Karnataka

Gadag

CC/44/2017

Shankargouda.S.Mudanagoudar and Others - Complainant(s)

Versus

The Managing Director, AIC of India and Others - Opp.Party(s)

S.K.Patil

12 Mar 2018

ORDER

COMMON ORDER

 

JUDGEMENT DELIVERED BY SMT.SAMIUNNISA .C.H., PRESIDENT:

        There are the 3 complaints filed by the complainants against the OPs claiming certain reliefs by invoking Sec 12 of the Consumer Protection Act 1986.

           2.  The OP’s in all the above complaints are same and also the fact of the cases are one and same, all these complaints are heard together and disposed-off  by this common order. For the convenience sake, the above complaint numbers are mentioned above.

          3.     The above complaints filed by the complainants, states that they had sowed onion crop in 2014-15 in their respective lands and insured for the Kharif yield and paid the premium through the Nodal Banks.

 

 

         4.    The averments of the complaints in brief are:

       That the complainants have sowed the Onion Kharif crop in 2014-15 in their respective lands and insured with AIC for the yield and paid the premium through the Nodal Banks in 2014-15 the Kharif crop failed due to shortfall of rain, humidity, wind, velocity, temperature etc. As per the said Scheme, the reading of the rainfall and other reasons has to be recorded from Karnataka State Natural Disaster Monitoring Centre (KSNDMC) Bangalore. It is also to be considered the reading of the rainfall from the Telemetric Rainfall Measurement Centre in the Hobli level. As per the Scheme, day-to-day data has to be considered while assessing the loss or damages caused to the crop. But, no readings have been recorded in Konnur Hobli. Hence, the calculation made by the OP No.1 is wrong. Further, Complainants submits that as per the order of the Government and guidelines of the Government, no crop cutting experiments have been conducted in Konnur Hobli of Naragund Taluka. The OP No.1 has paid only meager amount to the Complainants i.e. Rs.362/- per hector. The OP No.1 has failed to settle the Insurance amount to the Complainant. Further, Complainants submits that OP No.1 not acted according to the Government Order No: Agriculture Department/38/Agri Produce Dept./2014, dated: 15.04.2014, the Complainants have paid the premium fixed by the Company. But OP No.1 had not issued any policy bonds after receipt of the premium amount from the Complainants. When Complainants demanded the OP No.1 finally on 10.06.2015 Complainants came to know that very less amount without following the norms of the Government deposited only Rs.1,07,804/- against Rs.2,56,10,800/-. Hence there is deficiency in service and prayed to order the OPs to pay the maximum insured amount along with court expenses.

        5.   In pursuance of the notice issued by this Forum, the OP No.1 appeared through his counsel. OP No.2 also appeared through his counsel, but no defence had been taken. On the other hand OP No.3 remained absent.

          The brief facts of the Written Version of OP No.1:-

            OP No.1 stated that the above complaints are not maintainable both in law and also on facts. The OP No.1- Agriculture Insurance Company of India is the only implementing agency for implemented Weather Based Crop Insurance Scheme (WBCIS). The Scheme formulated by the Government vide letter No.131015/02/2012 – Credit II, dated: 21.02.2014, Govt. of Karnataka vide their Order No.AGD/38/AMS/2014, Bangalore dated: 15.04.2014. OP No.1 strictly implemented this Scheme. As per the Scheme guidelines of Government, the State Government has its active involvement in this Scheme. The Scheme was formulated with the objective to protect the farmers against seasonal adverse weather, rainfall condition. OP further contended that Clause-14 of Scheme lays down the circumstances in which compensation become payable. Sub-clause II thereof lays down pay-out (compensation) shall arise in case of Adverse Weather Incidence. Adverse Weather Incidence is equivalent to the deviation between “Trigger Weather” and “Actual Weather” Data recorded at a RWS during specified time period. Trigger Weather is pre-defined Weather Parameter applicable to a Notified Crop in a notified RUA. It is further laid down in sub-clause III of clause-14 that payout procedure shall be automatic and the insured need not make a claim to the Company. OP further submits that RW for each area are specified to the State Government concerned. By RW is not to be presumed that a full-fledged metrological office is to be established, but at the designate place weather monitoring equipments are installed which records weather data. In the event, for particular period RWS are unable to record data, data is to be collected from Back-up Weather Station (BWS) which are also specified by the concerned State Government and as per the Scheme guidelines, pay-outs will be calculated based on the weather data recorded at RWS only. Pay-out shall arise only in case of adverse weather incidents. Adverse weather is equivalent to the deviation between Trigger Weather and Actual Weather data recorded at a Reference Weather Station (RWS) during specified time period. Trigger Weather is predefined weather parameter applicable to a notified crop in a notified reference unit area. To this, there is a state level coordination committee on crop insurance has identified the Karnataka State Natural Disaster Monitoring Centre (KSNDMC) as the nodal agency for providing rainfall and weather data. Under the WBCIS the weather data are being provided by the KSNDMC to OP No.1.

