Bombay HC directs Bajaj Allianz to pay insurance claims of 3.5 lakh farmers

In a relief to over 3.5 lakh farmers from the Osmanabad district of Maharashtra after the Soybean crop loss due to heavy rainfall in the Kharif season of 2020, the Bombay High Court recently directed Bajaj Allianz General Insurance Company Limited to compensate them.

A division bench of Justices RD Dhanuka and SG Mehare, on May 6, while directing Bajaj Allianz to compensate the farmers said that in the event the insurance company fails to compensate the farmers, the state should compensate.

“If the said amount is not paid by the insurance company within a period of six weeks from today, the state government is directed to pay such claim for compensation for post-harvest loss caused to the Soybean crop in Kharif season 2020 to remaining 3,57,287 agriculturists of Osmanabad district within a period of six weeks thereafter,” read the 41-page judgment.

The HC has also directed the insurance company to comply with the directions issued by the Maharashtra government in its letter dated March 5, 2021. The government had asked the insurance company and various authorities in the state to grant the claims of farmers on the basis of reports of losses prepared by the competent authorities.

The HC passed the order in a batch of petitions filed by farmers challenging the refusal of their insurance coverage for their post-harvesting losses. They had sought that Bajaj Allianz be directed to sanction and grant compensation for the same. The farmers had further prayed that in case the insurance company refuses to pay the claims of 3,57,287 agriculturists, then the government should be directed to compensate them.

Their pleas contended that they had paid premiums for insurance coverage of their crops. Even the government had contributed part of the insurance premium on behalf of the agriculturists. Reportedly, around 4,57,216 agriculturists were affected in all eight talukas of Osmanabad.

The Court was informed that the insurance company received over Rs 500 crore as a premium under Pradhan Mantri Fasal Bima Yojana (PMFBY) from farmers in Osmanabad.

The insurance company had compensated 72,325 agriculturists by paying an aggregate amount of Rs 87.87 crores. However, it refused to pay claims of a large number of farmers, including the petitioners, on the ground that the farmers had failed to intimate the insurance company within 72 hours from the date of alleged loss suffered by them. This disentitled them from such benefit under the said scheme.

The HC rejected the contention of the insurance company that the farmers have claimed relief beyond the ambit and scope of PMFBY.

“The insurance company has acted illegally and arbitrarily. It has already paid a large number of similarly situated agriculturists without those agriculturists availing any alternate remedy pursuant to the directions issued by the state government or otherwise. The alternate remedy in this situation would not be an efficacious alternate remedy,” added the court order.