Full Judgment Text
2025 INSC 731
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6623 OF 2025
GOPAL DIKSHIT …APPELLANT(S)
VERSUS
UNITED INDIA INSURANCE
COMPANY LTD.
…RESPONDENT(S)
J U D G M E N T
SATISH CHANDRA SHARMA, J.
1. The present appeal under Section 23 of the Consumer
Protection Act, 1986 (hereinafter the “Act”) arises out of the
impugned order dated 07.12.2022 passed by the Hon’ble
National Consumer Disputes Redressal Commission, New Delhi
(hereinafter “NCDRC”) in Consumer Case No. 2287 of 2017
whereby NCDRC dismissed the complaint filed by the Appellant.
Signature Not Verified
Digitally signed by
NEETU SACHDEVA
Date: 2025.05.19
17:18:05 IST
Reason:
Civil Appeal No. 6623 of 2025 Page 1 of 18
FACTUAL MATRIX
2. The complainant who is the Appellant herein is the owner
of the premises situated at 50, Ishwar Nagar, Mathura Road, New
Delhi, 110065 (hereinafter “Premises”). The Premises had a
basement, ground floor, first floor and second floor. The entire
building was insured with the opposite party who is the
Respondent herein vide House Holder Insurance Policy No.
2219042615P115431073 for Rs. 1.50 crores which was valid for
the period from 13.03.2016 to 12.03.2017.
3. It is the case of the Appellant that due to a heavy downpour
in New Delhi from 25.08.2016 to 31.08.2016, the Premises were
severely flooded. During this period, the Appellant was out of
Delhi from 24.08.2016 to 29.08.2016. Upon his return, he found
that the basement of the Premises was inundated with water,
resulting in extensive damage to the furniture, fittings, almirahs,
books, and other belongings stored there. In an effort to prevent
further deterioration, the Appellant installed a booster pump on
30.08.2016 to drain out the water from the basement. Despite this
measure, the accumulated floodwater could not be completely
drained out. Thereafter, the Surveyor, Mr. Akash Chopra, visited
the Premises on 03.09.3016 and inspected the basement.
4. On 04.09.2016, the Appellant contacted Ms. Indu Singh by
phone to inquire about the outcome of the survey conducted by
Civil Appeal No. 6623 of 2025 Page 2 of 18
Mr. Akash Chopra. Ms. Singh informed him that the report
prepared by Mr. Chopra was not satisfactory and, therefore, she
would assign another Surveyor to revisit the premises and
reassess the damage. The Appellant also requested a copy of the
preliminary survey report, but the Respondent did not provide it,
avoiding the request without offering any explanation.
5. Second Surveyor, Mr. R.K. Singla visited the Appellant’s
Premises and conducted the survey again. In the meanwhile, the
surveyor who visited the site on 03.09.2016, submitted its report
on 06.09.2016 which stated that the cause of loss was due to
heavy rain in Delhi on 25.08.2016 and water entered from the
flooring, resulting in damages to the insured building and
contents.
6. Additionally, on 07.09.2016 the Appellant sought the
opinion of two structural engineers concerning the safety of the
Premises. The opinion given by both of them indicated that the
building was no longer fit for habitation and had become
structurally unsafe and concluded that the Premises had to be
vacated immediately and recommended that it be demolished and
reconstructed.
7. On 10.09.2016, the Complainant once again contacted Ms.
Indu Singh to inquire about the status of the survey. She reiterated
that the report was not satisfactory and requested the Appellant
Civil Appeal No. 6623 of 2025 Page 3 of 18
to visit her office on 12.09.2016 to clarify certain points. During
this meeting, Ms. Indu Singh informed the Complainant that, due
to the use of the term “seepage” in the survey reports, the
insurance claim would not be admissible. Consequently, the final
survey report was submitted on 18.10.2016.
8. Subsequently, on 23.11.2016, the Appellant received a
letter from the Respondent formally repudiating the claim. The
rejection was based on the ground that the damage to the building
was caused by continuous seepage of water from the basement,
which was not listed as a named peril under the insurance policy,
therefore, the resulting loss or damage was not indemnifiable.
9. Being aggrieved and dissatisfied by the dismissal of the
Appellant’s claim, Consumer Case No. 2287 of 2017 was filed
before NCDRC. However, the said complaint was dismissed by
the NCDRC, which gives rise to the instant appeal.
10. Before delving into the merits of the case, we would like
to consider the submissions made by the parties.
SUBMISSIONS MADE BY THE
APPELLANT/COMPLAINANT
11. The learned counsel for the petitioner submitted that
judgments of NCDRC have consistently held that “flood” means
outpouring of water and on this analogy, it would include both
Civil Appeal No. 6623 of 2025 Page 4 of 18
inundation and seepage. Reliance was placed on United India
Insurance Co. Ltd. v. Dipendu Ghosh & Anr. reported in II
(2009) CPJ 311 (NC) .
12. Moreover, it was submitted that NCDRC ought to have
relied on the Meteorological Department Report stating that
Delhi had rainfall during the period of 25.08.2016 to 31.08.2016.
It was further submitted that it is a common practice in Delhi that
on a particular day certain portions of Delhi received scanty
rainfall whereas other pockets received heavy rainfall. In the case
of the Appellant, the Ishwar Nagar area received heavy rainfall
and as such there was flooding in the area.
