Bajaj Allianz Gets Relief as Bombay HC Cancels ₹374 Crore Recovery Demand

The Bombay High Court has overturned a Maharashtra government order that sought to recover ₹374 crore from Bajaj Allianz General Insurance, as per the news reports. The division bench ruled that crop insurance dues under the Pradhan Mantri Fasal Bima Yojana (PMFBY) cannot be treated as land revenue and therefore do not fall under the Maharashtra Land Revenue Code.

Background of the Dispute

Bajaj Allianz, a subsidiary of Bajaj Finserv, had an agreement with the state government to provide insurance coverage to farmers under PMFBY. The scheme covers crop losses from the pre-sowing to post-harvest stage due to non-preventable natural risks. In 2021, heavy rainfall between September 23 and October 10 damaged soybean crops in Osmanabad (now Dharashiv). The company disbursed around ₹374 crore to affected farmers.

State’s Claim and Insurer’s Stand

The state government maintained that the payout was only half of what was due and pressed for another ₹374 crore. Bajaj Allianz argued that harvesting had started on September 17, before the rains, placing the event within 15 days of “normal harvest.” 

In such cases, the rules required claims to be settled through a mix of sample surveys and crop-cutting experiments. As CCE data showed yields above the threshold, the insurer held that no further amount was payable.

Government Action

The state countered that the “normal harvest” period should be read as October 15 to November 15 as per the notified crop calendar. On that basis, it insisted losses should be computed only through sample surveys, which indicated higher damage. 

Following this interpretation, the district collector issued notices, froze Bajaj Allianz’s bank accounts in November 2022, and threatened recovery measures under the MLR Code.

Court’s Ruling

In its order delivered on September 12, the High Court found the collector’s actions unsustainable. It held that insurance obligations under PMFBY could not be enforced as land revenue. The court also disposed of a public interest litigation filed by farmers seeking release of the additional claimed amount.

Read more: Bajaj Finserv Targets 250 Million Customers by 2029!

Conclusion

The judgment brings closure to the ₹374 crore dispute, underscoring that crop insurance contracts must be dealt with within the framework of the scheme and not through revenue recovery laws.

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