Failure To Pay Insured Crop Damage, Jind District Commission Holds Bajaj Allianz General Insurance Liable For Deficiency Of Service

The District Consumer Disputes Redressal Commission, Jind (“Haryana) bench comprising A.K. Sardana (President), Neeru Agarwal (Member) and GD Goyal (Member) held Bajaj Allianz General Insurance Company liable for deficiency in services for failure to pay the loss of crop incurred by the Complainant which was insured by him under Pradhan Mantri Fasal Bima Yojna. The bench directed it to disburse Rs. 74,686/-, pay Rs. 10,000/- compensation for mental agony and Rs. 10,000/- for litigation expenses to the Complainant.

Brief Facts:

Mr. Rakesh (“Complainant”) maintained a bank account with the State Bank of India (“SBI”) and availed a crop loan. The Complainant's Kharif (Paddy) crop was insured under Pradhan Mantri Fasal Bima Yojna (PMFBY) by SBI, with a premium of Rs. 2,431/- paid by the Complainant. Due to the flood in the region, 4½ acres of Paddy crop planted by the Complainant were destroyed. The Complainant informed SBI regarding the same and a sample survey assessed a 96% loss. The Complainant applied for a claim of Rs. 2,37,600/- to Bajaj Allianz General Insurance Company Ltd (“Insurance Company”), but didn't receive any compensation. Later, a joint complaint was filed by affected farmers with similar claims to the Deputy Commissioner, Jind, seeking compensation. However, no resolution was provided. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Jind, Haryana (“District Commission”) against SBI, the Insurance Company and the Deputy Director Agriculture and Farmers Welfare Department, Jind (“DDA”).

In response, SBI stated that the deducted premium was remitted to the Insurance Company for crop insurance, denying knowledge of the Complainant's crop damage. Therefore, the SBI contended that it has no liability for any inaction on the part of the Insurance Company.

The Insurance Company challenged the maintainability of the complaint. It argued that the Complainant lacked a cause of action, and there was no deficiency in service or unfair trade practice on its part. On merits, it asserted that the Complainant's crop was insured under PMFBY and stated that there was no intimation received about crop damage to it. It claimed that it disbursed Rs. 41,796/- based on input cost and denied any deficiency in service, urging the dismissal of the complaint with costs.

DDA contended that the complaint was false, frivolous, and filed with malafide intentions. It objected to the misjoinder and non-joinder of necessary parties. It denied for Complainant's entitlement to compensation, arguing that the Complainant was not their consumer.

Observations by the Commission:

After considering the arguments presented by both parties and reviewing the relevant bank account statements and documents, the District Commission noted that the prevailing rate of the sum insured for the Kharif Paddy crop in 2017 was Rs. 71,500/- per hectare. Therefore, the District Commission calculated the actual loss of Rs. 1,16,482/- for the Complainant's crop. However, the Insurance Company disputed this figure, contending that there was no intimation about the crop damage, and assessed the claim on an input cost basis of Rs. 41,796/-. The District Commission found this version unreliable, as it was admitted that the Insurance Company was informed of the loss by DDA.

The District Commission held that the Insurance Company was legally obligated to pay the remaining amount to the Complainant. Therefore, the District Commission held the Insurance Company liable for deficiency in services and unfair trade practices. Additionally, the District Commission emphasized that PMFBY Operational Guidelines intended to provide insurance cover to the framers on at individual basis. The District Commission held that the Insurance Company wrongly assessed the loss on an input cost basis, ignoring the Agriculture Department's sample survey report, thereby, violating the PMFBY guidelines.

Furthermore, the District Commission highlighted the failure of the Insurance Company to provide a copy of the insurance policy to the Complainant after collecting the premium, constituted a violation of IRDA Regulations and a deficiency in service.

Based on these findings, the Commission allowed the complaint against the Insurance Company dismissing the complaint against SBI and DDA. The District Commission directed the Insurance Company to pay Rs. 74,686/- to the Complainant with a simple interest of 9% per annum and pay a compensation of Rs. 10,000/- for mental agony and physical harassment caused to the Complainant. It was additionally directed to pay Rs. 10,000/- for litigation expenses incurred by the Complainant.

Advocate for the Complainant: D.B. Bhanwala 

Advocate for the Respondent: Sushil Kumar, G.R. Parmar and Navneet Kumar