Bombay HC Orders Insurance Company To Compensate 3 Lakhs Farmers For Crop Loss

The Bombay High Court's Aurangabad bench has ordered an insurance company to pay claims filed by 3,57,287 farmers in the Osmanabad district for post-harvest losses to soyabean crops caused by excessive rains in the 2020 Kharif season. Due to cyclonic retreating rains, the region experienced severe rainfall in October 2020.

The Maharashtra government would have to pay the money within 12 weeks if the company does not pay within six weeks, according to a bench comprising Justice RD Dhanuka and Justice SG Mehare. This ruling came in response to a number of farmer petitions requesting compensation from the state government and insurance company.

Farmers' advocate AS Wakure stated that the insurance company profited handsomely from the entire premium received from farmers, the state, and the central government.

According to the court, the insurance company (Bajaj Allianz General Insurance Co. Ltd.) collected nearly Rs 500 crore in premiums from farmers in Osmanabad, the state, and the central government under the Pradhan Mantri Fasal Beema Yojana (PMFBY).

However, the company only paid out Rs 87.83 crore to 72,325 farmers who applied within or immediately after 72 hours of crop loss, as the scheme required. The remaining farmers were not reimbursed.

According to the farmers, the company insured 3,61,010 hectares of soyabean crops, with roughly 2 lakh hectares damaged, accounting for more than 33% of the entire insured area.

In March of last year, the company and other authorities were told to approve farmers' claims, according to additional government pleader AR Kale representing the state government. The company, on the other hand, disobeyed such orders and rejected complaints from relevant authorities. The remaining insured farmers were likewise not paid.

The petitions were disputed by the insurance company's lawyer, Advocate SG Chapalgaonkar, who questioned their feasibility.

The farmers' attorney, on the other hand, informed the court that because the disaster was broad, no notification was necessary within 72 hours.

Farmers' counsel, Advocate AS Wakure, stated that the claims of agriculturists cannot be rejected on technical grounds.

Farmers did not individually contact the insurance company about losses, but several government bodies performed surveys, panchanamas, and told the insurance company about payment of such losses, according to Wakure.

Even if the telephone company's server was down during the relevant period, he noted, it was impossible to notify the insurance company within 72 hours of the date of such significant rainfall that caused loss and damage to the farmers. The farmers lacked access to Android phones.

After hearing from all sides, the bench decided that farmers were not compelled to inform the company within 72 hours, and that it was impractical because they couldn't move to their fields.

The company's argument that the petitioners sought relief that went beyond the scope of the Pradhan Mantri Fasal Bima Yojana was dismissed by the court.