13. Furthermore, the Appellant submitted that “seepage”
refers to the slow and gradual flow of liquid from a source. In the
present case, the basement had accumulated over 3 feet of water
within a span of just three days while the Appellant was away
from Delhi. The Appellant respectfully contended that such rapid
and substantial flooding cannot be classified as “seepage” as
seepage does not result in the sudden inundation of a basement
with three feet of water.
14. It was further submitted that in case there was seepage
water in the basement, the same ought to have attracted the
attention of the Appellant earlier and he ought to have taken
adequate remedial measures to stop the seepage and not allowed
Civil Appeal No. 6623 of 2025 Page 5 of 18
the water to retain in the premises and get his belongings
damaged.
15. Moreover, the first surveyor visited the site on 03.09.2016
while the 2nd Surveyor visited the site only on 09.09.2016 i.e. 10
days after the reporting of the incident to the Respondent. It was
respectfully submitted that no prudent person would allow the
water to stay in the premises for 10 days and further facilitate in
destroying his belongings kept in the basement. The NCDRC
ought to have relied on the Survey Report dated 06.09.2016
rather than the Survey Report dated 18.10.2016. It may not be out
of place to state that once the survey was conducted on
09.09.2016, there was no occasion to submit the report on
18.10.2016 i.e. more than one month after conducting the survey.
The same smacks of mala fide intentions on the part of the
Respondent.
16. It was further contended that in its Report dated
06.09.2016, the Surveyor specifically states that the cause of loss
was: “Due to heavy rains in Delhi on 25.08.2016 the water
entered from the flooring, resulted in damages to the insured's
building and contents.” It is submitted that the Survey Report
dated 06.09.2016 was never taken into consideration by the
Respondent and instead the Respondent opted to go for another
survey which was conducted 10 days after the incident occurred.
Civil Appeal No. 6623 of 2025 Page 6 of 18
17. Moreover, the report of the engineer only stated the
condition of the building which had nothing to do with the
seepage water in the basement. In this behalf it was submitted
that the Certificates issued by M/s Unique Consulting Engineers
dated 07.09.2016 states that:
“Further, existing building was constructed having
RCC frame. As time passes structure became old
resulting corrosion in reinforcement due to water
seepage in structural elements, i.e. reducing the
strength of building.
Hence, it is strongly recommended to dismantle
existing building and reconstruct to meet present
seismic parameters of the National Building Code
of India; 2009.”
The said report only states the structural condition of the building
and further states that there is water seepage in structural
elements (not basement) which includes the iron rods etc., which
are inserted in the soil. The said report nowhere discusses
anything about the condition of the basement of the building. In
the respectful submission the NCDRC had wrongly relied on the
said Report to reject the legitimate claim of the Appellant.
18. Further, it was submitted that Surveyors appointed by the
Respondent had categorically stated in their reports that there was
heavy rainfall on 25.08.2016. It was submitted that the basement
of the Appellant was perfectly dry when he left on 24.08.2016
but after his return on 29.08.2016 he found that the basement was
Civil Appeal No. 6623 of 2025 Page 7 of 18
flooded with water with water marks on the walls up to the
window height.
19. It was submitted that it is not in dispute that the basement
was flooded with water. The Respondent has denied the claim of
the Appellant on the ground of seepage and appointed multiple
surveyors, however, not once the Respondent has or their
surveyors tried to trace the source of the water, nor appointed
anybody to trace the source of water. The Respondent is
completely silent about the source of water in the basement. The
same is unfair practice on the part of the Respondent.
SUBMISSIONS MADE BY THE RESPONDENTS
20. Learned counsel for the Respondent vehemently argued
that even if “seepage” encompasses both inundation and seepage,
it is pertinent to note that each case is distinct and should be
evaluated/assessed based on its individual set of circumstances
and the specific terms laid out in the contract. Further, the case
law cited by the Appellant in this context does not establish a
universal interpretation applicable to all cases. It was submitted
that the applicability of such precedents should be evaluated
within the framework of the unique insurance policy under
consideration. It was further submitted that the specific terms and
conditions of the policy do not encompass seepage as a covered
Civil Appeal No. 6623 of 2025 Page 8 of 18
peril. Consequently, the rejection of the Appellant’s claim aligns
with the policy’s provisions.
21. Further, it was contended that it is crucial to address the
th st
fact that the Appellant's claim timeline, ranging from 25 to 31
August 2016, raises substantial questions regarding its reliability
and consistency, leaving room for doubt as to whether it was
introduced as an afterthought to buttress its claim by the
Appellant. It is submitted that upon thorough examination of the
th st
Meteorological Report dated 25 to 31 August, 2016,
submitted by the Appellant, it was observed by NCDRC that
there is no mention of heavy rainfall on 25.08.2016. The relevant
portion of the impugned order is reproduced hereinbelow for the
sake of convenience:
“17. The Complainant, however, in the Consumer
Complaint, alleged that the loss was caused during
the period from 25th to 31st August, 2016, which
appears to be an afterthought. We have carefully
gone through the Meteorological Report dated 25th
to 31st August, 2016, filed by the Complainant.
