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Judgment
Heard Mr. R. Baruah, the learned counsel for the appellants. Also heard Ms. R. D. Mozumdar, the learned counsel for the respondent No.2, Mr. K. K. Dey, the learned counsel for the respondent Nos. 6 and 7 and Mr. C. K. S. Baruah, the learned Government Advocate, Assam, for respondent Nos. 3, 4, 5, 8 and 9.
This appeal under Section 96 of the Code of Civil Procedure (CPC) is preferred by the appellants against the judgment and decree dated 04.09.2013 passed in Title Suit No.08/2011 by the learned Civil Judge, Morigaon dismissing the suit of the plaintiffs/appellants.
The plaintiffs/appellants filed the suit for recovery of Rs. 28,75,000/- as the claim for damage of insured Boro paddy cultivated by the plaintiffs/appellants and insured under the National Agricultural Insurance Company of India Limited, the defendant/respondent No.2. In the financial year 2007-08 the plaintiffs/appellants obtained loan from the State Bank of India, Raja Mayong Branch by mortgaging their individual agricultural land for cultivation of Boro paddy. The said loans were sanctioned individually and the crop was insured under the defendant/respondent No.2 and for that purpose an amount of 2 % from the sanctioned loan amounts were deducted by the respondent bank as the individual premium for the cultivation of Rabi Season crops for the year 2007-08 of the notified Mayong Area of Morigaon District.
The standing crops of the plaintiffs/appellants were totally damaged by hailstorm on 29.03.2008 at about 5 PM which was communicated to the Branch Manager, SBI, Raja Mayong Branch, the defendant/respondent No.6, the Circle Officer of the Mayong Revenue Circle, the pro-forma defendant respondent No.8 under the Deputy Commissioner, Morigaon and to the District Agricultural Officer of Morigaon District, the pro-forma defendant/respondent No.9. A joint enquiry was conducted by the Circle Officer, Mayong Revenue Circle and District Agricultural Department of Morigaon and certified damage of 80% of the standing crops under the notified Mayong Area. Mayong Anchalic Krishak Sommittee was registered under the Societies Registration Act later with the individual plaintiffs/appellants as Members of the Society and the plaintiff/appellant No.2 as the Secretary took up the matter on behalf of the Society with the Branch Manager of defendant No.6 but the Insurance Authority did not assist the inquiry conducted by the Circle Officer and the District Agricultural Officer as per guideline of National Agricultural Insurance Scheme issued by the defendant respondent No.2. Upon advice of the defendant/respondent No.6, the plaintiffs/appellants No.1 and 2 filed CP Case No.01/2009 before the President, District Consumer Forum, Morigaon and later on, the same was withdrawn by obtaining liberty to file a fresh suit vide order dated 15.12.2010 of the District Consumer Forum.
Notices under Section 80 of the CPC were issued to the defendants/respondents No.1 to 7 on 04.02.2011. The Insurance Company i.e. the defendant/respondent No.2 on receipt of the said notice under Section 80 CPC denied/repudiated the claim of the plaintiffs/respondents. It is pleaded that the paddy cultivated by the plaintiffs/appellants were insured by the defendant/respondent No.6, SBI as the agent of the defendants/respondents No.2 and 7 as per the provision of the National Agricultural Insurance Scheme of the defendant/respondent No.2, Insurance Company. The State Government, the Insurance Authority and the Financial Bank cheated the plaintiffs/appellants by deducting the premium from the loan amount in order to insure the paddy and the repudiation of the claim against loss is wrongful and as such, they filed the suit. The cause of action as pleaded in the plaint arose on 29.03.2008 when the crops were damaged by hailstorm, 30.03.2009, the date on which the information of damage to the crops was communicated to the State Bank of India and after denial of the claim by the Insurance Company fresh cause of action accrued and as such the suit is within the period of limitation.
The defendant/respondent No.1, Union of India filed its written statement and took the defence that the Agricultural Insurance Company of India i.e. the defendant/respondent No.2 is the Nodal Implementing Agency of the National Agricultural Insurance Scheme (NAIS). As the subject matter of the instant case relates to settlement of claims based on the report of the Circle Officer, Morigaon is not as per the guidelines of the scheme and the defendant/ respondent No.2 is required to settle the claims as per the provision of the scheme based on the yield data furnished by the State based on the requisite number of Crop Cutting Experiments conducted under General Crop Estimation Survey and not on any other basis like report of the Circle Officer supported the reply issued by the defendant/respondent No.2 against the notice under Section 80 of the CPC.
