In the High Court of Karnataka Dharwad Bench

: 1 :

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

DATED THIS THE 1 ST DAY OF OCTOBER, 2015

BEFORE

THE HONOURABLE MR.JUSTICE ANAND BYRAREDDY

Writ Petition No. 63094/2010 (GM-RES) Connected with Writ Petition Nos.63378/2009, 63145/2010 and 66194/2009

W.P. No.63094/2010 :

Between:

1. Smt. Nagavva W/o. Shankrappa Pujar Age. 71 years, Occupation Household R/o. Amminabhavi village, Taluk and District Dharwad.

2. Kallappa S/o. Shankrappa Pujar Age. 43 years, Occupation Agriculturist R/o. Amminabhavi village, Taluk and District Dharwad.

3. Smt. Kasturevva W/o. Mallappa Angadi Age. 48 years, Occupation Agriculture R/o. Amminabhavi village, Taluk and District Dharwad. : 2 :

4. Basappa S/o. Shekappa Angadi Age. 41 years, Occupation Household R/o. Amminabhavi village, Taluk and District Dharwad.

5. Smt. Iravva W/o. Bharamappa Angadi Age. 35 years, Occupation Household R/o. Amminabhavi village, Taluk and District Dharwad.

6. Smt. Neelavva W/o. Basavaraj Ghanti Age. 31 years, Occupation Household R/o. Amminabhavi village, Taluk and District Dharwad. … Petitioners (By Shri Gangadhar S. Hosakeri, Advocate)

And :

1. The Managing Director Agricultural Insurance Corporation Of India Limited, Regional Office, 25, I Floor, Shankar Narayana Building, M.G. Road, Bangalore-1.

2. UCO Bank Amminabhavi Branch Amminabhavi, Taluk and District Dharwad. … Respondents (By Shri N.P. Vivekmehta, Advocate for respondent No.1; Shri R.V. Bellakki, Advocate for respondent No.2) : 3 :

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the award dated 29.10.2009 passed by the Permanent Lok Adalat, Dharwad, in P.L.A. Petition No.1040/2009 vide Annexure-A.

W.P. No.63378/2009:

Between:

Bhoomappa S/o. Gadaigeppa Roogi Age 78 years, Occupation Agriculture, R/o. Byahatti, District Dharwad. … Petitioner

(By Shri P.G. Chikkanaragund, Advocate)

And :

1. The Managing Director Agricultural Insurance Corporation Of India Limited, Regional Office, (Karnataka), I Floor, Shankar Narayana Building, M.G. Road, Bangalore-560001.

2. The Manager Syndicate Bank, Byahatti, District Dharwad. … Respondents

(By Shri N.P. Vivekmehta, Advocate for respondent No.1; Shri Mallikarjun B. Hiremath, Advocate for respondent No.2) : 4 :

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the order dated 15.05.2009 passed by the Permanent Lok Adalat, Dharwad, in P.L.A. Petition No.206/2009 vide Annexure-E.

W.P. No.63145/2010 :

Between:

Smt. Gadigevva W/o. Basappa Itagi Age. 59 years, Occupation Agriculture R/o. Amminabhavi village, Taluk and District Dharwad. … Petitioner

(By Shri P.G. Chikkanaragund, Advocate)

And :

1. The Managing Director Agricultural Insurance Corporation Of India Limited, Regional Office, 25, I Floor, Shankar Narayana Building, M.G. Road, Bangalore-1.

2. UCO Bank Amminabhavi Branch Amminabhavi, Taluk and District Dharwad. … Respondents

(By Shri N.P. Vivekmehta, Advocate for respondent No.1; Shri Mallikarjun B. Hiremath, Advocate for respondent No.2) : 5 :

W.P. No.66194/2009 :

Between:

Smt. Munnabi W/o. Maktumsaheb Nadaf Age. 65 years, Occupation Household R/o. Kavalgeri, At present Shirastedar Galli, Madihal, Dharwad. … Petitioner

(By Shri P.G. Chikkanaragund, Advocate)

And :

1. The Managing Director Agricultural Insurance Corporation Of India Limited, Regional Office, (Karnataka), I Floor, Shankar Narayana Building, M.G. Road, Bangalore-560001.

