Chandigarh/Hisar, Feb 16: Kshema General Insurance has obtained a stay from the Punjab and Haryana High Court against a federal move to blacklist the firm over alleged failures in crop insurance delivery. The court’s decision suspends a Union Agriculture Ministry show-cause notice that sought to remove the company from the PMFBY panel due to reported administrative deficiencies.
The administrative friction began after Haryana, Rajasthan, and Tamil Nadu reported “serious operational lapses” to the central government. Specifically, the Haryana administration affirmed that the insurer ignored repeated instructions to settle rabi 2023-24 claims amounting to Rs 85 crore in three districts. While the company sought a review of these orders, the Union Ministry stated that the request lacked merit and demanded immediate compliance.
In addition to the specific payment delays, state authorities declared that the company’s management of Cluster-III has resulted in a vast number of unresolved loss claims. This backlog, officials asserted, has exacerbated financial distress for small and marginal farmers who depend on these payouts to recover from seasonal crop losses.
“The delay in settlements erodes the trust that farmers place in government-backed insurance initiatives,” the state government maintained in its correspondence with the Centre.
The legal complexity of the case increased as farmer representatives noted that the insurance firm had approached the high court as early as September 2025. Balbir Singh Thakan of the All India Kisan Sabha declared that the state’s agricultural department had been negligent in filing its replies to the court, which he argued paved the way for the insurer to receive interim relief.
The High Court has now set July 8 as the date for further deliberations on whether the blacklisting process can proceed.
