Gujarat High Court
Universal Sompo General ... vs State Of Gujarat on 30 September, 2022
Bench: A. P. Thaker
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10523 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD.
Versus
STATE OF GUJARAT
==========================================================
Appearance:
MR. MIHIR JOSHI, SENIOR COUNSEL with
MR. MITUL SHELAT with MS. RAVEENA KINKHABWALA with
MS DISHA N NANAVATY(2957) for the Petitioner(s) No. 1
MS JYOTI BHATT, AGP for the Respondent(s) No. 1
MR PATHIK M ACHARYA(3520) for the Respondent(s) No. 2,3,4,5,6,7,8,9
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CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 30/09/2022
ORAL JUDGMENT
1. With the joint request of the learned advocate for
the parties, the matter has been heard finally at
admission stage.
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
2. The petitioner has filed the present petition under
Article 226 and 227 of the Constitution of India for
the following reliefs:-
(A) This Hon'ble Court may be pleased to issue
a writ of Mandamus or any other writ order or
direction to quash and set aside the order of
the State Government at Annexure B.
(B) As an ad interim ex parte relief stay the
order of the State Government at Annexure B.
(C) This Hon'ble Court be pleased to issue a
Writ of Mandamus or any other appropriate
writ, order or direction directing the
Respondent No. 1 to release an amount of Rs.
216.93 crores towards the pending state share
of subsidy for Kharif Season 2019 to the
Petitioner.
(D) Your Lordships be pleased to pass such
other and further orders as the facts and
circumstances of the case may require."
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
3. The brief facts giving rise to the present petition are
as under:-
3.1. The Central Government has notified Pradhan
Mantri Fasal Bima Yojana (hereinafter referred to as
PMFBY) in the year 2016 for the benefit of the
farmers against the loss/ failure of the crop due to
natural calamities, paste and disease. The said
scheme came to be revised by the Central
Government from time to time. The object of the
scheme was to provide insurance coverage to the
farmers regarding unforeseen loss of crop, due to
inundation and other perils. It is implemented
through the agricultural department of the State
Government.
3.2. The petitioner is the insurance company for the
year 2019-20 for various districts as Surendranagar,
Amreli, Anand and Patan etc. It is alleged by the
farmers that in the year 2019, due to heavy rain,
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
flood and excessive rain in whole district,
Surendranagar and Morbi, most of the crops of the
farmers were damaged and therefore they have
allegedly suffered huge crop loss in both the
districts. Many of the farmers who have intimated
their claims were not paid. Therefore they
approached this Court by filing a SPCA writ
application No.12184 of 2020. This Court by an
order dated 27.10.2020 dismissed the petition but
directed the State Government to look into the
representations of the farmers. On that basis the
State Government has issued the impugned order
no.2624-28/2021 dated 12.05.2021 by which it is
directed to the petitioner to pay the claims by over-
riding the guidelines issued by the Central
Government. This order of the Government has been
challenged by way of this petition, and with the
further direction to the State Government to release
the pending subsidy of Rs.216,93,31,438/-.
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
3.3. It is contended by the petitioner that they have
made several representations to the Government for
releasing the subsidy. The petitioner has referred to
various communications in the petition, requesting
the State Government for release of the share of the
premium and the subsidy thereof as per the scheme
framed by the Central Government. According to the
petitioner, due to non receipt of the premium of
subsidy amount from the State Government,
payment to the farmers are getting delayed.
According to the petitioner, it is bound by the
guidelines issued by the IRDAI and the Government
from time to time. According to it, as per the
regulations, the premium subsidy is to be received
by the petitioner within a given time frame. It is also
contended that the delay in the release of subsidy is
resulting in the delay in settlement of the claims of
the farmers and is also adversely affecting the
financial position and solvency margin of the
petitioner as mandated by IRDAI. The petitioner has
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
also referred to various clauses of the operational
guidelines which provides that the State
Government has to release the State share of
premium subsidy within three months from the
premium requisition failing which the interest @10%
per annum per month would levy penalty on the
State Government.
3.4. The petitioner has also referred to various
definitions incorporated in the scheme and the
guidelines which includes, "actual yield", "crop
cutting expenses", "national threshold yield" etc.
and various clauses thereof. It is contended by the
petitioner that on one hand the State Government
has failed to release the amount to the petitioner
towards the State share of subsidy and on the other
hand the respondent no.1 has directed the petitioner
to make payment to the farmers in Surendranagar
District towards their claims for Kharif season 2019
in the PMFBY scheme. It is contended that the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
respondent no.1 cannot be permitted to take
advantage of their own wrong. On all these grounds,
the petitioner has filed the present petition and
prayed for the aforesaid reliefs.
4. Respondent no.1 has filed its affidavit in reply and in
detailed referred to various provisions of the scheme
and the Government Resolutions. The main
contention of the respondent is that under the
scheme, the State Government's total share of
premium subsidy for Kharif pak 2019 season is
Rs.396.93 crores/- out of which Rs.180 crore/-
already released to the insurance company. It is
contended that the insurance company has rejected
total 53,115 applications under localised calamities
and post harvest in Kharif 2019 season on the
ground of 15 days delay in intimation from normal
harvest time and other reasons. It is contended that
the State Government has imposed penalties on
insurance company for non-adherance to the terms
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
and conditions of the work order dated 04.07.2019
such as late payment of claims, insufficient/ absent
empower at local level, non operating of office at
local level etc. for the Kharif 2018 and Kharif 2019.
According to the respondent, due to this fact, the
part of the subsidy is pending due to above pending
claims and imposed penalties to the insurance
company. Thus, it had supported its case of non
release of the subsidy in favour of the plaintiff.
5. The petitioner has filed rejoinder at page no.224 of
the petition memo. It has reiterated its stand in the
petition and has submitted that the respondent no.1
failed to appreciate that the State share of subsidy is
in effect in nature of the insurance premium which is
required to be received by the insurance company
for the disbursement of the insurance claim. Non
release of the subsidy by the State Government
ultimately adversely affects the interest of the
farmers as the receipt of subsidy is a prerequisite for
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
the disbursement of the claims to the farmers as per
the provisions of the Revised Operational Guidelines.
