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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
PUBLIC INTEREST LITIGATION NO.113 OF 2016
Abasaheb s/o Vitthal Shirsat,
Age: 35 years, Occu: Social work,
R/o: Guruprasad Mahatma Phule Nagar,
Gangapur, Tq. Gangapur,
Dist. Aurangabad ..PETITIONER
VERSUS
1. The State of Maharashtra,
Through it Principal Secretary,
Agriculture Department,
Mantralaya, Mumbai-32
2. The Agriculture Commissioner,
Pune
3. Agricultural Insurance Company
of India Ltd.,
Through its Regional Manager,
Regional Office, Bombay Stock Exchange,
Towers, 20 Floor, Dalal Street, Fort,
Mumbai 400 001
4. State Bank of India,
Through General Manager (R-1),
Region-1, Plot No. 1, Town Center,
CIDCO, Aurangabad
5. State Bank of India,
Through its Branch Manager,
Shivaji Chowk, Gangapur,
Tq. Gangapur, Dist. Aurangabad
6. Agricultural Officer,
Gangapur, Tq. Gangapur,
Dist. Aurangabad ..RESPONDENTS
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Mr C. R. Thorat, Advocate for petitioner;
Mr. S. B. Yawalkar, A.G.P. for respondent Nos. 1, 2
& 6;
Mr D. S. Kulkarni, Advocate for respondent No.3;
Mr P. B. Paithankar, Advocate for respondent Nos. 4
& 5
CORAM : SHANTANU S. KEMKAR &
N.W. SAMBRE, JJ.
DATE : 7th AUGUST, 2017 ORAL ORDER : [N.W. SAMBRE,J.] Leave to amend as prayed for carrying out the corrections in the name of respondent Nos 4 and 5 is granted. Amendment be carried out forthwith.
2. The petitioner to the present Public Interest Litigation claiming to be a Social Worker has sought issuance of directions to the respondents to release the amount of compensation against crop insurance for which premium was paid by the farmers for kharip season 2014 in Gangapur Taluka of Aurangabad District, list of which is enclosed with the petition.
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3. The facts as are necessary for deciding the Public Interest Petition are as under :-
Respondent No.3-Agricultural Insurance Company, a Government of India Company is entrusted with the work of implementation of National Agricultural Insurance Scheme (hereinafter shall be referred to as "AIC" and "NAIS" respectively for the sake of brevity). The said scheme was available to farmers, those who have taken loan or not, irrespective of size of their agricultural holdings.
4. For the implementation of the said scheme, Government of Maharashtra issued resolution dated 3rd June, 2014 which prescribed guidelines for insuring crops pursuant to the said scheme. The said insurance was carried out by the prospective beneficiaries by paying premium as prescribed in the said Government Resolution, through Co-operative or Nationalized Bank, who in turn, is required to deposit the same with respondent No.3- ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::
113.16pil (4) AIC in tune with NAIS by 31st August, 2014. The agriculturists or beneficiaries are required to be certified by Taluka Agricultural Officer and then are required to deposit the amount of premium. So far as Gangapur Taluka in Aurangabad District is concerned, it is respondent Nos. 4 and 5, who were authorized to collect the premium and accordingly, 173 agriculturists paid insurance premium before cut-off date, as prescribed in the Government Resolution.
5. The scheme further provided that upon deposit of such premium within prescribed time with respondent No.3-AIC, by respondent Nos. 4 and 5- Banking Institution, AIC is required to settle the claim for compensation made by the agriculturists.
6. In the case in hand, it is alleged that respondent No.4 and 5 - Nationalized Bank received amount of premium, however, failed to deposit the same with respondent No.3 - AIC within period prescribed i.e. before cut-off date. It is claimed ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (5) that there was no delay on the part of agriculturists to deposit the premium with respondent Nos. 4 and 5. As such, the premium was deposited within prescribed time. However, it is alleged that the delay in depositing premium is at the behest of respondent Nos.4 and 5.
7. According to the petitioner, in the aforesaid circumstances, respondents be directed to release the amount of compensation to agriculturists who are entitled for the same.