Nowhere in the report is it mentioned that there was
heavy rains on 25th August, 2016. The Policy
covered the risk due to flood and inundation,
amongst others. Meteorological Report does not
show that there was such heavy rain in the area
leading to flooding. Admittedly, the loss was caused
due to seepage. The certificate of International
Consultants and Technocrats Pvt. Ltd. dated
06.09.2016 as well as certificate issued by Unique
Consulting Engineers dated 07.09.2016 make it
Civil Appeal No. 6623 of 2025 Page 9 of 18
abundantly clear that there was continuous ingress
of seepage water into the foundation and basement,
which corroded the reinforcement steel, making it
weaker to sustain loads, especially the lateral loads.
As seepage of water was not named in the insured
perils, the Opposite Party rightly repudiated the
claim.”
It was further submitted that while the insurance policy
encompassed coverage for risks associated with flood and
inundation, among other perils, the Meteorological Report did
not provide substantial evidence to support the occurrence of
significant rainfall in the specific area leading to flooding. It is
pertinent to mention that the primary cause of the loss was
attributed to seepage. This attribution is firmly supported by the
certificates issued by both the structural engineers. Both
certificates unequivocally confirm the existence of a continuous
ingress of seepage water into the foundation and basement,
which consequently resulted in the corrosion of the
reinforcement steel. This corrosion, in turn, compromised the
building’s structural integrity, particularly in its capacity to
withstand loads, especially lateral ones. It is imperative to stress
that the insurance policy did not explicitly include seepage of
water among the insured perils. Consequently, the insurance
company’s decision to repudiate the claim was a justifiable
response, consistent with the policy’s terms and conditions and
the distinct circumstances surrounding the loss.
Civil Appeal No. 6623 of 2025 Page 10 of 18
22. Moreover, the Respondent considers it imperative to
emphasize that the interpretation of “seepage” as a gradual
process aligns with the prevailing circumstances in this case. The
understanding of seepage, especially in the context of a basement
or foundation, acknowledges its potential for a prolonged
occurrence, as water gradually infiltrates and accumulates. It is
submitted that seepage is not confined to insignificant or minimal
quantities of water, but rather refers to the unauthorized
infiltration of water into areas where it should not be, resulting in
the progressive accumulation of water over time.
23. Furthermore, the certificates issued by International
Consultants and Technocrats Pvt. Ltd. on 06.09.2016 underlines
the continuous ingress of seepage water into the foundation and
basement. It was also contended that the certificate issued by
Unique Consulting Engineers dated 07.09.2016 accentuates that
the building was designed according to the Indian Standard codes
of the period when it was constructed in 1986. However, with the
revision of seismic parameters, the existing structure no longer
meets the updated requirements. Furthermore, the structure has
aged over time, resulting in corrosion of reinforcement due to
water seepage, consequently reducing its strength. Therefore,
these expert certificates affirm that the significant damage and
structural deficiencies were primarily attributed to continuous
seepage of water into the foundation and basement, turning
Civil Appeal No. 6623 of 2025 Page 11 of 18
seepage into a persistent issue rather than an abrupt or isolated
event.
24. Moreover, regarding the escalation of the water level in the
basement during the Appellant’s absence, it can still be
reasonably attributed to seepage as it is conceivable that the water
had been gradually infiltrating the area for an extended period,
ultimately leading to a substantial accumulation. Hence, the
NCDRC rightly dismissed the complaint of the Appellant after
appreciating facts and circumstances of the case and the evidence
on records.
25. It was further contended that both the Preliminary Report
and the Final Survey Report unequivocally identified the cause
of the loss as continuous seepage of water into the foundation and
basement of the affected building. These reports provide a clear
and consistent account of the circumstances leading to the
damage. Furthermore, it was noteworthy that there was no
mention of heavy rainfall causing significant damage in The
Times of India editions dated 26.08.2016 and 27.08.2016. The
absence of any news reports documenting rainfall-related
damage during the relevant period supports the conclusions
drawn in the reports submitted by the insurance company.
26. Furthermore, in this case, the certificate issued by M/s
International Consultants & Technocrats Pvt. Ltd. played a
Civil Appeal No. 6623 of 2025 Page 12 of 18
pivotal role in assessing the cause of the loss. The certificate
indicated that continuous seepage of water into the foundation
and basement was the primary cause of the damage, rendering
the building structurally unsound.
DISCUSSION AND ANALYSIS
27. We have carefully considered the submissions and perused
the impugned judgment and materials on record. The point at
issue for consideration is, whether, the cause of loss to the
premises is due to the seepage water or the heavy rains in Delhi.
In considering the arguments advanced by the Appellant, we are
of the considered opinion that the impugned order passed by
NCDRC is liable to be set aside. We shall now examine the
various certificates issued by different authorities in relation to
the said premises.
(a) Observations made in the First Survey Report Dated
06.09.2016 - On perusal of the first survey report dated
06.09.2016 conducted by Mr. Akash Chopra on 03.09.2016, it
can be observed that cause of loss noted in the report is heavy
rains in Delhi on 25.08.2016, during which period, the water
entered from the flooring and that resulted in damage to the
Appellant’s premises. It was further noted that based on the
inspection, the report confirmed that water was found coming
from the flooring and had not come from the main entrance
Civil Appeal No. 6623 of 2025 Page 13 of 18
and/or any openings. The aforesaid survey report was clear about
the cause of loss to the said Premises.
(b) Observations made in the certificate issued by M/s
International Consultants & Technocrats Pvt. Ltd. dated
07.09.2016 - On assessment of the amended certificate issued by
them, which stated that the damage was due to the flooding of
water into the basement which happened due to heavy rainfall, it
can be comprehended that the damage to the premises was not
due to seepage but was caused by flooding of water.