The defendant/respondent No.2 also filed its written statement thereby pleading that the scheme NAIS envisages coverage of all crops and scheme operates on the basis of "defined area" which may be Gram Panchayat, Circle, Block, Taluka, etc. to be notified by the State/Union Territory Government who are authorized under the plan and conduct requisite number of Crop Cutting Experiments and the Threshold Yield (TY) or Guaranteed yield for a particular crop in an Insurance Unit is the moving average based on past 3 years average yield in case of rice and wheat and 5 years average yield of other crops multiplied by the level of indemnity. The yield data once received from the State as per the prescribed cut-off date, the claims will be worked out and settled by the Insurance Agencies. The claim cheques alongwith the claim particulars will be released to the individual Nodal Banks and the Banks at the grass-root level shall credit the accounts of the individual farmers. During the Rabi 2007-08 season, Morigaon, Mayong and Mikirbheta areas were notified under the Morigaon Revenue Circle, the company received the yield data on the basis of 40 Crop Cutting Experiments and the company worked out the claims for the notified area. As there was no shortfall in the yield, no claim was payable for the crop in the notified areas under the Morigaon Revenue Circle. The defendant/respondent No.2 received three declarations from the defendant/respondent No.6 bank covering 476 loanee farmers under the scheme and the defendant/respondent No.2 received the premium through 4 Demand Drafts amounting Rs.1,74,430/- from the defendant No.6, SBI and the date so pleaded of receipt of the bank drafts are subsequent to 29.03.2008 i.e. on 16.06.2008. Specific denial was made with respect to the receipt of any communication from the insured farmers or from the district authorities and as such, the question of denying assistance to the enquiry does not arise. There is no shortfall in the Actual Yield Data submitted by the Government of Assam for the Boro paddy crops and hence, no claims payable to the insured farmers.
The defendant/respondent No.6, the State Bank of India also filed a separate written statement. It is pleaded that as per the provisions of the scheme, the plaintiffs/appellants approached the bank and expressed their willingness to avail loan from the bank by mortgaging their cultivable Boro paddy land. Loan application forms alongwith the land documents were submitted and accordingly, loan was sanctioned to the plaintiffs/respondents alongwith coverage of insurance by deducting premium at the rate of 2 % from the sanctioned loan amount of its farmers and deposited the premium to the defendant/respondent No.2 for insurance coverage of the Boro paddy land of Rabi season for the year 2007-08 for the notified Mayong area of Morigaon district. Admitting the loan and the deduction of the premium for the insurance coverage the defendant bank denied the pleadings in the plaint.
On the basis of the pleadings of the parties, the learned trial court framed the following issues:-
"1. Whether there is any cause of action for this suit?
Whether the suit is maintainable in its present form?
Whether the suit is bad for non-joinder of necessary parties?
Whether the plaintiffs are entitled for decree for recovery of total sum of Rs. 28,75,000/- with interest @ 10 % till realisation as compensation of the demand caused by hailstorm on 29.3.08 from the defendants?
Whether the plaintiffs are entitled for any relief as prayed for?
To what relief/reliefs the parties are entitled to?"
The plaintiff side examined 4 witnesses and exhibited some documents. On the other hand, the defendants/respondents examined 2 numbers of witnesses and also exhibited some documents.