8. Per contra, respondent No.2 -
Agricultural Commissioner filed its affidavit in reply stating that as per guidelines of Central Government in the State of Maharashtra, Nationalized Agricultural Insurance Scheme (NAIS) is implemented since 1999. According to them the farmers, who intend to participate in the said insurance scheme, are required to submit proposal along with premium to the nearest branch and the Bank in turn, is required to submit declaration and ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (6) premium amount to respondent No.3 (AIC) - Insurance Company before cut-off date i.e. 31st August, 2014. It is claimed that respondent Nos.4 and 5 - Nationalized Bank have failed to deposit proposal forms and premium amount by cut-off date.
9. Learned Counsel for respondent Nos. 1 and 2 would then urge that the object and intention of providing insurance scheme is to bring insurance coverage and financial support to the farmers, in case of failure of any notified crop, because of natural calamities, to encourage farmers to divert to progressive farming by taking recourse to better technology in the field of agriculture so as to help in stabilizing farmers' income, etc.
10. According to respondent No.2, as per guidelines of the NAIS, it is mandatory for respondent Nos. 4 and 5 - Bank to deposit premium, received from farmers to Agricultural Insurance company i.e. respondent No. 3 by 31 st August, 2014. According to him, the last date of submission of ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (7) the proposal was 16th September, 2014. He would then urge that the proposal received for insurance of the crop from the farmers was submitted by respondent Nos. 4 and 5 on 13th December, 2016. As such, it is not responsibility of respondent No.2 to settle the claim, as same were received after cut-off date. According to him, it is responsibility of respondent Nos.4 and 5-Bank to pay compensation, as because of their failure the premium was not deposited within the time.
11. Respondent Nos. 4 and 5 filed reply in affidavit and submitted that after collection of premium and proposal, same was sent to service branch at Aurangabad, instead of sending it to respondent No.3-Insurance company at Mumbai, which was a bona fide mistake. According to them, another demand draft was sent on the correct address of respondent No.3 - insurance company, as such, the delay has occurred. It is further claimed that there was short of staff, as such, premium was not deposited within time. It is also claimed that ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (8) there is an alternate remedy to the affected farmer of approaching before the District Consumer Redressal Forum and as such, this PIL be dismissed.
12. However, respondent Nos.4 and 5-Bank have not disputed the acceptance of premium from the farmers and the deposit of the same at belated stage to respondent No.3 - Insurance Company.
13. In the aforesaid background, the question that needs to be answered is, whether a case for direction is made out whereby respondent No. 3, or respondent Nos. 4 and 5 are liable to pay the amount of compensation?
14. For deciding the said issue, it is required to be noted that the Division Bench of Bombay High Court in the matter of Secretary, All India Biodynamic and organic Farming Association vs Principal Secretary of the Government of Maharashtra and others, reported in 2006(3) B.C.R. 867 has settled the remedial measures to be taken ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (9) at the end of the Government, to avoid suicides by the farmers. In the said judgment, the Court has relied upon the report submitted by the Tata Institute of Social Sciences and in paragraph-16 has given following directions.