(c) Observations made in the certificate issued by Unique
Consulting Engineers Dated 07.09.2016 - Upon a thorough
review of the statement issued by them, it becomes evident that
no causal link can be established between the subject matter of
the certificate and the cause of damage that has occurred. The
certificate in question specifically addresses water seepage
affecting the structural elements of the building, noting a
consequent reduction in the overall structural integrity. However,
it makes no reference whatsoever to the basement area or any
damage that may have occurred therein. Thus, the aforesaid
certificate fails to substantiate any connection between the
structural issues and the cause of damage in question in the
premises. Therefore, we cannot take into consideration the
aforesaid certificate and we concur with the submissions made
Civil Appeal No. 6623 of 2025 Page 14 of 18
by the learned counsel for the Appellant that the report nowhere
discusses anything about the condition of the basement of the
building.
(d) Observations made in the certificate issued by M/s Chordia
Engineering Consultancy Services Dated 22.09.2016 - This
certificate clearly notes that during the site visit conducted by the
concerned representative, the basement of the insured premises
was found to be flooded. This flooding was attributed to a heavy
downpour that had occurred in the last week of August. As per
the observations recorded, the ingress of water into the basement
was a direct result of this excessive rainfall. Thus, the certificate
establishes that the cause of damage was not due to any structural
failure or seepage water but rather a consequence of the intense
rainfall experienced during that period.
28. Upon a careful examination of the material on record,
including the first survey report and certificates submitted by
various technical experts, it is evident that the cause of damage
to the insured premises was the flooding of water into the
basement due to heavy rainfall in Delhi during the relevant
period. The First Survey Report dated 06.09.2016 clearly
attributes the damage to rainwater entering through the flooring
following the downpour on 25.08.2016. Subsequently, the same
cause is further corroborated by the certificates issued by M/s
Civil Appeal No. 6623 of 2025 Page 15 of 18
International Consultants & Technocrats Pvt. Ltd. and M/s
Chordia Engineering Consultancy Services, both of which
confirm that the flooding, and not seepage or structural failure,
was the proximate cause of loss. Conversely, the certificate
issued by Unique Consulting Engineers pertains solely to
seepage affecting the structural elements of the building and is
silent on the condition of the basement or the cause of damage in
question. As such, this report does not assist in determining the
cause of damage to the basement and therefore, as a result of such
limitation, it cannot be relied upon for the present purpose.
Further, the learned counsel for the Respondent relied upon the
judgment of this court in Mahavir Road and Infrastructure
Private Limited v. Iffco Tokio General Insurance Company
Limited (2019) 5 SCC 677. However, the set of facts of the relied
upon judgment are different from the instant case. In the said
case, the Surveyor recorded that there was no evidence of any
damage on account of flood water and only surface damage was
found. In the case at hand, from the evidence presented before us
it can be concluded that the cause of damage to the premises is
due to heavy rainfall accounting for flooding in the basement.
29. In view of the concurrent findings in the certificates and
first survey report aforementioned, we conclude that the damage
to the insured premises was not caused by any inherent structural
defect or seepage, but was instead a direct consequence of the
Civil Appeal No. 6623 of 2025 Page 16 of 18
unprecedented and heavy rainfall experienced during the relevant
period, which led to flooding of water into the basement.
30. Proceeding further, our attention is drawn to the final
survey and assessment report dated 18.10.2016, which was
prepared following a second survey conducted on the insured
premises approximately ten days after the occurrence of the said
incident. It is pertinent to note that the first survey, conducted
promptly on 03.09.2016, had already comprehensively assessed
the cause and extent of the damage, and there is nothing on record
to suggest that it was deficient or incomplete in any manner.
Despite conducting a survey before, the Respondent proceeded
to commission a second survey without furnishing any
reasonable, cogent, or valid grounds justifying the necessity for
a reassessment. Subsequently, the second survey report dated
18.10.2016 deviated from the reasons of the first survey report
and curiously recorded that the damage to the premises was
caused by seepage, rather than by flooding due to heavy
downpour. However, the second survey report failed to counter
or address the detailed and comprehensive observations made in
the first survey report dated 06.09.2016, nor did it offer any
explanation or new material facts that would warrant a reversal
of the initial conclusion. This abrupt departure from the earlier
findings, without explanation or justification, raises serious
concerns about the reliability and objectivity of the second
Civil Appeal No. 6623 of 2025 Page 17 of 18
survey. In the absence of any substantive grounds to question the
findings of the first survey, we find that the belated reassessment
conducted by the Respondent is deemed arbitrary and without
due basis. In consequence thereof, we find no reason to accept
the second survey report dated 18.10.2016 and the same is hereby
set aside.
31. Accordingly, we set aside the contrary findings impugned
before us and remand the matter back to the NCDRC for the
limited purpose of determining the appropriate quantum of
compensation payable to the Appellant in accordance with the
policy terms and applicable law.
32. The civil appeal is accordingly disposed of.
33. Pending application(s), if any, shall stand disposed of.
……………………………………J.
[B.V. NAGARATHNA]
……………………………………J.