According to it, admittedly more than 50% of the
State share and Central Government share of
subsidy has not been received by the petitioner till
date. Despite that, the petitioner has settled
localized claim of farmers for an amount of Rs.40
crores/-. It is specifically stated that the claim for an
amount of Rs.118.79 crores/- are outstanding due to
non receipt of subsidy. It is contended that it had
already communicated to the Government
authorities that in addition to Rs.118.79 crores/-, an
amount of Rs.59 crores/- will also be paid by the
company to the farmers upon receipt of subsidy.
6. Heard learned senior counsel Mr.Mihir Joshi assisted
by Mr.Mitul Shelat with Ms.Disha Nanavaty with
Ms.Raveena Kinkhabwala for the petitioners,
learned AGP Ms.Jyoti Bhatt for the respondent-State
and learned advocate Mr.Pathik Acharya for the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
private respondent at length. Perused the materials
placed on record and the decisions cited at bar.
7. Learned senior counsel Mr.Mihir Joshi has submitted
the same facts which are narrated in the memo of
petition as well as in rejoinder affidavit and further
affidavit filed in the petition. His main contention is
that the scheme was implemented by the Central
Government and according to this scheme, the
premium for insurance has to be paid by the Central
Government as well as State Government. He has
submitted that subsidy is nothing but a form of a
premium to be paid by the Central Government and
State Government. He has submitted that in absence
of any premium paid, no insurance company can pay
any amount to the insured, even if there is a loss to
the farmers. While referring to various
communications and the provisions of the scheme
and operational guidelines, Mr.Joshi has submitted
that the State Government has withheld the payment
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
of subsidy, which is in the nature of premium,
contrary to the Government Resolutions. He has also
submitted that even the Central Government has
already directed the State Government to release
the subsidy and also directed that, if any penalty
needs to be imposed upon the insurance company
then it cannot be recovered from the amount of
subsidy which is to be paid as a premium. He has
submitted that the State Government has withheld
the amount which is towards the premium. He has
also submitted that the reasons assigned by the
State Government for withholding the subsidy is not
in consonance with the scheme and directions of the
Central Government. While referring to Section 64B
of The Insurance Act, 1938, he has submitted that in
any insurance, there is prerequisite of prepayment
of the premium. He has submitted that the stand
taken by the State Government is against the
provisions of statute as well as directions of the
Central Government. He has submitted that the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
payment is pending to be made to the farmers due to
non receipt of the premium from the State
Government. He has submitted that therefore this
Court be pleased to direct the State Government to
release the amount of premium which is in the form
of subsidy to the petitioner so that the petitioner
insurance company can pay the requisite amount to
the concerned farmers for the loss they have
suffered under the scheme formulated by the
Central Government. He has prayed to allow the
present petition.
8. Per contra, learned AGP Ms.Jyoti Bhatt for the State
has vehemently opposed the petition and has mainly
contended that the insurance company has rejected
the claim of many farmers on the ground of non
receipt of intimation of damage within stipulated
period. While referring to the Government
communications and affidavit in reply, which she has
read in entirety, submitted that there were defect in
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
the service of the petitioner by not providing
sufficient staff and non-availability of requisite
system of accepting the claim of the farmers and
there is a delay in making payment to the farmers of
their legitimate claim. She has submitted that as
there was defect in service on the part of petitioner,
penalty has been imposed upon the petitioner by the
State Government. She has submitted that even as
per the correspondence entered into between the
parties, unless the petitioner disbursed the requisite
amount to the eligible farmers, no subsidy can be
released in its favour by the State Government. She
has submitted that first of all, the petitioner has to
settle the claim of the farmers by making requisite
payment and thereafter they can get subsidy, even if
it is in the nature of premium. She has also
submitted that there is alternative remedy available
to the petitioner and therefore this petition may not
be entertained. She has also submitted that the
present petition involves disputed questions of facts
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
and therefore this petition may not be entertained
and be dismissed. She has relied upon the following
decisions:-
(i) In case of Punjab National Bank vs Atmanand
Singh reported in (2020) 6 SCC 256, the Apex Court
held in para nos.16, 17, 21, 22 and 26 as under:-
"16. Be it noted that on one hand, the case
made out by the respondent No. 1 is that he
had sold his family gold and the sale
proceeds received were deposited in the
concerned Branch of the appellant Bank for
withdrawal, as the amount was required by
him for meeting medical expenses of his
ailing son suffering from cancer. At the same
time, vide alleged agreement, the
respondent No. 1 conveniently agrees to
invest the amount for seven (7) years, which
circumstance also raises serious doubt about
the genuineness of the document. We do not
wish to elaborate on the terms set out in the
subject agreement except to observe that the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
plea taken by the appellantBank about
genuineness of the document is debatable
(triable) and is not a case of admitted
position or indisputable fact, so as to
proceed against the appellantBank by
directing payment of the amount claimed by
the respondent No. 1 (writ petitioner), on the
basis of such an agreement.
17. The judgment of the learned single Judge
has completely glossed over these crucial
aspects and the writ petition has been
disposed of in a very casual manner. The
Division Bench of the High Court committed
the same error in upholding the decision of
the learned single Judge. The Division Bench
has not even analysed the efficacy of the
affidavits filed in support of the stand taken
by the appellant-Bank during the pendency
of the LPA. It merely reiterates the view
taken by the learned single Judge in just two
short paragraphs reproduced in paragraph 6
above. It has not analysed the efficacy of the
proceedings in Misc. Case No. 04 (DW1)
PNB/198990, as well as, the certified copy of
the proceedings filed in appeal before it, in
the context of affidavits of Bank officials and
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
report of the District Magistrate. The
Division Bench was also misled by the
voluminous documents relied upon by the
respondent No. 1 and assumed that the same
could not be a figment of imagination or a
piece of fiction.
21. In Smt. Gunwant Kaur (supra) relied
upon by the respondent No. 1, in paragraph
14, the Court observed thus:-
"14. The High Court observed that they will
not determine disputed question of fact in a
writ petition. But what facts were in dispute
and what were admitted could only be
determined after an affidavit in reply was
filed by the State. The High Court, however,
proceeded to dismiss the petition in limine.
The High Court is not deprived of its
jurisdiction to entertain a petition under
Article 226 merely because in considering
the petitioner's right to relief questions of
fact may fall to be determined. In a petition
under Article 226 the High Court has
jurisdiction to try issues both of fact and law.
Exercise of the jurisdiction is, it is true,
discretionary, but the discretion must be
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
exercised on sound judicial principles. When
the petition raises questions of fact of a
complex nature, which may for their
determination require oral evidence to be
taken, and on that account the High Court is
of the view that the dispute may not
appropriately be tried in a writ petition, the
High Court may decline to try a petition.