"16. On the basis of the report, the fundamental causes for suicide by cultivators in the State of Maharashtra can, therefore, be summarised as follows :
1. The major reason for suicides is the heavy indebtedness that the cultivators find themselves in today. This indebtedness is not an overnight phenomenon that occurred suddenly. It has its roots in the credit policy that has been followed over a number of years;
2. Indebtedness itself results from a mismatch in the cost of production and the support price and the market price that the cultivators receive at the end of every cropping cycle;::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::
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3. Field data suggests that there have been repeated crop failures in the last four years. These crop failures have resulted in a reduction in the productivity of the land due to a variety of reasons. These reasons could be due to the overuse of fertilisers, pesticides and reliance on HYV seeds and now to some extent on genetically modified seeds such as Bt. Cotton. Thus, crop failure becomes a cyclical phenomena and not a one-time occurrence;
4. Heavy indebtedness is spreading across landholding patterns. In that context, the small and the medium-sized cultivator is the most affected of the lot, though the large landholder in the rain-fed areas of the state, too, is coming under strain;
5. In the context of availability of credit, field data suggests that even after 55 years of Independence, private money lending remains the single largest source of credit to small and marginal farmers. This is so because the banking sector is fast moving out of the credit delivery mechanism;
6. Cultivation in Maharashtra is primarily ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (11) rain-fed. Thus, the subsidy given on fertilisers and pesticides, irrigation and electricity does not touch the small/ marginal and mediumsized landholder, as cultivation is deprived of an assured irrigation source. Thus, those who are cultivating cash crops that require irrigated water have to perforce rely on rainfall that is fickle at the best of times. This puts the system under tremendous stress. The cash crop becomes a kind of a compulsion, as subsistence farming alone does not provide for the need of liquid capital that the cultivator needs for survival. More and more, the small and marginal farmers are pushed into compulsory cash crop cultivation that is having a spiral effect in terms of the debt crisis;
7. The access to an information base that the cultivators have largely comes from the agents of fertiliser and seed companies. The government extension machinery is not visible in the sense that it could provide an objective database in information to cultivators;::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::
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8. The attitude of the government may be described as starkly apathetic. This is demonstrated by the fact that almost 80% of the victims have not received any kind of compensation from government; and
9. There is a total absence of any safety net for cultivators, especially the small and the medium ones."
15. It is, no doubt, true that the insurance scheme is implemented since 1999 viz., before the above judgment came to be delivered. However, it is required to be noted that the Division Bench of this Court has shown its sensitivity to the issue brought before it and has directed the State Government to take remedial measures, which perhaps, has prompted the respondents to implement the scheme effectively. The Division Bench of this Court in paragraph 21.3(b) has suggested package for subsidy on crop insurance premium amongst various measures to be adopted.
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16. So far as the case in hand is concerned, it is not disputed by respondent Nos. 4 and 5-bank that it has received premium from the agriculturists within cut-off date, however, same was not deposited with respondent No.2-AIC, as there was shortage of staff and because of communication gap.
17. Even the relevant Government Resolution speaks of payment of compensation to the insured by the Bank in case bank fails to deposit the amount of premium collected before cut-off date as prescribed. The relevant portion of the said Government Resolution reads thus:-
"8- vf/kd`r cWadk vkf.k izfrfu/kh ;kapsdMwu foek /kkjd 'ksrd&;kaph @ ykHkkF;kZaph ekfgrh ladfyr d#u rh ladsrLFkGkoj izlkfjr dj.ks-
9- ;k ;kstusr dtZnkj 'ksrd&;kapk lekos'k QDr foek daiuhusp djkok-
foek izfrfu/kh fdaok czksdlZ ;kauh d# u;s-
10- foRrh; laLFkkauh ;kstusr lgHkkxh >kysys 'ksrdjh ;kstusP;k ykHkkiklwu oaphr jkg.kkj ukghr ;kph n{krk ?;koh- foRrh; laLFkkaP;k ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (14) [email protected]@gyxthZi.kkeqGs ;kstusP;k ykHkkiklwu ;kstusr lgHkkxh >kysys 'ksrdjh oaphr jkfgY;kl ;k laca/kkr dkgh uqdlku HkjikbZ n;ko;kph >kY;kl R;kps nkf;Ro laca/khr foRrh; laLFksoj jkghy-"
Respondent Nos. 4 and 5 bank have conducted itself in accordance with NAIS and Government Resolution and have accepted premium from agriculturists with a promise to grant insurance cover. The conduct of respondent Nos. 4 and 5 depicts that it is respondent Nos. 4 and 5 who are responsible for accepting premium within time and not depositing same with respondent No.3 within time prescribed.18. The fact remains that respondent Nos. 4
and 5 in categorical terms in reply have admitted about receipt of premium before cut-off date and non deposit of such amount of premium with respondent No.2 insurance company. There is no convincing reason for non complying with the directions of deposit of premium with respondent No. 3. Rather, respondent Nos. 4 and 5-bank having noticed that it has failed to deposit the amount of ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (15) premium within stipulated period have made itself liable by virtue of default committed by it in depositing the premium with respondent No. 3 in time stipulated. Hence, it has to be held that respondent Nos. 4 and 5 - bank is liable to pay the amount of compensation.