[SATISH CHANDRA SHARMA]
NEW DELHI
May 19, 2025
Civil Appeal No. 6623 of 2025 Page 18 of 18
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6623 OF 2025
GOPAL DIKSHIT …APPELLANT(S)
VERSUS
UNITED INDIA INSURANCE
COMPANY LTD.
…RESPONDENT(S)
J U D G M E N T
SATISH CHANDRA SHARMA, J.
1. The present appeal under Section 23 of the Consumer
Protection Act, 1986 (hereinafter the “Act”) arises out of the
impugned order dated 07.12.2022 passed by the Hon’ble
National Consumer Disputes Redressal Commission, New Delhi
(hereinafter “NCDRC”) in Consumer Case No. 2287 of 2017
whereby NCDRC dismissed the complaint filed by the Appellant.
Signature Not Verified
Digitally signed by
NEETU SACHDEVA
Date: 2025.05.19
17:18:05 IST
Reason:
Civil Appeal No. 6623 of 2025 Page 1 of 18
FACTUAL MATRIX
2. The complainant who is the Appellant herein is the owner
of the premises situated at 50, Ishwar Nagar, Mathura Road, New
Delhi, 110065 (hereinafter “Premises”). The Premises had a
basement, ground floor, first floor and second floor. The entire
building was insured with the opposite party who is the
Respondent herein vide House Holder Insurance Policy No.
2219042615P115431073 for Rs. 1.50 crores which was valid for
the period from 13.03.2016 to 12.03.2017.
3. It is the case of the Appellant that due to a heavy downpour
in New Delhi from 25.08.2016 to 31.08.2016, the Premises were
severely flooded. During this period, the Appellant was out of
Delhi from 24.08.2016 to 29.08.2016. Upon his return, he found
that the basement of the Premises was inundated with water,
resulting in extensive damage to the furniture, fittings, almirahs,
books, and other belongings stored there. In an effort to prevent
further deterioration, the Appellant installed a booster pump on
30.08.2016 to drain out the water from the basement. Despite this
measure, the accumulated floodwater could not be completely
drained out. Thereafter, the Surveyor, Mr. Akash Chopra, visited
the Premises on 03.09.3016 and inspected the basement.
4. On 04.09.2016, the Appellant contacted Ms. Indu Singh by
phone to inquire about the outcome of the survey conducted by
Civil Appeal No. 6623 of 2025 Page 2 of 18
Mr. Akash Chopra. Ms. Singh informed him that the report
prepared by Mr. Chopra was not satisfactory and, therefore, she
would assign another Surveyor to revisit the premises and
reassess the damage. The Appellant also requested a copy of the
preliminary survey report, but the Respondent did not provide it,
avoiding the request without offering any explanation.
5. Second Surveyor, Mr. R.K. Singla visited the Appellant’s
Premises and conducted the survey again. In the meanwhile, the
surveyor who visited the site on 03.09.2016, submitted its report
on 06.09.2016 which stated that the cause of loss was due to
heavy rain in Delhi on 25.08.2016 and water entered from the
flooring, resulting in damages to the insured building and
contents.
6. Additionally, on 07.09.2016 the Appellant sought the
opinion of two structural engineers concerning the safety of the
Premises. The opinion given by both of them indicated that the
building was no longer fit for habitation and had become
structurally unsafe and concluded that the Premises had to be
vacated immediately and recommended that it be demolished and
reconstructed.
7. On 10.09.2016, the Complainant once again contacted Ms.
Indu Singh to inquire about the status of the survey. She reiterated
that the report was not satisfactory and requested the Appellant
Civil Appeal No. 6623 of 2025 Page 3 of 18
to visit her office on 12.09.2016 to clarify certain points. During
this meeting, Ms. Indu Singh informed the Complainant that, due
to the use of the term “seepage” in the survey reports, the
insurance claim would not be admissible. Consequently, the final
survey report was submitted on 18.10.2016.
8. Subsequently, on 23.11.2016, the Appellant received a
letter from the Respondent formally repudiating the claim. The
rejection was based on the ground that the damage to the building
was caused by continuous seepage of water from the basement,
which was not listed as a named peril under the insurance policy,
therefore, the resulting loss or damage was not indemnifiable.
9. Being aggrieved and dissatisfied by the dismissal of the
Appellant’s claim, Consumer Case No. 2287 of 2017 was filed
before NCDRC. However, the said complaint was dismissed by
the NCDRC, which gives rise to the instant appeal.
10. Before delving into the merits of the case, we would like
to consider the submissions made by the parties.
SUBMISSIONS MADE BY THE
APPELLANT/COMPLAINANT
11. The learned counsel for the petitioner submitted that
judgments of NCDRC have consistently held that “flood” means
outpouring of water and on this analogy, it would include both
Civil Appeal No. 6623 of 2025 Page 4 of 18
inundation and seepage. Reliance was placed on United India
Insurance Co. Ltd. v. Dipendu Ghosh & Anr. reported in II
(2009) CPJ 311 (NC) .
12. Moreover, it was submitted that NCDRC ought to have
relied on the Meteorological Department Report stating that
Delhi had rainfall during the period of 25.08.2016 to 31.08.2016.
It was further submitted that it is a common practice in Delhi that
on a particular day certain portions of Delhi received scanty
rainfall whereas other pockets received heavy rainfall. In the case
of the Appellant, the Ishwar Nagar area received heavy rainfall
and as such there was flooding in the area.
