template to the insurance companies so that reconciliation process can be completed by extended cut off.    The Bank did not comply with this direction by the extended date and as such Petitioner was bound to summarily reject any declaration / proposal received after the extended cut-off date in terms of sub clause 13 of clause X of the guidelines.

A meeting under the Chairmanship of Director Farmers Welfare and Agriculture Development, Bhopal, M.P. was held on 03.11.2018 for reconciliation of insurance proposal of Rabi 2017-18, but some of the banks including the Bank of Baroda raised issues with regard to non acceptance of insurance proposals related to Kharif 2017 by the Petitioner. In Para 1 of the meeting, statement of petitioner was specifically recorded that Petitioner will only accept such declaration / proposals if the Central Government will direct the Petitioner to accept such proposals.  Bank prior to 06.10.2018 ( the date on which Bank sent mail to Petitioner ) was fully aware of the fact that the Petitioner refused to pay Insurance amount against claim of the complainant and other farmers whose data were not submitted by cut offdate. In the said meeting, the cut-off date to receive declarations / proposals received by Bank to submit details of any proposal / declaration which were neither uploaded on the insurance portal nor the details of which were submitted to the Petitioner in 34 columns excel template by the cut off date i.e. 02.07.2018. Such proposals / declarations were required to be rejected summarily in terms of the guidelines, if any submitted after 02.07.2018.

It is further the case of the Petitioner that Bank neither  uploaded the details of complainant no.1 on the insurance portal nor submitted the details in 34 coloumns excel template by the extended cut off date i.e. 02.07.2018.  Therefore, neither complainant no.1 was insured by the Petitioner nor were the premium subsidies from Central and State Government collected by the Petitioner. Bank has not produced any document indicating that the competent authority extended the cut off date after 02.07.2018 but Bank taking advantage of mail dated 24.01.2018 sent to branches of Bank of Baroda i.e. Badnawar, Badwaani, Patlawad, Sendhwas, Jhabua and Dhaamnod who were specifically permitted to submit declaration /proposal in the meeting dated 03.11.2018 sent mail to the Petitioner on 30.11.2018 alongwith 34 coloumn excel sheets containing details of complainant no.1 that too with defects i.e. incorrect crop code as well as revenue village code.  Since Bank was not permitted to submit the details of complainant no.1 in the meeting, therefore, declaration / proposal related to complainant no.1 sent by Bank on 30.11.2018 was liable to be summarily rejected by Petitioner and such complainant no.1 was not insured by the Petitioner and liability satisfy the insurance claim of complainant no.1 was on the Bank.

4.       Important features / clauses of Operational Guidelines of PMFBY

          Ministry of Agriculture and Farmer’s Welfare, Govt. of India launched PMFBY on 18.02.2016 and published the operational guidelines.  Before we proceed further with the case, it is considered necessary to have a detailed look at the operational guidelines of PMFBY. Some of the important features / clauses of PMFBY are stated below in brief ( clause wise, with clause number as given in the guidelines).

I.        Objective of the Scheme: Interalia,supporting sustainable production in Agriculture sector by way of providing financial support to farmers suffering crop loss / damage arising out of unforeseen events.

II.       Coverage of Farmers     :  All farmers, including sharecroppers and tenant farmers growing the notified crops in the notified areas.  The farmers should have insurable interest in the notified / insured crops. The non-loanee farmers are required to submit necessary documentary evidence of land record. 

2.       Compulsory Component         :         All farmers availing Seasonal Agricultural Operations ( SAO) loans from Financial Institutions ( i.e.loanee farmers) for the notified crop(s) would be covered compulsorily.

3.       Voluntary Component    : Scheme would be optional for the non-loanee farmers.

III.      Coverage of crops :      

1.       Food crops ( Cereals, Millets and Pulses)

2.       Oilseeds

3.       Annual Commercial / Horticulture crops

IV.     Coverage of Risks and Exclusions

1.  Following stages of the crop and risks leading to crop loss are covered under the scheme.

a) Prevented Sowing/Planting Risk  : Insured area is prevented from sowing/ planting due to deficit rainfall or adverse seasonal conditions

b) Standing Crop (Sowing to Harvesting): Comprehensive risk insurance is provided to cover yield losses due to non- preventable risks, viz. Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane and Tornado.

c) Post-Harvest Losses: coverage is available only up to a maximum period of two weeks from harvesting for those crops which are allowed to dry in cut and spread condition in the field after harvesting against specific perils of cyclone and cyclonic rains and unseasonal rains.

d) Localized Calamities: Loss/ damage resulting from occurrence of identified localized risks of hailstorm, landslide, and Inundation affecting isolated farms in the notified area.

V. Preconditions for implementation of the Scheme

1.       Issuance of Notification by State Government / UT for implementation of the scheme (PMFBY) will imply their acceptance of all provisions, modalities and guidelines of the Scheme. The main conditions relating to PMFBY which are binding on States/UTs, are as follows:

a)       State has to conduct requisite number of Crop Cutting Experiments (CCEs) at the level of notified insurance unit area;

b)       CCE based yield data will be submitted to insurance company within the prescribed time limit;

c)       State / UT will make necessary budgetary provision in State / UT budget, to release premium subsidy based on fair estimates, at the beginning of the crop season;

d.       State / UT should be willing to facilitate strengthening of weather station network.

e.       Adoption of innovative technology specially Smart phones / hand held devices for capturing conduct of CCEs.

VI.     Notification

Notification of crops, areas and Implementing Agency (IA)

2 (a)   The scheme shall operate on the principle of ‘Area Approach’ in the selected Defined Areas called Insurance Unit ( IU).  State Government / UT will  notify crops and defined areas covered during the season.  The State Government / UT should notify as an insurance unit village or village Panchayat or any equivalent unit for major crops.  For other crops, it may be unit of size above the level of village / village Panchayat.

(b)     For the claims arising out of crop damage due to post-harvest losses and localized risks, assessment of damage will be made on individual farm basis.

11.     Entry of data on Crop Insurance Portal

The Government of India recently designed an insurance portal www.agri-insurance.gov.in for better administration, coordination amongst stakeholders, proper dissemination of information and transparency for Farmers, States, Insurers and Banks. Detailed outlines of Crop Insurance Portal for administration of Crop Insurance Programme along with its phases, functions and role and responsibilities for entry of data/information etc under different phases are at Para XXV. The basic information like notified areas, crops, Sum Insured, Government subsidy, premium to be paid by farmers, and concerned insurance companies in the particular insurance unit of has been digitized and put on the web portal so that Farmers and other stakeholders may get the relevant information on Internet and through SMS. Further, to ensure better administration and ease in accessing information by farmers, an android based "crop insurance app" has also been launched which could be downloaded from either the website of DAC & FW or Google play Store.

The Government also took some steps for the integration of all the stakeholders viz, farmers, insurance companies, financial institutions and Government agencies on an IT platform to ensure better administration, coordination and transparency for getting real time information and monitoring etc. in a phased manner in consultation with Ministry of Finance and other stakeholders.

State Government and concerned IAs are responsible for entry of all requisite information/ data as per notification issued by the States in the crop Insurance portal well in time so that information may be available in digitized form to all stakeholders. The details of entry of data/information on the web portal have already been available on the portal (www.agri- insurance.gov.in). State Government and concerned IAs are responsible for any wrong entry/errors/omissions etc.

VII.    Sum Insured /Coverage Limit

1. Sum Insured per hectare for both loanee and non-loanee farmers will be same and equal to the Scale of Finance as decided by the District Level Technical Committee, and would be pre-declared by SLCCCI and notified. No other calculation of Scale of Finance will be applicable. Sum Insured for individual farmer is equal to the Scale of Finance per hectare multiplied by area of the notified crop proposed by the farmer for insurance. 'Area under cultivation shall always be expressed in hectare.

2.  Sum insured for irrigated and un-irrigated areas may be separate.

VIII.   Premium Rates and Premium Subsidy

1. The Actuarial Premium Rate (APR) would be charged under PMFBY by Implementing agency (IA). The rate of Insurance Charges payable by the farmer will be as per the following table:

2.       TSU (Technical Support Unit) shall calculate Loss Cost (LC) i.e. Claims as% of Sum Insured (SI) observed in case of the notified crop(s) in notified unit area of insurance during the preceding 10 similar crop seasons (Kharif/ Rabi) (AIC shall act as TSU till an Independent agency/Technical Support Unit (TSU) in place) based on the latest available yield data in month of February for Kharif crops and August for Rabi crops as per requirement of the States and shall provide to DAC & FW/ Concerned States on request before invitation for premium bidding. This calculation to be done by AIC on behalf of Ministry is for internal purposes to have information on the approximate cost to the lAfor covering the risks so as to evaluate the bids in proper perspective.

3        Payment of Government Subsidy:

a)       The difference between actuarial premium rate and the rate of Insurance charges payable by farmers shall be treated as Rate of Normal premium Subsidy, which shall be shared equally by the Centre and State. However, the State/ UT Governments are free to extend additional subsidy over and above the stipulated subsidy from its budget. In other words, additional subsidy, if any shall be entirely borne by the State/ UT Government. Subsidy in premium is allowed only to the extent of Sum Insured.

b)       Government premium subsidy to the Private empanelled Insurance Companies may be routed through Agricultural Insurance Company (AIC) of India Limited strictly as per the guidelines/ order of the Government. It may be reviewed later and changed accordingly if felt necessary. Accordingly, AIC is empowered to call/ collect all requisite information related to implementation of the Scheme and utilization of Government funds and to share /disseminate the same among the concerned insurance companies and Governments for better planning, implementation and monitoring of the scheme.

c)       Government ( both Central and States ) may release 50% of the total estimated premium subsidy to empanelled insurance companies at the beginning of crop season on the basis of business projection to be submitted by each insurance company subject to fulfilment of General Rule / guidelines in the matter.

X.      Collection of Proposal and Premium from Farmers

1.       The present Nodal Bank system under NAIS / NCIP will continue for PMGBY as well, for Cooperative Banks only,  wherein the implementing insurance company is not required to deal with all the loan disbursing points (PACs) and instead, deals only with designated Nodal banks.  However, individual bank branches for Commercial Banks / RRBs shall act as Nodal branch for this purpose. The concerned Lead bank and Regional offices/ Administrative offices of commercial banks/RRBs will provide necessary guidelines to concerned bank branches and coordinate with them to ensure that all concerned branches submit the consolidated proposals to insurance companies well within the stipulated cut-off dates and also upload the soft copy of insured details in crop insurance portal. Besides, insurance company may also use the IRDA approved insurance agents/ insurance intermediaries for the coverage of non-loanee farmers only.

2.       Declaration/proposal formats to be submitted by Nodal banks/ Branches shall contain details about Insurance Unit, sum insured per unit, premium per unit, total area insured of the farmers, number and category of farmers covered (small and marginal or other) and number of farmers under other categories (SC/ST/others)/Women along with their bank account details etc. (bank/their branches) as per the format envisaged/provided in the crop insurance portal.

          Loanee farmers (Compulsory coverage)

3.       Whenever banks sanction loan for a notified crop in a notified area, the crop loan amount only to the extent of Scale of Finance for notified crops and acreage of Individual notified crops of loanee farmers shall be taken into consideration for compulsory coverage, as per seasonality discipline. Based on seasonality of Crops, banks should separately calculate the eligibility of loan amount for both Kharif and Rabi seasons based on the scale of Finance and declared acreage under notified crops. Disbursing bank branch/Primary Agriculture Cooperative Society (PACS) will prepare monthly statement of crop-wise and insurance unit-wise details of crop insurance with premium as per the seasonality discipline. Loan disbursing bank branch/ PACS will finance the additional loan towards premium amount payable by farmer for crop insurance.

4.       Crop loans through Kisan Credit Cards (KCC) are covered under compulsory coverage and banks shall maintain all back up records and registers relating to compliance with PMFBY and its seasonality discipline and cut-off-date for submitting Declarations in case of normal crop loans. Bank branch will apportion coverage among insurable crops, based on acreage mentioned in loan application or on the basis of actual area sown as declared by the farmer subsequently.