Rejection of a petition in limine will normally
be justified, where the High Court is of the
view that the petition is frivolous or because
of the nature of the claim made dispute
sought to be agitated, or that the petition
against the party against whom relief is
claimed is not maintainable or that the
dispute raised thereby is such that it would
be inappropriate to try it in the writ
jurisdiction, or for anologous reasons.
22. We restate the above position that when
the petition raises questions of fact of
complex nature, such as in the present case,
which may for their determination require
oral and documentary evidence to be
produced and proved by the concerned party
and also because the relief sought is merely
for ordering a refund of money, the High
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
Court should be loath in entertaining such
writ petition and instead must relegate the
parties to remedy of a civil suit. Had it been
a case where material facts referred to in the
writ petition are admitted facts or
indisputable facts, the High Court may be
justified in examining the claim of the writ
petitioner on its own merits in accordance
with law.
26. For the view that we have taken, it is not
necessary for us to dilate on the decisions of
this Court in Bhinka (supra) and Kaliya
(supra), which have dealt with the efficacy
and admissibility of certified copies of the
relevant documents. Be it noted that these
decisions are in reference to the suit/trial in
the concerned case, where the documents
are required to be proved by the party
relying upon it by examining competent
witnesses to prove the existence thereof and
also their contents."
(ii) In case of Commissioner Of Income Tax &
Ors. Vs. Chhabil Dass Agarwal reported in
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
(2014) 1 SCC 603, the Apex Court held in para 11,
12, 13 to 17 as under:-
"11. Before discussing the fact proposition, we
would notice the principle of law as laid down
by this Court. It is settled law that non-
entertainment of petitions under writ
jurisdiction by the High Court when an
efficacious alternative remedy is available is a
rule of self-imposed limitation. It is essentially a
rule of policy, convenience and discretion
rather than a rule of law. Undoubtedly, it is
within the discretion of the High Court to grant
relief under Article 226 despite the existence of
an alternative remedy. However, the High Court
must not interfere if there is an adequate
efficacious alternative remedy available to the
petitioner and he has approached the High
Court without availing the same unless he has
made out an exceptional case warranting such
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
interference or there exist sufficient grounds to
invoke the extraordinary jurisdiction under
Article 226. (See: State of U.P. vs. Mohammad
Nooh, AIR 1958 SC 86; Titaghur Paper Mills
Co. Ltd. vs. State of Orissa, (1983) 2 SCC 433;
Harbanslal Sahnia vs. Indian Oil Corpn. Ltd.,
(2003) 2 SCC 107; State of H.P. vs. Gujarat
Ambuja Cement Ltd., (2005) 6 SCC 499).
12. The Constitution Benches of this Court in
K.S. Rashid and Sons vs. Income Tax
Investigation Commission, AIR 1954 SC 207;
Sangram Singh vs. Election Tribunal, Kotah,
AIR 1955 SC 425; Union of India vs. T.R.
Varma, AIR 1957 SC 882; State of U.P. vs.
Mohd. Nooh, AIR 1958 SC 86 and K.S.
Venkataraman and Co. (P) Ltd. vs. State of
Madras, AIR 1966 SC 1089 have held that
though Article 226 confers a very wide powers
in the matter of issuing writs on the High
Court, the remedy of writ absolutely
discretionary in character. If the High Court is
satisfied that the aggrieved party can have an
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
adequate or suitable relief elsewhere, it can
refuse to exercise its jurisdiction. The Court, in
extraordinary circumstances, may exercise the
power if it comes to the conclusion that there
has been a breach of principles of natural
justice or procedure required for decision has
not been adopted.
(See: N.T. Veluswami Thevar vs. G. Raja
Nainar, AIR 1959 SC 422; Municipal Council,
Khurai vs. Kamal Kumar, (1965) 2 SCR 653;
Siliguri Municipality vs. Amalendu Das, (1984)
2 SCC 436; S.T. Muthusami vs. K. Natarajan,
(1988) 1 SCC 572; Rajasthan SRTC vs. Krishna
Kant, (1995) 5 SCC 75; Kerala SEB vs. Kurien
E. Kalathil, (2000) 6 SCC 293; A.
Venkatasubbiah Naidu vs. S. Chellappan,
(2000) 7 SCC 695; L.L. Sudhakar Reddy vs.
State of A.P., (2001) 6 SCC 634; Shri Sant
Sadguru Janardan Swami (Moingiri Maharaj)
Sahakari Dugdha Utpadak Sanstha vs. State of
Maharashtra, (2001) 8 SCC 509; Pratap Singh
vs. State of Haryana, (2002) 7 SCC 484 and
GKN Driveshafts (India) Ltd. vs. ITO, (2003) 1
SCC 72).
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
13. In Nivedita Sharma vs. Cellular Operators
Assn. of India, (2011) 14 SCC 337, this Court
has held that where hierarchy of appeals is
provided by the statute, party must exhaust the
statutory remedies before resorting to writ
jurisdiction for relief and observed as follows:
"12. In Thansingh Nathmal v. Supdt. of Taxes,
AIR 1964 SC 1419 this Court adverted to the
rule of self-imposed restraint that the writ
petition will not be entertained if an effective
remedy is available to the aggrieved person
and observed: (AIR p. 1423, para 7).
"7. ... The High Court does not therefore act as
a court of appeal against the decision of a court
or tribunal, to correct errors of fact, and does
not by assuming jurisdiction under Article 226
trench upon an alternative remedy provided by
statute for obtaining relief. Where it is open to
the aggrieved petitioner to move another
tribunal, or even itself in another jurisdiction
for obtaining redress in the manner provided
by a statute, the High Court normally will not
permit by entertaining a petition under Article
226 of the Constitution the machinery created
under the statute to be bypassed, and will leave
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the party applying to it to seek resort to the
machinery so set up."
13. In Titaghur Paper Mills Co. Ltd. v. State of
Orissa, (1983) 2 SCC 433 this Court observed:
(SCC pp. 440-41, para 11) "11. ... It is now well
recognised that where a right or liability is
created by a statute which gives a special
remedy for enforcing it, the remedy provided
by that statute only must be availed of. This
rule was stated with great clarity by Willes, J.
in Wolverhampton New Waterworks Co. v.