The learned trial court dismissed the suit. While taking up issue No.4 it was observed that the plaintiff's witnesses failed to bring on record as to when the loans were sanctioned. On the other hand it took note of the pleadings that the Boro paddy were totally damaged by hailstorm on 29.03.2008 and the matter was communicated to the defendant/respondent No.6, the Circle Officer and the District Agricultural Officer and on the basis of that information an inquiry by the District Agricultural Officer and the Circle Officer, Mayong Revenue Circle was conducted and it was certified that the damage was at the rate of 80 %. One Prafulla Kumar Bhuyan, PW-1 admitted that he does not know about the estimation of crops yield, loss assessment in case of localized calamities and procedure for settlement of claim prior to the institution of the suit. It is also held by the court below that the plaintiffs/appellants had not received the insurance policy and after damage of the crops it was informed to the Branch Manager, SBI immediately and as per the advice of the Branch Manager, SBI, they were asked to make correspondence with the Insurance Company. It is further observed by the trial court that the PW-1 admitted that they did not inform the matter within 48 hours of the damage of crops to the Insurance Company nor to the Deputy Commissioner, Morigaon. The PW-1 does not know that the Circle Officer is not the immediate authority. PW-2 also admitted that he does not know the contents of the insurance policy. PW-3, the Lat Mandal of Mayong Revenue Circle also was not aware of the Agricultural Insurance Scheme and he was not ordered by the Deputy Commissioner, Morigaon to determine the loss caused by the hailstorm. The PW-4 is the Sub-Divisional Agricultural Officer, Morigaon who proved the certificate issued by him as Ext-4 and deposed that the same was issued as per the request of the plaintiffs/appellants. The trial court took note of the procedure of loss assessment in case of localized calamities and held that as the plaintiffs/appellants did not inform the proper authority concerned within 48 hours of the damage of the paddy on 29.03.2008 on the basis of the evidence on record as such held that the plaintiffs/appellants are not entitled for the compensation and decided the issue No.4 against the plaintiffs/appellants.
The learned trial court took up issue Nos. 1 and 2 though separately but held that there is no cause of action for the suit and the suit is not maintainable. The learned trial court considered that the plaintiffs/appellants claimed the compensation on the basis of cause of action which arose on 29.03.2008, 05.11.2008, 04.02.2011, 14.02.2011 and 05.03.2011 and held that as per Limitation Act for compensation on breach of a promise to do anything at a specified time or upon the happening of specified contingency, the prescribed period of limitation is 3 years and as the crops of plaintiffs/appellants damaged on 29.03.2008 and the suit filed on 25.10.2011, the same was found beyond the period of limitation. It further held that the plaintiffs/appellants ought to have filed the suit within 29.03.2010 and as such, there is no cause of action to institute the suit on 25.10.2011 and the suit is not maintainable. On the basis of the said findings issue Nos. 5 and 6 were decided against the plaintiffs/appellants resulting dismissal of the suit.
Being aggrieved by the said judgment and decree of the trial court, present appeal is filed under Section 96 of the CPC. Mr. Baruah contends that the court below was wrong in deciding the issue Nos. 1 and 2 inasmuch as the defendants/respondents acknowledged the liability within the period of 3 years as prescribed by the Limitation Act. Notice under Section 80 of the CPC was issued on 04.02.2011 and the respondent No.2 received it on 14.02.2011 and thereafter, vide reply dated 31.03.2011 repudiated the claim of the plaintiffs/appellants.
Mr. Baruah further submits that the finding of the issue No.4 is also perverse inasmuch as the matter was informed to the Circle Officer who is a competent officer under the District Revenue Administration. Moreover, as the premium was deducted from the loan amount the paddy crops were covered duly under the Insurance Scheme and the court below merely holding that the information was not fed to the Insurance Company within 48 hours cannot itself be a ground to hold that the plaintiffs/appellants are not entitled for the claim.
Ms. Mozumdar, on the other hand, submits that the court below was wrong in the approach so far the point of limitation is concerned inasmuch as the same is governed under Article 44(b) of the Limitation Act. However, on the point of payment of the insurance premium @ 2% from the plaintiff/appellant, Ms. Mozumdar referring to the written statement and the evidence of the respondent No.2 specifically submits that on the date of hailstorm crops were not covered by the Insurance Policy as the State Bank of India deposited the premium of Rs.1,74,430/- on 16.06.2008 by way of 4 number of Demand Drafts i.e. much after 29.03.2008. However, she submits that on receipt of the premium the policy and the coverage started with effect from 16.06.2008 only.
Mr. Dey though supported the findings of the court below however vehemently objects to the submission made by Ms. Mozumdar that there was delay in remitting the premium of the Insurance Policies of the individual plaintiffs/appellants inasmuch as the same was credited to the account of the insurance company on the very date of deduction of 2 % of the loan amount.
From the submissions of the learned counsel, the point for determination are as follows:-
Whether the findings on issue Nos.1 and 2 are proper?
Whether the premium was received by the Insurance Company immediately after its deduction and whether on the date on which the hailstorm lashed out the paddy crops, the same was covered under the various individual policies?