5.       Bank branches of commercial banks and RRBs/ Nodal Bank in case of PACS under its jurisdiction shall consolidate insurance proposals/ statements from their bank branch/ PACS under its jurisdiction respectively and forward the same to insurance company along with details of remittance / RTGs towards insurance premium, in accordance with cut off dates, as specified by SLCCCI for that particular cop and season.

Non-loanee farmers (Optional coverage) through Channel partners

6.       Farmers desirous of availing insurance shall fill up Proposal Form of the Scheme and submit the same to nearest bank branch or authorized channel partner or insurance intermediaries of insurance company.

7.       In case channel partner is a Bank, farmers will submit duly filled up proposal form in the village branch of a Commercial Bank (CB) or Regional Rural Bank (RRB), or PACS (DCCB) with requisite insurance premium amount. Operating a bank account is essential for such cases. Branch/ PACS officials will assist the farmers in completing the insurance proposal form and provide necessary guidance. While accepting the proposal and premium, Branch/ PACS will be responsible for verification of eligible sum insured, applicable premium rate, etc. PACS will thereafter consolidate these particulars and send them directly/ to respective Nodal Banks respectively which will, in turn, submit crop-wise and insurance unit-wise Crop Insurance Declarations in the prescribed format, along with the premium, within the stipulated time, to insurance company. However the bank branches of commercial banks/ RRBs will directly submit the consolidated proposals along with details of insured farmers in the format envisaged in the crop insurance portal within the stipulated time.

8.       Non-loanee cultivators could also be serviced directly by any designated agencies, other authorized channel partners or insurance intermediaries, approved by the IRDA for the purpose and they will act as a guide and facilitator wherein they will advise them the benefits and desirability of the Scheme and guide the farmers through procedures; collect requisite premium and remit individual/ consolidated premium to insurance company, accompanied by individual proposal forms and summary details in Declarations/ Listing sheet (MIS), provide soft copy to IA and details of each insured farmer and will also upload the data directly to the crop insurance portal.

9.       While accepting the Proposal and the premium from aforesaid, designated agents, other authorized channel partner or insurance intermediaries. approved by the IRDA, it shall be the responsibility of Insurance Company or its designated agents to verify insurable interest and collect the land records, particulars of acreage, sum insured, crop sown etc. and applicable contract/agreement details in case of share croppers / tenant farmers.  The designated intermediaries shall remit the premium with consolidated proposals within 7 days. However, it is mandatory that the Non-loanee cultivators serviced by the designated intermediaries should  hold a bank account in order to facilitate remittance of the claim, if payable.

Non-loanee Farmers (Optional coverage) companies directly to Insurance

10      Non-Loanee farmer may submit insurance proposals personally / through post to insurance company with requisite premium. Non-loanee farmer can also avail insurance through on-line portal of concerned insurance company or crop insurance portal designed by Government for the purpose. However, it is mandatory that Non-Loanee farmers, personally submitting proposals to insurance company or through crop insurance portal, should have insurable interest and submit necessary documentary evidence as proof as decided by SLCCCI (like print copy of application along with remittance of premium). The insured farmer forfeits the premium and the right to claim (if any) if the material facts furnished in the proposal form are wrong or incorrect.

11.  Insurance companies retain the right to accept or reject insurance proposal(s) in case proposal is incomplete, not accompanied by necessary documentary proof or insurance premium ordinarily, within one month of receipt of proposal by Insurance Companies. If the proposal is rejected the insurance company will refund full collected premium.

b.  Option for change of crop name

14.     The concerned branches of banks and Nodal Banks/ DCCBs in case of PACS will also collect the list of individual insured farmers (both loanee and non-loanee) with requisite details like name, father's name, Bank Account number, village, categories - Small and Marginal/SC/ST/Women, insured acreage, details of insured land, insured crop(s), sum insured, premium collected, Government subsidy etc. from concerned branch in soft copy also for further reconciliation and send the same to the concerned insurance company within 15 days after final cut-off date for submission of Proposal/ Declaration to insurance company and also upload the same on the crop insurance portal. Same standard format of crop insurance portal will be utilized.

15.  Insurance companies may also collect the requisite information in respect of non-loanee farmers from the channel partner in same formats. It is the responsibility of the concerned insurance companies to collect/obtain the details of the insured farmers (both loanee and non-loanee) from the bank/financial institutions/ intermediaries/ agents and facilitate the banks to upload the same on crop insurance portal.

16.     Insurance Companies should also verify and be satisfied themselves about the coverage of farmer’s crop.

XVII.            Important Conditions/Clauses Applicable for Coverage of Risks

1.       Insurance companies should have received the premium for coverage either from bank, channel partner, insurance intermediary or directly. 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.

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.

3.       Mere sanctioning / disbursement of crop loans and submission of proposals / declarations and remittance of premium by farmer / bank, without explicit intent to raise the crop, does not constitute acceptance of risk by insurance company.

XIX.             Commission and Bank Charges

          Bank and other Financial Institutions etc. shall be paid service charges @ 4% of the premium collected from the farmers.

XXIII.           Participation of Insurance Companies in the implementation of the Scheme

          Selection criteria of Insurance Companies as Implementing Agency ( IA)

2.       The selection of Insurance Company from the designated / empanelled Insurance Companies to act as Implementing Agency ( IA) shall be done by the concerned State / UT Government.

XXIV.           Role and Responsibilities of various Agencies

3.       Insurance Companies (IA)

a)       Insurance companies to liaise with State Governments and agencies/ institutions/committees involved in implementation of PMFBY.

b)       Furnish the necessary details to SLCCCI as may be required as per the notification.

c)       Underwriting-responsibilities of processing and acceptance of risk.

d)       Claim processing / finalization on receipt of yield data from States/UTs and payment within the prescribed timelines.

e)       Obtain Re-insurance arrangements if felt necessary.

f)       Database-develop crop-yield and weather databases, also related agri-insurance databases.

g)      Review of implementation of PMFBY and provide regular feedback for its effective implementation/improvements to DAC & FW.

h)       Disclose designated Agents in writing before the underwriting of insurance for the season.

i)        Ensuring payment of commission/service charges to banks/other agents for implementing the scheme.

j)        Awareness and publicity extensive efforts to create awareness and generate publicity for PMFBY at grass-roots level including bank branches. Also coordinate with the States and other agencies for awareness and publicity of the scheme.

k)       Providing monthly progress returns/statistics/information demanded by the Governments, both Central and State Government.

l)        Facilitate the bank branches/ intermediaries/ agents to upload the details of insured farmers and beneficiaries with all requisite details on Crop Insurance portal well in time.

m)      Redressal of all Public Grievances within the time fixed by IRDA. There shall be toll free number maintained by AIC which will be used for receiving the grievances of farmers which will work on the docket system.

n)       The coverage of loanee farmers should be carried out by insurance companies themselves, use of agents/brokers are not allowed.

0)       Establish a functional office in each Tehsil level and at least one agent should be deployed at the block level in the allocated districts.

4.                Financial Institutions/Banks

a)       For purpose of PMFBY, scheduled banking institutions engaged in disbursing Seasonal Agricultural Operations (SAO) loans as per relevant guidelines of NABARD/RBI shall be reckoned as Banks.

b)       The existing system of Nodal Banks would continue to service the PMFBY as described in various sub paras of Para X.

c)       Notification, as well as other directives, guidelines, etc., shall flow as insurance company  /Lead Bank/Administrative offices of Commercial banks/RRBs/Nodal Bank  Service (subordinate) Bank Branch/PACS. While claim remittance to and from insurance companies shall follow same route, the remittance of premium shall follow the reverse route.

Lead Bank/Nodal Bank/Administrative office of Commercial banks/ RRBs

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

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

(c )    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.

d)       Ensure that, for both loanee and non-loanee farmers separately, premium and related data is remitted to nodal bank within the prescribed time.

e)       Lead bank/Nodal Banks should ensure that all the eligible crop loans/seasonal operational loans taken for notified crop(s) are fully insured and the conditions stated in the declarations submitted have been complied with. No farmer should be deprived from insurance cover. Nodal banks therefore, should make all out 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 responsible to make payment of the admissible claims to loanee farmers who were deprived from insurance cover to their crops.

f)       Concerned Bank and it's branches should ensure submission to insurance companies within stipulated time the notified crop-wise, insurance unit-wise Declarations in prescribed format, along with consolidated Premium payable separately for both loanee farmers and non-loanee farmers. If Concerned Bank and it's branches keep the amount of premium collected beyond the defined timelines then they will be liable to pay interest (at prevailing rate of interest for saving account) for the delay period to the insurance company.

g)      Nodal bank/Branches will also arrange for onward transmission to service (subordinate) bank branches / PACS, compensation amounts as received from insurance companies with all details, to be credited to beneficiary accounts.

h)  The Nodal Banks/Administrative offices may also collect the list of individual insured farmers with requisite details like name, fathers' name, Bank Account number, village, categories Small and Marginal /SC/ST Women, insured acreage, insured crop(s), sum insured, premium collected, Government subsidy etc from concerned PACS/Bank Branch in soft copy for further reconciliation and send the same to the concerned insurance company within 15 days after final cut-off date for submission of proposal to insurance company.

i)        The insurance company shall acknowledge all the declarations submitted by the banks mentioning the details of crop, area, sum insured etc. The banks should cross check with their records and aberrations, if any, should be brought to the notice of the insurance company immediately. If no response is received from banks within 15 days, the details given in the acknowledgement shall be considered final and no changes would be accepted later on.

j)        To credit the claim proceeds of PMFBY received from insurance company to respective beneficiary bank account within seven days. If Bank Branches/Nodal banks keep the claims amount beyond the defined timelines then they will be liable to pay interest (at prevailing rate of interest for saving account) for the delay period to the eligible farmers. The list of beneficiary cultivators with claim amount shall be displayed by the Branch/ Primary Agricultural Cooperative Society (PACS) and a copy shall also be provided to the Chairman/ Sarpanch/ Pradhan of the village Panchayat. The Banks shall issue a certificate to the insurer that entire money received for settlement of claims has already been credited into the account of beneficiaries.

k)       Soft copy of the beneficiary' farmers may also be uploaded directly on Crop Insurance portal by bank branch/ PACS through Nodal Bank to concerned Insurance companies for uploading the same in their web-site.

l)        To permit insurance company with access to all relevant records / ledgers at the Nodal Bank/ Branch/ PACS at all times for the purpose of implementation of the scheme.

m)      Banks should ensure that cultivator may not be deprived of any benefit under the Scheme due to errors/omissions/commissions of the concerned branch/ PACS, and in case of such errors, the concerned institutions shall only make good all such losses.

Lending Banks/RFIS

a)       To educate the cultivators on the Scheme features.

b)       To guide the cultivators for filing up the insurance proposal in the prescribed forms and collecting the required documents, particularly in case of Non-Loanee cultivators.

c)       To prepare the consolidated statements for Loanee and Non- Loanee cultivators and forward the same to the insurance company along with the premium amount and other details of the insured farmers.

d)       Maintaining the records of proposal forms, the other relevant documents and statements for the purpose of scrutiny/verification by insurance company or its authorized representatives and DLMC.

e)       Allow insurance company access to all relevant records and registers at offices of Nodal Bank and service (subordinate) bank branches within their jurisdictional area.

1)       To capture all relevant data including land and crop details of all loanee farmers covered compulsorily as well as non loanee farmers availing crop insurance through them.

Under administrative mechanism, banks are designated as terminal service points for farmers. Hence, it is their duty to ensure compulsory coverage of all eligible loanee farmers and all interested non-loanee farmers. In case of any misreporting by Nodal Bank/branch/PACS in case of farmers coverage, concerned bank only will be liable for such mis- reporting and its consequences.