            6.         OP further submits that if the observed Index value false below are above the notified triggered value. The claims for unit shall be calculated as per formula provided in the Scheme for claim calculation

            i.e. Claims per unit = (Defence between observed and notified index value) X Notional Pay out

Overall claims will be - claims per unit X No. of units.

            7.         OP further submits that as per the term sheet in respect of Deficit rainfall peril, payout is given only in respect of Phase-I, since the aggregate of rainfall during 15.06.2014 to 10.07.2014 was below 45 mm. Hence, a payout of Rs.361.56 was given to the petitioner (45-37.14)* 46 = Rs.361.56). There was no payout in any other phase in respect of Excess Rainfall, as the criteria of Highest of 4 consecutive days cumulative rainfall in respective Phases did not exceed the strike limits. Therefore all eligible claims in respect of WBCIS Kharif-2014 have already been settled by AIC.  As per the data, there is no shortfall in the area claimed by the complainants and claims that the complainants are hiding the material facts and fraudulently claiming the undue amount and prays to dismiss the complaint.

          8.  OP-2 has appeared through his counsel before the Forum, but not filed any Version or documents.

         9.  All the complainants filed Chief affidavit along with the documents i.e. premium receipts which had been issued by the nodal bank, RTC copy and two documents concerned to crop cutting experiments and yield. On the other hand, OP filed Chief Affidavit along with photo copies of 3 documents.

1.  Circular of the Ops Company,

2.  Central Govt. Order copy and its enclosures,

3. Book let of Terms and Conditions of Insurance Policy.

4. Payout structure for Kharif - 2014.

5. Letter from KSNDMC and its enclosures. 

            10.      on pursuance of the materials, placed by the complainants and OP No.1, the following points arises for our consideration:-

1. Whether the complainants have proved the deficiency in service on the part of the OPs as averred in the complaints?
2. Whether the complainants are entitled to any relief?
3. What Order?

Our findings to the above points are:-

Point No. 1:  Affirmative,

Point No. 2:  Partially Affirmative,

Point No. 3:  As per the final Order

R E A S O N S

             11.  POINT NO.1 AND 2:  Both the points are inter-link and identical. Hence we proceed both the points together.

12.       The Complainants filed these Complaints against the Ops for claiming crop insurance 2014-15 on failure of weather. The Complainants submits that they have insured their crops with OP’s in the year 2014-15 for the crop of onion for Kharif season in the National Crop Insurance Program (NCIP) which is Weather Based Crop Insurance Scheme. The Complainants on good faith and for protection of their crop as per publications and advice of OP insured their crop irrigated onion under Konnur Hobli, Naragund Taluk of Surakod village and paid the premium of Rs.5,160/- per hector with OP No.3 and obtained receipt and Sum Assured was Rs.86,000/- per hector. In this year, Complainants suffered less rain, weather condition and velocity of wind and humidity, but OP No.1 deposited less amount in the Complainants account by wrong calculation. OP No.1 deposited Rs.362/- per hector. Meantime, the Complainants approached OP No.3, but OP No.3 submitted that OP No.1 have directed to deposit the amount to their account. Hence, Complainants submits that they have not got the sum assured from the Ops. On the other hand, OP No.1 submits that as per the Scheme Condition, the payout is calculated and deposit the amount in the respective account of the Complainants and submits that they have received the report from Karnataka State Natural Disaster Monitoring Centre and photocopy of the same had been produced before the Forum and submits that they have deposited the payout amount to the Complainants account and they are not responsible any loss or the Company had not made any deficiency in service or unfair trade practice and submitted that as per the terms and conditions of the Government, they have paid the insurance amount and prayed to dismiss the case.

