Rajasthan High Court Directs Cooperative Bank To Pay PMFBY Insurance To Farmers, Says They Cannot Suffer Due To Data Entry Error

Rajasthan High Court directed the Nagaur Central Cooperative Bank (“Bank”) to disburse the insurance money to farmers, opining that the farmers could not be denied benefits under the Pradhan Mantri Fasal Bima Yojna (PMFBY) owing to error committed by the cooperative societies in filling the data on the National Crop Insurance Portal (“NCIP”). The bench of Justice Kuldeep Mathur was hearing a bunch of petition filed by a number of farmers who had suffered losses due to crop failure in the year 2020, but still had not received the insurance claim under the PMFBY. On the contrary, the Bank had filed a petition seeking quashing of order by the High Level Committee that ordered it to pay to the farmers. The farmers were members of a cooperative society and had opted for crop insurance which was implemented by the PMFBY. When their crop failed, and the insurance amount was claimed, it was revealed that the name of Patwar Area was wrongly entered on the NCIP by the inadvertent error of the cooperative society. Subsequently, petitions were filed by the farmers contending that they could not be penalized for a mistake of the bank officials. The Court by an earlier order directed constitution of a high-level committee which decided in favour of the farmers, and asked the Bank to pay the insurance money to the farmers. The order was challenged by the Bank on the ground that the role of the Bank under the PMFBY was limited to that of an intermediary, who did not verify the correctness of the underlying beneficiary details. It was submitted that since the erroneous data came from the cooperative society, liability could not be fastened upon the Bank. After hearing the contentions, the Court highlighted that farmers had no role or control over the data filling process, and referred to the administrative orders and guidelines for implementing the scheme, issued by the Department of Agriculture, Farmers Welfare and Cooperation in 2019 and 2020. It was stated that as per paragraph 24 of the notification, the decision of the Central Committee carried binding force and could not be interfered with lightly, under the writ jurisdiction. The Court further observed that, “This Court, keeping in view the clauses of the revamped operational guidelines of the PMFBY reproduced above and the orders of the High Level Committee, cannot accept the contention of learned counsel for the Co-operative Bank that its role was merely that of a middleman and that it is thereby absolved of any responsibility with respect to the correctness of the data uploaded on the insurance portal.”It held that the scheme and the notification casted duty on the bank to check and recheck all the entries before uploading data. The bank could not be permitted to dilute this responsibility by shifting the entire blame on the cooperative society. “The petitioners are small and marginal farmers having their only source of income based on farming, and to protect their livelihood, the Government of India has implemented the Pradhan Mantri Fasal Bima Yojana. However, the Co-operative Bank has deprived the farmers of the benefit of such scheme without there being any fault on their part. Rather, the petitioners–farmers had to suffer the agony of litigation thrice to obtain their legitimate claim under the scheme.”Accordingly, the bank was directed to disburse the insurance claim amount to the petitioners. Title: Purna Ram v Union of India & Ors., and other connected petitionsCitation: 2026 LiveLaw (Raj) 93Click Here To Read/Download Order

Rajasthan High Court Directs Cooperative Bank To Pay PMFBY Insurance To Farmers, Says They Cannot Suffer Due To Data Entry Error

Nupur Agrawal

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