The Supreme Court on Monday (September 5) upheld the Bombay High Court order for insurance payout to Osmanabad farmers who suffered crop damage due to heavy rainfall in 2020.
The top court directed the firms to pay the compensation to the farmers within three weeks. It told the insurance companies that they had collected over Rs 600 crore as premium and their liability is around Rs 300 crore, and it was not as if the companies would be "wiped out."
The Supreme Court said the insurance companies had already deposited Rs 200 crore with the registry to be paid under the Pradhan Mantri Fasal Bima Yojana.
The top court said that crop loss due to rain or drought is a human problem as it rejected the insurance companies' appeal and said they can't impose corporate conditions on farmer insurance.
In May, the Bombay High Court had told insurance companies to compensate the farmers from Osmanabad district with Rs 3.5 lakh each for crop loss due to excessive rain, to which the firms said that due process had not been followed and they had not been informed in time.
The insurance companies raised disputes over payment of premium and allowing insurance cover. They then challenged the Bombay High Court order in the Supreme Court.
"You are treating this as a commercial policy. Not all farmers will be able to file a claim that quickly," the SC told the insurance companies.
