HyderabadThe Telangana State Consumer Disputes Redressal Commission directed an insurance company to pay ₹2 lakh as compensation to a seed company and held repudiation of its insurance claims related to rain-damaged seeds consignments as deficiency in service.The Commission was dealing with a complaint filed by JK Agri Genetics Ltd. The opposite parties were Oriental Insurance Company Co Ltd.According to the complaint, a marine cargo open policy covering the period between April 13, 2015, and April 12, 2016, was purchased. The company transported consignments of paddy, cotton, maize and bajra seeds packed in pouches and cartons through trucks covered with tarpaulin. While in transit in July and August 2015, rainwater seeped into the consignments, damaging several cartons, they said.Surveyors appointed by the insurer assessed the losses but the claims were later repudiated through letters issued in January and April 2016, the complainant stated, contending that despite submitting explanations, the opposite parties failed to honour the claimsThe insurance company argued that the complaint was not maintainable. It contended that the damage did not result directly from rainwater but from moisture absorption by the seeds, which affected their germination. Since the policy excluded losses stemming from change in moisture content or “ingress of moisture”, the insurer maintained that the claims were not maintainable. Discrepancies in test reports and some seeds were produced two or three years earlier which suggested deterioration due to storage, it contended.Taking the evidence and arguments placed on record, the Commission observed that the consignments had been transported in trucks covered with tarpaulin which was in compliance with the policy conditions. Survey reports indicated that rainwater seeped through inadequately covered tarpaulin and entered the cartons, causing damage to the consignments.The Commissionalso noted that the policy excluded losses caused by moisture generated due to climatic conditions within the cargo, but did not exclude damage caused by seepage of rainwater, which it described as an external factor. The Commission held that there was a clear difference between moisture naturally accumulating in seeds and moisture entering due to rainwater.In the judgement, the Commission held that the repudiation of the claims was unjustified and directed the company to pay the assessed amounts of ₹14.67 lakh, ₹8.20 lakh, ₹2.03 lakh and ₹1.84 lakh, along with interest of 12% per annum, a compensation of ₹2 lakh, and costs of ₹25,000.Published - March 05, 2026 07:59 pm IST