The dispute arose from the implementation of the Bangla Shasya Bima (BSB) crop insurance scheme introduced by the Government of West Bengal. Under the scheme, participating banks are required to upload the particulars of insured farmers to the designated portal in order to activate the insurance coverage. A group of farmers alleged that Punjab National Bank did not fulfil this obligation, with the result that their insurance policies were not issued despite payment of premium.
The Calcutta High Court examined the statutory and contractual obligations imposed on Punjab National Bank by the BSB scheme. The Court observed that the bank’s duty to upload the insured particulars is a condition precedent for the efficacy of the insurance cover. The Court held that the bank’s failure to perform this act constituted a breach of its duty under the scheme.
The Court applied the principles of negligence, noting that a duty of care existed towards the farmers who had entrusted their premium to the bank for the purpose of securing insurance. The breach of the duty to upload the particulars was found to be the direct cause of the farmers’ deprivation of the insurance benefits. The Court concluded that the loss suffered by the farmers was a foreseeable consequence of the bank’s omission.
The judgment clarifies that banks acting as intermediaries in government‑sponsored insurance schemes bear a strict obligation to comply with procedural requirements. Non‑compliance that results in denial of benefits to beneficiaries may attract liability for compensation. The decision serves as a precedent for similar cases where financial institutions fail to fulfil mandatory administrative steps in public welfare programmes.
The Calcutta High Court’s ruling affirms that procedural lapses by banks in the administration of crop insurance can give rise to compensable liability. The Court’s reasoning rests on the bank’s duty to upload insured particulars, the breach of that duty, the causal link to the farmers’ loss, and the appropriate remedial measure of compensation.