Under the Pradhan Mantri Fasal Bima Yojana, insurers and lending banks share a coordinated duty in processing crop insurance; failure by the insurer to exercise verification of bank-submitted data or to act on discrepancies renders them liable alongside the bank for service deficiencies resulting in denied claims.

Headnote:(A) Consumer Protection Act, 2019 - Pradhan Mantri Fasal Bima Yojana (PMFBY) - Agricultural insurance claim - Liability of insurer and lending bank - Where bank fails to upload correct farmer data on the National Crop Insurance Portal (NCIP) or fails to inform the farmer of discrepancies, the bank is liable for negligence; however, the insurance company is also found liable for failing to exercise due diligence in verifying data before issuing policies and remaining inactive for long durations regarding premium refunds - Courts below rightly apportioned liability or found joint liability where both stakeholders failed in their coordinated duties under the Scheme. (Paras 16, 17, 18, 19)

Facts of the case:
Agriculture Insurance Company of India Limited filed appeals against orders holding both the insurance company and various lending banks liable for failing to settle crop insurance claims under the Pradhan Mantri Fasal Bima Yojana. The insurer argued that its liability is limited to data uploaded on the NCIP, and that banks are solely responsible for errors in data entry. In some cases, premium was collected but no data was uploaded, or incorrect land/village details were registered, leading to the rejection of claims by the insurer.

Findings of Court:
Despite the insurer's arguments regarding the bank's exclusive responsibility to register data correctly, the Commission found that both the insurer and the bank have well-defined roles requiring coordination. The insurer's failure to verify data before issuing policies or to communicate regarding discrepancies and refunding premiums after significant delays rendered them contributorily negligent.

Issues: Whether the insurer can be held liable for crop insurance claims when the lending bank erroneously uploads, or fails to upload, farmer/land data on the National Crop Insurance Portal as mandated under the PMFBY guidelines.

Ratio Decidendi: Insurance companies and lending banks share an interdependent responsibility under the PMFBY; while banks are the primary data entry agents, insurers are not absolved of their duty to verify details or take proactive steps regarding premium reconciliations, and they cannot shift the entire burden of service deficiencies solely onto the banks when they contribute to the loss through inaction.

Result: Appeals dismissed.

Table of Content
1. overview of appeals concerning pmfby insurance claims and bank-insurer liability. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. arguments regarding portal data entry responsibility under regulatory guidelines. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. court holds both insurers and banks jointly liable for lack of coordinated vigilance. (Para 16 , 17 , 18 , 19 , 20 , 21)

ORDER

DR. INDER JIT SINGH, PRESIDING MEMBER

1. The Second Appeal No. 861 of 2020 has been filed against the order dated 28.07.2025 of the State Commission Madhya Pradesh whereby the First appeal filed by the Agriculture Insurance Company of India Ltd. (Insurance Company) was dismissed, the Appeal being not maintainable.

2. The Second Appeal No. 863 of 2020 has been filed against the order dated 24.06.2025 of the State Commission Rajasthan whereby the First appeal filed by the State Bank of India was partly allowed making the Appellant Bank and Respondent no.2 ( Insurance Company) jointly liable to pay Rs.61,010/- alongwith interest @ 9% p.a. from the date of filing the complaint within a period of 45 days with liability of 75% to be paid by the Insurance Company and 25% by the Bank. Further, they were also directly to pay jointly a sum of Rs.10,000/- for mental agony and Rs.5000/- for legal expenses, in the same proportion, failing which complainant is entitled to receive interest 9% p.a.

3. The Second Appeal No. 864 of 2025 has been filed against the order dated 21.04.2025 of the State Commission Rajasthan whereby the First appeal filed by the Insurance Company was dismissed.

4. The issue pertains to insurance claims under Pradhan Mantri Fasal Bima Yojana ( PMFBY) issued by Government of India, Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture and Farmer’s Welfare. Agriculture National Insurance Company was selected as insurer( Implementing Agency) under the PMFBY. Complainants before the District Forum(s) were various farmers, having agricultural land of various extents who participated in the PMFBY of Central Government, as notified by Government of Rajasthan for insurance of their crops. There are three categories of farmers ( a) loanee farmers ( b) non-loanee farmers and ( c) share cropper farmers.

Brief Facts of SA No. 861 of 2025

5. The complainant took agricultural loan from Bank of India for insurance of soyabean crop for Kharif season 2018 and Bank under the PMFBY deposited insurance amount of Rs.800/- from his account and thus he was entitled to receive the insurance claim amount under PMFBY. The crop of the complainant got destroyed due to natural calamity as a result of which production became minimal. As no compensation amount was received by the complainant, the complainant filed CC before the District Forum Khandwa and District Forum Khandwa vide order dated 18.08.2020 held both the OP(s) - Bank of India and Agriculture Insurance Company of India jointly or separately liable. Being aggrieved the Insurance Company filed an appeal before the State Commission Madhya Pradesh and State Commission Madhya Pradesh vide order dated 28.07.2025 dismissed the Appeal of the Insurance Company.

Brief Facts of SA No. 863 of 2025

6. The complainant got his crops insured with Insurance Company. The complainant under PMFBY got the details of insured crop for Kharif 2019 uploaded by the State Bank of India on the National Crop Insurance Portal (NCIP) and claim was sent by OP No.2. At the time of awarding compensation, the complainant was supposed to receive Rs.61,010/- but this was refused by the Insurance Company on the ground of error in the entry related to the complainant’s village name on the portal. The complainant made multiple attempts to rectify the said error to get the claim of his insurance but in vain. Being aggrieved, the Complainant filed CC before the District Forum Bikaner and District Forum Bikaner vide order dated 23.05.2022 held only State Bank of India (OP No.1) liable for compensation alongwith physi

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2026 Supreme(Online)(NCDRC) 377

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONInder Jit Singh, Presiding Member, Sudhir Kumar Jain, MemberAgriculture Insurance Company Of India Limited – AppellantVersusBank Of India – RespondentSECOND APPEAL NO. 861 OF 2025|SECOND APPEAL NO. 863 OF 2025|SECOND APPEAL NO. 864 OF 2025

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Presiding Member, Sudhir Kumar Jain, Member
Agriculture Insurance Company Of India Limited – Appellant
Versus
Bank Of India – Respondent
SECOND APPEAL NO. 861 OF 2025|SECOND APPEAL NO. 863 OF 2025|SECOND APPEAL NO. 864 OF 2025