13.       On-going through the records on file, it is undisputed fact that complainants have insured their crops with OP No.1 and it is also undisputed fact that they have received the premium amount from the complainants as well as the Government that means OP No.1 received entire premium amount from the complainants. The disputed fact is that OP No.1 calculated the loss as per the scheme framed by the Government. We have to discuss clearly about the scheme to conclude the case.

Perils Covered:

Following major weather perils, which are deemed to cause “Adverse weather incident”, leading to crop loss, shall be covered under the scheme.

1. Rainfall – Deficit Rainfall. Unseasonal rainfall, Excess rainfall, Rainy days, Dry-spell, dry days.
2. Relative Humidity
3. Temperature – High temperature (heat), Low temperature (frost)
4. Wind speed.
5. A combination of the above.
6. Hailstorms, cloud-burst may also be covered as Add-on/Index-Plus products for those farmers who have already taken normal coverage under WBCIS of NCIP.

 

The perils listed above are only indicative and not exhaustive, any addition/deletion may be considered by insurance companies based on availability of relevant data.

These are the adverse weather incidence leading crop loss shall be covered under the scheme. If we see these conditions and as per the submission of Complainants, the crop was loss due to humidity, wind, velocity, less rainfall, temperature and they caused these incidents the losses for growing the crops.

 14.      Complainants advocate while arguing the matter submitted that while the Complainant approached to District Statistical Department for information regarding the yielding and crop cutting report and also rain data during the 2014/2015 the said office issued the letter stating that they have not made any crop cutting experiment and also submitted that they cannot furnish the rainfall data and further submits that the agriculturist are not known about the terms and condition of the crop insurance and even they don’t know what is the trigger fixed by the OP’s and moreover they saw the advertisement and notice board of the OP No.3 in which the premium and the sum assured was mentioned. The Complainants have no knowledge about the Terms and Conditions of the policy since Ops have not explained about terms and conditions of the policy. Here, Complainants advocate draw our attention towards the Terms and Conditions of the policy in Operational guidelines which have been produced by the OP No.1 itself. It is very clear as per the policy condition No.25.3.4 role and responsibilities of the Bank in sub-rule 11 (a) to (d) it reads as under:

     “ a) To educate the cultivators about WBCIS.

      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 forwarding the same to the insurance Company along with the premium amount.

    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”. 

 

As such, there is a specific role and responsibility of the Insurance Company also. As per the condition No.25.4 in (viii) & (ix) it reads as under: 

           “(viii) Coordinating with the States and other agencies for awareness and publicity of the scheme.

           (ix) Providing monthly progress returns/statistics or any information demanded by the Government, both Central and State Government.”

As per the Operational guidelines Point No.20, sub-point No.20.1 and 20.2 also says that there is a need for publicity and awareness, it speaks as follows:

“20.1 Adequate publicity needs to be given in all the villages of the notified districts/areas. All possible means of electronic and print media, farmer’s fair, exhibitions including SMS messages, short films, and documentaries shall be utilized to create and disseminate awareness, benefits and limitations of the Scheme among the cultivators and the agencies involved in implementing the Scheme. Agriculture/Cooperation Departments of the State in consultation with Insurance Companies shall workout appropriate Plan for adequate awareness and publicity three months prior to the start of coverage period.