Hawkesford, 141 ER 486 in the following
passage: (ER p. 495) '... There are three classes
of cases in which a liability may be established
founded upon a statute. ... But there is a third
class viz. where a liability not existing at
common law is created by a statute which at
the same time gives a special and particular
remedy for enforcing it. ... The remedy
provided by the statute must be followed, and it
is not competent to the party to pursue the
course applicable to cases of the second class.
The form given by the statute must be adopted
and adhered to.' The rule laid down in this
passage was approved by the House of Lords in
Neville v. London Express Newspapers Ltd.,
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1919 AC 368 and has been reaffirmed by the
Privy Council in Attorney General of Trinidad
and Tobago v. Gordon Grant and Co. Ltd., 1935
AC 532 (PC) and Secy. of State v. Mask and
Co., AIR 1940 PC 105 It has also been held to
be equally applicable to enforcement of rights,
and has been followed by this Court
throughout. The High Court was therefore
justified in dismissing the writ petitions in
limine."
14. In Mafatlal Industries Ltd. v. Union of India,
(1997) 5 SCC 536 B.P. Jeevan Reddy, J.
(speaking for the majority of the larger Bench)
observed: (SCC p. 607, para 77) "77. ... So far
as the jurisdiction of the High Court under
Article 226--or for that matter, the jurisdiction
of this Court under Article 32--is concerned, it
is obvious that the provisions of the Act cannot
bar and curtail these remedies. It is, however,
equally obvious that while exercising the power
under Article 226/Article 32, the Court would
certainly take note of the legislative intent
manifested in the provisions of the Act and
would exercise their jurisdiction consistent
with the provisions of the enactment."" (See: G.
Veerappa Pillai v. Raman & Raman Ltd., AIR
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
1952 SC 192; CCE v. Dunlop India Ltd., (1985)
1 SCC 260; Ramendra Kishore Biswas v. State
of Tripura, (1999) 1 SCC 472; Shivgonda Anna
Patil v. State of Maharashtra, (1999) 3 SCC 5;
C.A. Abraham v. ITO, (1961) 2 SCR 765;
Titaghur Paper Mills Co. Ltd. v. State of Orissa,
(1983) 2 SCC 433; H.B. Gandhi v. Gopi Nath
and Sons, 1992 Supp (2) SCC 312; Whirlpool
Corpn. v. Registrar of Trade Marks, (1998) 8
SCC 1; Tin Plate Co. of India Ltd. v. State of
Bihar, (1998) 8 SCC 272; Sheela Devi v. Jaspal
Singh, (1999) 1 SCC 209 and Punjab National
Bank v. O.C. Krishnan, (2001) 6 SCC 569).
17. In the instant case, the Act provides
complete machinery for the assessment/re-
assessment of tax, imposition of penalty and for
obtaining relief in respect of any improper
orders passed by the Revenue Authorities, and
the assessee could not be permitted to abandon
that machinery and to invoke the jurisdiction of
the High Court under Article 226 of the
Constitution when he had adequate remedy
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
open to him by an appeal to the Commissioner
of Income Tax (Appeals). The remedy under the
statute, however, must be effective and not a
mere formality with no substantial relief. In
Ram and Shyam Co. vs. State of Haryana,
(1985) 3 SCC 267 this Court has noticed that if
an appeal is from "Caesar to Caesar's wife" the
existence of alternative remedy would be a
mirage and an exercise in futility. In the instant
case, neither has the assessee-writ petitioner
described the available alternate remedy under
the Act as ineffectual and non-efficacious while
invoking the writ jurisdiction of the High Court
nor has the High Court ascribed cogent and
satisfactory reasons to have exercised its
jurisdiction in the facts of instant case."
(iii) In case of Union Of India vs M/S. Puna Hinda
reported in (2021) 10 SCC 690, the Apex Court in
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para nos. 23 and 24 has held as under:-
"23. The High Court has based its order on
the ground that after five monsoons, the final
measurements could not be ascertained. If
the final measurements could not be done at
the spot, the contemporary evidence and the
measurement books prepared from time to
time could be the basis for determining the
liability of the appellants. The Joint Survey
Report is not an admitted measurement,
though some officers might have signed it.
The Report prepared after the completion of
work wherein no such work done is reflected
in the measurement book prepared during
execution of work is an attempt to inflate the
claim raised by the writ petitioner. The entire
amount claimed by the writ petitioner is
disputed. It has been asserted that the entire
payment due as against the claim of work
order had been made, as reflected from the
following table:
I Awarded cost of the work Rs.31.87 Crores
under the Contract
II Cost of the work already Rs.0.86 Cr.
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executed by the department on the same
stretch before the award of work
III Cost of the work as reduced in Rs.31.01
Crores view of prior departmental work
IV Amended cost of work under Rs.35.03
Crores the Contract
V Contract cost in revised DPR Rs. 42.27
Crores processed to Ministry of Road,
Transport and Highways
VI Payment made to the Rs.42.27 Crores
contractor/respondent herein inclusive of
Rs.3.86 Crores as per the order dated
18.05.2017 of the Hon'ble High Court VII
Contractor's claim as per final Rs. 71. 76
Crores bill dated 23.11.2015
24. Therefore, the dispute could not be
raised by way of a writ petition on the
disputed questions of fact. Though, the
jurisdiction of the High Court is wide but in
respect of pure contractual matters in the
field of private law, having no statutory
flavour, are better adjudicated upon by the
forum agreed to by the parties. The dispute
as to whether the amount is payable or not
and/or how much amount is payable are
disputed questions of facts. There is no
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admission on the part of the appellants to
infer that the amount stands crystallized.
Therefore, in the absence of any acceptance
of Joint Survey Report by the competent
authority, no right would accrue to the writ
petitioner only because measurements
cannot be undertaken after passage of time.
Maybe, the resurvey cannot take place but
the measurement books of the work
executed from time to time would form a
reasonable basis for assessing the amount
due and payable to the writ petitioner, but
such process could be undertaken only by
the agreed forum i.e., arbitration and not by
the Writ Court as it does not have the
expertise in respect of measurements or
construction of roads."
