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

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To relieve more than 3.5 lakh farmers in Osmanabad district of Maharashtra after soybean crop loss due to heavy rains in 2020 Kharif season, Bombay High Court recently ordered Bajaj Allianz General Insurance Company Limited to indemnify them.

A divisional bench consisting of Justices RD Dhanuka and SG Mehare on May 6, while ordering 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 six weeks from today, the state government is liable to pay this claim for post-harvest losses caused to the soybean harvest during the 2020 Kharif season to the remaining 3, 57,287 farmers in Osmanabad district within six weeks,” the 41-page judgment reads.

The HC also ordered the insurance company to comply with the instructions issued by the Maharashtra government in its letter dated March 5, 2021. The government had asked the insurance company and various state authorities to award farmers’ claims on the basis of loss reports established by the competent authorities.

The HC passed the ordinance in a batch of petitions filed by farmers challenging the denial of their insurance coverage for their post-harvest losses. They had requested that Bajaj Allianz be ordered to sanction and award compensation for the same. The farmers had further prayed that in case the insurance company refuses to pay the claims of 3,57,287 farmers, the government should be responsible for compensating them.

Their pleas claimed that they had paid premiums for the insurance coverage of their crops. Even the government had contributed part of the insurance premium on behalf of the farmers. An estimated 4,57,216 farmers were reportedly affected in the eight talukas of Osmanabad.

The Court was told that the insurance company had received more than Rs 500 Crore as premium under Pradhan Mantri Fasal Bima Yojana (PMFBY) from farmers in Osmanabad.

The insurance company had compensated 72,325 farmers by paying a total amount of Rs 87.87 crores. However, it refused to pay the claims of a large number of farmers, including the claimants, on the grounds that the farmers failed to notify the insurance company within 72 hours of the date of the alleged loss that they would have suffered. This deprived them of these benefits under the said scheme.

The HC rejected the insurance company’s claim that the farmers sought relief beyond the scope and reach of PMFBY.

“The insurance company acted illegally and arbitrarily. He has already paid a large number of farmers in a similar situation without these farmers having recourse to an alternative remedy according to instructions issued by the state government or otherwise. The alternative remedy in this situation would not be an effective alternative remedy,” the court order added.

Posted: Saturday May 14th 2022, 9:38 PM IST

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