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Burden Shifts to Insurer Once Peril Established: J&K Consumer Commission in Bajaj Allianz Case
A Collapse That Toppled More Than One Building
The , Srinagar, has firmly shut the door on 's attempt to escape liability for a house collapse claim. In a judgment delivered on , the Commission — comprising President Smt. Nighat Sultana and Member Sh. Maheep Gupta — dismissed the insurer's appeal and upheld the order of the , which had held the company guilty of .
At the heart of the dispute was a fundamental question: who bears the when a claim arises under a , and can an insurer repudiate a claim based solely on a surveyor's casual inspection?
When Four Homes Fell at Once
The case traces back to the sudden collapse of Mohammad Altaf Bhat's residential building in Nowhatta. Bhat, who held an insurance policy with Bajaj Allianz, lodged a claim asserting that the loss was caused by
"
of the land beneath the building"
— a peril expressly covered under his policy. The insurer repudiated the claim, prompting Bhat to file a complaint before the
(C.C. No. 76/2022), which ruled in his favour.
Aggrieved, the insurer appealed to the State Commission, raising three principal grounds: first, that Bhat had failed to discharge the burden of proving the loss resulted from the named peril; second, that the District Commission had placed undue reliance on a scientific report based on a study conducted at Rainawari, situated about 2 kilometres from the insured premises; and third, that the District Commission had erred in outrightly ignoring the .
Bajaj Allianz's Three-Pronged Challenge
The insurer's counsel argued that unlike an "," a "" places the primary duty of proof squarely on the insured. Since Bhat allegedly failed to establish that caused the collapse, the company argued it should not have been saddled with any liability.
On the scientific report, the insurer contended that a study from a site 2 kilometres away could not serve as evidence for conditions at the insured premises. On the survey report, it maintained that the District Commission had improperly disregarded a vital document.
The Commission's Clarification on
Addressing the first ground, the State Commission acknowledged that in a , the initial burden of establishing a link between the loss and the named peril lies with the insured. However, it issued a crucial clarification: once the insured discharges that burden, the onus shifts to the insurer to prove otherwise.
The Commission found that Bhat had indeed succeeded in establishing his case. Critical to this finding was the cross-examination of Sub Inspector Fayaz Ahmad of
, who confirmed that three other houses in the vicinity had collapsed simultaneously. The Commission reasoned that
"multiple non-adjacent buildings fell down suddenly in the same vicinity points strongly to macro-environmental ground movement (regional land
) or a shared geological trigger, rather than isolated flaws in the specific building's materials."
The Scientific Report: Not Too Far to Be Relevant
On the scientific report from Rainawari, the Commission adopted a nuanced position. It observed that a study conducted 2 kilometres away is
"too far to serve as a direct substitute for a site-specific soil test,"
yet
"not too far as well that would justify outright rejection of the said report and its importance as an indirect piece of evidence."
The report was therefore admissible as
.
Survey Report: Important but Not Sacrosanct
The Commission underscored that while a
is a vital document, it is
"not that sacrosanct that cannot be challenged."
Courts and tribunals remain free to evaluate and disregard survey reports where there are apparent errors, bias, failure to consider vital facts, or incorrect appreciation of evidence.
Significantly, the Commission noted that the surveyor's opinion — offered during cross-examination — that the loss might have been caused by defective workmanship had never been raised earlier by the insurer or the surveyor as a basis for
. This late-emerging plea appeared to be an afterthought designed to bring the loss within a
. The Commission observed:
"The sequence of events leads us to infer that the Surveyor is also somehow inclined to believe that the loss was caused by
and has come with this new excuse just to ensure that even if the loss is concluded to have caused due to
still falls out of the scope of the policy due to the specific
."
Key Observations
The Commission's judgment offers several pointed observations:
"A mere expression of opinion by the Surveyor that the loss is not caused by theon the basis of his casual inspection of the site not backed with any scientific study/ soil test cannot be justified for denial of liability/of claim."
"Once the Insured succeeded in fairly establishing that the loss was caused by a named peril, the onus gets shifted to the Insurance Co. to prove the Complainant wrong."
"The fact that multiple non-adjacent buildings fell down suddenly in the same vicinity points strongly to macro-environmental ground movement (regional land) or a shared geological trigger, rather than isolated flaws in the specific building's materials used in the construction of the insured building &/or defective workmanship."
The Verdict and Its Implications
Finding no reason to interfere with the District Commission's order, the State Commission dismissed the appeal, upheld the impugned order dated , and rescinded any previously granted. The insurer was permitted to adjust its , along with interest, against its liability to the complainant. Costs were left to be borne by the parties respectively.
The judgment carries significant implications for insurance litigation in India. It reinforces that insurers cannot repudiate claims based on unsupported surveyor opinions, clarifies the burden-shifting framework in Named Perils Policies, and establishes that regional geological evidence — even from a few kilometres away — can serve as legitimate indirect proof of . For policyholders, the ruling affirms that a good-faith establishment of a covered peril is enough to shift the onus onto the insurer to rebut the claim with scientific rigour.