(iv) In case of Assistant Commissioner (CT) LTU,
Kakinada v. Glaxo Smith Kline Consumer
Health Care Limited. reported in AIR 2020 SC
2819, in para nos. 11, 12, 14 and 15, it is held as
under:-
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
"11. In the backdrop of these facts, the central
question is: whether the High Court ought to
have entertained the writ petition filed by the
respondent? As regards the power of the High
Court to issue directions, orders or writs in
exercise of its jurisdiction under Article 226 of
the Constitution of India, the same is no more
res integra. Even though the High Court can
entertain a writ petition against any order or
direction passed/action taken by the State
under Article 226 of the Constitution, it ought
not to do so as a matter of course when the
aggrieved person could have availed of an
effective alternative remedy in the manner
prescribed by law (see Baburam Prakash
Chandra Maheshwari v. Antarim Zila Parishad
now Zila Parishad, Muzaffarnagar and also
Nivedita Sharma v. Cellular Operators
Association of India and Ors. ). In Thansingh
Nathmal and Ors. v. Superintendent of Taxes,
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
Dhubri and Ors. , the Constitution Bench of this
Court made it amply clear that although the
power of the High Court under Article 226 of
the Constitution is very wide, the Court must
exercise self-imposed restraint and not
entertain the writ petition, if an alternative
effective remedy is available to the aggrieved
person. In paragraph 7, the Court observed
thus: -
"7. Against the order of the Commissioner an
order for reference could have been claimed if
the appellants satisfied the Commissioner or
the High Court that a question of law arose out
of the order. But the procedure provided by the
Act to invoke the jurisdiction of the High Court
was bypassed, the appellants moved the High
Court challenging the competence of the
Provincial Legislature to extend the concept of
sale, and invoked the extraordinary jurisdiction
of the High Court under Article 226 and sought
to reopen the decision of the Taxing Authorities
on question of fact. The jurisdiction of the High
Court under Article 226 of the Constitution is
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
couched in wide terms and the exercise thereof
is not subject to any restrictions except the
territorial restrictions which are expressly
provided in the Articles. But the exercise of the
jurisdiction is discretionary: it is not exercised
merely because it is lawful to do so. The very
amplitude of the jurisdiction demands that it
will ordinarily be exercised subject to certain
self imposed limitations. Resort that
jurisdiction is not intended as an alternative
remedy for relief which may be obtained in a
suit or other mode prescribed by statute.
Ordinarily the Court will not entertain a
petition for a writ under Article 226, where the
petitioner has an alternative remedy, which
without being unduly onerous, provides an
equally efficacious remedy. Again the High
Court does not generally enter upon a
determination of questions which demand an
elaborate examination of evidence to establish
the right to enforce which the writ is
claimed.The High Court does not therefore act
as a court of appeal against the decision of a
court or tribunal, to correct errors of fact, and
does not by assuming jurisdiction under Article
226 trench upon an alternative remedy
provided by statute for obtaining relief. Where
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it is open to the aggrieved petitioner to move
another tribunal, or even itself in another
jurisdiction for obtaining redress in the manner
provided by a statute, the High Court normally
will not permit by entertaining a petition under
Article 226 of the Constitution the machinery
created under the statute to be bypassed, and
will leave the party applying to it to seek resort
to the machinery so set up."
We may usefully refer to the exposition of this
Court in Titaghur Paper Mills Co. Ltd. and Anr.
v. State of Orissa and Ors., wherein it is
observed that where a right or liability is
created by a statute, which gives a special
remedy for enforcing it, the remedy provided
by that statute must only be availed of. In
paragraph 11, the Court observed thus: -
"11. Under the scheme of the Act, there is a
hierarchy of authorities before which the
petitioners can get adequate redress against
the wrongful acts complained of. The
petitioners have the right to prefer an appeal
before the Prescribed Authority under sub-
section (1) of Section 23 of the Act. If the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
petitioners are dissatisfied with the decision in
the appeal, they can prefer a further appeal to
the Tribunal under sub-section (3) of Section 23
of the Act, and then ask for a case to be stated
upon a question of law for the opinion of the
High Court under Section 24 of the Act.The Act
provides for a complete machinery to challenge
an order of assessment, and the impugned
orders of assessment can only be challenged by
the mode prescribed by the Act and not by a
petition under Article 226 of the Constitution.
It is now well recognised that where a right or
liability is created by a statute which gives a
special remedy for enforcing it, the remedy
provided by that statute only must be availed
of.This rule was stated with great clarity by
Willes, J. in Wolverhampton New Waterworks
Co. v. Hawkesford [(1859) 6 CBNS 336, 356] in
the following passage:
There are three classes of cases in which a
liability may be established founded upon
statute. . . . But there is a third class, viz.
where a liability not existing at common law is
created by a statute which at the same time
gives a special and particular remedy for
enforcing it.... The remedy provided by the
statute must be followed, and it is not
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
competent to the party to pursue the course
applicable to cases of the second class. The
form given by the statute must be adopted and
adhered to.
The rule laid down in this passage was
approved by the House of Lords in Neville v.
London Express Newspapers Ltd. (1919 AC
368) and has been reaffirmed by the Privy
Council in Attorney General of Trinidad and
Tobago v. Gordon Grant and Co. Ltd. (1935 AC
532) and Secretary of State v. Mask and Co.
(AIR 1940 PC 105). It has also been held to be
equally applicable to enforcement of rights, and
has been followed by this Court throughout.
The High Court was therefore justified in
dismissing the writ petitions in limine."
In the subsequent decision in Mafatlal
Industries Ltd. and Ors. v. Union of India and
Ors. 12 , this Court went on to observe that an
Act cannot bar and curtail remedy under
Article 226 or 32 of the Constitution. The
Court, however, added a word of caution and
expounded that the constitutional Court would
certainly take note of the legislative intent
manifested in the provisions of the Act and
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
would exercise its jurisdiction consistent with
the provisions of the enactment. To put it
differently, the fact that the High Court has
wide jurisdiction under Article 226 of the
Constitution, does not mean that it can
disregard the substantive provisions of a
statute and pass orders which can be settled
only through a mechanism prescribed by the
statute.
