The Agricultural Produce Market ... vs The State Of Maharashtra, Through ...
2007 Latest Caselaw 619 Bom

ORDER

B.P. Dharmadhikari, J.

1. The challenge in this Writ Petition under Article 226 of Constitution of India is to the Scheme for agricultural insurance popularly known as "Rashtriya Krishi Bima Yojna" or "National Agricultural Insurance Scheme" and relief sought is of direction to Respondent No. 1 -State of Maharashtra to modify the policy and government resolution in relation to its implementation by allowing representatives of Petitioners No. 1 and 2 in crop cutting experiment with direction that such experiments should be conducted with previous public notice thereof in all affected/concerned villages. Further relief sought is of deletion of criteria of placing threshold income which forms its basis at percentage lower than hundred percent be deleted and instead hundred percent income be considered for the purpose of calculating compensation. Petitioner is also seeking declaration that agriculturists should be allowed to institute their claims with insurance company which it should decide on merits. Next prayer is to delete criterion of finding out average yield on the basis of three years and five years yield, alleging that the same is irrelevant because drought situation and calamities do not occur every year. First petitioner before this Court is Agricultural Produce Market Committee, Tumsar, constituted under the provisions of Section 12 of Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, and it claims to be representing the agriculturists in general. Petitioner No. 2 is a root level primary agricultural credit cooperative society registered under the provisions of Maharashtra Co-operative Societies Act, of which several agriculturists are members. Petitioner No. 3 is an agriculturist who has obtained crop loan. Respondent No. 2 before this Court is Union of India while Respondent No. 3 is Director of Agriculture and Respondent No. 4 is General Insurance Corporation of India, which was acting as implementing agency for the above Scheme. As the Scheme itself is required to be considered in some details later on, we are not going into those details at this stage. The stand of Petitioners is that Scheme has become a loss-making proposition for loanee farmers i.e. agriculturists who have borrowed loan from financing institutions. During arguments emphasis was on introducing more transparency into the Scheme by seeking participation of agriculturists at its various stages.

2. We have heard Shri S.D. Paliwal, Advocate for the Petitioners, Shri S.Y. Deopujari for Respondents No. 1 and 3 and Shri R.L. Khapre, Advocate for Respondent No. 4. After giving brief details of the Scheme, Advocate Paliwal has contended that though crop cutting experiments are required to be undertaken with the assistance of Revenue Department, Zilla Parishad, Agricultural Department with technical guidance of Chief Statistician, the job is actually done by staff of revenue Department and if number of such experiments exceeds 12, additional experiments are to be performed by agricultural assistant and Gram Sevak of Zilla Parishad. There is no representative of any agriculturists and 16 experiments are performed irrespective of number of villages in any circle or defined area without any previous notice to the farmers and without any schedule. It is contended that mostly the work is completed only in the office in reality without actually visiting the spot and in such circumstances conclusions reached on the basis of such experiments cannot be made binding on entire circle in which about 40 to 50 villages are included. It is contended that natural calamity may not affect all villages equally and crop cutting experiments are required to be undertaken actually in such villages. Hence basis on which compensation is calculated is itself irrelevant rendering the Scheme itself defective. It is further contended that experiment performed or its nature is never disclosed and basis of conclusions reached therein is also not communicated or revealed. Therefore prayers made in the Petition are sought to be justified.

Advocate R.L. Khapre for Respondent No. 4 has at the threshold pointed out that the Scheme has been modified later on and has been made optional. He further points out that earlier Respondent No. 4 was the implementing or operating agency and now said agency has been changed. He has filed pursis pointing out that Central Government has established new company by name Agricultural Insurance Company of India Ltd. which has started its business from 1/4/2003 and entire business of crop insurance being handled till then by present Respondent No. 4 has been made over to it. He states that said new agency is not joined as party and there is no notice of present petition to that agency. He, therefore, states that Respondent No. 4 needs to be discharged. However, he has assisted the Court by explaining the Scheme and its functioning. According to him present petition contains general grievance without any specific instance and it loses sight of the fact that Scheme itself is of general insurance and individual farmer who wants to have more compensation has been permitted to insure his yield accordingly by paying more premium.

AGP S.Y. Deopujari for Respondents No. 1 and 3 has taken the Court through entire Scheme and documents filed with it to point out how the basis of compensation is arrived at under it. His attempt is to show that very basis of present writ petition is misconceived. He argues that Scheme is sufficiently transparent and he further invites attention to figures of premium received and insurance amount paid to farmers during earlier years. He further states that purpose of crop cutting experiments is to ascertain average crop yield and this is scientifically done by experts. He also invites attention to the return filed on affidavit dated 19th or 23rd August 2004 for this purpose. He states that Scheme has been successful and no individual farmer has made any grievance about it. He argues that prayers made in Writ Petition cannot be granted.

