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2025 Supreme(Online)(NCDRC) 2430
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
LAXMIBAI – Appellant
Versus
M/S. NATIONAL INSURANCE COMPANY LTD. & ANR. – Respondent
NC/RP/1113/2023
Insurance claims under the Pradhan Mantri Fasal Bima Yojana must prioritize the sum insured in cases of total crop loss due to localized calamities like hailstorms, even if individual notification requirements are unmet.
Headnote:(A) Consumer Protection Act, 2019 - Sections concerning insurable events & claims - Insurance claims under Pradhan Mantri Fasal Bima Yojana - Appeals from various District Fora regarding hailstorm damage to crops - Main issue: Criteria for determining compensation for local disasters - Court held that the insurance company must adhere to the personal reporting requirements as specified in clause 10.5 for localized calamities, but if the loss is widespread, 48-hour notification may not be strictly enforced. (Paras 2.1, 10, 22, 12, 17)
(B) Local disasters - The court emphasized the importance of timely assessment of losses and adherence to the defined terms under insurance policies - Acknowledgment of procedural lapses was deemed reasonable under the circumstances of widespread calamity. (Paras 20, 21, 22)
Facts of the case:
Multiple farmers from Chudawada, Maharashtra, insured their Rabi crops under the Pradhan Mantri Fasal Bima Yojana. Severe hailstorm on 12.02.2018 caused 100% loss of crops. The National Insurance Company failed to process the claims at full coverage, leading to appeals against both the District and State Consumer Fora decisions which modified compensation amounts based on established formulas and thresholds. (Paras 2.1, 10, 12)
Findings of Court:
The court found that the claims should have been assessed under Clause 10.5 of the insurance scheme, emphasizing the need for appropriate recognition of localized calamities and total crop loss scenarios. The panel deemed that the conditions of timely notification could be relaxed due to the nature of the disaster. (Paras 10, 12, 22)
Issues: The main issues included the ambiguity surrounding the threshold yield assessments and whether timely notifications were requisite when widespread calamities occurred that were well understood by all parties involved. (Paras 17, 20, 21)
Ratio Decidendi: The court clarified that the insurance company was bound to reimburse the insured maximum amount given the 100% crop loss due to hailstorm, establishing dissatisfaction over reliance on threshold yield when such categorical loss was evident. The 48-hour reporting mandate could be waived under significant calamities. (Paras 10, 11, 22)
Result: Revision petitions dismissed; orders of the District Forum upheld, directing insurance payout according to the sums insured due to the total crop loss. (Paras 1-3, 17)
ORDER
DR. INDER JIT SINGH, PRESIDING MEMBER
1. These 100 RPs have been filed against the order(s) dated 12.01.2023 of the State Commission Maharashtra, whereby the appeals filed by the National Insurance Company ( Insurance Company ) have been partly allowed and order of the District Forum was set aside. Details of these RPs are given in Annexure-1 to this order. As issues / law points involved are the same in these RPs, these are taken up together, with RP No. 1111 of 2023 filed by the Complainant Gyanoji as lead case . The delay in filing the RPs, has been condoned after considering the reasons stated in the condonation of delay application and those adduced during the hearing, especially considering that these large numbers of cases involve common issues pertaining to large number of farmers. For sake of convenience, parties will also be referred to as they were arrayed before District Forum. Notice was issued to the OP(s) / Respondents(s) on 20.11.2023. Petitioner and Respondent No.1 filed Written Arguments / Synopsis 03.04.2025.
Brief facts of the lead case ( common facts broadly applicable to all the cases) ( as presented by the Complainant and as emerged from other records)
RP No. 1111 of 2023
2.1. The issue pertains to insurance claims under Pradhan Mantri Fasal Bima Yojana ( PMFBY) issued by Government of Maharashtra, Department of Agriculture, Animal Husbandry, Daily Development and Fisheries vide their communication dated 17.11.2017.
National Insurance Company was selected as insurer( Implementing Agency) under the PMFBY. Govt. of Maharashtra issued a notification(s) under the scheme for the insurance of Rabi crop for the year 2017-18 in Village Chudawa Tq. Purana District Parbhani covering 8 notified crops like Wheat, Rabi Jowar, Gram, summer rice, safflower, sunflower, summer groundnuts, rabi onion.in the notified revenue circle / or Taluka /Taluka Gut. The operational guidelines of the scheme delineate the roles and responsibilities of each involved entity, in particular the Insurance Company and financial institution concerned.
2.2. Complainants before the District Forum were various farmers of District Parbhani of Maharashtra, having agricultural land of various extents who participated in the PMFBY of Central Government, as notified by Government of Maharashtra for insurance of their crops. There are different categories of farmers ( a) creditor farmers for whom participation in the scheme was compulsory, (b) non creditor farmers for whom it was optional (c) apart from account holders farmers, who are cultivating clan or household were also eligible to participate in the scheme.
2.3. The complainant is an agriculturist from village Chudawada Tq. Purna Dist. Parbhani of Maharashtra and the State of Maharashtra implemented the PMFBY, whose objective was to provide insurance cover to the farmers in case of damage due to natural calamities, pests and diseases and to encourage farmers to use innovative and improved cultivation technologies and inputs. Further, the scheme was promulgated to maintain financial stability of the farmers in adverse conditions of crop loss and to maintain continuity in supply of credit to the agricultural sector. The scheme was mandatory for creditors farmers for the notified crop in notified areas and was optional for non creditors farmers.
The complainant insured his crop under the PMFBY for the rabi season 2017-18 and deposited the insurance premium amount of Rs. 216/- for the notified crop and the Bank ( OP No.1) credited the amount of insurance premium to the Insurance Company ( OP No.2). On 12.02.2018 there was hailstorm due to which complainant sustained 100% loss to their crops and Panchnama to that effect was drawn by the Revenue Authority at Chudawada. The State of Maharashtra paid Rs.6800/- per hectare as compensation to the complainant. Complainant intimated the information to the Insurance Company who was the designated insurance company to pay the insurance claims. As the National I