5.       Designated Insurance agents

a)       To educate the cultivators on the Scheme features.

b)  To guide the cultivators for filing up the insurance proposal in the prescribed forms and collecting the required documents from Non- Loanee cultivators.

c)       Underwrite and collect the premium on behalf of Insurance Company, strictly as per the provisions of the scheme.

d)       To prepare the consolidated statements of Non-Loanee cultivators  and forwarding the same to the insurance company along with the premium amount well within the stipulated time.

e)       The designated Insurance agents shall also prepare the list of individual insured farmers with requisite details like name, fathers' name, Bank Account number, village, categories -Small and Marginal/ SC/ ST/ Women, insured acreage, insured crop(s), sum insured, premium collected, Government subsidy etc in soft cop and send the same to the concerned insurance company within five days after final cut-off date.

f)       The designated Insurance agents should ensure that insured farmers may not be deprived of any benefit under the Scheme due to errors/ omissions/ commissions of them, and if any, the concerned agents/insurance company shall only make good all such losses. Necessary administrative and legal action may also be taken for lapses in service/malpractices, if any, reported.

6.       Loanee farmers

a)       As the Scheme is compulsory for all loanee cultivators availing SAO loans for notified crops, it is mandatory for all loanee cultivators to insist on insurance coverage as per provisions of the Scheme.

b)       Any change in crop plan should be brought to the notice of the bank within one week of sowing.

c)       Insurance Proposals are accepted only upto a stipulated cut-off date, which will be decided by the SLCCCI.

d) Give information of any loss due to localized risk or post harvest loss due to specified perils of cyclone, cyclonic rains and unseasonal rains resulting in damage to harvested crop lying in field in "cut and spread condition to concerned bank branch/ financial institution/ channel partner/insurer within 48 hours.

7.       Non-Loanee cultivators

a)       Non-Loanee cultivators desirous of availing insurance under PMFBY for any notified crop in any notified insurance unit may approach nearest bank branch/ PACS/authorized channel partner/ insurance intermediary of insurance company within cut-off date. fill-up proposal form completely in prescribed format, submit form and deposit requisite premium to bank branch/ Insurance  intermediary along with necessary documentary evidence regarding his insurable interest in cultivating land/ crop (e.g. ownership/ tenancy/ cultivation rights) proposed for insurance.

b)       The farmer desiring for coverage should open/operate an account in the branch of the designated bank, and the details should be provided in the proposal form.

c)       The farmers should mention their land identification number in the proposal.

d)       The farmer must provide documentary evidence with regard to possession of cultivable land.

e)       The cultivator must furnish area sown confirmation certificate.

f)       The farmer should ensure that he gets insurance coverage for a notified crop(s) cultivated/proposed to be cultivated, in a piece of land from a single source. In other word, Double insurance is not allowed. The insurance company shall reserve the right to repudiate all such claims and not refund the premium as well in such cases. Company may also take legal action against such farmers.

g)      Give information of any loss due to localized risk or post harvest loss due to specified perils of cyclone, cyclonic rains and unseasonal rains resulting in damage to harvested crop lying in field in "cut and spread" condition to concerned bank branch/ financial institution/ channel partner/insurer within 48 hours.

5.       Details of various orders passed by State Commission

5.1.    20 RPs covered under this order arise out of various appeals disposed off by State Commission under common order dated 27.09.2022 covering 10 cases / consumer complaints / appeals as per details given in Annexure-I.

6.       Main issues under consideration

          As stated earlier, during the course of hearing on 19.01.2024, Insurance Co. and BOB categorically stated that they are contesting the present RPs filed by them with regard to their liabilities against each other and not contesting the entitlement of the complainants – respondents to the benefits under the Pradhan Mantri Fasal Bima Yojna ( PMFBY).  According to Bank, it is the Insurance Company who is liable for the claims with respect to the losses suffered by the farmers while according to Insurance Company, it is the bank who is liable for the losses suffered by the farmers.  Hence, the main issue for consideration in the present RPs is with regard to respective liabilities of Insurance Co. and Bank only and not whether the complainants – respondents are entitled to insurance claims / compensation for their crop losses under PMFBY as ordered by District Forum and State Commission.

7.       Issue wise rival contentions of parties

7.1.    Contentions of Insurance Company

(A)     Brief facts of the case and background

            The present case pertains to insurance coverage of loanee farmer who was compulsorily insured under Pradhan Mantri  Fasal Bima Yojana ("Scheme") for Kharif 2017 season (crop- Soyabean). Central Government vide letter dated 12.07.2017 directed head offices of all the Banks that insurance proposals against Kharif, 2017 crops can be accepted only through the crop insurance portal and premium subsidies from Central and State Government will be released only against persons insured through crop insurance portal. However, due to error on part of Bank, the details of the complainant was neither uploaded on the crop insurance portal nor the same was supplied in 34 column excel sheet by 2.07.2018 in terms of Central Government Letter dated 23.05.2018. Due to error/omission/commission committed by the Bank, complainant was deprived from insurance cover of his Soyabean crop. Consequently, the complainant approached the District Forum and the District Forum held Insurance Company liable to satisfy entire claim of the complainant. Hence, the Insurance Company approached the State Commission.  The State Commission partly allowed the appeal filed by the Insurance Company and modified the judgment of the District Forum to the extent that in place of Insurance Company paying the total amount of insurance claims, compensation and cost of litigation with interest, both Insurance Company and Bank  will be jointly and severally liable to pay those amounts to the complainant.

 (B)    Analysis of the Scheme Provisions:

1.       The PMFBY was launched by the Government of India on 18.02.2016 to achieve, inter alia, the objective of providing financial support to the farmers suffering crop damage arising out of unforeseen events. To ensure proper implementation of the Scheme, Operational Guidelines were also issued, Clause XXIV of which deals with the roles and responsibilities of various agencies including Insurance Company (Clause 3) and Banks (Clause 4). Therefore, the scheme is a multi-agency scheme with pre-defined roles and responsibilities for each agency and the agencies are bound to act within the ambit of the scheme provisions.

2.       Clause X deals with Collection of insurance proposals and premium from farmers and Sub-Clause (1) of Clause X provided that implementing Insurance Company is not required to deal with all the loan disbursing points and instead deals only with designated Nodal Banks. This sub-clause further provides that the Bank or its branches will collect proposals & premiums and submit the consolidated proposal to Insurance Companies and also upload the soft copy of insured details in crop insurance portal.

3.       Sub-clause 7 of Clause X states that while accepting proposals and premium, Bank Branch will be responsible for verification of eligible sum insured, premium rate, etc.

4.       Sub-clause 13 of Clause X provides that the declarations/proposals received from the Banks/ PACS after the cut-off date shall be summarily rejected and the liability, if any, for such declarations shall rest with the concerned bank. Therefore, the Banks/ PACS must not receive any proposal after the cut-off date of coverage. Banks must ensure that consolidated statement along with premium amount is remitted to the insurance company within stipulated time failing which they shall be responsible for payment of claims, if any, to the farmers.

5.       As per Clause XXIV, Sub-Clause 4(i), the Banks should cross check with their records and aberrations, if any, should be brought to the notice of the insurance company immediately. If no response is received from banks within 15 days, the details given in the acknowledgment shall be considered final and no changes would be acceptable later on.

6.       As per Sub-Clause 4 (m) of Clause XXIV of the Operational Guidelines the Bank is responsible to ensure that farmer is not deprived of any benefit under the scheme due to errors/ omissions/commissions of the concerned branch/ PACS and in case of such errors, the concerned institution shall only make good such loss.

7.       As per Clause XXVII Sub Clause ( 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.

8.        Clause VII of the Operational Guidelines provide the manner of calculating the "Sum Insured" and Clause VIII (1) indicated the premium to be paid by farmers i.e. 2% of the "Sum Insured" or actual premium, whichever is less. Therefore, premium collected by Banks from farmers and submitted to Insurance Company are only a part of actual premium to be collected by the Insurance Company and remaining premium subsidy are to be collected from the State Government & Central Government on the basis of details of farmers/data uploaded by Banks.

9.       The "Sum Insured" or actual premium are dependent upon the type of crop to be insured and the area where land is situated (Patwari Halka), therefore, if the Banks fail to upload the details of a farmer then the Insurance Company will not be able to collect any premium subsidies from the State or Central Government. Therefore, the insurance company cannot be held liable to pay the insurance claim amounts.

( C)    Grounds of Challenge ( in RPs filed by Insurance Company ) and Grounds of Defense & Counter Claims ( in RPs filed by Bank)

1.       Both the Commissions below came to a definite finding that the Bank neither uploaded the details of the complainant on the crop insurance portal nor supplied such details in 34 column excel sheet by 2.07.2018 in terms of Central Government Letter dated 23.05.2018. Therefore, Bank denied an opportunity to the Insurance Company  to collect the premium subsidies from the State as well as Central Government and as such Insurance Company  cannot be compelled to pay the insurance claim amount to the complainant without even receiving the entire premium amount.

2.       The State Commission misinterpreted the Scheme Provisions as is evident from, inter alia, the interpretation given by it to Sub-Clauses 15 & 16  of the Operational Guidelines of the Scheme in Para 15 of its Order wherein it states that Insurance Company should have matched the complete information of the insured farmers and informed the Bank to rectify the error, etc. Central Government, after issuance of Operational Guidelines, vide letter dated 12.07.2017 directed head offices of all the Banks that insurance proposals against Kharif, 2017 crops can be accepted only through the crop insurance portal and premium subsidies from Central and State Government will be released only against persons insured through crop insurance portal. Therefore, if the details were not uploaded on the insurance portal by the Bank nor the information related to individual farmers were to be supplied by the Banks or to be accepted by the Insurance Companies in physical form as per directions of the Central Government, then there was no occasion for the Insurance Companies to perform the functions as contemplated by Sub-Clauses 15 & 16 of the Operational Guidelines. Only if Banks uploaded wrong details on insurance portal and subsequently as per Clause XXIV, Sub-Clause 4(i) informed the Insurance Companies about the aberrations within 15 days, the functions contemplated by Sub-Clauses 15 & 16 of the Operational Guidelines can be performed but not in the present case.

3.       Under Para 16 the insurance company is obligated to verify and satisfy itself for the data as received by it from the nodal bank. The Lower forum failed to appreciate that the verification and satisfaction is with respect to the acceptation or rejection of the application form. In the present case upon verification, since the data entered by the bank was found to be incorrect and received after the cut off date therefore the insurance company could not have received the premium subsidy with respect to the complainant farmer. Thus, the complainant did not become entitled for payment of claim as per the scheme.

4.       All the original documents pertaining to the coverage of farmer are only available with the bank and therefore bank is fully aware about the correct details of the farmer.

5.       The Commissions below failed to appreciate that as per Sub- Clause 4 (m) of Clause XXIV of the Operational Guidelines, the Bank alone is liable to satisfy the claim of complainant farmer for any errors/ omissions/commissions on its part.

6.       The Central Government considering the fact that some of the Banks were facing difficulties in uploading correct data on the insurance portal and as such initially extended the date for uploading details till 21.09.2017 and again till 17.10.2017. Even thereafter, Central Government vide letter dated 23.05.2018 permitted Banks to submit correct details of farmers in physical forms in 34 Columns Excel templates to the Insurance Company. Even after so many opportunities given to the Bank,  Bank made no effort to upload or supply correct details of the  complainant within the last cut-off date and denied him the benefits of the scheme by its own error/omission/commission. Therefore, it is only the Bank who has to satisfy the claim of the respondent and liability cannot be fastened jointly and severally on the Insurance Company.

7.       The Commissions below erred in law in not appreciating the fact that the Insurance Company as per provisions of the PMFBY Scheme has no authority to make payment contrary to the Scheme provision.

8.       The Commissions below were not justified in ignoring the fact that in most cases the insurance premium collected by Banks from cultivators and submitted to the Insurance Company are just a part of entire insurance premium and remaining insurance premium subsidies are paid by Central & State Governments and in case no details are uploaded by the Bank on the crop insurance portal then the Insurance Company cannot be declared as having received entire insurance premium and cannot be burdened with paying the entire insurance claim of cultivator either jointly with Bank or severally.

