Abasaheb Vitthal Shirsat vs The State Of Maharashtra And ...
2017 Latest Caselaw 5714 Bom

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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-

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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

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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

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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

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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

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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

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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;

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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

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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;

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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

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[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

who are responsible for accepting premium within

time and not depositing same with respondent No.3

within time prescribed.

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

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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).

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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.

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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

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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.)

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