3. The grievance of the Petitioners as argued therefore is in relation to fixation of average income as threshold income for determination of entitlement to compensation of any farmer. However at the end of paragraph 4 of their Petition, Petitioners themselves state that entire amount of loan advanced to a farmer is treated as sum assured for the purposes of insurance. Their next bone of contention is insufficient number of crop cutting experiments or not conducting those experiments in affected areas or villages and secrecy shrouding these experiments. It appears that since 1985 a scheme known as Comprehensive Crop Insurance Scheme was in vogue in Country. It has been replaced from Rabi season of 1999-2000 by Rashtriya Krishi Bima Yojna. The object of the Scheme is to provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests and diseases. Vide its Clause 4, Scheme provides for comprehensive risk insurance to cover yield losses due to non preventable risks viz. Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, Inundation & Landslide, Drought, Dry spells, Pests/Diseases etc. Losses arising out of war and nuclear risks, malicious damages and other preventable risks are however excluded. Sum for which loss is to be insured or limit of coverage can extend to threshold yield of the insured crop but then option is given to individual farmer to have it insured even beyond that value up to 150% of average yield of notified area on payment of premium at commercial rates. Premium rates prescribed under Scheme vary from 1.5% to 3.5% depending upon the type of crop and the season. Small and marginal farmers are provided 50% subsidy in premium to be shared equally by State and Union. As per Clause 9 the Scheme operates on the basis of "Area Approach" which is defined area for each notified crop. It also operates on individual basis for localised calamities. Defined Area which constitutes "Unit of Insurance" may be Gram Panchayat, Mandal, Holbi, Circle, Phirka, Block, Taluka etc. which is to be decided by State. However, this Clause also provides that within maximum period of three years State has to reach at the level of Gram Panchayat as unit of insurance. In respect of individual based assessment this Clause states that it would be implemented in limited areas on experimental basis initially and thereafter shall be extended in the light of operational experience gained. Its Clause 11 requires State Government to conduct requisite number of crop cutting experiments for all notified areas in the notified insurance units and Government has to maintain single series of Crop Cutting Experiments and resultant yield estimates both for Crop Production estimates and for Crop Insurance. Number of experiments to be performed is specified to be 16 if unit area is taluka or block. It is 10 for unit area comprising 8 to 10 villages and number of experiments for Gram Panchayat comprising of four to five villages is 8. It further states that Technical Advisory Committee consisting of representatives from N.S.S.O., Ministry of Agriculture (G.O.I.) and Implementing Agency is to be constituted to decide the sample size of crop cutting experiments and all other technical matters. Clause 12 prescribes level of indemnity and threshold yield at 90 percent, 80 percent and 60 percent depending upon yield of past ten years. According to it, Threshold Yield or Guaranteed Yield for crop in Insurance Unit is moving average based on past three years average yield in case of Rice and Wheat and five years average yield in case of other crops multiplied by level of indemnity. Clause 13 states that when Actual Yield of the insured crop for defined area arrived at on the basis of requisite number of crop cutting experiments in the insured season falls short of specified "Threshold Yield", all the insured farmers growing that crop in said defined area are deemed to have suffered shortfall in their yield. It provides for calculation of indemnity also in such circumstances. Clause 13A states that loss and indemnity in case of localised risks where settlement of claims is to be done on individual basis is to be formulated by implementing agency in coordination with State. It also states that initially it will be experimented in limited areas and shall be extended in the light of operational experience gained. Clause 14 states that after Yield Data is received by State, claims will be worked out and settled by Implementing Agency. For individual problems, Implementing Agency has to evolve a procedure to estimate such losses at individual farmer level in consultation with DAC/State and settlement of such claims has to be on individual basis between Implementing Agency and insured.

Operational modalities issued under the Scheme require State Government to notify smallest possible units as defined areas. It also permits receipt of proposals directly by Implementing Agency from non-loanee farmers with requisite insurance charges/premium. It also contemplates higher coverage for an individual upon payment of proportionate premium at commercial rate. Clause 7 states that once yield data is received by State Government the claims of farmers will be worked out as per declarations received from Financial Institutions for each notified area and funds needed for payment of claims beyond the risk sharing limits of Implementing Agency shall be provided by Government. Resolution of State Government dated 4th December 1999 is also important. Its Clause 7 prescribes procedure for ascertaining damages in case of localised risks. It requires concerned farmer to inform the loss within 48 hours to his financing institution or implementing agency and thereafter such agency has to depute its officer for conducting survey to fix the percentage of loss.