13. Furthermore, the Appellant submitted that “seepage”
refers to the slow and gradual flow of liquid from a source. In the
present case, the basement had accumulated over 3 feet of water
within a span of just three days while the Appellant was away
from Delhi. The Appellant respectfully contended that such rapid
and substantial flooding cannot be classified as “seepage” as
seepage does not result in the sudden inundation of a basement
with three feet of water.
14. It was further submitted that in case there was seepage
water in the basement, the same ought to have attracted the
attention of the Appellant earlier and he ought to have taken
adequate remedial measures to stop the seepage and not allowed
Civil Appeal No. 6623 of 2025 Page 5 of 18
the water to retain in the premises and get his belongings
damaged.
15. Moreover, the first surveyor visited the site on 03.09.2016
while the 2nd Surveyor visited the site only on 09.09.2016 i.e. 10
days after the reporting of the incident to the Respondent. It was
respectfully submitted that no prudent person would allow the
water to stay in the premises for 10 days and further facilitate in
destroying his belongings kept in the basement. The NCDRC
ought to have relied on the Survey Report dated 06.09.2016
rather than the Survey Report dated 18.10.2016. It may not be out
of place to state that once the survey was conducted on
09.09.2016, there was no occasion to submit the report on
18.10.2016 i.e. more than one month after conducting the survey.
The same smacks of mala fide intentions on the part of the
Respondent.
16. It was further contended that in its Report dated
06.09.2016, the Surveyor specifically states that the cause of loss
was: “Due to heavy rains in Delhi on 25.08.2016 the water
entered from the flooring, resulted in damages to the insured's
building and contents.” It is submitted that the Survey Report
dated 06.09.2016 was never taken into consideration by the
Respondent and instead the Respondent opted to go for another
survey which was conducted 10 days after the incident occurred.
Civil Appeal No. 6623 of 2025 Page 6 of 18
17. Moreover, the report of the engineer only stated the
condition of the building which had nothing to do with the
seepage water in the basement. In this behalf it was submitted
that the Certificates issued by M/s Unique Consulting Engineers
dated 07.09.2016 states that:
“Further, existing building was constructed having
RCC frame. As time passes structure became old
resulting corrosion in reinforcement due to water
seepage in structural elements, i.e. reducing the
strength of building.
Hence, it is strongly recommended to dismantle
existing building and reconstruct to meet present
seismic parameters of the National Building Code
of India; 2009.”
The said report only states the structural condition of the building
and further states that there is water seepage in structural
elements (not basement) which includes the iron rods etc., which
are inserted in the soil. The said report nowhere discusses
anything about the condition of the basement of the building. In
the respectful submission the NCDRC had wrongly relied on the
said Report to reject the legitimate claim of the Appellant.
18. Further, it was submitted that Surveyors appointed by the
Respondent had categorically stated in their reports that there was
heavy rainfall on 25.08.2016. It was submitted that the basement
of the Appellant was perfectly dry when he left on 24.08.2016
but after his return on 29.08.2016 he found that the basement was
Civil Appeal No. 6623 of 2025 Page 7 of 18
flooded with water with water marks on the walls up to the
window height.
19. It was submitted that it is not in dispute that the basement
was flooded with water. The Respondent has denied the claim of
the Appellant on the ground of seepage and appointed multiple
surveyors, however, not once the Respondent has or their
surveyors tried to trace the source of the water, nor appointed
anybody to trace the source of water. The Respondent is
completely silent about the source of water in the basement. The
same is unfair practice on the part of the Respondent.
SUBMISSIONS MADE BY THE RESPONDENTS
20. Learned counsel for the Respondent vehemently argued
that even if “seepage” encompasses both inundation and seepage,
it is pertinent to note that each case is distinct and should be
evaluated/assessed based on its individual set of circumstances
and the specific terms laid out in the contract. Further, the case
law cited by the Appellant in this context does not establish a
universal interpretation applicable to all cases. It was submitted
that the applicability of such precedents should be evaluated
within the framework of the unique insurance policy under
consideration. It was further submitted that the specific terms and
conditions of the policy do not encompass seepage as a covered
Civil Appeal No. 6623 of 2025 Page 8 of 18
peril. Consequently, the rejection of the Appellant’s claim aligns
with the policy’s provisions.
21. Further, it was contended that it is crucial to address the
th st
fact that the Appellant's claim timeline, ranging from 25 to 31
August 2016, raises substantial questions regarding its reliability
and consistency, leaving room for doubt as to whether it was
introduced as an afterthought to buttress its claim by the
Appellant. It is submitted that upon thorough examination of the
th st
Meteorological Report dated 25 to 31 August, 2016,
submitted by the Appellant, it was observed by NCDRC that
there is no mention of heavy rainfall on 25.08.2016. The relevant
portion of the impugned order is reproduced hereinbelow for the
sake of convenience:
“17. The Complainant, however, in the Consumer
Complaint, alleged that the loss was caused during
the period from 25th to 31st August, 2016, which
appears to be an afterthought. We have carefully
gone through the Meteorological Report dated 25th
to 31st August, 2016, filed by the Complainant.