9.       The Commission below failed to appreciate the fact that the scheme functions on area approach basis and in the absence of details of area to be insured under the scheme, no coverage can be provided to the complainant and consequently the complainant cannot be paid any claim by the Insurance Company.

10.     The State Commission in the impugned order has itself noted that the Bank had failed to provide the correct details to the insurance company and further had failed to put on record any proof that the record was submitted within the last cut off date. The Insurance Company had rejected the application of the Complainant strictly in accordance with the scheme provisions as envisaged under Clause 13 reproduced in preceding para.

11.     The Commissions below went against the scheme provisions in making the Insurance Company and Bank jointly liable as none of the Clauses of the Operational Guidelines state that the implementing agencies can be made jointly liable.

12.     The State Commission has no authority to incorporate additional guidelines of joint liabilities in the Operational Guidelines, if as per policy of the Central Government no such liability was imposed on the Insurance Company to make good all losses suffered by a cultivator due to errors/omissions/commissions of the Banks.

13.     Prior to launch of PMFBY Scheme, National Agricultural Insurance Scheme was in force and this scheme also contained provision similar to Sub-Clause 4 (m) of Clause XXIV of the Operational Guidelines related to PMFBY. This Commission in the case of Canara Bank vs. Seth Prakash Chandra Jain & Anr. Revision Petition No. 4589 of 2013 and other connected revision petitions  after recording the mistake committed by the Bank held that it stands proved that the mistake was committed by the Bank.  Consequently, the Bank is liable to compensate the complainant as per terms and conditions of the policy.

14.     The Bank committed mistakes at every stage of implementation of insurance scheme and as such Bank is solely liable to fully satisfy the claim of the complainant and as such Insurance Company prays that the present Revision Petition may kindly be allowed by this Commission and impugned judgment may be modified to the extent that the relief granted to the complainant be satisfied by the Bank alone. 

( D)    Additional points / contentions

1.       Since correct address were  not forthcoming from the Bank even after continuous, multiple reminders and till date even after specific directions by the State Commission in the impugned order dated 27.09.2022 the correct details in the prescribed format have not been provided by the bank, the question of entitlement to the claim amount does not and cannot arise. 

2.       Nodal bank is paid 04% commission/service charge on premium of individual farmer by the  insurance company as per the PMFBY guidelines.

3.       As per Clause VIII, Sub-Clauses (1) & (3) of the PMFBY Scheme Guidelines  a farmer can be insured on payment of actuarial premium. Out of total actuarial premium only a small part of premium is to be paid by farmer ie. 2% of the Sum Insured or Actuarial rate, whichever is less. The remaining amount of premium was to be paid by the State Government & Central Government in equal proportion.

4.       Further in Clause XVI, Sub-Clause 1 of the PMFBY Scheme clearly provides that "Upfront premium subsidy from Government of India and concerned State/UT, should have been received for the season, by insurance company to enable them to settle the claim."

5.       Since PMFBY was introduced in 2016, the crop season of 2017-2018 was a transition period for the said insurance scheme, whereby PMFBY guidelines of 2017 did not contain any provisions with respect to refund of premium paid. Nonetheless, subsequent guidelines were formulated to reconcile and refund the premium amount to the nodal banks.

6.       On 21.08.2017, the, Insurance Company received consolidated premium of Rs. 12,12,532/- from the Nodal Bank for entire Khandwa region.  Only one entry was made on the NCIP by the Bank.

7.       On 16.02.2018, the Insurance Company received a communication from the Government of India, Ministry of Agriculture and Farmers Welfare enclosing minutes of meeting held on 12.12.2018 to reconcile the premium remittance to insurance companies for Kharif  2017 under PMFBY, specifically directing the nodal banks to reconcile the data uploaded and premium remitted to Insurance Companies for Kharif 2017 by 26th February 2018.

8.       On 03.04.2018, the Insurance Company, after giving multiple telephonic reminders to Bank, sent an email to them again requesting them to upload the requisite data of the farmer's for whom the premium had been paid but no entry was made on the Portal as per the attached template. However, the bank neither took any action in pursuance to the said email nor did they reply back on the same.

9.       Thereafter, Insurance Company again wrote an email to the Bank requesting to provide requisite details for reconciliation, however no response was received from the Bank.

10.     Even after two extensions granted by the Central Government for the reconciliation of data when the same did not take place, then in the interest of farmers the Central Government vide letter dated 23.05.2018, again extended the time limit whereby the Nodal Banks were permitted to supply the details of farmers in physical form in 34 Columns Excel Template to the Insurance Company till 15.06.2018.

11.     In the excel sheet ("34 Excel sheet") template the banks had to fill in the details strictly as per the format provided wherein premium paid by individual farmers along with other pertinent details such as crop code, area, Aadhar details etc., to the insurance Company, which was to be supplied to the authority managing National Crop Insurance Portal, who would upload the said entries on the portal from backend and eventually the insurance coverage would be given to those farmers whose names were entered on the Portal with all the correct details and accordingly the claim would be assessed.

12.      The Insurance Company wrote multiple emails to the Bank, however, none were answered and neither the Bank furnish any details of the loanee farmers.

13.     As per Clause XVI Sub-Clause 7 of the PMFBY Scheme,  a disputed claims/sub-standard claims can be referred to designated authority as indicated in the said sub-clause. Therefore, when a meeting under the Chairmanship of Director, Farmers Welfare and Agriculture Development was held on 03.11.2018, then several Banks including Bank of Baroda raised disputes with regard to non-acceptance of 34 Column Excel Sheet. In the said meeting AIC clearly stated  that "if directions may be given to AIC for accepting the information of the above insurance by the Government of India, only then, the AIC will accept the above insurance"

14.     From the e mail trail it is evident that specific emails were sent to Khandwa branch of Bank of Baroda, however, none were responded to nor the excel sheets were provided to the Insurance Company.

15.     A meeting was convened by Government of India, Ministry of Agriculture and Farmer's Welfare whereby as last opportunity for filing 34 excel sheet was extended to 30.11.2018. The insurance company duly informed the Bank about last date to submit the 34 excel sheet vide email dated 24.11.2018.

16.     Nonetheless, the Bank after several reminders from the Respondent No. 2 as well as from the nodal bank, for the first time sent the details of the farmer vide e mail dated 30.11.2018 at 22.05 pm to the Insurance Company, after office working hours of both the Bank and Insurance Company, which was way past the time granted by the Central Government to send the data for uploading on the portal.

17.     Moreover, the data provided in the 34 Excel sheet was incorrect and incomplete due to which it could not have been uploaded on the Portal even if it was sent within the cut-off date. It is pertinent to note that in case the details are not entered correctly and as per the format, the same could not have been auto populated on the Portal and consequently no entries could have been made from the backend, which also amounts to complete reckless misreporting by the Bank under Clause XIV of the PNFBY guidelines.

18.     The Insurance Company was obligated as per the directions of the Central Government and as per the scheme provisions to consider the insurance coverage based on the details uploaded on the NCIP only. The consideration of physical 34 excel sheet by the insurance company would come into picture, only if the entries were already there on the portal but there was only one entry on portal, which was also incomplete or incorrect. In case there was no entry at all in the portal itself, the same would have to be first uploaded on the portal from backend and thereafter taken into consideration by the insurance company.

19.     The true copy of the excel chart prepared for convenience, with regards to the concerned 10 Original Complainant farmers before this Hon'ble Commission as per details provided by the Bank in 34 excel sheet is annexed herewith and marked as Annexure A-8.

20.     The delayed 34 excel sheet submitted by Bank were not correct, whereby some names were missing, crop name/codes were incorrect with incorrect area measurement, incorrect village code i.e. Halka Patwari Code and incorrect surnames as well as father's name etc., which are extremely important details to ascertain the identity of the insured farmer as well to calculate the actual crop loss. For instance, for the complainant Vishnu Prakash, the crop code entered was 530 whereas the correct crop code as per the list of crop codes provided by the State Government was 11627400. Further, the Complainant in its complaint has claimed compensation for 9.34 hectares of land for soyabean crop whereas the bank entered 5 hectares of area of land for soyabean crop. It is further pertinent to note that the premium and the sum insured for a farmer is decided based on the area to be insured. Thus, the premium amount would have been different for 9.34 hectares of land.

21      In another instance, in case of the complainant namely, Thakur Singh s/o Ratan Singh (in RP No. 1589 & 1592 of 2023) apart from entering the wrong crop code, the bank has entered the name of father as Ratan Patel instead of Ratan Singh in both the cases. However, it is to be noted, that the Aadhar number for both the entries (even though the name and father's name is same) are different. Therefore, in such a case it cannot be ascertained as to who is the correct beneficiary to whom the insurance coverage would be provided.   The discrepancies and errors in the data entered by the bank in 34 excel sheet have been highlighted in the excel sheet annexed at Annexure A- 8.

22.     As per records in totality the 34 excel sheet provided by the Bank after the cut off date contained 578 entries out of which, out of which details of 577 entries did not reconcile with the portal as same were not initially uploaded by the Petitioner bank on the portal. Further, these 577 entries were not as per the prescribed format and were incorrect.

23.     The data of only 01 entry was correct, whereby the Insurance Company duly refunded the premium amounting to Rs. 12,10,557 on 26.10.2021, while closing the account for Kharif crop season 2017, keeping back premium of only one (01) farmer amounting to Rs. 1975, whose details duly reconciled with the portal.

24.     The service charge was paid to the bank on 18.03.2020.

25.     Bank till date even after the concurrent findings of both District Forum and State Commission with regards to the misreporting by the Bank as well as the specific directions passed against them in 'the impugned order 27.09.2022, passed by the State Commission still hasn't provided correct details to the Insurance Company.

26.     This Hon'ble Commission in a similar matter, relating to identical issues in R.P No. 1777 of 2023 vide order dated 17.10.2023, has held that,

7. Both the Ld. Fora below rightly took note of the rules framed under the operational Guidelines for the PMFBY Scheme. According to proviso XVII(1)(2) of the Guidelines, "(1) Insurance companies should have received the premium for coverage either from bank, channel partner, insurance intermediaries or directly. Any loss in transit due to negligence by these agencies or non-remittances of premium by these agencies, the concerned by/intermediaries shall be liable for payment of claim.

(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 misreporting."

8.       In view of the aforesaid Guidelines governing the Insurance Scheme in question, the liability to satisfy the claim would undeniably fall upon the -Bank, since it had wrongly remitted the premium for an entirely different area, which was far-away and totally different from the land of the Complainants, where the damage had taken place. Consequently, there was no error on the part of both the Fora below in thus holding the Bank liable to satisfy the claim of the Complainants."

27.     The Bank has failed to discharge its duty to provide correct details of the loanee farmers, depriving them insurance coverage, while enjoying 04% commission on individual premium of 578 poor farmers under PMFBY scheme.

28.     The Bank in order to mislead this Commission wrongly claimed that details of the farmers insured under PMFBY according to 34 Column Excel sheet were provided by Bank to Insurance Company on 31.08.2017. 

29.     Central Government vide letter dated 23.05.2018 permitted the Banks to submit details of farmers in 34 Column Excel Sheet to the Insurance Companies, therefore, there is no question of Bank submitting details in a 34 Column Excel sheet even before Central Government issued such instructions i.e. on 31.08.2017.  Infact, the Bank probably supplied the consolidated proposal and premium details through mail dated 31.08.2017.

30.     It is not the case of the Bank that Bank faced any difficulty in uploading the relevant details on the crop insurance portal still Bank made no attempt to upload the details before the cut-off date. 

31.     Bank in order to mislead this Commission submitted in the list of dates that various communications were sent by Bank to Insurance Company regarding premium amount having been received and remitted but claim amount not being issued by the Insurance Company.  However, a bare perusal of the same will show that all those communications are from 06.10.2018 and not prior to extended cut off date i.e. 02.7.2018.  The Bank realized its errors / omissions / commissions only after Insurance Company had not transferred the claim amount to the Bank for disbursement to the complainant and other famers and after such realization Bank started making communications to cover up its own lapses and to avoid the liability fixed by Operational Guidelines.

