CASE TITLE: M/S BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. v. DNYANRAJ & ORS. SLP(c) 10391/2022
Summary
The Bombay High Court upheld the order directing Bajaj Allianz General Insurance to compensate 3,57,287 farmers in the Osmanabad District of Maharashtra for post-harvesting losses caused by heavy rainfall during the Kharif Season 2020. The Supreme Court bench, consisting of Chief Justice U.U. Lalit and Justice Ravindra Bhat, deemed the company adversely affected as they offered compensation to farmers who had not filed claims within the 72-hour period. The court rejected the argument of Solicitor General Tushar Mehta, who claimed that the state intended to dispute the portion of the judgment mandating the government to pay the insurance payout to the farmers in the event that the company was unable to do so. The court observed that the frequency of these types of incidents will rise in conjunction with climate change, and the nature of crop insurance for farmers is significantly different. The immediate Special Leave Petitions are denied, and the District Treasury will receive Rs. 200 crores, along with the interest that has accrued, deposited in the court’s registry. The High Court also noted that the insurance company did not dispute that there was a post-harvesting loss for Soybean crop in the Kharif season 2020 due to heavy rain.
About the case
Recently, the Bombay High Court’s order directing Bajaj Allianz General Insurance to compensate 3,57,287 farmers in the Osmanabad District of Maharashtra for post-harvesting losses caused to the Soya bean crop during the Kharif Season 2020 due to heavy rainfall was upheld by the Supreme Court bench, which consisted of Chief Justice U.U. Lalit and Justice Ravindra Bhat.
The bench stated that the company would be “adversely affected” because they were offering compensation to farmers who had not filed claims within the 72-hour period, and senior advocate Vivek Tankha, who was representing Bajaj Allianz, submitted that there were different policies for National Disaster Relief than for localized incidents, as stated in the policy document.
“This is a human issue, not a typical commercial policy.” You are treating it as a commercial policy.
Consequently, the court also rejected the argument of Solicitor General Tushar Mehta, who claimed that the state intended to dispute the portion of the judgment that mandated the government to pay the insurance payout to the farmers in the event that the company was unable to do so.
The court observed that the frequency of these types of incidents will rise in conjunction with climate change. What would be the consequences of continuing to exclude farmers from the policy?…The claimants are impoverished farmers who may not have the resources to submit a claim within 72 hours.The nature of crop insurance for farmers is significantly different, and it has a profound impact on the farmer and his family.
With this, the Bombay High Court’s decision was upheld by the court.
“The affidavit in response filed on behalf of Respondent no. 2 in the present Special Leave Petition has been relied upon by Mr. Vivek Tankha, a learned Senior Advocate.” Additionally, he has requested that we examine paragraphs 75-80 of the orders issued by the Division Bench of the High Court, which are currently being challenged. We believe that the High Court’s conclusions, after careful consideration of the entire matter, do not warrant any interference with our jurisdiction under Article 136(1) of the Constitution. Consequently, the immediate Special Leave Petitions are denied. The District Treasury will receive the sum of Rs. 200 crores, along with the interest that has accrued, deposited in the court’s registry. The disbursement form for this sum, as well as any additional claims, will be executed in strict compliance with the law, under the supervision of the District Collector.
The high court in the impugned order observed that the Union of India had introduced a scheme known as the Pradhan Mantri Fasal Bima Yojana 2020, which was valid for a period of three years. The state of Maharashtra was implementing the scheme and had issued a Government Resolution on June 29, 2020, through the Department of Agriculture. It was noted that Clause 7 of the aforementioned scheme provided for the protected object of the scheme, Clause 7.5 provided for post-harvest losses, the scheme was applicable to a large number of agriculturists in the district, the state government had executed a memorandum of understanding with the insurance company for the implementation of the insurance scheme, and the state government was a nodal agency between the agriculturists and the insurance company.
The High Court further observed that the insurance company did not dispute that there was a post harvesting loss for Soybean crop in Kharif season 2020 due to heavy rain during the month of October 2020; that the insurance company however, has though cleared claims of large number of agriculturists, though made after 72 hours of the incident, did not pay the claims of large number of agriculturists including these petitioners on the ground that there was no intimation or complaint made by the agriculturists within 72 hours and thus they were not entitled for such benefit under the said scheme; that the insurance company also has not disputed that due to such heavy rainfall during the relevant period, the phone lines of the agriculturists were affected and it was not feasible to intimate the insurance company within a period of 72 hours, and that the said heavy rainfall continued for number of days.
“The insurance company has conducted itself in a manner that is both unlawful and arbitrarily.” The insurance company has already compensated a significant number of agriculturists in similar circumstances, without these agriculturists pursuing any alternative remedies in accordance with the state government’s directives or otherwise. Two of the petitioners have filed public interest litigation in light of the significant loss and distress experienced by a significant number of agriculturists in the Osmanabad district. The alternative remedy in this scenario would not be an effective alternative remedy. In our opinion, the petitioners have therefore established a case for the reliefs they are seeking,” the High Court had announced.