Nowhere in the report is it mentioned that there was
heavy rains on 25th August, 2016. The Policy
covered the risk due to flood and inundation,
amongst others. Meteorological Report does not
show that there was such heavy rain in the area
leading to flooding. Admittedly, the loss was caused
due to seepage. The certificate of International
Consultants and Technocrats Pvt. Ltd. dated
06.09.2016 as well as certificate issued by Unique
Consulting Engineers dated 07.09.2016 make it
Civil Appeal No. 6623 of 2025 Page 9 of 18
abundantly clear that there was continuous ingress
of seepage water into the foundation and basement,
which corroded the reinforcement steel, making it
weaker to sustain loads, especially the lateral loads.
As seepage of water was not named in the insured
perils, the Opposite Party rightly repudiated the
claim.”
It was further submitted that while the insurance policy
encompassed coverage for risks associated with flood and
inundation, among other perils, the Meteorological Report did
not provide substantial evidence to support the occurrence of
significant rainfall in the specific area leading to flooding. It is
pertinent to mention that the primary cause of the loss was
attributed to seepage. This attribution is firmly supported by the
certificates issued by both the structural engineers. Both
certificates unequivocally confirm the existence of a continuous
ingress of seepage water into the foundation and basement,
which consequently resulted in the corrosion of the
reinforcement steel. This corrosion, in turn, compromised the
building’s structural integrity, particularly in its capacity to
withstand loads, especially lateral ones. It is imperative to stress
that the insurance policy did not explicitly include seepage of
water among the insured perils. Consequently, the insurance
company’s decision to repudiate the claim was a justifiable
response, consistent with the policy’s terms and conditions and
the distinct circumstances surrounding the loss.
Civil Appeal No. 6623 of 2025 Page 10 of 18
22. Moreover, the Respondent considers it imperative to
emphasize that the interpretation of “seepage” as a gradual
process aligns with the prevailing circumstances in this case. The
understanding of seepage, especially in the context of a basement
or foundation, acknowledges its potential for a prolonged
occurrence, as water gradually infiltrates and accumulates. It is
submitted that seepage is not confined to insignificant or minimal
quantities of water, but rather refers to the unauthorized
infiltration of water into areas where it should not be, resulting in
the progressive accumulation of water over time.
23. Furthermore, the certificates issued by International
Consultants and Technocrats Pvt. Ltd. on 06.09.2016 underlines
the continuous ingress of seepage water into the foundation and
basement. It was also contended that the certificate issued by
Unique Consulting Engineers dated 07.09.2016 accentuates that
the building was designed according to the Indian Standard codes
of the period when it was constructed in 1986. However, with the
revision of seismic parameters, the existing structure no longer
meets the updated requirements. Furthermore, the structure has
aged over time, resulting in corrosion of reinforcement due to
water seepage, consequently reducing its strength. Therefore,
these expert certificates affirm that the significant damage and
structural deficiencies were primarily attributed to continuous
seepage of water into the foundation and basement, turning
Civil Appeal No. 6623 of 2025 Page 11 of 18
seepage into a persistent issue rather than an abrupt or isolated
event.
24. Moreover, regarding the escalation of the water level in the
basement during the Appellant’s absence, it can still be
reasonably attributed to seepage as it is conceivable that the water
had been gradually infiltrating the area for an extended period,
ultimately leading to a substantial accumulation. Hence, the
NCDRC rightly dismissed the complaint of the Appellant after
appreciating facts and circumstances of the case and the evidence
on records.
25. It was further contended that both the Preliminary Report
and the Final Survey Report unequivocally identified the cause
of the loss as continuous seepage of water into the foundation and
basement of the affected building. These reports provide a clear
and consistent account of the circumstances leading to the
damage. Furthermore, it was noteworthy that there was no
mention of heavy rainfall causing significant damage in The
Times of India editions dated 26.08.2016 and 27.08.2016. The
absence of any news reports documenting rainfall-related
damage during the relevant period supports the conclusions
drawn in the reports submitted by the insurance company.
26. Furthermore, in this case, the certificate issued by M/s
International Consultants & Technocrats Pvt. Ltd. played a
Civil Appeal No. 6623 of 2025 Page 12 of 18
pivotal role in assessing the cause of the loss. The certificate
indicated that continuous seepage of water into the foundation
and basement was the primary cause of the damage, rendering
the building structurally unsound.
DISCUSSION AND ANALYSIS
27. We have carefully considered the submissions and perused
the impugned judgment and materials on record. The point at
issue for consideration is, whether, the cause of loss to the
premises is due to the seepage water or the heavy rains in Delhi.
In considering the arguments advanced by the Appellant, we are
of the considered opinion that the impugned order passed by
NCDRC is liable to be set aside. We shall now examine the
various certificates issued by different authorities in relation to
the said premises.
(a) Observations made in the First Survey Report Dated
06.09.2016 - On perusal of the first survey report dated
06.09.2016 conducted by Mr. Akash Chopra on 03.09.2016, it
can be observed that cause of loss noted in the report is heavy
rains in Delhi on 25.08.2016, during which period, the water
entered from the flooring and that resulted in damage to the
Appellant’s premises. It was further noted that based on the
inspection, the report confirmed that water was found coming
from the flooring and had not come from the main entrance
Civil Appeal No. 6623 of 2025 Page 13 of 18
and/or any openings. The aforesaid survey report was clear about
the cause of loss to the said Premises.
(b) Observations made in the certificate issued by M/s
International Consultants & Technocrats Pvt. Ltd. dated
07.09.2016 - On assessment of the amended certificate issued by
them, which stated that the damage was due to the flooding of
water into the basement which happened due to heavy rainfall, it
can be comprehended that the damage to the premises was not
due to seepage but was caused by flooding of water.