12. Indubitably, the powers of the High Court
under Article 226 of the Constitution are wide,
but certainly not wider than the plenary powers
bestowed on this Court under Article 142 of the
Constitution. Article 142 is a conglomeration
and repository of the entire judicial powers
under the Constitution, to do complete justice
to the parties. Even while exercising that
power, this Court is required to bear in mind
the legislative intent and not to render the
statutory provision otiose. In a recent decision
of a three- Judge Bench of this Court in Oil and
Natural Gas Corporation Limited v. Gujarat
Energy Transmission Corporation Limited and
Ors. , the statutory appeal filed before this
Court was barred by 71 days and the maximum
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time limit for condoning the delay in terms of
Section 125 of the Electricity Act, 2003 was
only 60 days. In other words, the appeal was
presented beyond the condonable period of 60
days. As a result, this Court could not have
condoned the delay of 71 days. Notably, while
admitting the appeal, the Court had condoned
the delay in filing the appeal. However, at the
final hearing of the appeal, an objection
regarding appeal being barred by limitation
was allowed to be raised being a jurisdictional
issue and while dealing with the said objection,
the Court referred to the decisions in Singh
Enterprises v. Commissioner of Central Excise,
Jamshedpur and Ors. , Commissioner of
Customs and Central Excise v. Hongo India
Private Limited and Anr. , Chhattisgarh State
Electricity Board v. Central Electricity
Regulatory Commission and Ors. and
Suryachakra Power Corporation Limited v.
Electricity Department represented by its
Superintending Engineer, Port Blair and Ors.
and concluded that Section 5 of the Limitation
Act, 1963 cannot be invoked by the Court for
maintaining an appeal beyond maximum
prescribed period in Section 125 of the
Electricity Act.
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14. In this regard, another Constitution Bench
in Supreme Court Bar Assn. v. Union of India,
(1998) 4 SCC 409 : (AIR 1998 SC 1895 : 1998
AIR SCW 1706)] opined: (SCC pp. 43738, para
56) "56. As a matter of fact, the observations on
which emphasis has been placed by us from the
Union Carbide case [Union Carbide Corpn. v.
Union of India, (1991) 4 SCC 584 : (AIR 1992
SC 248)], A.R. Antulay case [A.R. Antulay v.
R.S. Nayak, (1988) 2 SCC 602 : (AIR 1988 SC
1531)] and Delhi Judicial Service Assn. v. State
of Gujarat, (1991) 4 SCC 406 : (AIR 1991 SC
2176 : 1991 AIR SCW 2419), go to show that
they do not strictly speaking come into any
conflict with the observations of the majority
made in Prem Chand Garg case [Prem Chand
Garg v. Excise Commr., AIR 1963 SC 996]. It is
one thing to say that "prohibitions or
limitations in a statute" cannot come in the way
of exercise of jurisdiction under Article 142 to
do complete justice between the parties in the
pending "cause or matter" arising out of that
statute, but quite a different thing to say that
while exercising jurisdiction under Article 142,
this Court can altogether ignore the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
substantive provisions of a statute, dealing with
the subject and pass orders concerning an
issue which can be settled only through a
mechanism prescribed in another statute. This
Court did not say so in Union Carbide case
[Union Carbide Corpn. v. Union of India, (1991)
4 SCC 584 : (AIR 1992 SC 248)] either
expressly or by implication and on the contrary
it has been held that the Apex Court will take
note of the express provisions of any
substantive statutory law and regulate the
exercise of its power and discretion
accordingly. ..."
15. From the aforesaid decisions, it is clear as
crystal that the Constitution Bench in Supreme
Court Bar Assn. v. Union of India, (1998) 4 SCC
409 : (AIR 1998 SC 1895 : 1998 AIR SCW
1706), has ruled that there is no conflict of
opinion in Antulay case [A.R. Antulay v. R.S.
Nayak, (1988) 2 SCC 602 : (AIR 1988 SC 1531)]
or in Union Carbide Corpn. case [Union
Carbide Corpn. v. Union of India, (1991) 4 SCC
584 : (AIR 1992 SC 248)] with the principle set
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
down in Prem Chand Garg v. Excise Commr.,
AIR 1963 SC 996. Be it noted, when there is a
statutory command by the legislation as
regards limitation and there is the postulate
that delay can be condoned for a further period
not exceeding sixty days, needless to say, it is
based on certain underlined, fundamental,
general issues of public policyas has been held
in Union Carbide Corpn. case [Union Carbide
Corpn. v. Union of India, (1991) 4 SCC 584 :
(AIR 1992 SC 248)]. As the pronouncement in
Chhattisgarh SEB v. Central Electricity
Regulatory Commission, (2010) 5 SCC 23 : (AIR
2010 SC 2061 : 2010 AIR SCW 2680), lays
down quite clearly that the policy behind the
Act emphasising on the constitution of a special
adjudicatory forum, is meant to expeditiously
decide the grievances of a person who may be
aggrieved by an order of the adjudicatory
officer or by an appropriate Commission. The
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
Act is a special legislation within the meaning
of Section 29(2) of the Limitation Act and,
therefore, the prescription with regard to the
limitation has to be the binding effect and the
same has to be followed regard being had to its
mandatory nature.To put it in a different way,
the prescription of limitation in a case of
present nature, when the statute commands
that this Court may condone the further delay
not beyond 60 days, it would come within the
ambit and sweep of the provisions and policy of
legislation. It is equivalent to Section 3 of the
Limitation Act. Therefore, it is uncondonable
and it cannot be condoned taking recourse to
Article 142 of the Constitution."
9. Learned advocate Mr.Acharya for the private
respondent has submitted that the petitioners have
filed the petition earlier in view of the directions of
this Court, the Government has directed the
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insurance company to pay the amount to the private
respondent herein. He has submitted that so far as
private respondents are concerned, in their respect
the advance subsidy is already paid and therefore
insurance company ought to have paid the claim of
the private respondents. He has submitted that the
private petitioners are only interested for getting
their claim. He has submitted that when their claim
is genuine one, even in absence of subsidy from the
Government, the petitioner be directed to pay the
amount to the private respondents without waiting
for any disbursement from the State Government to
it. He has submitted that the private respondent is
only interested to get their legitimate amount. He
has prayed to pass appropriate order accordingly.
10. In rejoinder, learned senior counsel Mr.Mihir Joshi
has submitted that the stand taken by the State
Government is not in consonance with the insurance
Act as well as various communications sent by the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
Central Government to the State Government
directing to make premium of subsidy and also
clarifying that the payment of subsidy as a premium
and the imposition of penalty are two different
things. He has also submitted that in the present
case, there is no disputed question of law. According
to him, the question involved is legal one as to
whether without making any premium the State
Government insist upon the petitioner insurance
company to make payment to the farmers. He has
submitted that the payment of premium even in the
nature of subsidy is a prerequisite for starting of a
terms of policy. According to him, therefore, if the
prior premium even in the form of subsidy is not
paid then the insurance company cannot be
compelled to make payment as there would be no
contract of insurance existing between the parties.