32.     Bank prior to 06.10.2018 ( the date on which Bank sent mail to Insurance Company ) was fully aware of the fact that Insurance Company refused to pay insurance amount against claim of the complainant and other farmers whose data  were not uploaded / submitted by extended cut-off date i.e. 02.07.2018, still no request was made in the meeting to accept those proposal also.  Further, in the said meeting, the cut-off date to receive declarations /  proposals received by Bank was not extended further by way of said meeting and it was neither open for the Bank to submit details of any proposals / declarations which were neither uploaded on the Insurance Portal nor the details were submitted to the Insurance Company in 34 column excel template by the cut-off date i.e. 02.07.2018, such proposals / declarations were required to be rejected summarily in terms of operational guidelines.

33.     The Bank was not allowed to submit the proposals received by it from the complainant or other farmers but with a view to avoid its liability, Bank took advantage of mail dated 24.11.2018 sent by Insurance Company to other branches of Bank, who were specifically permitted to submit declaration / proposals in the meeting dated 03.11.2018 and sent mail to Petitioner on 30.11.2018 alongwith 34 column excel sheet containing details of complainant and other farmers.  Since Bank was not permitted to submit the details of complainant and other farmers in the meeting, therefore declaration / proposal related to complainant was liable to be rejected by Insurance Company and as such complainant was not insured by Insurance Company.

34.     The responsibility of Insurance Company to collect the details of insured farmers from the Bank or helping the Bank in uploading the details of farmers arises only if the Bank inform the Insurance Company about difficulty faced by it in uploading the details of insured farmers. 

35.     There is no provision which requires the Insurance Company to return the part of premium amount paid by farmers and transferred by Bank to the Insurance Company.  Therefore, Insurance Company is entitled to retain the same, the Bank, for the errors / omissions / commission committed by it, is liable to satisfy the claim of the insured farmers.

36.     When the parties already referred their disputes for adjudication before a judicial authority, an executive authority was not competent to make any comment on such disputes.  In the inquiry report, it is indicated that ‘due to non-entry on the portal of crop insurance and excel sheet was sent by Bank to the Insurance Company, such excel sheet was neither placed before the Investigation Team nor the same the same is placed before this Commission.

7.2.    Contentions of Bank

1.       The basic thrust against the bank is that the bank would remain liable for remittance, uploading/providing details.  In case of remittance, not happening or data could not be communicated, the condition would very well become open for judicial scrutiny.  There is no possibility of such condition remaining exclusive without any exception, otherwise it would suffer from doctrine of unjust enrichment.

2.       The bank had actually remitted the amount of premium on 21.08.2017. The said amount was admittedly, received by the insurance company and even retained without any question. Even emails with details of farmers were also conveyed on 31.08.2017.  Admittedly no questions were raised by insurance company. It was only on 24.11.2018 that is more than a year after the insurance company desired uploading of data and 34 columns excel sheet latest by 30.11.2018 again, which is an admission of inherent glitches in the website maintained by the insurance company exclusively. The time period was limited since only six days’ time period was provided for all farmers which were 512. It is nobody’s case that the bank did not make any efforts. The fact has not even been discussed in the orders passed by the State Commission. There was a failure of the portal on 26.11.2018, still the details were submitted by the bank as on 30.11.2018.  There is no denial of information or details with regard to failure of portal on 26.11.2018 by the insurance company. It is also nobodys’ case that on 30.11.2018, the details were not furnished.  The remittance of the amount was informed to the insurance company.  Annexure A1 being correspondence/ intimation dated 31.08.2017 would remain clear on the subject.​ 

3.       There had been an investigation and details of proceedings as available on record where in insurance company was found to be liable and reconciliation work was also ordered. It was also directed that for Kharif 2018, many villages were not showing on the portal due to which the insurance of the insured farmers was not being registered on the portal. Banks were apprised that the remaining Patwari Halka/villages were being updated on portal and accordingly, the information would be furnished to the banks enabling them to enter the information of all the insured farmers of Kharif 2018 on the portal.

4.       On 30.11.2018, the requirement of uploading on portal had already been undertaken in spite of the glitches on 26.11.2018. Annexure A3 would remain relevant on the subject.  The bank should have been completely exonerated in respect of fastening any liability or any alleged lack of action on its part.

5.       In view of the fact that the District Forum did appreciate that status of the bank had been only that of facilitator, therefore, responsibilities for payment of the insurance benefit were not ordered against the bank. The State Commission, however, went beyond the records. Even the fact that the premium amount was returned by the insurance company, which in fact came to light in the investigation report. The same was however, remitted in the year 2017 and more specifically on 21.08.2017, however, the same was returned on 26.10.2021. It is apart from the fact that there was no reason to return the amount. However, the timing would remain quite relevant that the decision by State commission was delivered on 27.09.2022. When the appeal was decided, there was no mention of retention of amount for such a long period and enjoyment of the same without any cost/compensation by the insurance company. Without prejudice, on the merits, the case as set up by the bank, it is submitted that the law is clear on the subject, that somebody who has retained the money, even if without title, entitlement and enjoyed the same. has to compensate.

6.       The case law which is being cited would not be of any help to the insurance company in as much as the amount was enjoyed by the insurance company. The Bank had already taken all possible steps. The amount was duly remitted and the data was duly uploaded. Without proper appreciation of the records. the State commission came to a conclusion which would remain against all canons of law as well as facts.

7.       The insurance company is heavily relying upon different terms of the policy, ignoring that within the operational guidelines, it is clear that maintenance of proper records, acknowledgement of declaration would remain within the domain of the insurance company. It may further be appreciated that while relying upon clause ‘m’, of the operational guidelines the insurance company forgot to place compliance of ‘I’ that is:

“The insurance company shall acknowledge all the declarations submitted by the banks mentioning the details of crop, area, sum insured etc. The banks should cross check with their records and aberrations, if any, should be brought to the notice of the insurance company immediately. If no response is received from banks within 15 days, the details given in the acknowledgement shall be considered final and no changes would be accepted later on.”

Now, in view of the above, there is nothing on record to suggest that the insurance company forwarded any reason in respect of the uploading of information as on 30.11.2018. Though fact remains that the details were conveyed on 31.08.2017 as detailed above while amount of premium was remitted on 21.08.2017 again detailed as above.

8.       While pleading facts in the revision petition, the petitioner pleaded: 

“It is submitted that the role of insurance companies under Sub-Clause 15 & 16 of Clause X will come into XXIV picture if the Banks/PACS submit correct information 13(1) with regard to any insured farmer/crops within the cutoff date/stipulated times or incorrect details got corrected within 15 days otherwise incorrect details will be treated as final.”

However, Insurance Company forgot to take note of observations of the copy of minutes of meeting dated 15.11.2018, held under the chairmanship of Director, Farmers Welfare and Agriculture, Development, Bhopal, MP:

“6. It was informed by Bank of Baroda that in Kharif 2017, under the branch Badnawar and Barwani, Petlavad, Sendhwa, Jhabua and Dhamnod, is nuance of farmers in excel sheet was not accepted by AIC.”

9.       Further Insurance company even admitted the glitch:

“That for the Kharif 2017 crops, the Petitioner had to upload the details of declarations/ proposals received, on the Insurance Portal within the stipulated time but was not uploaded due to some technical problems faced by the Banks.”

The above would, however, be relevant to the mail dated 31.08.2017, in which the bank informed remittance of the amount to the account of AIC. The bank has therefore completed the proposal/declaration well within the time.

10.  Branches which were beneficiary of extended time have been mentioned:

“It is further submitted that in Para 6 the grievance of Bank of Baroda is also recorded but the grievances raised by Bank of Baroda were only related to Branches of Badnawar & Badwaani, Petlawad, Sendhwas, Jhabua and Dhaamnod and not related to Petitioner i.e. Branch – Indore Road, Khandwa, M.P.”

The same may be considered in view of the report:

“16. The A.I.C. has provide the Banks Excel tool sheet for reconciliation, wherein the information of farmers of those Patwari Halkas / Villages can be entered, which is available on the portal and the information of those Patwari Halka / Villages which are not available on the portal cannot be entered. It was also informed by the Banks that the said excel tool is containing the space of 90 MB, which cannot be acted upon by the Banks. Banks can process or send email on a maximum file size of 5 MB.”

11.     The decision of the State Commission is devoid of merits, without application of mind and also without considering the facts on record. The same therefore would not sustain. Though the decision of the District Forum was still not proper, however, considering the financial consequences/cost of opposing the same or litigating further before State Commission, the Bank decided to remit the amount as ordered by the District Forum. The matter therefore remains closed for all factual and legal purposes. 

12.     The bank had only been assigned limited role in view of the network of branches, ability to enter into financial transactions at its premises. The Bank was otherwise in the business of extending credit facilities. Hence, implementation of various schemes was based upon the monitoring by the parent organization. that is the insurance company.

13.     The expertise of ascertaining loss, percentage, deciding the amount which may be disbursed, have completely been ignored and has  not been discussed at all at any stage. The liability has been fastened on the bank without any discussion or basis. The same seems to be more than arbitrary or adhoc in nature. 

14.     Working out the premium amount is dependent on the risks which are likely to be entertained / covered. Bank would charge its charges depending on the quantum of services it has to provide irrespective of the amount of risk. The charges would remain stagnant and would have no connect with the amounts involved in respect of insurance/premium. Hence, fastening of any liability based upon the claims, premium is arbitrary without application of mind and without understanding the concept of insurance.  It is submitted that the bank would have no wisdom to even approve, certify any kind of amount in situation of claims having been alleged. In the present case, it is certain percentage only which was reported as loss.

15.     In cases, where the beneficiaries have availed credit facilities and in case directions are issued for payment of the insured amount, it would be a double jeopardy on the bank. There is no discussion by the State Commission. Without prejudice, it is submitted that the bank is otherwise not liable to pay even a single penny beyond what was ordered by the District Forum. However, over and above otherwise also, huge amounts are apparently recoverable against beneficiaries of the Insurance amount. The bank would always claim its rights for the amounts which are otherwise recoverable from insured individuals. Proper accounting, evidence, working was necessary, before at least holding bank liable to pay any amount.  

16.     The responsibilities could have been fixed only on insurance company. Even website was not working.  Huge excel sheet was sought to be uploaded, wherein Bank had no facility of uploading any document with attachment beyond 5MB at that time.  In all fairness, insurance company should have allowed physical submission or in the alternate suggested some other mode or method by which the details could have been received by them.  Except denying the benefits on the basis of the time limit, the insurance company did not take remedial steps but paved ways and devised method of shifting all plans on a shifting all responsibilities on an outside agency being the bank.

In terms of the above, it is, therefore, appropriate that each of the revision petition filed by the insurance company be dismissed with exemplary costs and judgement/order delivered by the District forum is retained as it is, besides passing off any other order, which is found appropriate in view of the above submissions.

17.     The case law cited by insurance Company in R.P No. 1777 of 2023 titled as State Bank of India Vs. Bijendar Singh & Ors. would not be applicable to the facts of the present case:

1. It is not a case of ex-parte proceedings. All parties including the bank are duly represented.
2. The present is not the case where the amount of premium was not remitted to the insurance company concerned. In the present case, the amount was very much remitted to the insurance company on 21.08.2017, after retaining the same for a considerable period of time. The insurance company returned it on 26.10.2021.

3. Present is the case where precise mistakes were never communicated or pointed out. There is nothing on record before the District Forum even before the State commission as well.
4. An attempt to stretch revisional jurisdiction would not be available in view of the records, provisions of law.

5. Repeated attempts are being made to emphasize as if premium was not tendered directly to the insurance company. Fact is otherwise admitted; it was tendered as detailed above and received back that is a different aspect. The requirements were never specified or identified.

