Bajaj Allianz Can't Reject House Collapse Claim Once Insured Establishes Subsidence As Covered Peril: J&K Consumer Commission
LIVELAW NEWS NETWORK
9 Aug 2026 7:27 PM IST
The J&K State Consumer Disputes Redressal Commission, Srinagar, comprising President Smt. Nighat Sultana and Member Sh. Maheep Gupta, has dismissed an appeal filed by Bajaj Allianz General Insurance Company Ltd., holding that once an insured establishes that the loss was caused by the covered peril of land subsidence, the burden shifts to the insurer to prove otherwise. The Commission observed that a surveyor's opinion based on a casual site inspection, unsupported by any scientific study or soil test, cannot justify repudiation of an insurance claim.
Facts
The matter originated from a complaint filed by Mohammad Altaf Bhat after his insured residential building collapsed, following which he lodged a claim under his insurance policy. The insurer repudiated the claim, prompting the insured to approach the District Consumer Commission, Srinagar. The District Consumer Commission allowed the complaint and held the insurer liable. Aggrieved thereby, Bajaj Allianz preferred the present appeal.
The insurer contended that the District Consumer Commission had erred in fastening liability upon it. It argued that the policy was a Named Perils Policy and not an All Risk Policy, and therefore the initial burden of proving that the loss was caused by the insured peril of land subsidence rested on the complainant. According to the insurer, since the complainant had failed to establish that the collapse was caused by subsidence, it could not be held liable.
Observations
The Commission observed that under a "Named Perils Policy," the initial burden lies on the insured to establish that the loss was caused by a covered peril. However, once the insured discharges that burden, the onus shifts to the insurer to prove otherwise. It held that although the scientific report relied upon by the complainant was based on a study conducted about two kilometres from the insured premises and could not substitute a site-specific soil test, it nevertheless constituted relevant indirect evidence and could not be rejected outright.
The Commission further observed that while a surveyor's report is an important piece of evidence, it is not sacrosanct and may be disregarded where it suffers from apparent errors, bias, failure to consider material facts, or incorrect appreciation of the evidence. It noted that the investigating police officer had confirmed that three other buildings in the locality had collapsed simultaneously, indicating regional land subsidence or a common geological trigger rather than isolated construction defects. The Commission, therefore, concluded that the complainant had successfully established that the loss was caused by subsidence, a peril covered under the policy.
Rejecting the insurer's reliance on the surveyor's opinion, the Commission observed that the surveyor had merely expressed an opinion based on a casual site inspection without any scientific study or soil test. It also noted that the plea of defective workmanship surfaced only during the surveyor's cross-examination and had never formed the basis for repudiating the claim. The Commission inferred that the plea appeared to have been raised subsequently to bring the loss within a policy exclusion.
Finding no reason to interfere with the order of the District Consumer Commission, the State Commission dismissed the appeal, upheld the award, vacated the interim relief granted earlier, and directed the parties to bear their own costs.
Case Title:
Area Manager, M/s Bajaj General Insurance Ltd. (Formerly Known as Bajaj Allianz General Insurance Co. Ltd.) v. Mohd. Altaf Bhat
Case No.:
First Appeal No. 83 of 2025 (Against the order dated 28.10.2025 passed by the District Consumer Commission, Srinagar in C.C. No. 76/2022)
Appearance:
- For the Appellant (Insurer) : Adv. N.A. Shalla
- For the Respondent: Adv. M.A. Baqal
