Agricultural insurance: Can't introduce reduction factor

The National Consumer Commission has directed Agricultural Insurance Co Ltd to fully compensate a potato farmer without arbitrarily introducing a ‘reduction factor’ in the insured amount. The judgement in Agricultural Insurance Co vs SK Chandragowda stated that the “least one could expect from a public authority (insurance company) is fairplay and it cannot act arbitrarily and apply certain formulations or formula to the detriment of the other party which has got no provision in the scheme and operation modalities of the National Agricultural Insurance Scheme (NAIS) issued by the Ministry of Agriculture, Government of India.”

The farmer in this case insured his crop but due to shortfall in rains, it was damaged. His insurance claim was rejected, forcing him to move the consumer court. The defence of the insurer was that a reduction factor of 36 per cent was introduced by it after an investigation of the crops in the region by the Agriculture Finance Corporation Ltd. The rest of the amount was given to the farmer. The National Consumer Commission stated that this step was unfair as there was no provision in the NAIS for reducing the amount of compensation against the insured amount and area of the crop.

 

Director’s liability in criminal cases
The Supreme Court has quashed the order of the Bombay high court and set aside the complaint against the chairman and managing director and directors of Gharda Chemicals Ltd, a public limited company, which was building and renovating its premises. A lawyer in the adjacent plot had complained against them before the police for restraining his movement during the construction. The magistrate issued summons after taking cognisance of the complaint. They moved the high court for quashing the criminal complaints against them. But the high court dismissed their application.

Then they appealed to the Supreme Court (Keki Hormusji vs Mehervan Rustom). It quashed the proceedings, stating the CMD and the directors could not be held vicariously for the alleged offence merely because they held posts in the firm. “The MD and the directors of the company should not have been summoned only because some allegations were made against the company,” the court said. Citing an earlier decision in the case of Pepsi Foods Ltd (1998), the court underlined that summoning an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The magistrate should not behave like a silent spectator but apply his mind before taking action.

Mediator in raising power tower
The Supreme Court recently defused a dispute between the Power Grid Corporation of India, a poultry farmer and a landlord in the case, M/s Ramakrishna Poultry (P) Ltd vs R Chellappan. The poultry company built sheds by acquiring land. Meanwhile, the corporation took up construction of 400 KV line as part of its thermal station expansion. It had to raise towers in private lands, one of which was on the poultry farm. The firm protested against it and approached the district magistrate for realignment of the power lines. He ordered so.

However, the neighbouring farmer was affected by the realignment and so he moved the high court. It held that the district magistrate had no powers to order realign the power lines. The poultry firm appealed to the Supreme Court against the high court judgment. It allowed the appeal, but offered a new formula, raising the height of the pylons at key places to protect the chickens.

Labour: Civil courts can’t decide on industrial disputes
The apex court has set aside the judgment of the Kerala high court in case, Apollo Tyres Ltd vs CP Sebastian, and asserted that civil courts have no jurisdiction to decide labour matters. In this case, the general secretary of the trade union in the Kerala factory was promoted and transferred to a unit in West Bengal. He refused the promotion and resisted the transfer.

He moved the civil court asking it to restrain the management from interfering with his right to perform legitimate trade union activities in the Kerala unit. He also asked the court not to force him to accept any promoted post. The civil court dismissed his petition, but the high court ruled that the issue could be decided by the civil court. On appeal by the company, the apex court declared that the issued was in the nature of an industrial dispute. “There are many powers which the labour court or the industrial tribunal enjoy which the civil court does not enjoy, e.g. the power to enforce contracts of personal service, to create contracts, to change contracts.”

A contract for personal service includes all matters relating to the service of the employee, eg confirmation, suspension, transfer and termination.”