20.2 The State Government/UT in collaboration with Insurance Companies shall also chalk out plan for capacity building of the associated agents, banks etc. for effective implementation of the scheme and organize training workshops/sensitization programme for them in association with participating insurance companies”.    

These are the terms and conditions have to be followed by the OP. But, Ops have not produced any single documents to show that these terms and conditions are fulfilled by them. Without educating the farmer, without explaining the policy condition and without receiving day-by-day data from the concerned weather station, while calculating the insurance amount they cannot say that they have followed the terms and conditions of the policy.

15.       The Ops Advocate while addressing the Forum submitted that they have received the rainfall data from the Karnataka State Natural Disaster Monitoring Centre as per the data, OP No.1 have settled the insurance amount by paying payout. 

The complainants paid the premium what was fixed by the OP with a good intention now the contention of the OP No.1 advocate is that the trigger was fixed. OP No.1 was calculated the payout as per the terms sheet phase one i.e. as shown in the below table:

TERMSHEET

Crop

Onion_Irri

AWS:

BWS:

Unit:

Hectare

DEFICIT RAINFALL

                                    PHASE-I                                PHASE-II                               PHASE-III

RAIN  FALL VOLUME	PERIOD	15-Jun to 10-Jul		11-Jul to 20-Aug		21-Aug to 20-Sep
	INDEX	Aggregate of rainfall over respective phases
	STRIKE1	45 mm		70 mm		52 mm
	STRIKE2	10 mm		40 mm		12 mm
	EXIT	0		15		9
	PAYOUT RS	46.00		57.33		48.00
	PAYOUT RS	914.00		619.20		3660.00
	MAXIMUM	10,750		17,200		12,900

 

TOTAL MA

40,850

This is the term sheet produced by the OP No.1 and OP No.1 also produced daily rainfall data for the month of June to October-2014 which has been received from the Karnataka State Natural Disaster Monitoring Center. As per this report, they calculated the payout and submits that only in the first phase the Complainants got less rainfall but in other days Complainants received proper rainfall for the onion crops. But, this Forum observed that the OPs have not produced how the trigger was fixed and what are the criteria they used to calculate the payout simply saying that as per the term sheet they calculate the payout. It is very important to note that whether the OPs i.e. OP No.1 & 3 have explained the terms and condition and what is the trigger fixed to calculate the payout to the farmers. Here OPs have not produced any signed terms sheet of the complainants even OPs have not produced calculation sheet of Surakod village and not came forward to lead the cogent and acceptable evidence. Moreover, it is burden on both OP No.1 & 3 to say that OP No.1’s calculation is just and proper as per their argument and document placed on record speaks that OP No.1 have also received rainfall data every day, but OP No.1 have not produced the same before the Forum and another thing Forum observed that OP paid the payout calculating before receiving the rainfall data from Karnataka State Natural Disaster Monitoring Center i.e. the OP No.1 received the data on 28.07.2017, but they have transferred the payout is to the Complainants before receiving the data itself. OP No.1 received the said data after filing the Complaints, but payouts have been paid before filing these Complaints. They have produced the documents i.e. payout list by generating the computer copy. In this juncture, it is impossible to believe the argument made by the OPs that they have paid the proper payout to the Complainant’s.

The payout calculated by the OP No.3 is less than the premium they received from the Complainant here in beginning itself i.e. In Phase-I (June-2015 to July-2010) itself they have received low rainfall for the crop, the laymen says that without proper foundation building cannot be constructed like this only if the farmers does not get proper rainfall in early phase itself it is difficult to get good yielding.

Here Forum totally dis-believe the argument made by the OP No.1, that the trigger had been fixed. As per trigger, terms sheet had been drafted. The Forum raised a question as stated supra about the education of the farmers that whether OP No.1 educated the farmers properly or not OP No.1 totally denied that the propaganda, education of the farmer lies on shoulders of OP No.3 and while the Forum asked about the term sheet signed by the farmer. OP No.1 submitted that they don’t have the term sheet of the same, such being the fact without proper explanation OP No.1 cannot loot the amount of the farmers and while giving the amount they cannot produced the term sheet before the Forum saying that as per the term sheet they have calculated the payout.

