Authority: Hon'ble Court (Judge Sabyasachi Bhattacharyya)

Order Date: July 17, 2026

Case Overview

  • Petitioner: Sk. Lalmahammad Ali (cultivator) vs IDBI Bank Limited (Branch Manager Rakesh Kumar) and an unnamed Insurance Company.
  • Dispute arises under the Bengal Shasya Bima (BSB) Yojana, which obliges banks to deduct insurance premium from cultivators and remit it to the insurer.
  • IDBI Bank deducted only Rs. 1 for account verification and failed to deduct/pay the premium, contrary to its statutory liability and to prior judgments against Punjab National Bank in similar contempt applications disposed on July 10 2026.
  • The Court observed that no recall application was filed by IDBI Bank, rendering it liable to comply with the directions issued in the earlier judgments.

Final Outcome

  • The contempt applications CPAN 1840 of 2024 and CAN 1 of 2025 are disposed.
  • (i) IDBI Bank shall refund to the writ petitioner any premium amounts paid, if any, within thirty (30) days from the date of this order, with interest at 12% per annum from the date of such deposit to the date of payment. In default, interest at 6% per annum on the principal plus accrued 12% interest shall accrue from the 31st day after judgment until payment.
  • (ii) The writ petitioner must file a written claim for compensation, annexing relevant documents, by 31 August 2026, quantifying the insurance coverage denied and any financial losses suffered.
  • (iii) Upon receipt of the claim, IDBI Bank shall, at its own cost, appoint valuers and competent insurance personnel, obtain necessary reports from the State Government’s Meteorological Department or other authorities, and decide the claim by 31 October 2026, paying the assessed amount with a reasoned written order. If the compensation exceeds the refunded amount plus interest, the excess may be adjusted against the total compensation payable.
  • (iv) While deciding, IDBI Bank shall afford the petitioner an opportunity of hearing and the right to produce relevant documents.
  • (v) If the petitioner is aggrieved by the compensation assessment, he may challenge it before the appropriate court or forum.
  • No order as to costs.
  • Certified copies of this judgment shall be supplied to the parties upon compliance with all necessary formalities.

Topics: Banking Regulation, Insurance Scheme Compliance