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2017 Supreme(Bom) 1272
IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
SHANTANU S. KEMKAR, N.W. SAMBRE, JJ.
Abasaheb - Petitioner
Versus
The State of Maharashtra & Others - Respondents
Public Interest Litigation No. 113 of 2016
Decided On : 07-08-2017
For the Petitioner:C. R. Thorat, Advocate
For the Respondents:S.B. Yawalkar, A.G.P., D.S. Kulkarni, P.B. Paithankar, Advocates
The main legal principle established in the judgment is that financial institutions responsible for handling premiums under insurance schemes are liable for ensuring timely compensation to the insured parties, and their failure to do so can result in legal liability.
Headnote:
Crop Insurance - Public Interest Litigation - NAIS - Government Resolution - Compensation - Premium - Bank - Liability
Fact of the Case:
The petitioner, a social worker, sought directions to release compensation for crop insurance for farmers in Gangapur Taluka of Aurangabad District. The National Agricultural Insurance Scheme (NAIS) was implemented by the Agricultural Insurance Company (AIC) and the Government of Maharashtra, where farmers paid premiums through banks. The banks were responsible for depositing the premiums with AIC. The petitioner alleged that the banks failed to deposit the premiums, causing a delay in compensation to the farmers.
Finding of the Court:
The court found that the banks had accepted premiums from the farmers within the prescribed time but failed to deposit them with AIC, leading to a delay in compensation. The court criticized the insensitivity and casual approach of the respondents, including the State Government, AIC, and the banks, towards the issue, leaving the farmers to suffer. The court held the banks liable to pay compensation to the affected farmers and directed AIC to assess the loss and entitlement of each farmer for payment of compensation.
Issues: The main issue was whether the banks or AIC were liable to pay compensation to the farmers for the delayed deposit of premiums, and whether the delay in compensation violated the farmers' rights.
Ratio Decidendi: The court held that the banks, by accepting premiums within the prescribed time but failing to deposit them with AIC, were responsible for the delay in compensation. The court also emphasized the need for sensitivity and prompt redressal of issues affecting farmers, as highlighted in previous judgments and reports.
Final Decision: The Public Interest Litigation was allowed, and the court directed the banks to pay compensation to the affected farmers, with interest, and mandated AIC to assess the loss and entitlement of each farmer for payment of compensation.
N.W. Sambre, J.
1. 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.
3. The facts as are necessary for deciding the Public Interest Petition are as under :Respondent No.3Agricultural 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 Cooperative or Nationalized Bank, who in turn, is required to deposit the same with respondent No.3-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 cutoff 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 5Banking 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 cutoff date. It is claimed 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 premium amount to respondent No.3 (AIC) – Insurance Company before cutoff 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 cutoff 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
