The Jammu & Kashmir State Consumer Disputes Redressal Commission has held that damage caused by a landslide is covered under a home insurance policy and cannot be denied on the ground that it resulted from the normal settlement of the structure. A Bench of President (O) Smt. Nighat Sultana and Member Sh. Maheep Gupta upheld the admissibility of the claim after relying on the testimony of the Patwari who prepared the ground report, but remanded the matter to the District Commission for a fresh assessment of the quantum of loss and interest.

Facts

The complainant, Mohd. Taj, had obtained a home insurance policy from SBI General Insurance Company Ltd. for his residential house. Claiming that the house suffered extensive damage due to landslides triggered by heavy rainfall, he lodged an insurance claim under the policy. Following the insurer's refusal to indemnify the loss, he approached the District Consumer Disputes Redressal Commission.

The District Consumer Commission allowed the complaint and directed the insurer to pay ₹28 lakh towards the loss along with interest at the rate of 2% per month on the principal amount from the date of filing of the complaint. Aggrieved by the order, the insurance company preferred an appeal before the State Commission.

Contentions

The insurance company contended that the District Commission failed to appreciate the terms and conditions of the insurance policy. It argued that the damage was caused by normal cracking and settlement of the building, which was specifically excluded under the policy, and not by a landslide. The insurer further submitted that its surveyor had assessed the admissible loss at only ₹95,330, whereas the District Commission awarded ₹28 lakh without considering the survey report. It also argued that the award of interest at 2% per month (24% per annum) was excessive and unsupported by any reasoning.

The complainant, on the other hand, maintained that the damage resulted from a landslide caused by heavy rainfall, an insured peril under the policy. In support of his claim, he relied on a certificate issued by the Tehsildar, Thannamandi, which was based on the ground report prepared by the concerned Patwari Halqa. During the proceedings, the Patwari was examined and reaffirmed that the damage had indeed been caused by a landslide.

Observations

The State Commission observed that although the insurer questioned the authenticity of the Tehsildar's certificate, the Patwari who prepared the underlying ground report was examined and stood by his report during cross-examination. Finding no reason to disbelieve his testimony, the Commission held that the damage had been caused by a landslide, an insured peril under the policy. Consequently, it upheld the admissibility of the insurance claim and rejected the insurer's contention that the damage resulted merely from normal settlement of the building.

On the issue of compensation, the Commission found a substantial disparity between the surveyor's assessment of ₹95,330 and the complainant's claim of over ₹41 lakh based on an architect's estimate. It noted that while both the surveyor and the architect had been examined and cross-examined, the District Commission ignored both assessments and awarded ₹28 lakh without assigning adequate reasons. In such circumstances, the Commission held that a fresh assessment by an IRDA-approved surveyor was necessary for a fair adjudication.

The Commission further observed that the award of interest at 2% per month was not supported by any logical reasoning. It held that compensation for delayed payment should ordinarily be based on prevailing market rates with a reasonable enhancement and that any substantially higher rate must be justified by cogent reasons.

Decision

Partly allowing the appeal, the State Commission set aside the District Commission's order and remanded the matter for a fresh determination of the quantum of loss and the appropriate rate of interest. It clarified that the issue of admissibility of the insurance claim had attained finality and could not be reopened by the insurer during the reassessment proceedings.

The Commission directed the District Commission to appoint an IRDA-approved surveyor from a panel of three surveyors to be furnished by the insurance company. The surveyor's role would be strictly confined to reassessing the quantum of loss under the policy and would not extend to reconsidering the admissibility of the claim. The insurer was directed to bear the cost of the reassessment, and the parties were directed to appear before the District Commission on 17 August 2026 for further proceedings.

Case Title: SBI General Insurance Company Ltd. v. Mohd. Taj

Case No.: Appeal No. 39 of 2025

Appearances: Adv. Diwakar Sharma for the Appellant; Adv. Abrar Ahmad Khan for the Respondent

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