7.3.    Contentions of Complainant - Respondent

( in RP No. 1588 of 2022)  (Similar Contentions raised by other Complainants)

          It is an admitted fact that complainant no.1 and his brother Om Prakash is a farmer of Gram Bhagwanpura, Patwari Halka No. 120, Tehsil and District Khandwa and agricultural land of complainant no.1 B. No. 138, 478/1, 478 /3 is situated on an area of 9.340 hectares.  The said fact has been accepted in the reply given by the Petitioner ( Bank) and Insurance Company.  The complainant no.1 has account in the Petitioner’s bank and on 05.8.2017, the premium amount was deducted by the Petitioner ( Bank) from account of the complainant.  Thus, respondent no.1 is a consumer and is entitled to receive crop insurance amount for Kharif 2017.  It has been accepted in the reply and affidavit submitted by the Bank that respondent no.1 has Kisan Credit card in the Petitioner Bank and that information has been sent by the Bank to the Insurance Company from time to time and there is also mention of claim amount to be provided to complainant no.1.  It is also accepted that respondent no.2 shall provide crop insurance claim to respondent no.1. In the reply filed by respondent no.1 before the District Forum, according to paragraph no.2 “ for the Kharif 2017 season, eligible farmers are insured by the bank by entering entries related to eligible farmers on pmfby.gov.in portal and sending the premium amount related to it to the insurance company”.  Crop insurance portal is under the central government and currently it is operated and controlled by the central government. According to the present report of pmfby.gov.in portal, entry of insurance of the complainant in Kharif 2017 season   was not uploaded on the portal by the Bank of Baroda Branch, Khandwa.     After the closure of the portal, it was instructed by the Central Government that due to delay in the reconciliation of Kharif 2017 season, whose date could not be entered  on the portal, their 34 column excel sheet and declaration form provided by the Central Government be made available to the insurance companies immediately by the bank so that all the farmers can avail the benefit of insurance for Kharif 2017. Along with this, the details of the said article will be provided to the Government of India in the prescribed format which will be uploaded by the Government of India on the portal and the premium subsidy share of the state government and central government will be paid. Under this excel sheet, the bank has been given the facility to submit any data related to the customer to the insurance company for addition/rejection/modification. The last date for completing the said relaxation process was fixed as 02.07.2018 and till this date, the petitioner Bank has not provided any information related to respondent no.1 to the Insurance Company.  Even after this, some banks did not provide information in due time and that they had approached the state government and after the meeting conducted by the state government, keeping in mind the welfare of farmers, it was decided that those banks through which the farmer's share amount is deducted and sent to the insurance company within the stipulated time period But the entry of the farmers related to them has not been made by the bank on the portal of the central government,  after receiving the information from the banks, the claim be forwarded for approval after examination. The said approval was given only to those banks who had approached the state government to present the information again and Banks which were mentioned by the State Government in the meeting.  But the petitioner did not present his representation before the government and the state government did not allow the petitioner bank to publish the information of the farmers. Even if the applicant bank has sent details of the farmer's family name after the prescribed period, the same has not been accepted for insurance as per the directions given by the State Government and Central Government from time to time. Therefore, Bank is responsible for compensation of the farmer.

       According to the reply filed by Insurance Company before the District Forum, Respondent no.1 Bank of Baroda, Khandwa Branch had made available the information of farmer to the insurance company for insurance in 34 columns excel template provided by the Central Government through email on 30.11.2018. In the excel template, not the name of the crop but in the row of crop code and revenue village code, the revenue village code related to Patwari Halka / village of the complainant was to be mentioned, the annexures related to which were made available to all the banks.   The crop code related to the crop of the farmers was not mentioned in the 34 columns excel template provided by the Bank but only the name of crop was written by the bank.  Along with this, name of Patwari headquarter of the farmer was written in place of revenue village code.  The State Government did not give the approval to the bank to provide the data again.  Therefore, any information sent by him after 02.07.2018 was not acceptable.  But even if they had given this approval, the crop insurance of those farmers could not be calculated due to wrong information given by bank in the 34 column excel template and for which the bank itself is responsible.          Under the scheme, it is the responsibility of the nodal bank to collect the details of the land and crop under crop insurance of all the loanee / non loanee farmers and its insurance is to be uploaded on the Central Government’s crop insurance portal within the stipulated time period.  If the details of any farmer have not been uploaded on the crop insurance portal by the bank, then the insurance company cannot consider that farmer as insured and they cannot be considered for the compensation amount according to provisions of the scheme.  Documents were presented by the petitioner and respondent no. 2 in the meeting headed by the Director Farmers Welfare Department in which the remaining disputes related to the crop insurance scheme were to be resolved. In the said meeting Bank of Baroda has informed that in kharif 2017 the insurance of farmers under branch Badnavar, Petlavad, Sendhwa and Daahmnod was not accepted by AIC in excel sheet. There is no name of Bank of Baroda Branch Khandwa nor mention of the bank in this meeting. It is, therefore, clear that no efforts have been done by Bank of Baroda for giving insurance claim to the farmers and Bank has therefore committed deficiency in service.

8.       Observations / Findings of NCDRC

8.1.    To summarise, the case of the Insurance Company is that Bank did not furnish the correct and complete details of the farmers in the prescribed format within the prescribed timeline and did not upload such details on the portal, which was mandatory as per Central Government guidelines, in the absence of which Insurance Company could not have claimed the premium subsidy from the State / Central Government, hence the Insurance was not done and premium was refunded to the Bank.  As Complainants have been deprived of insurance cover on account of errors / omission / commission committed by the Bank, in accordance with scheme guidelines, Bank alone is liable and State Commission went wrong in making both Insurance Company and Bank liable jointly and severally.  The Bank is paid 4% commission / service charge on the premium collected from the farmer.  As per guidelines, a farmer can be insured on payment of actuarial premium.  Out of actuarial premium, only a small part of premium is to be paid by the farmers, remaining is paid by the State and Central Governments in equal proportion as subsidy, for which it was mandatory to upload the proposals on the portal by the Bank.  Receipt of upfront subsidy from State and Central Government is must for Insurance Company to settle the claim.  Although the Insurance Company received consolidated premium of Rs.12,12,532/- on 21.08.2017, for the entire Khandwa region, out of list of 512 farmers, only one entry was made on NCIP by Bank.  Despite repeated communications from the Insurance Company, Bank did not submit the complete and correct details of farmers.  Even the details finally submitted by the Bank on the finally extended timeline of 30.11.2018 which were submitted after office hours on 30.11.2018 i.e. at 22:05 hours, were incorrect and incomplete.  Correct details have not been submitted by the Bank till date despite directions of the State Commission.  The delayed submitted 34 column excel sheet had wrong / missing entries pertaining to crop code, village code, name of farmer’s father, land area of farmer, aadhar number etc.  Out of 578 entries in the format, details of 577 entries were incorrect / incomplete and did not reconcile with the portal, the data of only one entry was correct.  Hence, the Insurance Company refunded the premium amounting to Rs.12,10,557/- on 26.10.2021 keeping back premium of only one farmer amounting to Rs.1975/-, while closing the account for kharif crop season 2017.

8.2.    The Bank on the other hand has contended that premium was remitted on 21.08.2017, emails with details of farmers were also conveyed on 31.08.2017, no questions were raised by Insurance Company till 24.11.2018, i.e. after a more than one year, when Insurance Company desired uploading of data and 34 column excel sheet again latest by 30.11.2018, which is an admission of inherent glitches in the website maintained by the Insurance Company.  A limited time period of only 6 days was given for uploading details of 512 farmers.  There was a failure of portal on 26.11.2018, still the details were sent on 30.11.2018, the last extended date.  Many villages were not showing on the portal.  On 30.11.2018, the requirement of uploading on portal had already been undertaken inspite of glitches on 26.11.2018. The role of bank is of a mere facilitator, recognising this, the District Forum ordered payment of insurance benefit by Insurance Company, State Commission went wrong in fixing liability on both Bank and Insurance Company jointly and severally.  The premium was refunded after a gap of more than four years i.e. 26.10.2021.  As Insurance Company retained the premium for such a long time and enjoyed the benefits of such retention, Insurance Company alone had to compensate.  The Insurance Company is relying on different terms of the policy ignoring that under the guidelines maintenance of proper records, acknowledgment of declaration etc remains within the domain of Insurance Company. The Bank had only been assigned limited role in view of network of branches.  Huge excel sheet was sought to be uploaded wherein Bank had no facility of uploading any document with attachment beyond 5 MB at a time.  Insurance Company should have allowed physical submission or in the alternative suggested some other mode or  method by which details could have been received by them.  Though on some counts decision of District Forum was not proper, it was not challenged before the State Commission considering the financial consequences / cost of opposing the same or litigating further.

8.3.    The complainants have contended that premium has been deducted by the Bank from their account, they are consumer and entitled to receive the crop insurance amount.  Information has been sent by Bank to Insurance Company from time to time. Crop insurance portal is operated by Central Government.  Bank did not upload their entries on the portal. Bank has sent the details of farmers to Insurance Company after the prescribed period, same have not been accepted by the Insurance Company, hence Bank is responsible for compensating the farmers.  The details furnished by Bank to Insurance Company on 30.11.2018 were incorrect.

8.4.    We have carefully gone through various correspondence that took place between the Insurance Company and Bank as well as instructions issued by Central Government and the operational guidelines.  Relevant extract of some of these is reproduced below.  Relevant extract of operational guidelines have already been given in para 4.

(a)     Letter no.13016/01/2016-Credit II ( PLI) dated 12.07.2017 from Department of  Agriculture, Cooperation and Farmers Welfare, Government of India

1.         I am directed to refer to this Department's letter of even number dated May 29, 2017 regarding Pradhan Mantri Fasal Bima Yojona (PMFBY) and Restructured Weather Based Crop Insurance Scheme (WBCIS) in the country from Kharif 2016 season. As you are aware, National crop Insurance portal namely, www.agri-Insurance.gov.in has been launched to enable integration among all stakeholders for smooth flow of both information and services with the ultimate aim of direct benefit of claim settlement in to Aadhar seeded accounts of affected farmers. It is made compulsory from Kharif 2017 season that notification of crops/areas for the season should be made on national portal itself so that. banks and Insurance companies, can feed coverage data directly on the portal for real time data flow and transparency.

2.         xxxx

3.         As the portal has been designed to collect real-time data, Il is therefore, necessary that all entries of coverage under the schemes should be made on the portal, Therefore, it has been made mandatory for the banks to enter all coverage details on portal from Kharif 2017 onward and no other format of computing farmers details shall be used, Successful entries mode, on portal through CBS Integration, online mode and offline utility tools etc, which are already available on the portal should only be considered as valid crop insurance and accordingly premium subsidy will be paid to farmers.