2. The Manager Vevasaya Seva Sahakari Bank Limited, Govanakoppa, Taluk and District Dharwad. …Respondents (By Shri N.P. Vivekmehta, Advocate for respondent No.1; Respondent No.2 is served) : 6 :

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the order dated 22.10.2009 passed by the Permanent Lok Adalat, Dharwad, in P.L.A. Petition No.971/2009 vide Annexure-G.

These writ petitions coming on for hearing, this day, the Court has made the following:

ORDER

These petitions are disposed of by this common order, having regard to the common issue that arises for consideration.

2. The petitioners herein had filed a petition before the

Permanent Lok Adalat, Dharwad, against the respondents under

Section 22A(b)(vi) read with Section 22C(1) of the Legal

Services Authorities Act, 1987 (hereinafter referred to as ‘the

Act’, for brevity) claiming certain crop insurance amount with interest and also seeking compensation for mental agony suffered by them. The claim was uniformly in respect of the year 2003-04 khariff season. The petitioners had sought for award of costs as well. The petitioners are said to be the owners of respective agricultural lands situate at Amminabhavi : 7 : and surrounding villages. They had raised crops such as groundnut, onion, jowar and toordal during the said season.

3. The petitioners are said to have insured the crops with the Agricultural Insurance Corporation of India Limited through Financial Institutions and had paid the insurance premium along with the Declaration Forms and other necessary documents. They had complied with all formalities in that regard.

4. It transpires that the petitioners uniformly suffered losses, and therefore, sought the crop insurance. They were paid certain amounts, which the Insurance Company claimed was in full satisfaction of the claims, in terms of the Insurance

Policy. However, the petitioners being aggrieved of a shortfall in the said amounts paid, had raised the claim before the Lok

Adalat. There was a delay in filing the application and they had also sought for condonation of delay before the Lok Adalat.

They were not aware of the part payment of the crop insurance amount and it is only in retrospect they had realised that they : 8 : had been short changed in the settlement of their claims. This aberration had occurred since the insurance amount had been directly transferred to the loan accounts of the respective petitioners and it had gone unnoticed that they were not provided the entire amount to which they were entitled and it is only on realising the injustice that they had approached the Lok

Adalat.

5. The second reason for the delay was that normally any claim for insurance is invariably settled after two or three years from the date of claim, and therefore, it was not unusual for the petitioners to have overlooked the fact that the respondents had, in fact, paid certain amount, which was not the entire amount to which they were entitled and the third reason was that the petitioners were mostly illiterate persons and unaware of the legal proceedings especially the law of limitation, and hence, there was a delay.

6. It is their further grievance that the Lok Adalat without addressing the circumstances of the case, having : 9 : summarily dismissed the claim petitions on the ground of

Limitation without addressing the merits, the present petitions are filed.

7. It is the case of the petitioners that they are all claiming under the National Agricultural Insurance Scheme, which is introduced by the Central Government through the

Agricultural Insurance Company of India Limited and, in terms of the Scheme, the sum insured would cover the entire amount of loss and not merely the basis on which the respondents sought to claim, namely that there is a formula prescribed under the Scheme that a threshold yield which is specified for an

Insurance Unit based on the three years’ average yield in case of rice and wheat and five years’ average yield in case of other crops, multiplied by the level of Indemnity. This threshold yield is applied against the actual yield, when the actual yield is less than the threshold yield, the extent to which it falls short of the threshold yield is taken as the shortfall and the shortfall yield divided by the threshold yield. The sum of insurance is the amount payable and this according to the petitioners has : 10 : been taken into account by the Lok Adalat in earlier matters for the year 2003-04 in several matters. It is seen that the entire sum assured has been paid in respect of claims for losses of that year in respect of other farmers and the petitioners being denied their due, is therefore, unfair and unjust. The summary manner in which the Lok Adalat has rejected the petition on the ground of limitation was also misplaced.

8. It is pointed out that the law of limitation would only take away the right to a remedy and not the right itself and since the Lok Adalat is an extraordinary dispute resolution mechanism intended to expedite disposal of claims especially such as the ones now before this Court. The strict application of the Limitation Act was unfair and unjust in denying the claim of the petitioners.