19. Inaction on the part of respondents reflects very sorry state of affairs, particularly on the part of three respondents i.e. State Government, Agricultural Insurance Company of India and respondent Nos.4 and 5-bank, in not settling the insurance claim of the agriculturists, which should have been done almost three years back. What could be noticed from the pleadings in the petition is that each of the respondent is trying to shift their responsibility of payment of compensation. The State Government, in stead of resolving the issue, has contributed in delaying payment of compensation by not compelling the concerned authorities to pay compensation immediately.
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20. All the respondents, from their conduct noticed herein above appears to have shown complete insensitivity to the issue involved and have left the farmers, to their destiny. The poor farmers who have parted with the amount of premium are required to suffer for last three years for no fault on their part.
21. We are informed by learned Counsel for the respondents that few of beneficiaries have approached District Consumer Redressal Forum and awards are passed in their favour, which are subject matter of challenge in an appeal at the behest of respondent-bank.
22. The respondent-bank instead of complying with such orders, have chosen to file appeal before the State Consumer Redressal Forum instead of settling the claim and made agriculturists to suffer for last six season (3 years). ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::
113.16pil (17) The cumulative effect of the conduct of respondent Nos. 1 to 5 prima facie speaks of their casual approach towards the issue which should have been redressed immediately, the moment default was committed by respondent Nos. 4 and 5 bank. The social object with which the scheme was brought into effect, by providing financial security to poor agriculturists, particularly with aim to avoid any financial distress, has been lost sight by all the respondents.
23. Once it is having established that the farmers, who were insured in Kharip season 2014 were not at fault and it is respondent Nos.4 and 5- Bank, who is at fault for not submitting premium with respondent No.3 AIC, this Court is left with no other option but to direct respondent Nos.4 and 5 to pay amount of compensation, to which farmers of Gangapur Taluka in Aurangabad district are entitled. The list of such affected farmers is disclosed at annexure D to the present petition, which is not disputed by either of the respondents. ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::
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24. While doing so, in our opinion, it will be duty of respondent No.3 AIC to ascertain loss and entitlement of each of the farmers for payment of compensation under the insurance scheme and submit such assessment to respondent Nos.4 and 5 Bank. Respondent No.3 AIC shall forward such assessment to the respondent Nos.4 and 5 Bank with copy to respondent No.2 within period of four weeks from the date of passing of this order. After receipt of such list, respondent No.4 Bank shall within two weeks thereafter pay amount of compensation along with interest as shall be directed hereinafter to the concerned agriculturists by "cross banker's cheque" within two weeks thereafter.
25. Looking to the conduct and the response, particularly of respondent Nos.4 and 5, it will be appropriate in our opinion, to direct that such payments shall carry interest at the rate of 14% p.a. from the date, amount shall be due and payable ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 ::: 113.16pil (19) as per NAIS, till demand drafts are drawn and paid in favour of agriculturists. The reason for awarding interest at the rate of 14% p.a. is insensitivity shown by respondent Nos.4 and 5 - Bank and their attitude of not honouring the responsibility and liability, playing with life and future of agriculturists, from whom already it has accepted premium three years back.
26. It is brought to our notice that some of the agriculturists have approached Consumer Forum, however, in such eventuality, respondent Nos. 4 and 5-Bank shall pay to the agriculturists higher amount as is ascertained by respondent No.3 or District Consumer Redressal Forum.
27. It is rightly pointed out that till such payments are made by respondent Nos.4 and 5 in time bound manner, orders of the Consumer Redressal Forum shall not be implemented.
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28. With above observations, Public Interest Litigation stands allowed.
(N.W. SAMBRE, J.) ( SHANTANU S. KEMKAR, J.) Tupe ::: Uploaded on - 24/08/2017 ::: Downloaded on - 25/08/2017 23:15:19 :::