JUSTICE V.K.JAIN (ORAL)

Vide its Notification dated 13.12.2013, Govt. of Rajasthan notified a Weather Based Crop Insurance Scheme for Rabi 2013-14 for the districts mentioned in the said Notification. The scheme was applicable in respect of the crops included in the Notification and interalia covered Gram. The Districts in which the scheme was to be enforced included Churu in Rajasthan. Under the scheme, the crop of the farmers who had taken loans from the banks and financial institutions was to be insured by several insurers including respondents ICICI Lombard General Insurance Co. Ltd.and HDFC Ergo General Insurance Co. Ltd., hereinafter referred to as the ‘insurer’. It  was mandatory for the banks and financial institutions who had disbursed loans to the farmers to obtain insurance cover in respect of all such farmers. Under the scheme, the bank / financial institution concerned was required to send the requisite details including  a Declaration to the insurer. The Declaration which the banks/financial institutions were to send to the insurer was to disclose the notified Weather Stations as well as Weather Centres  from which the weather data was to be collected.

2.      The complainants in these matters are farmers who had grown Gram crop in the villages of District Churu. The petitioner bank, while sending the requisite documents including Declaration Form to the insurer, named Pithisar as the notified Weather Centre though the Weather Centre at Pithisar  was not functioning at that time. The name of the backup weather station was not disclosed in the Declaration Form so submitted by the petitioner  bank to the insurer. The consolidate single premium required for insurance of the crop, however, was remitted to the insurer.

3.      The complainants having suffered loss on account of bad weather in the area, claims were lodged by them. The insurer made payment as per the data available in respect of a Centre, namely, Khiwalsar. The complainants wanted compensation based upon the data available at the Weather Centre Jasrasar. Therefore, they approached the concerned District Forum by way of separate consumer complaints seeking the difference between the compensation computed as per the data available at Jasrasar and the compensation based upon the data available at Khiwansar.

4.      The complainants were resisted by the insurer as well as by the petitioner bank. The petitioner bank admitted the mistake in the name of the Weather Centre given in the Declaration Form sent to the insurer. The insurer claimed that under the scheme, it was the bank which was made liable for any loss to the famers  on account of any mistake on the part of the bank and since the mistake in recording the name of the Weather Centre in the Declaration Form happened at the end of the bank, it was for the bank to pay the difference claimed by the farmers/complainants.

5.      The District Forum directed the petitioner as well as the insurer to pay the differential in the ratio of  the 50% each alongwith 9% interest from the date on which the last payment was made by the insurer to the farmers. Cost of litigation quantified at Rs.2000/- was also awarded and the said cost of litigation was also to be shared by the bank and the insurer in the ratio of 50% each.

6.      Being aggrieved from the order passed by the District Forum, the petitioner bank as well the insurer filed separate appeals before the concerned State Commission  by way of appeals. The appeals having been dismissed, the petitioner bank is before this Commission by way of these revision petitions. However, the insurer has accepted the order passed by the State Commission  and has not challenged the same.

7.      It is evident from the Notification issued by the Govt. of Rajasthan that in Girdawar Circle of Churu District, Pithisar  was the concerned Weather Centre, Jharia was backup Weather Centre -1 and Jasrasar was backup Weather Centre -2. The submission of the learned counsel for the petitioner is that in the Declaration Form sent by them to the insurer, the name of the concerned Weather Centre was by mistake given as Pithisar. This is accepted by the learned counsel appearing for some of the complainants. The learned counsel for the insurer, however, has no instructions as to which was the concerned Weather Centre named in the Declaration Form. It is, however, not in dispute before me that Pithisar was not functional at the time the Declaration Form was sent. Therefore, there is no scope for disputing that a mistake was committed by the petitioner bank in the Declaration Form sent to the insurer since a wrong Weather Centre was given. The mistake, however, appears to be bonafide considering that Pithisar was the concerned Weather Centre as per the Notification issued by Govt. of Rajasthan. Probably the petitioner bank was not aware at the time the Declaration Form was sent, that the Weather Centre at Pithisar had not been made functional  by that time. Be that as it may, the question which arises for consideration is as to whether the mistake committed by the petitioner bank had in any manner affected the decision of the insurer on the question  as to whether the proposal for insurance should be accepted by it or not or it had in any manner prejudicially affected the insurer. This is not the case of the insurer that had the bank given the name Jharia or Jasrasar as the backup Weather Centre, they would have not accepted the proposal. In my opinion, it was absolutely  immaterial from the point of view of the insurer as to whether the concerned Weather Centre was Pithisar or Jharia or Jasrasar. Therefore, the mistake committed by the bank could not have influenced the decision of the insurer on the question  whether to  accept the proposal or not nor had it in any manner prejudicially affected the insurer. Therefore, in my opinion there would be no justification for directing the petitioner bank to pay 50% of the difference in the quantum of compensation payable to the complainants. The insurer having taken the premium and having insured the crop of the complainants, it was for the insurer alone to pay to the farmers in terms of the scheme under which the crop of the complainants was insured.

