Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 2076

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Judicial Member
Sundent India – Appellant
Versus
Bajaj Allianz General Insurance Co. Ltd. – Respondent
COMPLAINT CASE NO.-1102/2015

Advocates:
For the Appellants/Petitioners: Rajeev Nanda
For the Respondents: None

An insurance company cannot repudiate a claim based on structural defects or building age if it issued the policy without conducting a pre-inspection of the premises, and any collapse of the insured structure qualifies as an 'implosion' peril covered under standard fire policies.

Headnote:(A) Consumer Protection Act, 1986 - Section 2(1)(g) - Deficiency in service - Insurance claim repudiation - Burden of proof and pre-inspection duties - Once an insurer issues a cover, they cannot retrospectively assess structural defects in the insured premises to deny liability without earlier inspections - Repudiation based solely on claims of aging/wear-and-tear, when the policy covers events like implosion/explosion, constitutes deficiency in service. (Paras 16, 26, 27)

Facts of the case:
The Complainant purchased a Standard Fire & Special Perils Policy and a Burglary Insurance Policy from the insurer through the bank. Subsequently, the insured building collapsed. The insurer rejected the claim based on a surveyor's report stating the building was 100 years old and the collapse was due to aging, claiming no insured peril was involved.

Findings of Court:
The Commission found that the insurance company failed in its duty to pre-inspect the premises. Further, the collapse fell under the policy's coverage of 'implosion' or 'explosion'. Therefore, the insurer was held liable for the net loss assessed, along with compensation for harassment and litigation costs.

Issues: Whether the insurer's repudiation of the claim based on the structural age of the building and the surveyor's findings constituted a deficiency in service.

Ratio Decidendi: An insurance company cannot avoid liability for structural defects if it failed to pre-inspect the premises before policy issuance. A collapse of a building is covered under the risk of implosion, and arbitrary rejection of bone-fide claims by insurers is contrary to public policy.

Result: Complaint allowed.

Table of Content
1. overview of claim repudiation and parties' preliminary contentions. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13)
2. determination of deficiency in service under consumer law. (Para 14 , 15 , 16 , 17 , 18)
3. defining insurance policy scope including 'implosion'. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25)
4. insurer's duty to inspect prior to policy acceptance. (Para 26 , 27 , 28 , 29)
5. final orders, awarding of compensation and interest. (Para 30 , 31 , 32 , 33 , 34 , 35)

CORAM:

HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

HON’BLE MS. BIMLA KUMARI, MEMBER (JUDICIAL)

Present: Mr. Rajeev Nanda, counsel for the Complainant (M. No. 9968294748)

None for the Opposite Parties.

PER: HON’BLE MS. BIMLA KUMARI, MEMBER (JUDICIAL)

JUDGMENT

1. Brief facts of the case as per complaint are that Sh. Pankaj Kumar Jha is the sole proprietor of Complainant concern and is dealing in the supply of dental equipments from Shop No. 5, 1st Floor, 1487/2, Moti Cinema Compound, Chandni Chowk, Delhi-110006. The Complainant approached the Opposite Party No. 2/Bank to avail the overdraft facility, where he was advised to take insurance policy so that the money advanced to the Complainant remains safe in the event of any eventuality. Thus, on 05.07.2013, the Complainant purchased a ‘Standard Fire & Special Perils Policy’ bearing no. OG-14-1104-4001-00000732 from the Opposite Party No. 1 in respect of Shop No. 5, 1st Floor, 1487/2, Moti Cinema Compound, Chandni Chowk, Delhi-110006, for a sum insured Rs.28,50,000/- for the period w.e.f. 24.06.2013 to 23.06.2014. The Complainant also paid premium of Rs.8,646/-towards the policy. He also purchased a ‘Burglary Insurance Policy’ bearing no. OG-14-1104-4010-00000287 from the Opposite Party No. 1 in respect of Shop No. 5, 1st Floor, 1487/2, Moti Cinema Compound, Chandni Chowk, Delhi-110006, for a sum insured of Rs.28,50,000/- for a period w.e.f. 24.06.2013 to 23.06.2014. The Complainant also paid premium of Rs.640/-towards that policy.

2. It is the case of Complainant that on 04.08.2013, the building in which the shop No. 5, 1st Floor, 1487/2, Moti Cinema Compound, Chandni Chowk was located, had collapsed. The Authorities including Disaster Management team, SDM staff and MCD staff reported to the place of incident to ascertain the cause and to see if there was any casualty. The FIR bearing no. 144 was also registered at Kotwali, Police Station. In the incident, two people were injured and all shops/offices in that building were gutted due to fire, which was, later on, controlled by Fire Department. The incident was also reported in newspapers and News channels widely.

3. It is the further case of Complainant that its claim bearing no. OC-14-1101-4001-00000030 was illegally and arbitrarily rejected by Opposite Party No. 1 vide repudiation letter no. 18125 dated 28.10.2013. The repudiation letter was based on the report submitted by Surveyor/Opposite Party No. 3. It was stated in the repudiation letter that no insured peril was operated at the time of collapse of building.

4. It is the further case of Complainant that it had taken the insurance policies in June 2013 through Opposite Party No. 2 after completing the necessary formalities. However, its claim was repudiated by giving lame excuse that the building was around 100 years old and the collapse could be attributed to aging and normal wear and tear, which was beyond the policy coverage. The Complainant visited the office of Opposite Party No. 1 & 2 for inquiry, but the Opposite Parties failed to provide any information. He also made several visits to the offices of Opposite Parties to know the status of his claims, but evasive replies were given by the officials of Opposite Party No. 1 & 2. Several e-mails were also exchanged between him and Opposite Parties. The ex-facie conduct of Opposite Parties makes it clear that the Opposite Parties are regularly denying the legitimate right of

Click Here to Read the rest of this document

2026 Supreme(Online)(SCDRC) 2076

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONSangita Dhingra Sehgal, President, Bimla Kumari, Judicial MemberSundent India – AppellantVersusBajaj Allianz General Insurance Co. Ltd. – RespondentCOMPLAINT CASE NO.-1102/2015

An insurance company cannot repudiate a claim based on structural defects or building age if it issued the policy without conducting a pre-inspection of the premises, and any collapse of the insured structure qualifies as an 'implosion' peril covered under standard fire policies.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Judicial Member
Sundent India – Appellant
Versus
Bajaj Allianz General Insurance Co. Ltd. – Respondent
COMPLAINT CASE NO.-1102/2015