4.         Further, though the commercial banks are entering the coverage details on the Insurance portal but not at the required pace, Cooperative banks are also lagging behind, To facilitate the cooperatives and areas where there is a connectivity problem or have no internet connection, an offline utility has been provided on the portal. Through the use of this offline utility real-time coverage details can be entered

on the portal.

b.       E mail dated 03.04.2018 from Insurance Company to Bank

We are attaching data entered on farmer portal uploaded by Bank of Baroda, Khandwa Bombay Bazar Branch, Bhopal and also we are hereby attaching an xml template for rejection and modification in case the farmer data entered needs to be rejected or modified.

c.       E mail dated 15.05.2018 from insurance Company to Bank

                        But the portal data is showing only 1 farmer data.

d.       Letter no.13015/01/2016-Credit II ( 24354) from Ministry of Agriculture and Famers Welfare, Department of Agriculture, Cooperation and Farmers Welfare, Government of India

2.         Keeping in view the inordinate delay in carrying out the reconciliation, it has been decided that for the data which stands reconciled / approved on National Portal, empanelled Insurance Companies should immediately settled claims into famers bank accounts electronically.  In respect of farmer applications yet to be reconciled, the insurance companies may initiate claims settlement directly to the concerned bank branch on the basis of declarations submitted earlier by banks and banks may further settle the claims into individual farmer ban account immediately.  Insurance company may thereafter obtain data / information of individual insured farmers alongwith claims paid into their accounts from the concerned banks in prescribed formats and provide to  DAC and FW for  uploading at back end for final reconciliation of Government subsidy/premium for the season.  This back and / offline reconciliation may however, be treated as a onetime relaxation only for Kharif 2017 and will not be applicable for future seasons.

e.       E mail dated 07.06.2015 from Insurance Company to Bank

            The premium amount sent by Khandwa Bombay Bazar Branch for Kharif 2017 is Rs.12,12,532/- but the portal data shows only one farmer with premium of Rs.1975/-.  If the bank needs to enter the data of left out famers if any the bank can provide declarations for farmer data, halka number wise.

f.       E mail dated 15.06.218 from Insurance Company to Bank

            “The premium amount sent by Khandwa Bombay Bazar Branch for Kharif 2017 is Rs.12,12,532/- but the portal data shows only one farmer with premium of Rs.1975/-.  If the bank needs to enter the data of left out famers if any the bank can provide declarations for farmer data, halka number wise.”

g.       E mail dated  24.11.2018 from Insurance Company to Bank

“With reference to the letter dated 12.07.2018 of the Government of India under Pradhan Mantri Fasal Bima Yojna Kharif 2017, we have to inform that the famers who have been insured by the Banks have not been insured due to non-entry on the Crop Insurance Portal of the Government of India.

Therefore, there is an attachment being attached with this mail which is the excel file to be uploaded on the Government of India portal, which contained 34 columns and the code list is given along with it. You are requested that on the basis it, entry of farmer wise insurance in excel file along with code kindly be sent to this email id os.manojg@aicofindia.com, for which, the last date is fixed as 30.11.2018.

As well, it is requested to the Bank to provide the information as per the following

1. Please send overall information of the premium amount sent through D.D. or NEFT/ RTGS, being the premium amount of the farmers entered recently.

2. Please make sure at the time of filling the excel sheet that information of fully or partly insured farmer out of these farmers has not been sent in any excel or declaration form.

3. Those farmers, information of whose insurance is being given in the Excel File, there will be no short premium after accepting it.

4. Please also verify this information that you will have to make available the data for inspection of the documents of all these insured farmers insured by the Insurance Company in accordance with Pradhan Mantri Fasal Bima Yojana.”

8.5.    District Forum in its order has held only Insurance Company liable.  Extract of relevant paras of orders of District Forum is reproduced below :

25.       The insurance premium amount has been paid by the complainant to the bank under the Pradhan Mantrri Fasal Bima Yojna with the intention that in future, if the production of the complainant’s crop is affected by natural calamities, then he will not be at least financially harmed, by the Insurance Company, sum assured will be paid, but in the present case, the respondent bank and the insurance company did not settle the compensation claim related to the complainant on the basis of equity, blaming each other.  For which it does not seem justified to deprive the complainant of the sum insured, and the work of the bank and the insurance company comes under the purview of deficiency in service.

26.       xxxx

27.       As far as getting the crop insurance amount to the complainant is concerned, in this regard, on the basis of the actual yield data supplied by the State Government, the compensation amount is calculated on the basis of the formula mentioned in the Prime Minister’s Fasal Bima Yojna and on the portal related to the farmer according to the entered information.  In such a situation, according to the calculation received from the insurance company in respect of soyabean crop damage caused to the complainant, he seems to be justified in getting the insurance amount under the Pradhan Mantri Fasal Bima Yojna.

28.       On the basis of thorough consideration, accepting the complainant presented by the complainant, the following order is passed against Bank of Baroda Branch Khandwa and Insurance Company that :

(1)        Within 30 days from the date of order, on the basis of the total agricultural land of the complainant, the actual Khasra number and the insurance premium received, the respondents number 2 insurance company will pay the crop insurance amount related to the complainant's agricultural land. This payment of crop insurance amount will be made to respondents No. 1 through the bank.

(2)        It is expected from the respondents No. 1 bank that if the complainant's agricultural land, insurance premium and other information is demanded from the respondents No. 2 insurance company for settlement of the insurance claim of the complainant, then all this information will be provided by the respondents No. 1 bank to the respondents No. 2 insurance company immediately.

(3)        Due to negligence and error of respondents No. 1 Bank of Baroda branch Khandwa and respondents No. 2 insurance company, the complainant has suffered mental distress due to non-payment of crop insurance amount under Pradhan Mantri Fasal Bima Yojana. respondent No. 1 Bank of Baroda branch Khandwa and respondents No. 2 Insurance Company will pay an amount of 2500-2500 rupees (two thousand five hundred only in words) respectively to the complainant as compensation for this mental distress.

(4)        If the amount mentioned in the above clause is not paid by the respondent No. 1 Bank of Baroda branch Khandwa and the respondent No. 2 insurance company within a period of 30 days from the date of order, interest at the rate of 12 percent per annum will be payable on the said amounts from the date of order to the date of payment.

(5)        The legal expenditure of the complainant Rs.2000 ( Rupees two thousand only) will also be equally borne by the respondent no1 Bank of Baroda branch Khandwa and the respondent no.2 Insurance Company.

8.6.    In appeal filed by State Commission, both Insurance Company and Bank were held liable jointly and severally.  Extract of relevant paras of order of State Commission is reproduced below :

12.       The collector got the investigation done when the crop insurance amount was not received by the farmer. Cases were also presented at the state level and a meeting was held on 03.11.2018 under the chairmanship of Director, Farmers Welfare and Agriculture Development. these In meetings, instructions were given to the bank that the information in the 34 column excel sheet should be sent to the insurance company. The evidence of whether the bank has followed these instructions was not presented in the District Commission and Appeal.

13.       Clause 10(4) of the instructions issued regarding the Pradhan Mantri Fasal Bima Yojana, Lead Bank / Nodal Bank / Administrative office of commercial banks/Clause (c) of RRBs page 51, which is attached on page 120 in the record, it is mentioned as follows:

14.       According to the above, if the eligible farmers are deprived of getting insurance and getting the sum insured due to the error of the bank, then the bank is also held responsible for the same. Timely sending of information by the bank is not proved in the case in  question. Therefore, the bank will also be held accountable in respect of payment of the sum insured.

15.       On page 14 of the instructions of the Pradhan Mantri Fasal Bima Yojana, as per clause 15 and 16 of the instruction mentioned on page 101 of the record, the insurance company should have matched the complete information of the insured farmers and informed the bank to rectify the error, and after rectifying this error from the bank, action should have been taken to insure the crop of the farmers and pay the compensation. In the case in question, the proof that the insurance company has fulfilled this responsibility has not even been produced.

16.       Thus, according to the above, it is not proved that the discrepancy can be resolved in time by mutual coordination by both the institutions, rather, accusations and counter-accusations have been made against each other.

17.       It was not clearly established in the District Commission that the bank had sent the error free information on time. Therefore, the insurance company alone cannot be held liable for non-payment of insurance compensation amount. In the light of this discussion and the provisions of the scheme, in the case in question, both the respondent insurance company and the bank are jointly and severally responsible for giving the sum insured.

18.       Considering the above discussion, partly allowing the appeals, deletion of the phrase "by respondent no.-2 insurance company" in clause 28(1) of the order of the District Commission, "by the respondent No.-1 Bank and the respondent No.-2 Insurance Company jointly and severally" phrase is added. Rest of the orders passed by the District Commission are kept unchanged.

19.       The cost of these appeals will be borne by both the parties themselves.

8.7.    We have carefully gone through the orders of the State Commission, District Forum, other relevant records, rival contentions of the parties, correspondences between Insurance Company and Bank, details given by Insurance Company in Annexure II, response of Bank and case laws relied  upon by the parties.  As regards nature and extent of inaccuracies / incompleteness in the details furnished by Bank are concerned, which have been listed by Insurance Company as given in Annexure-II, the main ones are discussed as follows:

(a)       The Bank provided data on 30.11.2018 at 10.05 p.m. i.e. after the cut-off date

          As per instructions issued by Central Government, initial timeline for submission of proposals for Kharif 2017 was  12.07.2017.  However, considering the difficulties being faced by Bank in uploading the data on the portal, Central Government extended this timeline, initially till 21.09.2017, then till 17.10.2017 and again till 30.11.2018.  Hence, it is evident that these timelines were fixed and extended from time to time through executive instructions of the Central Government and were not in the nature that these once fixed cannot be extended.  Moreover, Insurance Company admits having receiving the proposals on 30.11.2018 i.e. on the last date of finally extended timeline, but contends that these were received at 10.05 p.m. on 30.11.2018 i.e. after office hours.   Hence these are to be treated as having been received after the prescribed timeline.  However, we are not in agreement with these contentions of Insurance Company.  The proposals having been received on the  last day of finally extended timeline, notwithstanding that these were received after 5.30 p.m. i.e. office hours of the Insurance Company, are to be treated as having been received within the extended timeline.  What if such proposals were received at 5.15 p.m. or at 5.29 p.m. on 30.11.2018.  Could it have made any difference in terms of Insurance Company having processed on the same day.  Government Companies like the Insurance Company in these cases are not expected to raise such objections of proposals having  been received after office hours.  Hence, this objection of Insurance Company that Bank sent the proposals after the finally extended timeline is rejected.

(b)       The proposals / details received even on 30.11.2018 were incomplete / inaccurate.

          It is the case of the  Insurance Company that even the details received on 30.11.2018 were not correct and complete.  In some cases extent of land is wrongly mentioned ( e.g. Sl. No. 1,9 of Annexure-II),  wrong crop codes have been mentioned ( e.g. Sl. No.1,2,3, 4, 5,6,7,8,9, 10 etc.), village name has been wrongly mentioned ( e.g. Sl. No.2,3), village code has not been mentioned ( e.g. Sl. No.2 ), father’s name wrongly mentioned (e.g. Sl. No.2, 3), different Aadhar number mentioned for same complainant in two different complainants filed by him ( e.g. Sl. No.2, 3), wrong crop name has been mentioned ( e.g. Sl. No.3), village code has been wrongly mentioned ( e.g. Sl. No.4,8 ).  Bank has not given any specific response to these specific instances of incorrect / incomplete details sent by them to the Insurance Company in these 10 cases, except making general statement that it provided the correct details within the timelines.   Hence, we accept the contentions of Insurance Company in this regard and hold that Bank provided incorrect and incomplete details to Insurance Company in these 10 cases, hence they are liable as per operational guidelines of the scheme.

( C)    The Bank did not upload the details on the portal, which was mandatory as per instructions of Central Government for Insurance Company to claim subsidy from the State and Central Government.

            It is the case of the Bank that premium was remitted on 21.08.2017 and details of farmers were also conveyed on 31.08.2017. It was only on 24.11.2018 that Insurance Company desired to upload these details on the portal in a 34 column format.  Bank  contends that there were technical snags on the portal and keeping in view their limited capacity and limit on file size for uploading, the same could not be done.  The Bank had a limited role under the guidelines.  Considering the scheme ( PMFBY) was a newly launched scheme and Kharif 2016 was the Ist year, when proposals by Banks were to be submitted offline.  It was only from the Kharif 2017 that Central Government made uploading of details on the portal compulsory.  Being a transitory period, there were many instances of technical glitches in the portal, and difficulties being faced by many banks / branches, especially in rural areas.  Considering these, timelines for submissions of proposals by Banks were extended by Central Government from time to time.  Review meeting used to take place by officers of State / Central Government to take stock of the situation and resolve the issues.  Considering the entirety of facts and circumstances of the case, we are of the view that Bank was justified in not being able to upload details of large number of farmers electronically on the portal.  Hence, had the Bank sent correct and complete details of the farmers on 30.11.2018, even in the physical form, it could have been justified in shifting the responsibility on the Insurance Company.  But in this case, as discussed in the preceding para, even the details submitted on 30.11.2018 in physical form were not correct and complete.  Hence, Bank is responsible for sending incomplete and incorrect details, hence liable as per scheme guidelines.

