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PMFBY Update: Supreme Court Stays Bombay HC Ruling to Insurer to Compensate Farmers for Crop Loss

The high court decision came in response to several farmer petitions contesting the denial of insurance coverage for post-harvest losses.

Kritika Madhukar
On June 16, the Supreme Court issued notice on the insurance firm's appeal
On June 16, the Supreme Court issued notice on the insurance firm's appeal

The Supreme Court has delayed a Bombay High Court judgment ordering Bajaj Allianz General Insurance Company Ltd. to reimburse over 3.5 lakh farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY) for soya bean crop losses caused by severe rains in 2020. 

However, a Supreme Court vacation bench comprised of justices JK Maheshwari and Hima Kohli directed the insurance corporation to deposit Rs 200 crore with its registry within six weeks starting June 16.

The Bombay High Court circuit bench in Aurangabad has instructed the insurance firm to reimburse soya bean farmers in Maharashtra's Osmanabad region who sustained crop loss owing to excessive rains in the Kharif season of 2020.

On June 16, the Supreme Court issued notice on the insurance firm's appeal, saying, "In the meantime, there will be a stay of execution of the impugned judgment subject to the petitioner depositing several Rs. 200 crores with the Registry of this Court within six weeks from today, as requested." 

Until further directives, the money shall be put in an interest-bearing fixed deposit at a nationalized bank. It was ruled that if the sum was not paid within six weeks, the order of stay would be immediately removed without further reference to the court.

The bench ordered the petitioning farmers and the state government to respond within six weeks.

"If the insurance company does not pay the amount, the state government is directed to pay such compensation claim for post-harvest loss caused to the soybean crop in Kharif season 2020 to the remaining 3,57,287 agriculturists of Osmanabad district within six weeks thereafter," the high court said. 

The farmers stated that they had paid premiums for crop insurance coverage. The high court was also informed that the insurance business got nearly Rs 500 crore in premiums from farmers in Osmanabad under the Pradhan Mantri Fasal Bima Yojana.

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