He has submitted that the submission of the State
Government is like putting cart before the horse. He
has submitted that even the State Government has
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
no power to withheld the premium. He has
submitted that even in old guidelines, page no.129,
130, there was no any provisions regarding the
penalty and admittedly, the present contract is
governed under the old guidelines. He has also
referred to the letters of the Government of India
placed on record at page no.237 and 309 and has
submitted that the direction of the Central
Government is yet not followed by the State
Government. He has stated that the approach of the
State Government is not proper. He has also
submitted that there is no alternative remedy
available for the petitioner as main grievance is
against the State Government. He has submitted
that earlier the impugned order passed by this Court
is the basis of the present petition and therefore it
cannot be alleged that there is an alternative
remedy available to the petitioner to agitate the
same. He has prayed to allow the present petition.
Learned senior counsel has relied upon the following
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
decisions:-
(i) In case of Surya Constructions Vs. State of Uttar
Pradesh And Others reported in (2019) 16 SCC 794,
the Apex Court in para 3 and 4 has held as under:-
"3. It is clear, therefore, from the aforesaid
order dated 22.03.2014 that there is no
dispute as to the amount that has to be paid
to the appellant. Despite this, when the
appellant knocked at the doors of the High
Court in a writ petition being Writ Civil No.
25216/2014, the impugned judgment dated
02.05.2014 dismissed the writ petition
stating that disputed questions of fact arise
and that the amount due arises out of a
contract. We are afraid the High Court was
wholly incorrect inasmuch as there was no
disputed question of fact. On the contrary,
the amount payable to the appellant is
wholly undisputed. Equally, it is well settled
that where the State behaves arbitrarily,
even in the realm of contract, the High Court
could interfere under Article 226 of the
Constitution of India ['ABL International Ltd.
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
and Another v. Export Credit Guarantee
Corporation of India Ltd. and Others' (2004
(3) SCC 553)].
4. This being the case and the work having
been completed long back in 2009, we direct
the Uttar Pradesh Jal Nigam to make the
necessary payment within a period of four
weeks from today. Given the long period of
delay, interest at the @ 6% p.a. may also be
awarded."
(ii) In case of ABL INTERNATIONAL LTD. AND
ANOTHER V/s EXPORT CREDIT GUARANTEE
CORPN. OF INDIA LTD. AND OTHERS reported in
2004 (3) SCC 553, the Apex Court has held in para
27 and 53 as under:-
"27. From the above discussion of ours,
following legal principles emerge as to the
maintainability of a writ petition :-
(a) In an appropriate case, a writ petition as
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
against a State or an instrumentality of a State
arising out of a contractual obligation is
maintainable.
(b) Merely because some disputed questions of
facts arise for consideration, same cannot be a
ground to refuse to entertain a writ petition in
all cases as a matter of rule.
(c) A writ petition involving a consequential
relief of monetary claim is also maintainable.
53. From the above, it is clear that when an
instrumentality of the State acts contrary to
public good and public interest, unfairly,
unjustly and unreasonably, in its contractual,
constitutional or statutory obligations, it
really acts contrary to the constitutional
guarantee found in Article 14 of the
Constitution. Thus if we apply the above
principle of applicability of Article 14 to the
facts of this case, then we notice that the
first respondent being an instrumentality of
State and a monopoly body had to be
approached by the appellants by compulsion
to cover its export risk. The policy of
insurance covering the risk of the appellants
was issued by the first respondent after
seeking all required information and after
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receiving huge sums of money as premium
exceeding Rs.16 lacs. On facts we have
found that the terms of the policy does not
give room to any ambiguity as to the risk
covered by the first respondent. We are also
of the considered opinion that the liability of
the first respondent under the policy arose
when the default of the exporter occurred
and thereafter when Kazakhstan
Government failed to fulfil its guarantee.
There is no allegation that the contracts in
question were obtained either by fraud or by
misrepresentation. In such factual situation,
we are of the opinion, the facts of this case
do not and should not inhibit the High Court
or this Court from granting the relief sought
for by the petitioner."
11. Having considered the submissions made on behalf
of both the sides coupled with the material placed on
record and the decisions cited at bar, it reveals that
there is no dispute regarding the facts of
implementation of the scheme in question by the
Central Government. The scheme provides that the
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said Central Government and the State Government
shall give equal share of premium to the insurance
company for the implementation of the scheme. The
said premium is to be paid by way of subsidy. Thus,
the nomenclature subsidy is nothing but a payment
of premium. It is admitted facts that the present
petitioner has been identified as an insurance
company for the vicinity which includes
Surendranagar, Amreli, Morbi etc. Various
conditions relating to the scheme held for settlement
of claims as reflected from the material placed on
record, which includes the important conditions/
clauses applicable for coverage of risk needs to be
reproduced here and which is at page no.90 which
reads as under:-
"24.1. Insurance companies should have
received the premium for coverage either
from bank, channel partner, insurance
intermediary or directly. In case of any loss
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
in transit due to negligence by these
agencies or non remittance of premium by
these agencies, the concerned
bank/intermediaries shall be liable for
payment of claims."
12. At this juncture, the provisions regarding the
monitoring and review of the scheme is also to be
referred to wherein in clause no.29.2.3, the
provisions reads as under:-
"29.2.3. Insurance Companies shall calculate
crop-wise, IU wise payable claims based on the
actual yield data and threshold yield given at
the time of tendering. Accordingly the payable
claims subject to payment of full premium
share by the Central and State Govt for the
season shall be remitted by the Insurance
Companies directly into benefitted farmer's
accounts electronically, payment details for
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which shall be updated on the National Crop
Insurance Portal on daily basis."
13. At this juncture, it is pertinent to note that the stand
taken by the respondent no.1 in its affidavit in reply
is that the State Government has to pay premium
subsidy for Kharif pak of 2019 is Rs.396.93 crores
out of which it has only paid Rs.180 crores. Thus, it
is an admission on the part of the State Government
that the remaining amount of "premium subsidy"
is not paid. Of course, it is the stand of the
Government that as there was some lacuna on the
part of the petitioner in non-adherance to the terms
and conditions of the work order dated 04.07.2019,
it has imposed penalty upon the petitioner and the
premium subsidy has been kept pending.