9. The learned counsel for the claimants would contend that from a reading of the provisions of the Legal Services

Authority Act, it is evident that the Lok Adalat while for the purposes of determining any matter under the Act is vested with : 11 : the powers of a Civil Court, it is also found that it shall have the requisite powers to specify its own procedure for the determination of every dispute coming before it and the question of limitation should have been the last of the impediments in the Lok Adalat taking a proactive approach in addressing the grievance of the petitioners, who are poor farmers, who have suffered serious losses and which the insurance coverage was required to come to their aid and the same being denied only on the ground of limitation is a denial of a right of the petitioners which results in serious mis-carriage of justice, and hence, would seek the intervention of this Court in its extraordinary writ jurisdiction.

10. While the learned counsel for the respondent appearing for the Agricultural Insurance Company of India

Limited would point out that, even assuming that the Lok

Adalat would condone the delay in the petitioners having approached it insofar as the interpretation of the Scheme is concerned, from a plain reading of the several terms and conditions of insurance which are spelt out under the Scheme, it : 12 : is evident that the Scheme operates on the basis of an area i.e., a defined area for each notified crop for widespread calamities and on an individual basis for localised calamity such as hailstorms, land slides, flood and cyclones.

11. The Defined Area i.e., the Unit Area of insurance may be a Gram Panchayat, Mandal, Hobli, Circle, Phirka, Block,

Taluka etc., could be decided by the State Government or the

Union Territory. However, each participating State or Union

Territory and its Government will be required to reach the level of Gram Panchayat as the Unit in a maximum period of three years.

12. The Scheme also defines the actual yield per hectare of the insured crop for the Defined Area on the basis of the requisite number of Crop Cutting Experiments in the insured season and the threshold yield and the indemnity which the insurance is required to cover is also prescribed on a formula as below :

(Shortfall in Yield/Threshold yield)xSum insured for the farmer : 13 :

13. It is applying this formula that the sum assured has been released in favour of the petitioners.

14. It is not the case of the petitioners that they have not received any sum assured at all. It is the case of the petitioners that there is a shortfall in the amounts that have been credited to their accounts. Therefore, the question is, whether the petitioners are justified in claiming that they are entitled to the entire sum insured or only such shortfall in terms of the formula that is prescribed hereinabove.

15. The view taken by the Lok Adalat as well as by the

National Commission on an earlier occasion where the entire sum assured was to be released in favour of the claimant is subsequently reviewed by the National Commission. It is now the view taken in Agricultural Insurance Company of India

Limited versus versus Nain Singh and Others in Revision

Petitions No.2393-2394 of 2008 disposed of on 22.04.2009.

The view taken therein is as follows : : 14 :

“ There cannot be any doubt that the area is system, which is based on instructions given by the revenue department of each State keeping in view the local conditions. Question before us is that applicability of the Scheme in terms of area declared affected by drought? Like the answer given to the query above, our answer also would be ‘No’. If anyone at the District Forum or State Commission had gone through the provisions of the Scheme, it is clear that the Scheme envisages compensation for the yield differential between ‘threshold level’ as arrived at by a Committee envisaged under the Scheme, and the actual yield levels on an ‘area approach’, which will be taluka/block or is equivalent. It flows from the above that mere declaration of area affected by drought would not make the insured eligible for any compensation for the simple reason that actual area-wise yield levels form the cropping season, and ‘threshold level’ declared by the State Government are the basis, and the difference between two is really compensated. This procedure has not been followed by both the lower fora, while making the petitioner liable to pay the amounts awarded in respect of each case. These : 15 :

orders passed in such cases cannot be sustained in view of provisions of the scheme and clarification of those schemes given by Government of India, the relevant portion of which has been reproduced earlier.”

16. Therefore, the reliance sought to be placed on earlier decisions of the Permanent Lok Adalat to claim the entire sum assured as set up by the present petitioners, is no longer relevant as the National Commission has changed its earlier view and since the Lok Adalat was merely following the opinion expressed earlier by the National Commission that is no longer the good law and in view of the Division Bench of this

Court in Writ Petition No.16462 of 2007 and connected petitions having followed the same view of the National

Commission by its order dated 31.05.2010 in the case of

Agricultural Insurance Company of India limited versus

Dyavanagouda and others in connected writ petitions. The legal position is well settled. : 16 :

17. The petitioners would only be entitled in terms of the formula, whereby the shortfall in yield is divided by the threshold yield multiplied by the sum insured. There is no substance in the contention, on merits, that the petitioners would be entitled to the entire sum assured. Consequently, the petitions lack merit and are dismissed.

Sd/- JUDGE hnm/