The Calcutta High Court has held Punjab National Bank (PNB) responsible for the failure of crop insurance coverage under the West Bengal Government’s Bangla Shasya Bima (BSB) Scheme. The Court directed the bank to refund the crop insurance premiums deducted from the farmers’ loan accounts along with interest. It also ordered the bank to assess and pay compensation to farmers who suffered losses because their insurance policies were never issued.
Background of the Case
The case was filed by a group of farmers from Kotulpur in Bankura district, West Bengal. They had enrolled under the Bangla Shasya Bima Scheme for the 2019–2020 crop season and paid the required insurance premiums through the Kotulpur branch of Punjab National Bank.
However, when they later claimed insurance benefits, they discovered that no insurance policies had actually been issued in their names. As a result, they were denied compensation for crop losses.
Earlier Court Orders
Earlier, the High Court had directed the National Insurance Company to extend the deadline for accepting premiums and asked Punjab National Bank to deposit the pending premium amounts. Later, the farmers filed contempt petitions alleging that these directions had not been followed.
During the contempt proceedings, the insurance company argued that the Bangla Shasya Bima Scheme had already expired before the writ petitions were filed. It also stated that the bank had failed to upload the mandatory farmer-wise details and declarations required under the scheme, due to which no insurance policies were created.
Bank’s Defence
Punjab National Bank argued that it had deposited the insurance premiums and that technical problems in the Crop Insurance Portal prevented it from uploading the farmers’ details. The bank also claimed that once the premiums were accepted, an insurance relationship had been created and the insurance company should have collected the remaining information.
The insurance company disagreed and argued that under the scheme guidelines, it was the bank’s responsibility to upload the required farmer details and documents.
High Court’s Findings
The High Court observed that it had the power to review and recall its own earlier orders if there was a clear legal error. It noted that the Bangla Shasya Bima Scheme had already expired before the petitions were filed. Therefore, the Court held that it could not revive an expired government scheme through judicial orders, as policy decisions are the responsibility of the government.
The Court recalled its earlier judgments that had attempted to revive the scheme.
Bank Failed to Complete Mandatory Process
The Court found that the Operational Guidelines of the Bangla Shasya Bima Scheme clearly required the nodal bank to upload the details of each insured farmer, along with declarations and other mandatory documents. Although the bank had collected the insurance premiums, it admitted that it had not uploaded these required details.
The Court held that under Clause XVII of the scheme, the bank was responsible for such failures. It also rejected the bank’s argument that the insurance company was required to collect the missing information, stating that this provision applied only to non-loanee farmers and was optional, not mandatory.
Technical Glitch Not Accepted
The High Court also rejected Punjab National Bank’s explanation that technical glitches in the portal prevented the uploading of data. It observed that the bank failed to provide any evidence about the nature or duration of the alleged technical problem.
The Court further stated that the bank could have used alternative methods to send the required information. It held that merely depositing the premiums without submitting the mandatory farmer details could not create valid insurance policies.
The Court concluded that the failure to issue insurance policies was entirely the responsibility of Punjab National Bank.
Court’s Directions
The High Court directed Punjab National Bank to refund the entire insurance premium collected from each farmer within 30 days, along with interest at 12% per annum from the date of deposit until payment. If the bank fails to make payment within 30 days, it will have to pay additional interest at 6% per annum on the total outstanding amount.
Compensation for Farmers
The Court also directed the affected farmers to submit their compensation claims to Punjab National Bank by August 31, 2026. The claims should include details of the insurance benefits they lost and the financial losses suffered due to the absence of insurance coverage.
After receiving the claims, the bank must examine them by October 31, 2026. It may appoint valuers, insurance experts, and obtain reports from the State Meteorological Department or other authorities to assess the losses. The bank must provide each farmer with a written reasoned order explaining how the compensation amount was calculated and must give the farmers an opportunity to present their documents and arguments.
Right to Challenge Compensation
The High Court clarified that if any farmer is dissatisfied with the compensation determined by Punjab National Bank, they are free to challenge the assessment before the appropriate court or legal forum.
Since the Court recalled its earlier orders, the contempt petitions were dismissed and all related applications were disposed of without any order regarding costs.
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