14. At this juncture, it is pertinent to note that
admittedly, the scheme is implemented by the
Central Government and therefore, the directions
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issued by the Central Government is binding upon
the State Government. In this respect, upon perusal
of the material placed on record, it appears from the
communication of the Central Government, which is
at page no.237 and 309 of the petition memo, which
are reproduced herein, reveals that the State
Government has to act according to this
communication.
A communication dated 7th January, 2021:-
"This is with reference to this Department's
letter no. 11016/02/2020-Credit-II dated 2nd
November 2020 regarding invoking penalty
clause for delayed settlement of claims and
Jetter no.11019/01/2015-Credit-ll dated 17th
October 2019 regarding timely release of
State share of premium subsidy and
diversion of State share of subsidy to deduct
against the special penalty provision etc., by
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State Government under PMFBY/RWBCIS. A
copy of aforesaid letters is attached for
ready reference.
2. During weekly reviews with Insurance
Companies (ICs), States and other
Stakeholders, this Department has noticed
that a significant amount of claims are still
pending due to the claim of the State Govt
and concerned Insurance companies
regarding offsetting of premium subsidy
against non-payment of penalty and non
release of requisite State share of subsidy,
respectively. The payment of claims to the
farmers in such cases are delayed
considerably which leads to dissatisfaction
amongst eligible farmers and defeats the
overall objectives of timely payment of
claims to the farmers. States may recover
the penalty imposed from Insurance
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Companies as per applicable laws and/or any
other established mechanisms for recovery
of penalty except offsetting the penalty with
premium subsidy.
3. It is further clarified that payment of
premium subsidy and settlement of claims by
Insurance Companies is monitored
individually by this Department for each
State, Season, Scheme (PMFBYor RWBCIS)
and Insurance Company. State Governments
are advised to ensure payment of entire
subsidy in respect of each Season, Scheme to
individual concerned Insurance Company
separately as the accounts/business statistics
are maintained accordingly........
A communication dated 02nd May, 2022
reads thus:-
This is to draw your attention
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towards long pending State share of
premium subsidy in the State of Gujarat
under Pradhan Mantri Fasal Bima Yojana
(PMFBY) and Restructured Weather Based
Crop Insurance Scheme (RWBCIS). The
State of Gujarat has implemented PMFBY
from Kharif 2016 to Rabi 2019-20. Timely
release of State subsidy is of essence and
any delay in the same may result in
significant delay in claim settlement to
affected farmers of your State. As the
scheme provides risk coverage for crop loss
to farmers, payments of claims to them must
be done within the prescribed timeline.
2. Government of India through its earlier
communications with State Government on
24/04/2020, 13/09/2020, 15/04/2021 and
08/06/2021 had been requesting for
expediting the same. The aforesaid matter
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has been reviewed and examined and has
been observed that i considerable claim
amount of 258.87 Crore is pending for
payment to the eligible farmers of your State
due to non-release committed State share of
premium subsidy of ₹ 859.39 Crore to
concerned Insurance Companies (details in
annexure). There is an urgent need to clear
all outstanding premium subsidy payments
so that claims to the farmers can be paid
without any further delay. On this account,
we are receiving large number of grievances
from farmers relating to their claim
settlements and other issues.
3. This pendency of subsidy has been
adversely impacting the overall
implementation of the scheme. Due to
inordinate delay in the release of subsidy,
this Department is not able to close the
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seasons and the concerned Insurance
Companies are facing solvency issues us
mandated by IRDAI and the companies are
also not able to bid further in other States
due to their choked capacities.
4. You are requested to kindly review this
matter personally and issue necessary
directions for immediate release of pending
State Share of Premium Subsidy so the
claims can be released to the affected
farmers at the earliest and the objectives of
the Scheme are achieved."
15. Now, it is a matter of common sense and knowledge
that the payment of prior premium is a Sine qua non
of coming into force of any contract of insurance
between the insured and insurer. The contract of
insurance would be effective only on making
payment of the premium. Without prior payment of
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the premium, if, somebody wants or desires that first
of all contract should be deemed to be come into
existence, such persons may be either have no
common sense or either he is living in any other
world. Who is insisting for first settlement of claim
without making any prior premium to the insurance
company is nothing but insisting to see that the cart
is put before the horse. In the present case, as
revealed from the communications of the Central
Government to the State Government and the
material placed on record, it clearly appears that the
State Government is insisting for making payment to
the concerned farmers on the basis of scheme of
insurance without payment of any prior premium.
Such instance of the State Government is nothing
but an exercise to put a cart before the horse. When
the Central Government has consistently directed
the State Government to release the "premium
subsidy", the State Government ought to have
followed such directions. The entire stand taken by
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the State Government in not releasing the
"premium subsidy" and at the same time, insisting
the petitioner company to make payment to the
farmers is not sustainable in the eyes of law. At the
same time, it is the bounden duty of the petitioner to
see to it that on receipt of the premium subsidy, it
shall immediately make payment to the eligible
farmers in respect of damages caused to them. At
the same time, the question regarding making
payment for any other purpose like non availability
of facilities of laying claim or non availability of staff
etc. can be considered by the competent authority
for initiating any penal action against the insurance
company. But only with a view to initiate such penal
action and to impose penalty, the State Government
is not entitled to stop the making of premium
subsidy which is sine qua non for the contract of the
insurance itself. Considering the facts and
circumstances of the present case, it clearly
transpires that the action and the stand taken by the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
respondent no.1- State Government is not
sustainable in the eyes of law.
16. In view of the above, the present petition deserves to
be allowed. Accordingly, it is allowed. The order
Annexure "B" of the State Government dated
12.5.2021, is hereby quashed and set aside with the
observations that as and when the petitioner
receives the premium subsidy from the State
Government, it shall immediately pay the
outstanding claim of the eligible farmers without any
fail, within a period of one week thereof.
17. The respondent no.1 is hereby directed to release
the remaining requisite amount pending State share
of the subsidy for Kharif season 2019 to the
petitioner within the period of four weeks from
today. On such receipt of the premium subsidy for
the said Kharif season, the petitioner shall, within
one week thereof, shall disburse the amount to the
C/SCA/10523/2021 JUDGMENT DATED: 30/09/2022
eligible farmers, who have suffered the damages
caused and are covered under the scheme. It is
clarified that the rights of the respondent - State to
take out necessary proceedings for penal action, if
any, is kept open. No order as to costs. Direct
service is permitted.
(DR. A. P. THAKER, J)
URIL RANA
