Bombay High Court directs Bajaj Allianz to pay insurance claims of 3.5 lakh farmers who lost crops due to rains

The Aurangabad Bench of the Bombay High Court recently directed Bajaj Allianz General Insurance Company Limited to compensate over 3.5 lakh farmers from Osmanabad district of Maharashtra after soyabean crop loss due to heavy rainfall in the Kharif season of 2020 [Prashant Lomate & Anr v. Union of India & Ors and connected pleas]..While directing Bajaj Allianz to compensate the agriculturists, a Bench of Justices RD Dhanuka and SG Mehare stated that in the event the 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 (06) weeks from today, the State Government is directed to pay such claim for compensation for post harvest loss caused to the Soyabean crop in Kharip season 2020 to remaining 3,57,287 agriculturists of Osmanabad district within a period of six (06) weeks thereafter," the judgment said. The Court also directed the insurance company to comply with the directions issued by the State government by its letter dated March 5, 2021.The State directives stipulated the insurance company and various authorities in the State to grant the claims of agriculturists on the basis of reports of losses prepared by the competent authorities.The judgment was passed in pleas were filed by farmers who were refused insurance coverage for their post harvesting losses.The petitioners had sought directions to Bajaj Allianz to sanction and grant compensation for the same.They had also prayed that in the event the company refused to pay the claims of 3,57,287 agriculturists, the State should be directed to pay the claim..The petitioners stated that they had paid insurance premium for insurance coverage. The State government had also contributed part of the insurance premium on behalf of the agriculturists.There were about 4,57,216 affected agriculturists in all eight talukas of Osmanabad district of Maharashtra. The Court was informed that the insurance company received over ₹500 crore as premium under Pradhan Mantri Fasal Beema Yojana (PMFBY) from farmers in Osmanabad. A total of 72,325 agriculturists were compensated by the insurance company by paying aggregate amount of ₹87.87 crores.However, it did not pay the claims of large number of agriculturists including the petitioners in the present pleas on the ground that there was no intimation or complaint made by the agriculturists within 72 hours from the date of alleged loss suffered by the agriculturists and this disentitled them from such benefit under the said scheme..The Court found no substance in the submissions made by the the insurance company that the petitioners have claimed relief beyond the ambit and scope of PMFBY.“The insurance company has acted illegally and arbitrarily. It has already paid 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”, the order stated..[Read Judgment]