Hisar District Commission Holds SBI General Insurance Co. Liable For Dishonoring Terms Of Pradhan Mantri Fasal Beema Yojna

Brief Facts:

Mrs. Kavita Rani (“Complainant”) obtained a Kisan Credit Card Account from IDBI Bank (“Bank”). On December 13, 2019, the bank debited Rs. 1919.31/- from the Complainant's account for Rabi-2019 Crop Insurance for 2 Hectare wheat crops under the Pradhan Mantri Fasal Beema Yojna (PMFBY) scheme. Despite numerous visits by the Complainant, the bank assured her that the wheat crops were insured with SBI General Insurance Company Limited (“Insurance Company”) but failed to hand over the insurance policy to her. Subsequently, the Complainant's wheat crops, spanning 2 hectares, suffered damage due to hailstorms on March 6, 2020, and again on March 27, 2020. The Complainant promptly informed the bank and the insurance company about the damage but encountered delays and unfulfilled promises of assessment and compensation. The Complainant made several communications with the bank, the insurance company and Deputy Director, Agriculture Department District Hisar but didn't receive a satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Hisar, Haryana (“District Commission”) and filed a consumer complaint against them.

In response to the complaint, the bank contended that the Complainant withdrew the insurance premium amount from their account and paid it to the insurance company. Furthermore, it argued that it processed the Complainant's claim. Therefore, it asserted that there was no deficiency in services on its part and that the complaint should be dismissed.

On the other hand, the insurance company asserted that it processed the Complainant's claim as per the guidelines of PMFBY, issuing a policy for the coverage of wheat crops. It claimed that the Complainant was only entitled to the amount already paid to her, and there was no deficiency in service on its part.

The Agriculture Department, in its defence, argued that the Complainant failed to file any application with the ADO office and that the complaint registered on the toll-free number was promptly uploaded to the portal without delay. It further claimed that due to the insurance company's failure to inform them, a survey of the damage was not conducted.

Observations by the District Commission:

Upon reviewing the operational guidelines and the PMFBY scheme, the District Commission noted that the scheme aims to support sustainable agricultural production by providing financial assistance to farmers facing crop loss due to unforeseen events. The scheme also aims to stabilize farmers' income, encourage the adoption of modern agricultural practices, and ensure the flow of credit to the agriculture sector. Under the scheme, all farmers availing seasonal agricultural loans from financial institutions are compulsorily insured, covering various risks such as planting risk, standing crop, post-harvest losses, and localized calamities.

The District Commission referred to the defence of the Agriculture Department that the complaint was uploaded to the insurance company's portal as per the PMFBY notification, but due to a lack of intimation from the insurance company, the survey necessary for assessment was not conducted promptly. Therefore, it held that despite the Complainant registering the complaint promptly, the insurance company failed to appoint a qualified loss assessor within the prescribed time frame and did not conduct the loss assessment or settle the claim within the stipulated period. It held the insurance company liable for deficiency in services.

Regarding the assessment of the crop damage, while the complainant did not provide concrete evidence of 100% crop loss, the District Commission held that the insurance company failed to supply the surveyor report. As per operational guidelines, it held that the insurance company was obligated to appoint a surveyor within 10 days of the intimation and release claim payment within 15 days from the receipt of the assessment report, which it failed to fulfil. Consequently, the District Commission assessed the loss at 80% of the insured crop.

The District Commission directed the insurance company to pay Rs. 77,706.3/- to the Complainant for the loss of the insured crop, along with interest and compensation for mental agony and harassment. The insurance company was also directed to pay a compensation of Rs. 10,000/- to the Complainant along with Rs. 5,000/- for the litigation costs incurred by her.

Case Title: Kavita Rani vs IDBI Bank and Others

Case Number: CC/470/2022

Advocate for the Complainant: Shri P.K. Berwal

Advocate for the Respondent: Shri T.M. Singh (For R1), Shri Ravinder Kumar Arora (For R2), Shri Ishwar Singh (For R3)