Raghuvir, a farm owner holds 50 acres of land at Badli Village in Haryana. His main cultivation was mustard seeds for which he uses a separate irrigation facility. He uses to buy fertilizer from a nearby fertilizer facto

CS Professional · Insurance - Law and Practice · PYQS · December 2020
Raghuvir, a farm owner holds 50 acres of land at Badli Village in Haryana. His main cultivation was mustard seeds for which he uses a separate irrigation facility. He uses to buy fertilizer from a nearby fertilizer factory adjacent to his land. The waste products from the fertilizer factory flow to a nearby lake through a cement pipe and the pipe runs through the agricultural land of Raghuvir. The waste products were the various chemicals used by the fertilizer company during the manufacturing process and are poisonous. One fine day, Raghuvir found out that the cement pipe has developed a crack and the waste products are accumulating in his land which is resulting in a poor yield from his land in that year. After analyzing the liability insurance concepts, determine whether the farm owner is justified in claiming compensation for the loss of income due to the cultivation of mustard seeds.

Answer & Explanation:

The fertilizer factory can be held liable for the loss of income due to crop failure. The factory operators could have reasonably foreseen that the waste product was likely to accumulate in the farm owner's land if there is a breakage of the pipe. Also, the accumulation of waste products as a result of the breakage of the pipe resulted in land becoming not useful for cultivation purposes. The factory is clearly identified as responsible for the loss and thus Raghuvir is justified in claiming compensation for loss from the factory.

Topics: Liability Insurance

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