16.       While arguing the matter, Advocate for Complainants submitted that there is a no weather station or back-up weather station or established in Konnur Hobli, the OP had not denied the same and OP No.2 was not present before the Forum to say whether any station had been established or not. Even OP NO.1 does not come forward to lead the evidence of the Office Incharge of the Weather Station with a cogent and acceptable evidence to prove their defence. Meantime, while scanning the documents on record, we observed that there is a specific role and responsibility of OP No.2 is there establish the Weather Station in every hobli level. It says in a Terms and Conditions No.8.2 sub-condition 8.2.3 speaks as follows:

          “The Scheme shall operate on the principle of “Area Approach” in selected notified Reference Unit Areas (RAUs). Therefore, State Govt. may notify the smallest possible areas as insurance units/Reference Unit Areas (RUAs), which should be preferably, the Village Panchayat/Revenue Circle/Mandal/Hobli/Block/Tehsil etc.”

 

And notification of weather station and authorized date providers is also one of the operational guidelines in 8.5 sub-point No.8.5.1 it reads as under:

                       “8.5.1. SLCCI based on distance and location and availability of Automatic Weather Stations/Rain Gauge will approve “Reference Weather Stations (RWS) for RUA’s. In addition for all RUAs, additional weather stations designated as Back-up Weather Stations (BWS) shall be notified for use in case RWS in unable to provide data for any reason. All claims shall be settled based on data recorded by the RWS. Information of RUAs along with RWS and back-up weather stations shall be covered in notification issued at the commencement of the season.”

Such being the Terms and Condition, OP No.2 have also made deficiency in service without establishing the weather station or back-up Weather Station in hobli level.

17.       Ofcourse complainants have also not produced any documents to show the yielding are low during 2014-15. Here we cannot totally disbelieve the prayer of the Complainants since there are lot of loopholes from OP No.1 while executing the scheme. Hence, Forum came to the conclusion that the claim is to be fixed on non-standard basis, that OP No.1 have to pay half of the Sum Assured for their un-fair trade practice and OP No.3 is also responsible for  the same since OP No.3 received the service charges of 4% from the Company. Here company have not paid the commission from their pocket to OP No.3. It is the hard earning money of the complainants and the Government which had been paid to the service providers i.e. OP No.3, such being the fact OP No.3 is also responsible to educate the farmers and explain the terms and condition to the Complainant. Since OP No.3 is also liable to pay for mental agony and harassment and further litigation charges. Hence, we answer Point No.1 in Affirmative & Point No.2 is in Partly Affirmative.           

             18.  POINT NO. 3: In view of our findings on the above points, the complaints filed by the complainants are partially allowed. In the result, we pass the following: 

//O R D E R//

            The above Complaint Nos.43/2017, 44/2017 and 45/2017 are partially allowed against OP No.1 to 3.

          2.   The OP No.1-AIC is directed to pay the half of the Sum Assured to each Complainants.

3.  All the Complainants are entitled to receive Rs.3,000/- (Rupees three thousand) towards mental agony and harassment from OP No.3.

4.  The Complainants are entitled to receive Rs.2,000/- (Rupees two thousand) towards the cost of litigation from OP No.2.

5.  The Ops are directed to comply this Order within a period of one month from the date of receipt of this order; fails to pay the said amount, the complainants are entitled to get interest at 12% p.a. on half of the Sum Assured from OP No.1, from the date of this order till realization.

          6.  Send the copies of this order to the parties free of cost.

7.  The original order shall be kept in Complaint No.43/2017 and copy thereof to other Complaints for reference.

           (Dictated to the Stenographer, transcribed by him, corrected and then pronounced by me in the Open Court on this 12^th day of March, 2018)

 

 

                  Member                                                                           President