8.      The learned counsel for the insurer has drawn my attention to the government  guidelines referred in para 15 of the order of the District Forum whereunder, the banks were required to cross check with their records and bring the aberrations to the notice of the Insurance Co. The said guidelines according to the District Forum also provide that if no response is received from the bank within 15 days, the details given in the acknowledgement shall be considered final and no change would be accepted later on. The Guidelines according to the District Forum also provide that in case of error the concerned institution shall make good all the losses of the farmers. Though the guidelines have not been filed before this Commission, in my opinion, the concerned bank / financial institution was liable to make good the loss of the farmers in terms of the above-referred Guidelines only if the insurer was in any manner been prejudicially affected on account of the mistake committed by the bank/ financial institution. The bank cannot be penalized for a bonafide mistake made by it when no prejudice in any manner is caused to the insurer on account of such a bonafide mistake. Moreover, there is no evidence or even allegation of the insurer having sought any kind of clarification from the petitioner bank with respect to the concerned weather station. Therefore, the period of 15 days referred in the Guidelines may not even be applicable.

9.      The learned counsel for the insurer has also drawn my attention to the Minutes of the Meeting held under the Chairmanship of the District Collector, Churu on 23.12.2015 wherein a decision was taken that the difference in the insurance claim amount should be borne 50-50% by ICICI Lombard Co. and the concerned bank. The same Minutes would also show that the representative of the bank present in the meeting had not consented to the aforesaid decision and had clearly stated that the decision could be taken only by State based representative of the bank, meaning thereby that the representative present on behalf of the bank in the meeting was not competent to consent to the aforesaid decision which required a decision by the State level reprehensive of the bank. Therefore, the petitioner bank, in my opinion, cannot be saddled with any liability on the basis of the Minutes of the above-referred meeting dated 23.12.2015.

10.    For the reasons stated hereinabove, the revision petitions are disposed of with the following directions:-

(i)      If the data for the relevant period is available at Pithisar Weather Station, the complainants shall be entitled to compensation calculated on the basis of the data available at the said Weather Station.

(ii)      If no data for the relevant period is available at Pithisar Whether Centre, the complainants shall be entitled to compensation calculated on the basis of the data available at Jharia which was back up Weather Station-1 under the Notification issued by the government.

(iii)     If the data for the relevant period is not available even at back up Weather Centre No.1, namely, Jharia, the complainants shall be entitled to compensation calculated on the basis of the data available at back up Whether Centre-2, namely, Jasrasar.

(iv)    The difference in the compensation calculated in terms of this order  and the compensation already paid to the complainants shall be paid to them by the insurer without any contribution by the petitioner bank.

(v)     The complainants shall also be entitled to interest @ 8% p.a. on the differential compensation found payable to them in terms of this order w.e.f. the date on which last payment was made to them by the insurer till the date on which the payment in terms of this order is actually made.

(vi)    The cost of litigation awarded by the District Forum shall be borne solely by the petitioner bank.

(vii)    The compensation shall be calculated and paid in terms of this order within three months from today.

(viii)   The conveyance charges wherever already not paid to the complainants shall be paid by the petitioner within three weeks from today, failing which the same will be recoverable as arrears of land revenue and shall be paid to the complainants after such recovery.