SC stays Bombay HC order to insurer to compensate farmers for soyabean crop loss

The Supreme Court on Thursday stayed the Bombay High Court’s direction to Bajaj Allianz General Insurance Company to compensate over 3.5 lakh farmers from Osmanabad district of Maharashtra, subject to the private insurer depositing Rs 200 crore with its Registry within six weeks.

The top court said that if insurance company failed to deposit Rs 200 crore, the stay order will stand vacated automatically.

A vacation bench of Justices J K Maheshwari and Hima Kohli sought a response from the Union Agricultural ministry, the Maharashtra government and others in the matter.

The court said that it will take the decision to release the amount so deposited by the insurance company on the next date of hearing in August.

Acting on a PIL, the High Court had on May 6 directed Bajaj Allianz, one of the stakeholders of the Pradhan Mantri Fasal Bima Yojana (PMFBY Scheme), to sanction and grant compensation/claim to as many as 3,57,287 agriculturists in the Osmanabad district for post-harvest damage caused to the soyabean crop due to heavy rainfall in Kharif season 2020.

The HC had also held that if the amount was not paid by the insurance company within six weeks, then the Maharashtra government should pay such claim within six weeks.

In its appeal, the company contended that the HC's judgment was “over-broad” and imposed new obligations and liabilities upon it when specific role, responsibilities and obligations were clearly delineated and defined under the June 29, 2020 Government Resolution and the underlying Operational Guidelines issued by the Maharashtra government for the implementation of the PMFBY Scheme.

According to insurance firm, lodging of loss intimation within 72 hours of the occurrence of the incident by the farmer/designated agencies was essential as the loss/damage for localised calamities and post harvest losses was to be assessed at the level of the individual insured farm. Around 65,307 farmers, who had submitted loss intimations in terms of the PMFBY Scheme, in a proper and timely manner, were granted relief to the tune of Rs 87.87 crore, Bajaj said.