(c) Observations made in the certificate issued by Unique
Consulting Engineers Dated 07.09.2016 - Upon a thorough
review of the statement issued by them, it becomes evident that
no causal link can be established between the subject matter of
the certificate and the cause of damage that has occurred. The
certificate in question specifically addresses water seepage
affecting the structural elements of the building, noting a
consequent reduction in the overall structural integrity. However,
it makes no reference whatsoever to the basement area or any
damage that may have occurred therein. Thus, the aforesaid
certificate fails to substantiate any connection between the
structural issues and the cause of damage in question in the
premises. Therefore, we cannot take into consideration the
aforesaid certificate and we concur with the submissions made
Civil Appeal No. 6623 of 2025 Page 14 of 18
by the learned counsel for the Appellant that the report nowhere
discusses anything about the condition of the basement of the
building.
(d) Observations made in the certificate issued by M/s Chordia
Engineering Consultancy Services Dated 22.09.2016 - This
certificate clearly notes that during the site visit conducted by the
concerned representative, the basement of the insured premises
was found to be flooded. This flooding was attributed to a heavy
downpour that had occurred in the last week of August. As per
the observations recorded, the ingress of water into the basement
was a direct result of this excessive rainfall. Thus, the certificate
establishes that the cause of damage was not due to any structural
failure or seepage water but rather a consequence of the intense
rainfall experienced during that period.
28. Upon a careful examination of the material on record,
including the first survey report and certificates submitted by
various technical experts, it is evident that the cause of damage
to the insured premises was the flooding of water into the
basement due to heavy rainfall in Delhi during the relevant
period. The First Survey Report dated 06.09.2016 clearly
attributes the damage to rainwater entering through the flooring
following the downpour on 25.08.2016. Subsequently, the same
cause is further corroborated by the certificates issued by M/s
Civil Appeal No. 6623 of 2025 Page 15 of 18
International Consultants & Technocrats Pvt. Ltd. and M/s
Chordia Engineering Consultancy Services, both of which
confirm that the flooding, and not seepage or structural failure,
was the proximate cause of loss. Conversely, the certificate
issued by Unique Consulting Engineers pertains solely to
seepage affecting the structural elements of the building and is
silent on the condition of the basement or the cause of damage in
question. As such, this report does not assist in determining the
cause of damage to the basement and therefore, as a result of such
limitation, it cannot be relied upon for the present purpose.
Further, the learned counsel for the Respondent relied upon the
judgment of this court in Mahavir Road and Infrastructure
Private Limited v. Iffco Tokio General Insurance Company
Limited (2019) 5 SCC 677. However, the set of facts of the relied
upon judgment are different from the instant case. In the said
case, the Surveyor recorded that there was no evidence of any
damage on account of flood water and only surface damage was
found. In the case at hand, from the evidence presented before us
it can be concluded that the cause of damage to the premises is
due to heavy rainfall accounting for flooding in the basement.
29. In view of the concurrent findings in the certificates and
first survey report aforementioned, we conclude that the damage
to the insured premises was not caused by any inherent structural
defect or seepage, but was instead a direct consequence of the
Civil Appeal No. 6623 of 2025 Page 16 of 18
unprecedented and heavy rainfall experienced during the relevant
period, which led to flooding of water into the basement.
30. Proceeding further, our attention is drawn to the final
survey and assessment report dated 18.10.2016, which was
prepared following a second survey conducted on the insured
premises approximately ten days after the occurrence of the said
incident. It is pertinent to note that the first survey, conducted
promptly on 03.09.2016, had already comprehensively assessed
the cause and extent of the damage, and there is nothing on record
to suggest that it was deficient or incomplete in any manner.
Despite conducting a survey before, the Respondent proceeded
to commission a second survey without furnishing any
reasonable, cogent, or valid grounds justifying the necessity for
a reassessment. Subsequently, the second survey report dated
18.10.2016 deviated from the reasons of the first survey report
and curiously recorded that the damage to the premises was
caused by seepage, rather than by flooding due to heavy
downpour. However, the second survey report failed to counter
or address the detailed and comprehensive observations made in
the first survey report dated 06.09.2016, nor did it offer any
explanation or new material facts that would warrant a reversal
of the initial conclusion. This abrupt departure from the earlier
findings, without explanation or justification, raises serious
concerns about the reliability and objectivity of the second
Civil Appeal No. 6623 of 2025 Page 17 of 18
survey. In the absence of any substantive grounds to question the
findings of the first survey, we find that the belated reassessment
conducted by the Respondent is deemed arbitrary and without
due basis. In consequence thereof, we find no reason to accept
the second survey report dated 18.10.2016 and the same is hereby
set aside.
31. Accordingly, we set aside the contrary findings impugned
before us and remand the matter back to the NCDRC for the
limited purpose of determining the appropriate quantum of
compensation payable to the Appellant in accordance with the
policy terms and applicable law.
32. The civil appeal is accordingly disposed of.
33. Pending application(s), if any, shall stand disposed of.
……………………………………J.
[B.V. NAGARATHNA]
……………………………………J.
[SATISH CHANDRA SHARMA]
NEW DELHI
May 19, 2025
Civil Appeal No. 6623 of 2025 Page 18 of 18