On perusal of the case record, it is found that the incident occurred on 29.03.2008 and thereafter, though they filed an application for compensation before the Consumer Forum they withdrew it and thereafter, they issued notices under Section 80 of the CPC to all the respondents on 04.02.2011. The respondent No.2, the Insurance Company received the same on 14.02.2011 i.e. within 3 years from 29.03.2008 as apparent from the A/D card which is Ext-10(iv). The letter dated 31.03.2011, Ext-9 by the insurance company was addressed to the counsel representing the plaintiffs/appellants and repudiated the claim on the ground that the notice was issued by Mayong Anchalic Krishak Sommittee a registered body under the Registration Act which was registered on 08.09.2008 much after the damage of the paddy on 29.03.2008. The society admits that the members in their individual capacity took loan but not by the society and as such, the society is not a party to the contract with Insurance Company, the defendant/ respondent No.2. Hence, there is no cause of action. Accordingly, it was informed that the plaintiffs/appellants were not entitled to claim any damage. The suit is governed by Article 44(b) of the Limitation Act, 1963 which stipulates that the period of limitation is 3 years from the date of occurrence causing the loss or where the claim on the policy is denied either partly or wholly then from the date of such denial. Here in the present case in hand, notice was issued on 04.02.2011 within 3 years from 29.03.2008, the date of hailstorm. Thereafter, on receipt of the said notice on 14.02.2011 i.e. within 3 years from 29.03.2008 by the defendant/respondent No.2 it replied on 31.03.2011 denying the claim of the plaintiffs/appellants. The learned court below has gone wrong while deciding the issue Nos. 1 and 2 inasmuch as the suit is well within the period prescribed under Article 44(b) of the Limitation Act, 1963 and the suit is not barred by limitation.
In the plaint, the plaintiffs/appellants raised that they were cheated inasmuch as they paid the premium, they intimated the Circle Officer and even then, the Insurance Company repudiated the claim. The learned court below came to the finding from the appreciation of evidence of PW-1 that he did not receive the Insurance Policy and as such, he was not aware of the terms of the insurance policy. On the other hand, from the submission of Ms. Mozumdar it is found that the Demand Drafts of the insurance premium of the plaintiffs/appellants were received by the Insurance Company on 16.06.2008. The scheme was admittedly for the financial year 2007-08 and loan was disbursed in the month of March 2007 before the financial year ending 2007-08. The deduction of the premium at the rate of 2 % of the loan amount is admitted by the State Bank of India and on the face of the said stand the counter stand taken by the Insurance Company that the premium were received belatedly is a point to be decided inasmuch as there is a plea of cheating taken by the plaintiffs/appellants. Further in the repudiation letter the insurance company informed that the Committee was not a party to the contract of indemnification but in the suit the stand is otherwise i.e. as the claim was not lodged within 48 years from its happening so it was repudiated which is an admission of coverage of the crops under the policies. But the policy was not received by the plaintiffs/appellants and quite obviously the condition for lodging the claim within 48 hours in localised calamities cannot be pressed by the Insurance Company. Moreover, as held hereinabove, the point of limitation as held by the learned trial court cannot be accepted. In view of the aforesaid discussion, I have no other alternative but to decide both the point for determination in favour of the plaintiffs/appellants.
As there is claim and counter claim with respect to the deposit of premium to the Insurance Company which is established further by the deposition of the PW-1 that Insurance Policy was not received by him it would be proper to set aside the judgment and decree passed by the trial court and remand Title Suit No.08/2011 to the court of learned Civil Judge, Morigoan to decide it afresh alongwith the following additional issue:-
(A) Whether the defendants are jointly and severally liable to compensate the plaintiffs/appellants against their claim and whether the letter dated 31.03.2011 issued by the counsel for and on behalf of the defendant No.2 is liable to be set aside?
In order to decide the said additional issue, parties to the suit shall be at liberty to adduce fresh evidence. Accordingly, the judgment and decree passed by the trial court is set aside and Title Suit No.08/2011 is remanded back to the learned court of Civil Judge, Morigaon to decide all the issues alongwith the additional issue keeping in view the observations made hereinabove and pass the judgment afresh.
LCR be sent back. No cost.
On receipt of the LCR, the learned court of Civil Judge, Morigoan shall issue notice to the parties to the suit and thereafter shall make an endeavour to dispose of the Title Suit No.08/2011 within a period of 3 (three) months from the date of appearance of the parties.