PER MR PREM NARAIN, PRESIDING MEMBER The present first appeal no. 130 of 2012 has been filed by M/s Progressive Agro Farms and Anr., and first appeal no.196 of 2012 has been filed by Oriental Insurance Co. Ltd., challenging the order dated 22.12.2011 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (the State Commission) in Consumer Complaint no. 37 of 2007. As these are cross appeals, the parties will be called by their party names as mentioned in 2. the order of the State Commission. The brief facts relevant for the disposal of the present appeals are that 20 acres of land was 3. taken on lease by the complainant and loan was taken from the bank for the project Safed Musli. HDFC bank sanctioned the loan of Rs.45 lakh with the condition that the crops must be insured. Though, the musli was sown in July, however, the crop was ultimately insured from 31.10.2005 to

30.10.2006. When the crop safed musli was finally dug out it was found that production of safed musli was very less than as compared to the norms as there was infestation of nematodes. Accordingly, the claim for the loss was filed before the insurance company. The surveyor was -2- appointed by the insurance company and the surveyor assessed the loss to the tune of Rs.7,56,423/-. After receiving the surveyors report, the insurance company appointed an investigator and 4. the investigator has opined that the crop was insured about three months after sowing and by that time the crop was already infested by infection at the initial stage. The investigation also questioned the insurance of the crop after three months of sowing without any reasons. Based on the surveyors report and the investigators report, the insurance company repudiated the claim vide letter dated 19.07.2007. Aggrieved by this, the complainant filed a consumer complaint before the State 5. Commission. The complaint was resisted by the insurance company by raising the same grounds as in the repudiation letter, however, the State Commission allowed the complaint partly vide its order dated 22.12.2011 by directing the insurance company to pay Rs.12,17,766.03 to the complainant. Hence, the present appeals. Aggrieved, the complainant has preferred an appeal against the order of the State 6. Commission for enhancement of the insurance amount on the ground that there was total loss to the crop of safed musli. The insurance company also preferred appeal against the order of the State Commission claiming that no amount is payable to the complainant. Heard the learned counsel for the appellant and perused the records. The learned counsel for 7. the complainant stated that the surveyor has himself assessed in his report that the total crop was insured for Rs. 38 lakh and the actual crop of safed musli was sold to Diverse Agro for Rs.3,66,000/-. It was stated by the learned counsel that the State Commission has relied on the letter dated 03.05.2006 which was written by the complainant informing that there may be loss to the crop to the tune of 30% to 40%. On this basis the State Commission has allowed Rs.12,17,766.03 as gross loss assessed by the surveyor. It was stated that the loss has occurred to the tune of 90% but the compensation has been given for about 30-35%. The loss has not been denied by the surveyor and therefore the insurance company is liable to pay the total loss suffered by the complainant. Coming to the report of the investigator, the learned counsel for the appellant has stated that 8. it is wrong to say that when the crop was insured it was already infested. Crop was inspected by various persons of the insurance company. It was further stated that the crop was in a very good condition when the crop was insured. Learned counsel has stated that when the crop was dug out, the representative of the insurance company and the surveyor was also present and he was taking down notes in his diary, though no joint report has been filed. On the other hand, the learned counsel for the insurance company has stated that the 9. surveyor has assessed the loss at Rs.7,56,422.76 and the State Commission has wrongly allowed the insurance claim for Rs.12,17,766.03. It was further stated by the learned counsel that the investigator has given a clear opinion that the insurance was taken when the crop was already infested. Generally, for every crop, insurance is taken from its sowing till harvesting, but in the present case it is not clear as to why the insurance was taken after three months of sowing. The learned counsel has argued that if the crop was already infested, no insurance claim is payable. However, even if certain insurance claim is considered for approval, the same cannot be for an amount more than that assessed by the surveyor. I have carefully considered the arguments advanced by the learned counsel for the parties 10. and perused the records. It is a general practice that a crop insurance is taken on its sowing till its harvesting, because, if any insurance is taken in between after a lapse of sometime after the sowing, the crop will always remain at risk due to various factors which have already contributed to the development of the crop but may not be in the knowledge of the insurance company. The investigator has rightly pointed out this fact that the insurance was taken when the crop might already be infested. This seems probable on two counts; firstly, the insurance was not taken at the time of sowing and it was taken when the crop was about three months old. Secondly, there is no inspection report of the surveyor or any representative of the insurance company stating that the crop was infestation free when the insurance was taken. It has been stated that there was a purchase agreement with Diverse Agro with the complainant, however, it is not clear as to what was the schedule of handing over the product to the Diverse Agro. Though the complainant has stated that the surveyor or his representative was present when the crop was dug out, however, there is no joint statement of production signed by the surveyor or any representative of the insurance company, therefore, the figures given by the complainant may not be totally prima facie reliable. On these grounds, the claim of the complainant becomes doubtful. However, as the insurance was agreed by the insurance company and it agreed to insure the three months old crop, this ground cannot be taken by the insurance company when pest and disease was a covered peril under the policy and the insurance company should have got the crop inspected at that time from their own machinery. As the same was not done, the insurance company cannot now raise this question that the crop might be infested at the time of insurance. Based on the above discussion, I would like to agree with the finding of the State 11. Commission that the insurance claim is payable. The surveyor has arrived at a figure of Rs.12,17,766.03 as gross loss assessed on actual loss basis. The surveyor has then arrived at the net loss by taking 60% of this amount, as perhaps, the crop was nine months old. The State Commission has not accepted this reduction by observing that the crop may be 10-11 months old, hence this factor should be 100% instead of 60%. As the actual loss has been known to the complainant only after the tubers were dug out, hence, I do not find fault with the observation of the State Commission. However, the State Commission has not deducted the policy excess of 10% from this amount which is a mandatory provision of the policy. Hence, in my view, the complainant is only entitled to Rs.10,95,990/- (Rs.12,17,766 Rs.1,21,776) only. Based on the above discussion, FA no. 196 of 2012 is partly allowed and the order of the 12. State Commission dated 22.12.2011 is modified to the extent that an amount of Rs.10,95,990/- (Rupees ten lakh ninety five thousand and nine hundred ninety only) will be substituted in place of Rs. 12,17,766.03. Rest of the State Commissions order shall remain unchanged. Once the FA No. 196 of 2012 is partly allowed, FA no. 130 of 2012 filed by the complainant fails and the same is dismissed. ...................... PREM NARAIN PRESIDING MEMBER