JA Legal has been engaged by a Client, who is a renowned grower/landlord/farmer, and is being aggrieved from the illegal actions and omissions of United Bank Limited (‘UBL‘) as the UBL is continuously charging a mark-up on the utilized Agricultural Finance Facility (‘Crop Loan’), despite being well aware of the fact that the Client’s crop of Cotton and Sugar Cane, which were acquired through the Crop Loan, have completely (100%) been damaged/destroyed by floods and excessive rain which lasted from 17.08.2020 till 31.08.2020, and the UBL’s associate company i.e. UBL Insurers Limited (‘Insurance Company’), in which UBL holds around 30% shareholding, has failed to fairly compensate and settle the Client with the insured amount.
That it is important to highlight that Crop Insurance Policy deals with the financial protection against natural disasters such as floods, excessive rain, fire & lightning, and insect/pets attacks on standing crops. As the Insurance company agrees to indemnify (that is, to protect) the insured (farmer, rancher, or grower) against losses that occur during the crop year.
That however in mid of August 2020 from 17.08.2020 till 31.08.2020, the Crops of our Client including cotton and sugar cane, before the same even reached the stage of harvesting, were “completely destroyed (100%)” destroyed by the excessive floods and rainfall. According to the Government of Pakistan, Meteorological Department Report of August 2020 it states: August 2020 ranked as “Pakistan ever wettest month” since 1961. The provinces of Sindh and Baluchistan experienced exceptionally excessive rainfall of 363% & 271% above average respectively and August 2020 had the highest rainfall in the last sixty years. The damage is further substantiated from the report issued by the Government of Sindh, office of the Mukhtiarkar (Revenue) Umerkot, dated 28.8.2020, which identified and confirmed that, due to the Monsoon – 2020, 100% of the crops were damaged in the Umerkot. Similarly, on 29.08.2020, the Government of Sindh, Relief Department, issued a notification whereby various areas of Sindh declared as “Calamity Affected Areas” including the Division Mirpurkhas and its Districts Mirpurkhas, Umerkot, and Tharparkar.
In addition, as per the official statistics/summary shared by the Government of Sindh (Rehabilitation Department) of the losses/damages due to the rain/flood from 06.07.2020 till 18.10.2020, 137,753 household affected, 88 relief camps were established, 91,757 number of people were in relief camps and 101,500 acres of crop area damaged. This shows and substantiates the gravity and intensity of the natural calamity which not only damaged the Crops but also human life and activity as a whole.
However, not only did the Insurance Company fail to compensate the Complainant’s insurance claim, UBL, on the contrary, continued to charge mark-up to the Complainant on the utilized Crop Loan, despite being well aware of the fact that the Client’s crops were completely damaged as a result of an Act of God, and the Insurance Company till date has not reimbursed a single penny to the Client on account of insurance compensation for the damage suffered as a result of natural calamity. It must be noted that the Complainant is willing to return/pay back the entire Crop Loan, however, at the same time it would be extremely unfair if UBL keeps on charging a markup on the Crop Loan, despite being aware of the aftermath of the monsoon-2020, and the fact that UBL’s associate company i.e. the Insurance Company has till date not compensated the Complainant with the Insured Amount.