In cases of crop insurance under PMFBY, where inaccurate data entry by a bank and subsequent failure of the insurer to reconcile or refund the premium occur, both the insurance company and the nodal bank are held jointly and severally liable for the payment of compensation to the farmer.

Headnote:(A) Consumer Protection Act, 2019 - Section 41 - Pradhan Mantri Fasal Bima Yojana (PMFBY) - Incorrect entry of farmer data in National Crop Insurance Portal (NCIP) - Compensation denial for crop shortfall - Liability of Insurance Company and Nodal Bank - State Government notification clauses 28, 29, and 30 explicitly state that if a bank fails to provide data or if an insurance company fails to refund premium of improperly insured land within the stipulated period, the insurance company remains liable; furthermore, joint liability is imposed where errors in data entry occur - Insurance company and Bank found jointly and severally liable. (Paras 11, 13, 14)

Facts of the case:
A farmer purchased crop insurance under the PMFBY scheme. Despite a 63% shortfall in crop yield in the registered area, the claim was denied, with the insurance company blaming the Bank for incorrectly entering the village name in the NCIP portal, while the Bank claimed it merely followed instructions. The District Commission held the insurance company liable for compensation based on the actual shortfall in the complainant's correct village.

Findings of Court:
The State Commission modified the order, holding that both the insurance company and the nodal Bank are jointly and severally liable for the payment of the awarded compensation, interest, and costs, as both entities failed to perform their duties in ensuring accurate data submission and reconciliation of insurance records.

Issues: Whether the insurance company or the nodal Bank is solely responsible for compensation when incorrect data is entered into the central insurance portal, or whether they are jointly and severally liable.

Ratio Decidendi: Incorporating the state-specific implementation guidelines of the PMFBY, the court reasoned that the failure to refund the premium within the stipulated time, coupled with the systemic failure of the parties to reconcile the data, renders both the insurer and the bank jointly and severally liable to the farmer for the loss of insurance benefits.

Result: Appeals partly allowed, modifying the orders to reflect joint and several liability.

O R D E R

PER: - JUSTICE GAUTAM CHOURDIYA, PRESIDENT

This order will govern disposal of both these appeals, under section 41 of the Consumer Protection Act 2019 (hereinafter called “the Act” for short), arising out of separate impugned orders dated 04.04.2025 & 13.05.2025 respectively of District Consumer Disputes Redressal Commission, Raigarh (CG) (herein after called “District Commission” for short) directing the appellants herein the Agriculture Insurance Company of India Limited as under : -

Sr. No.	Appeal No.	Complaint Case No.	Final Order
1	SC/22/FA/281/2025	CC/2022/335 Order Dt. 04/04/2025	1. To pay the insurance amount of Rs.62,906.63 (Rs. Sixty Two Thousand Nine Hundred-Six and Sixty Three Paise) within 45 days from the date of order. 2. To pay Rs.10,000/- (Rupees Ten Thousand) as compensation for mental loss and cost of litigation Rs.5,000/- (Five Thousand) within 45 days from the date of order. 3. In case of failure to pay the entire amount as above within the stipulated time, to pay simple interest @ 9% p.a. from the date of order till the date of payment.
2	SC/22/FA/349/2025	CC/2022/329 Order Dt. 13/05/2025	1. To pay the insurance amount of Rs.1,03,447.50 (Rs. One Lac Three Thousand Four Hundred Forty Seven and Fifty Paise) within 45 days from the date of order. 2. To pay Rs.10,000/- (Rupees Ten Thousand) as compensation for mental loss and cost of litigation Rs.5,000/- (Five Thousand) within 45 days from the date of order. 3. In case of failure to pay the entire amount as above within the stipulated time, to pay simple interest @ 9% p.a. from the date of order till the date of payment.

Sr. No.

Appeal No.

Complaint Case No.

Final Order

SC/22/FA/281/2025

CC/2022/335

Order Dt. 04/04/2025

1. To pay the insurance amount of Rs.62,906.63 (Rs. Sixty Two Thousand Nine Hundred-Six and Sixty Three Paise) within 45 days from the date of order.

2. To pay Rs.10,000/- (Rupees Ten Thousand) as compensation for mental loss and cost of litigation Rs.5,000/- (Five Thousand) within 45 days from the date of order.

3. In case of failure to pay the entire amount as above within the stipulated time, to pay simple interest @ 9% p.a. from the date of order till the date of payment.

SC/22/FA/349/2025

CC/2022/329

Order Dt. 13/05/2025

1. To pay the insurance amount of Rs.1,03,447.50 (Rs. One Lac Three Thousand Four Hundred Forty Seven and Fifty Paise) within 45 days from the date of order.

2. To pay Rs.10,000/- (Rupees Ten Thousand) as compensation for mental loss and cost of litigation Rs.5,000/- (Five Thousand) within 45 days from the date of order.

3. In case of failure to pay the entire amount as above within the stipulated time, to pay simple interest @ 9% p.a. from the date of order till the date of payment.

Since both these appeals involve similar questions of law and facts, they are being decided by this common order. For the sake of convenience, the facts of Appeal No. SC/22/FA/281/2025 are being discussed herein. Hereinafter, the parties shall be referred to in their original nomenclature as they appeared before the District Commission.

2. Very briefly stated the facts of the case are that the complainant, a farmer, purchased fertilizer and seeds from the opposite party No.1 Samiti during the year 2021–22 and obtained crop insurance from the opposite party No.3 for his own land measuring 3.032 hectares under the Pradhan Mantri Fasal Bima Yojana (hereinafter referred to as “PMFBY”), by paying a premium of Rs.1,988/- through opposite party No.2 for Kharif season. Farmers of Village Kapisada(B), R.I. Circle Hardi, Tehsil Sarangarh, District Raigarh (C.G.) were extended the benefit of the scheme by the opposite party No.3 on account of a 63% shortfall. However, the complainant was denied such benefit. On inquiry, it was informed that premium was deposited with the opposite party No.3 insurance company, through opposite party No.2. Consequently, a registered legal notice dated 19.05.2022 was sent to the opposite party Nos.2 & 3 demanding payment of compensation of Rs.99,449/-. Opposite party No. 2 refused to accept the notice, while opposite party No. 3, in its reply dated 30.05.2022, stated that the Bank had made an incorrect entry of the complainant’s village in the insurance portal, for which the Bank was responsible and therefore the compensation was not paid. Hence, the complaint before District Commission.

3. The Opposite Party No.1, in its written version, disowning any liability towards the complainant, averred that the insurance premium was duly transferred through NEFT to the Opposite Party No.3, the insurance company, through Opposite Party No.2, i.e., CG Rajya Sahkari Bank Ltd./Apex Bank. It was further contended that no negligence or deficiency in service was committed on its part. The opposite party No.3 deliberately misled the complainant by forwarding a contradictory document dated 01.06.2022, falsely attributing responsibility to the opposite party No.2, mentioning therein that the opposite party No.2 had entered incorrect crop village of the complainant in the insurance portal. When the Deputy Director

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