4. It is settled law that challenge as raised in present Writ Petition cannot be examined hypothetically. Petitioners have not pointed out violation of any statutory provision or the provision of the Constitution of India. They have not pleaded or pointed out any independent right to receive insurance claim for shortfall in crop produced except as conferred by the Scheme. Petitioners have not given any concrete and specific illustration to point out injustice caused to any particular individual or in any defined area or any part of that area because of alleged inadequate number of crop cutting experiments conducted by the respondents. The petitioners have not produced on record any representation or demand made by them to the respondents in this respect. Data from 1999-2000 till 2002-2003 produced on record by the Respondents reveal the figure of premium collected under the Scheme by Respondent No. 1 and payment of huge amounts as compensation as against it to the farmers. Separate treatment given to individual losses or localised risks by the Scheme is also shown by us above. Each year for arriving at Crop Production Estimates, State has to conduct crop cutting experiments and very same data is used for the purposes of crop insurance. These experiments are required to be conducted in defined area which are treated as unit area of insurance. All these details are worked out by Technical Advisory Committee. Respondents No. 1 and 3 have pointed out on affidavit that very same data and process used for working out loss under the Scheme is being followed since 1944-45 and is utilized by planners for future planning and by policymakers also. They have stated that for this purpose a plot is selected on random sample basis by field workers and at the end the plot is harvested in presence of village committee which consist of Sarpancha, Police Patil and other Revenue Officers. It is stated that supervision of two villages each at harvest stage and crop cutting experiments is allotted to responsible officers like Deputy Collector, Tahsildar, Agricultural or Block

Development Officer, Superintending Agricultural Officer, Divisional Statistician etc. It is stated that general public or interested parties are not permitted to participate in crop cutting experiments to avoid any interference and complications because of lack of knowledge of methodology with them. The petitioners have not filed any rejoinder dealing with this plea of the Respondents. Absolutely no material and details are produced on record by the petitioners to enable us to hold that recognition of any area as unit area is either arbitrary or not possible. There is also no material brought on record to show that crop cutting experiments conducted by the Respondents are inadequate or insufficient or defective. Our perusal of entire Scheme and particularly its relevant clauses as mentioned above leaves no manner of doubt that Respondents No. 1 and 2 have evolved a general Scheme for class of agriculturists as a whole to compensate them automatically if they have availed loan from any financing institution or if they pay nominal premium that too at subsidised rate if they have not availed loan. Said Scheme is made applicable on uniform basis in entire area but individuals affected by localised risks have also been given remedy of pointing out their distinct grievance and to claim different compensation. Average yield of a particular crop received in past 3 or 5 years depending upon the type of crop has been treated as "Threshold Yield" for defined area in which field of agriculturist is located and if "Actual Yield" per hectare of such crop falls below such Threshold Yield in that area, the farmer is deemed to have suffered shortfall in yield and becomes entitled to payment of compensation or insurance money as per the Scheme. It may be true that natural calamity may not affect all villages equally but in individual cases or cases of localised risks, individual or localised scrutiny and relief is also contemplated by the Scheme as discussed above. The Scheme therefore is practicable, reasonable and framed for granting relief to needy farmers immediately on uniform basis. The Scheme aims at granting relief generally to all farmers in difficulties at the cost of public revenue and at the same time it also gives option to such farmer to have his yield insured at 150% of average yield by paying premium at commercial rate. Any dishonest implementation of such welfare Scheme or its non-implementation or abuses/irregularities while implementing it cannot be the reason to hold that Scheme is not transparent or is arbitrary. Quantum of yield of any crop itself depends upon the vagaries of nature and hence determination of exact amount of loss sustained by any farmer is not possible. Therefore introduction of concept of or arriving at "Threshold Yield" by using average of past 3 years or 5 years by itself cannot be held to be arbitrary. There is no reason to presume that yield of affected agriculturist would have been 100%. On the contrary use of concept of "Threshold Yield" is essential to make the Scheme realistic to a great extent as payment to farmer is being made from public revenue. Three levels of indemnity i.e. 90%, 80% and 60% are also fixed based upon coefficient of variation in yield of past ten years. Individual farmer has been given option to opt for higher level of indemnity on payment of additional premium. Computation of compensation by calculating loss by using figures of such threshold yield is therefore neither discriminatory nor arbitrary. Moreover, as already disclosed to us during hearing by all learned Counsel, the Scheme has now been made optional and if any agriculturist is not satisfied with it, it is not compulsory for him to subscribe to it. We, therefore, find that vague grievance as made in present Writ Petition is entirely misconceived and unsustainable. Petitioners have not been in a position to point out violation of any of their legal rights or rights of any agriculturist. Scheme is a policy decision taken by Government in the interest of welfare of farmers and rights and extent thereof is bound to be as prescribed thereunder only. Arguments of Petitioners can at the most be termed as an effort to point out how a more better scheme could have been framed or how better procedure could have been prescribed for its more effective implementation. But such an effort without any legal injury is not sufficient to invoke writ jurisdiction of this Court.

5. We therefore find no merit in this Writ Petition. The same is accordingly dismissed. Rule discharged. However, there shall be no order as to costs.