Bombay HC Dismisses Maharashtra's Claim to Recover ₹374 Crore from Bajaj Allianz
The Bombay High Court has ruled in favor of Bajaj Allianz General Insurance, dismissing Maharashtra's attempt to recover ₹374 crore under the Maharashtra Land Revenue Code. The court clarified that insurance payouts under the Pradhan Mantri Fasal Bima Yojana (PMFBY) cannot be treated as land revenue.
Bombay High CourtBajaj AllianzMaharashtraCrop InsurancePradhan Mantri Fasal Bima YojanaReal Estate MaharashtraSep 16, 2025
Bajaj Allianz General Insurance Company, a subsidiary of Bajaj Finserv, had challenged the recovery, arguing that state government officers did not have jurisdiction to issue such orders. The company had signed an agreement with the state government under which it was to pay farmers in case of crop loss due to non-preventable natural risks or calamities from the pre-sowing to the post-harvesting stage, as per the Pradhan Mantri Fasal Bima Yojana (PMFBY).
Following unseasonal rains between September 23 and October 10, 2021, which damaged soyabean crops in Osmanabad (now Dharashiv district), Bajaj Allianz disbursed around Rs 374 crore to farmers in the area. The state government and cultivators, however, claimed this was only half of what was due and pressed for another Rs 374 crore. After the insurer denied the claim, the district collector issued a notice to recover the amount under the MLR Code.
The insurer argued that harvesting had commenced on September 17, ahead of the rains, meaning the calamity occurred within 15 days of “normal harvest”. In such cases, claims are to be settled using both sample surveys and crop-cutting experiments (CCEs) in equal proportion. As the CCE data showed yields above the threshold, Bajaj Allianz maintained that no additional amount was payable. The state, however, contended that “normal harvest” must be read as the officially notified harvesting window of October 15 to November 15 under the crop calendar. Since the rains struck before that, it insisted claims had to be computed solely on sample surveys, which indicated far greater losses.
Based on this interpretation, the collector issued recovery notices, threatened penal action, and froze the insurer’s bank account in November 2022. In its judgment delivered on September 12, a division bench of the Bombay High Court found the collector’s action unsustainable. “Insurance claims under PMFBY cannot be equated with land revenue,” the Bench observed, ruling that the MLR Code cannot be used to enforce contractual obligations under an insurance scheme. The court also disposed of the farmers’ PIL, which had sought a direction for the immediate release of the balance amount.
Launched in 2016, PMFBY provides insurance cover to farmers against non-preventable natural risks from the pre-sowing to post-harvest stages. The scheme aims to provide financial support to farmers in the event of crop loss, thereby ensuring their livelihood and reducing their financial burden.
Frequently Asked Questions
What was the main issue in the dispute between Bajaj Allianz and the Maharashtra government?
The main issue was the Maharashtra government's attempt to recover Rs 374 crore from Bajaj Allianz under the Maharashtra Land Revenue Code, claiming that the insurer had not paid the full amount due to farmers for crop losses.
How did the Bombay High Court rule on the case?
The Bombay High Court ruled in favor of Bajaj Allianz, stating that insurance payouts under the Pradhan Mantri Fasal Bima Yojana cannot be treated as land revenue and that the MLR Code cannot be used to enforce contractual obligations under an insurance scheme.
What is the Pradhan Mantri Fasal Bima Yojana (PMFBY)?
The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched in 2016 to provide insurance cover to farmers against non-preventable natural risks from the pre-sowing to post-harvest stages, ensuring financial support in the event of crop loss.
What was Bajaj Allianz's argument against the recovery notice?
Bajaj Allianz argued that the calamity occurred within 15 days of the ‘normal harvest’ period, and thus claims should be settled using both sample surveys and crop-cutting experiments in equal proportion. The CCE data showed yields above the threshold, indicating no additional amount was payable.
What actions did the Maharashtra government take after Bajaj Allianz denied the claim?
After Bajaj Allianz denied the claim, the district collector issued a notice to recover the amount under the MLR Code, threatened penal action, and froze the insurer’s bank account in November 2022.
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