8.8.    As per clause II of the scheme guidelines, all farmers growing the notified crops in notified areas are eligible for coverage.  Clause X provides for collection of proposal and premium from the farmer.  Bank is responsible for submitting consolidated proposals to the Insurance Company before the stipulated cut off dates.  As per clause XXIV ( 4) ( h), the Nodal Bank may also collect the list of individual insured farmers with requisite details from the concerned Bank branch in soft copy for further reconciliation and send the same to the Insurance Company.  As per clause XXIV (4) (m), Banks should ensure that cultivator may not be deprived of any benefit under the scheme due to errors / omissions / commissions of the concerned Branch / PACs, and in case of such errors, the concerned institutions shall only make good such losses.  Hence, except for small clerical or routine mistake, in case of any major / substantive misreporting by Nodal Bank / Branch, the concerned Bank only will be liable for such misreporting and its consequences. As per clause XXIV 4 (h), the Bank was obliged to provide requisite details of insured farmers.  Under the scheme, it is the prime responsibility of the bank to provide correct and complete details of each case to the Insurance Company.  The Insurance Company do not have access to land records or other documents, except the State Government’s notification to do a broad verification / cross checking of details furnished by the Bank.    Hence, we are not in agreement with the contentions of the Bank and hold that Bank furnished incorrect / incomplete details of the farmers / complainant on material aspect to the Insurance Company, due to which the farmers’ land could not be insured.  Hence, Bank is responsible and liable to compensate the complainants. 

8.9.    In Amarsin Shivajirao Pandit( supra), pertaining to implementation of the same scheme PMFBY in Maharashtra, , the Bank has wrongly reported the proposal as one for Beed Revenue District instead of Umapur Revenue Circle.  In view of clause XXIV 4 (m), Hon’ble High Court held the bank responsible to make the good all claim, observing that as per clause 4 (m), even in case of error, the concerned institution was under obligation to make good of such loss.  Bank committed error by mentioning an incorrect revenue circle.  The error had not been rectified within time frame.  Bank cannot escape from its liability. 

           Extract of relevant para of the judgment is reproduced below :

“8. Admittedly, the State Bank of India, Branch at Umapur committed the mistake in its proposal. The proposal was marked as one for Beed revenue district instead of Umapur revenue circle. In view of clause 4 (m) of Chapter XXIV of the Operational Guidelines, it would, therefore, be the responsibility of the bank to make good all claims. referred to The matter was, therefore, referred to the Government of India, Ministry of Agriculture, Cooperation and Farmers Welfare. It is reiterated that by virtue of clause 1(g) relating to Role and Responsibilities of various Agencies, the Central Government observed that the situation arose due to fault on the part of the bank and as per the role and responsibility enumerated in the Operational Guidelines, the liability of payment of claims to the farmers lies entirely with the bank. True, the decision of the Central Government may not be final since we are sitting in writ jurisdiction over the dispute. We have, however, no reason to take a different view. As per clause 4(m) of the Operational Guidelines, even in case of an error, the concerned Institution was under obligation to make good of such loss. Admittedly, the State Bank of India, Branch at Umapur committed an error by mentioning an incorrect revenue circle.  The error had not been rectified within time frame. Clause 4 (m) is nothing short of an understanding between the agencies working for implementation of the Scheme.  In our view, therefore, the HDFC Ergo General Insurance Company was justified in not granting the claim.  The State Bank of India, Umapur Branch cannot escape from its liability.”

          In Seth Prakash Chandra( supra ), this Commission observed, if mistake is committed by the Bank, then Bank is liable to compensate.  In this case, mistake was committed by the Bank by not paying premium for the Patwari Halka where the land of the Complainant was situated to the Insurance Company.  Extract of relevant para of the judgment is reproduced below :

“10.    The respondent insurance company has admitted that the Bank had sent the premium and declaration for the Kharif Crop of 2007 with regard to the Patwari Halka No, 40, 50 and 82 of District Sagar.  The Insurance Company has paid the compensation for the loss of crop in those Halka Nos.  However, no premium was sent to the Insurance Company for Patwari Halka No. 74 and other Halka Nos. of the respective complainants.  Insurance Company denied that they are not liable to pay the said amount. The case of the insurance company is that they have received premium of Rs. 10,500/- for Patwari Halka No. 40, 50 and 82 only.  The submission of the Bank hinges upon their oral words.  No documentary evidence saw the light of the day.  If you have paid the premium to the Insurance Company, there must be some record which was kept under the hat for the obvious reasons.  It is rudimentary principle of jurisprudence that the documentary evidence will always get preponderance over the oral evidence because it is well known axiom of law that “men may tell lies but the document cannot”.

11.    It is thus clear that the Bank is responsible for the same.  It stands proved that the mistake was committed by the Bank.  Consequently, the Bank is liable to compensate the complainants as per terms and conditions of the policy which reads as follows:-

“SPECIAL CONDITIONS FOR PIs/NODAL BANKS/LOAN DISBURSING POINTS

5.    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 only shall make good all such loses”

          In Bijendar Singh( supra ),where the Bank had wrongly remitted the premium for an entirely different area, which was far away and totally different from the land of the complainant where damage had taken place, Bank was held liable to satisfy the claim of the Complainant. Extract of relevant para of the judgment is reproduced below:

“8.      In view of the aforesaid Guidelines governing the Insurance Scheme in question, the liability to satisfy the claim would undeniably fall upon the Petitioner-Bank, since it had wrongly remitted the premium for an entirely different area, which was far-away and totally different from the land of the Complainants, where the damage had taken place. Consequently, there was no error on the part of both the Ld. Fora below in thus holding the Petitioner-Bank liable to satisfy the claim of the Complainants.”

8.10   While adjudicating a dispute between HDFC Insurance Company and SBI in relation to PMFBY in Maharashtra Region, where SBI had shared incorrect information pertaining to Revenue Circle, Central Government through its letter dated 11.05.2018 had fastened the liability on the bank.( as mentioned by Hon’ble High Court of Bombay in Amarsingh Shivaji Rao Pandit ( supra).

8.11.  As regards contentions of Bank that Insurance Company kept the premium for a very long time, having received on 21.08.2017, it was returned on 26.10.2021 only and that email with details of farmers were also conveyed on 31.08.2017 and no question were raised by Insurance Company till 24.11.2018, we are of the considered view that it was incumbent on the Insurance Company, on having received the proposal and premium during August 2017, to have processed the same within a reasonable period of about one to two months and taken a final decision, either to accept the proposals or reject the same giving reasons thereof or referred the matter back to Bank for rectifying the defects / errors, by giving case / farmers wise list of deficiencies / inaccuracies.  Had such an exercise been done, this situation could not have arisen.  The scheme is a multi-agency scheme with well-defined roles of Banks, Insurance Companies and other stakeholders, who all are expected to work together in a coordinated way for achieving the objectives of the scheme, and with a view to ensure that farmer’s interest are protected.  Insurance Company ought to have facilitated the Bank in timely submission of proposals with complete and correct details and its uploading on the portal.  In the facts and circumstances of the present cases,  Insurance Company have also failed to discharge their role properly and effectively.  Hence, we hold that in these cases, Insurance Company is equally responsible and liable to compensate the farmers.    Insurance Company was expected to facilitate the correct uploading of details on the portal.  It was a collaborative exercise, where both Insurance Company and Bank were to play an active role, but both have failed in proper discharge of the duties and responsibilities envisaged under the scheme guidelines.  Hence, both are held responsible and liable to compensate the affected farmers, jointly and severally in equal proportion.  With respect to delay on the part of Insurance Company in communicating the decision to decline insurance and refund premium to the Bank, we are in agreement with the contentions of Bank of Baroda, and same have already been elaborated in the preceding paras. 

8.12    In 10 cases covered under this order (20 RPs, 10 filed by Insurance Company and 10 filed by Bank), as the Bank furnished inaccurate / incomplete details,  which were material information for insurance company to issue the insurance policy,  we hold that in all these cases Bank is responsible for furnishing of inaccurate information and Insurance Company is also responsible for not taking timely action to reconcile the details and / or take up the matter with Bank for rectifying mistakes / inaccuracies, taking a decision, whether accepting or rejecting the proposal and refunding the premium within a reasonable period of about 3 months.  Hence, in these 10 cases,  both Insurance Company and Bank are held liable jointly.  In these cases, although we may not agree with some of the observations of the State Commission, in view of our detailed observations and findings in the preceding paras, we are in agreement with the final decision of State Commission with respect to both Insurance Company and Bank being liable jointly and to share the liability.  Hence, we direct that in these 10 cases, both Insurance Company and Bank will share the liability of sum insured to the complainants - farmers in equal proportion i.e. 50:50.

9.       Final Orders

          In view of the forgoing and after careful consideration of entire facts and circumstances of the cases and rival contentions of the parties, following final orders are passed.

1. In the following 10 cases (20 RPs; 10 filed by Agriculture Insurance Co and 10 filed by Bank of Baroda) Both Insurance Company and Bank are liable jointly and to co-share the liability of sum insured of the Complainant(s)-Farmer(s) in equal proportion i.e. 50: 50.  Bank shall rectify all the defects in Annexure II of this order, provide complete and correct details in all the 10 cases and return the refunded premium to Insurance Company within 30 days of the order. As regards Insurance premium subsidy from State / Central Government with respect to these cases is concerned, Insurance Company shall make an application to the concerned authority within 2 weeks of this order as per prescribed procedure, citing this order.  The concerned authorities of State and Central Government shall consider such request for release of premium subsidy in these cases notwithstanding the delay and non-uploading of details on the portal, subject to other usual verification. In these cases, final decision of the State Commission is upheld with suitable modifications and RPs are disposed off accordingly.

List of RPs

10.     Payment of sum insured / Compensation to Complainants as per this order

(a)     Insurance Company ( Agriculture Insurance Co. of India Ltd.) and the Bank ( Bank of Baroda), as the case may be, will pay the sum insured to the concerned Complainants ( Farmers ) in each of the case as per orders of this Commission alongwith interest @ 9% p.a. with effect from the  date of Complaint.  All payments as per this order alongwith Compensation / litigation cost as ordered by the District Forum shall be made to the concerned Complainants, by the Insurance Company and Bank, as the case may be, within maximum of 45 days of date of this order, failing which amounts payable at the end of 45 days shall carry interest @ 12% p.a. till the date of actual payment.

(b)     All Amounts payable as per this order shall be disbursed to the Complainants, by the Insurance Company and  Bank ( after adjusting the amounts  already paid, if any) by transferring the same to the respective accounts of the complainants/farmers maintained in the concerned bank / branch(s) through Bank of Baroda ( BOB).  Hence, Insurance Company shall transfer the requisite amounts payable by them as per this order with complainants / farmers wise list, to the BOB, within a maximum of 30 days of this order, for transferring it further to the respective bank accounts of concerned farmers / complainants.  Thereafter, BOB will transfer the amount received from Insurance Company to the accounts of respective complainants / farmers maintained at the concerned branch(s) within a maximum of 7 days from the date of receipt from the Insurance Company).  As regards amounts which are liability of BOB as per this order, the same shall be transferred to the accounts of respective complainants / farmers with the concerned bank branch (s) within a maximum of 30 days of this order.

( c)    Immediately on transferring the amounts to the accounts of respective complainants, both Insurance Company’s liability as well as BOB’s liability as per this order, BOB shall inform  the concerned complainants, in writing, through speed post / registered post, at the addresses available in their records, giving the details of amount credited in their account along with other required details, giving references to this Commission’s order.

(d)     Both Agriculture Insurance Company and BOB, after discharging their liability in full as per this order, will file a compliance affidavit alongwith requisite proof and copies of relevant communications before this Commission along with an application for release of deposits made by them with this Commission or any of the Fora below ( if any,) giving the requisite details of such deposits. 

11.     Pending IAs, if any, in any of the RPs also stand disposed off.

Annexure-I

                                                                                                        Annexure-II