Hyderabad
The Telangana State Consumer Disputes Redressal Commission ordered an insurance company to pay ₹2,000 as compensation to a seed company and rejected its insurance claims related to rain-damaged seed consignments as deficient service.
The Commission looked into a complaint filed by JK Agri Genetics Ltd. The opposite parties were Oriental Insurance Company Co Ltd.
According to the complaint, an open ocean cargo policy was purchased covering the period between April 13, 2015 and April 12, 2016. The company transported shipments of bagged and cartoned paddy, cotton, corn and bajra seeds in tarpaulin trucks. During shipping in July and August 2015, rainwater seeped into the shipments and damaged several cartons, they said.
Surveyors appointed by the insurer assessed the losses but the claims were later rejected through letters issued in January and April 2016, the complainant said, saying that despite submission of explanations, the opposite parties failed to meet the claims
The insurance company argued that the claim was not sustainable. He claimed that the damage was not caused directly by rainwater, but by the absorption of moisture by the seeds, which affected their germination. As the policy excluded losses arising from change in moisture content or “moisture ingress”, the insurer insisted that the claims were not maintainable. Irregularities in test reports and some seeds were produced two or three years earlier, indicating deterioration in quality due to storage, he claimed.
Based on the evidence and arguments presented, the Commission found that the shipments were transported in tarpaulin trucks, which was in accordance with the terms of the policy. Survey reports indicated that rainwater seeped through the inadequately covered tarpaulin and entered the cartons, causing damage to the shipments.
The commission also noted that the policy excluded losses due to moisture caused by climatic conditions in the cargo, but did not exclude damage caused by seepage of rainwater, which it described as an external factor. The Commission felt that there was a clear distinction between the moisture that naturally accumulates in seeds and the moisture that penetrates through rainwater.
In the judgment, the Commission held that the rejection of the claims was unjustified and ordered the company to pay the assessed sums of ₹ 14.67 lakh, ₹ 8.20 lakh, ₹ 2.03 lakh and ₹ 1.84 lakh, together with interest at ₹ 12%, compensation of ₹ 0.2 lakh per annum and ₹ 2 lakh
Published – 05 March 2026 19:59 IST
