Hyderabad: Oriental Insurance fined ₹29.0 1L for rejecting JK Agri Genetics' claim
The Commission termed the insurer’s rejection of a crop seed insurance claim as a deficiency in service.
By - Sistla Dakshina Murthy
Representational Image
Hyderabad: The State Consumer Disputes Redressal Commission has directed The Oriental Insurance Company Limited to pay ₹29.01 lakh to JK Agri Genetics Limited, for arbitrarily rejecting the claim
The insurer has been asked to pay ₹26.76 lakh as claim amount, ₹2 lakh as compensation for mental agony, and ₹25,000 as litigation costs. The Commission also asked the insurer to pay 12% interest on the claim amount of ₹26.76 lakh.
The Commission termed the insurer’s rejection of a crop seed insurance claim as a deficiency in service.
Claim rejected despite the surveyor’s assessment
The dispute arose after JK Agri Genetics transported consignments of cotton, maize, paddy, jowar, and bajra seeds to Punjab, Rajasthan, and other regions in July 2015. During transit, rainwater seeped through small holes in the tarpaulin sheets covering the trucks, damaging the seed cartons.
The company claimed it suffered losses worth ₹37.33 lakh and filed an insurance claim under a policy taken in 2015 to cover transit risks. However, the insurer rejected the claim, stating that the damage was due to increased moisture and not rainfall.
Aggrieved by the denial, the seed company approached the State Consumer Commission.
No policy exclusion for rain damage
After examining the case, the Bench comprising members K. Rangarao and V.V. Seshubabu observed that there was no exclusion clause in the policy barring compensation for rainwater damage.
The Commission noted that although the insurer had appointed surveyors to assess the loss, their own reports clearly indicated that rainwater had entered through small holes in the tarpaulin and damaged the cartons.
It further observed that the policy only required the consignments to be covered with tarpaulin during transportation — a condition the complainant had complied with.
Commission’s order
Relying on the surveyor’s assessment, the Commission allowed four claims amounting to ₹26.76 lakh and directed the insurance company to:
Pay ₹26.76 lakh with 12% annual interest
Pay ₹2 lakh as compensation for mental agony
Pay ₹25,000 towards litigation expenses
The Commission held that rejecting the claim despite clear evidence of rain-related damage constituted a deficiency in service under consumer protection law.
