Hyderabad: The Telangana State Consumer Disputes Redressal Commission has held that rejection of an insurance claim for seeds damaged during transportation due to rain amounts to a deficiency in service.
It directed Oriental Insurance Company to pay Rs 26.76 lakh to JK Agri Genetics Limited towards the loss.
The commission also ordered the insurer to pay the amount with 12 per cent interest, Rs 2 lakh as compensation for mental agony and Rs 25,000 towards litigation costs.
Insurance claim dispute
JK Agri Genetics Limited transports seeds such as cotton, maize, paddy, sorghum and millets to states including Punjab and Rajasthan. The company had taken an insurance policy in 2015 to cover risks involved in the transportation of seeds.
In July 2015, while the seeds were being transported in several trucks, rainwater entered through small holes in the tarpaulin covering the cargo. As a result, cartons containing the seeds were soaked, leading to losses estimated at about Rs 37.33 lakh.
Claim rejected by insurer
After the incident, the company filed an insurance claim. Though the insurer appointed surveyors to assess the damage, it rejected the claim stating that the loss occurred due to increased moisture and not because of rain.
Following the rejection, JK Agri Genetics Limited approached the Telangana State Consumer Commission by filing a complaint.
Commission findings
A bench comprising members K Rangarao and VV Seshubabu heard the case and delivered the verdict on Thursday. The commission observed that the insurance policy did not contain any clause excluding losses caused by rainwater.
It also noted that the policy only required the seeds to be transported under tarpaulin cover and that the complainant had complied with this condition.
Surveyor reports submitted in the case clearly stated that rainwater had entered through small holes in the tarpaulin and soaked the cartons. Based on the surveyor’s assessment, the commission directed the insurer to pay Rs 26.76 lakh with interest for four claims identified in the report.
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