The National Consumer Disputes Redressal Commission (NCDRC) recently directed the Agricultural Insurance Company of India Ltd to refund the premium paid by 61 farmers from Kurnool in Andhra Pradesh, for not disclosing all details of the crop insurance policy to them (K. Krishna Venamma V. Deputy General Manager, Agriculture Insurance Co of India Ltd. and Ors).
The Commission also directed the insurance company to pay Rs40,000 to each of the farmers for mental agony, harassment and as litigation costs.
The mango crop of the farmers in 2012 had suffered losses due to adverse weather conditions. However, the insurance company had rejected the claim on the ground that there had been no high speed wind as claimed by the farmers.
The Commission said there was deficiency of service on account of non-disclosure of full scheme details to the farmers.
"This fact of not sharing the true intricacies of the Scheme, which is highly technical and also complicated, should have been explained to the farmers before they were lured into paying premium to the extent provided and getting the insurance cover," Presiding Member Binjoy Kumar said in the ruling.
The Commission observed that pamphlet circulated by the insurance company contained extremely limited information.
It also noted that State had ordered wide publicity and awareness of the scheme by the department of horticulture and agriculture in coordination with the insurance company.
"Herein while some responsibility rests with the Department of Horticulture/ Agriculture of the State Government, who are not party to these Revision Petitions, it is to be borne in mind that the administration of the scheme was only with the Insurance Company. Therefore, since the premium was being collected by them, the primary responsibility for disclosure, in my considered opinion, rests with the Insurance Company,” the Commission said in its June 25 order.
However, the Commission agreed that the claim with regard to the loss of mango crop made by the farmers was not in accordance with the government scheme being implemented by the insurance company.
"In such situation, deficiency of service on this account cannot be held against the Insurance Company. The deficiency of service is only in respect of the non-disclosure of the full particulars of the Scheme to the farmers," it said.
In the present case, the mango crop of the farmers was insured under a 2010 Government of India scheme called Weather Based Crop Insurance Scheme (WBCIS).
Under the scheme, the concerned State governments were directed to issue separate notifications giving details of the main features of the scheme.
In 2012, Andhra Pradesh government notified certain districts including Kurnool for implementation of the scheme with respect to mango and banana crops.
The farmers paid their part of the premium to the insurance company and their mango crop was accordingly insured for the season.
However, due to certain adverse weather conditions as alleged by the farmers, the mango crop suffered losses prompting the farmers to file a complaint before the Kurnool District Consumer Disputes Redressal Forum.
The District Forum found the insurance company deficient in service for not compensating the farmers and awarded payment based on 70 percent of the insured amount.
However, the Andhra Pradesh State Consumer Disputes Redressal Commission reversed this decision, leading the farmers to file the present petition before the NCDRC.
