(Civil Appeal No. 6623 of 2025), delivered on 19 May 2025.
2025 7 SCR 1
Background of the Case The appellant, Gopal Dikshit, had insured his premises with United India Insurance Company Ltd.12. He claimed that due to a heavy downpour in Delhi from 25 to 31 August 2016, his basement was severely flooded, causing extensive damage to furniture, fittings, and other belongings13.
A first survey was conducted on 3 September 2016, and its report, submitted on 6 September 2016, attributed the loss to heavy rain and water entering from the flooring45. However, the insurance company’s representative deemed this report unsatisfactory and commissioned a second survey4. The appellant also obtained opinions from structural engineers, some of which focused on structural issues or general seepage, while another confirmed flooding due to heavy rainfall6….
On 23 November 2016, the respondent insurance company repudiated the claim, stating that the damage was caused by “continuous seepage of water from the basement”, which was not a covered peril under the policy1…. The National Consumer Disputes Redressal Commission (NCDRC) dismissed the appellant’s complaint, upholding the insurance company’s decision113.
Issue for Consideration by the Supreme Court The primary issue for the Supreme Court was whether the damage to the premises was caused by seepage or by heavy rains (flooding), and the correctness of the NCDRC’s decision114.
Supreme Court’s Findings and Reasoning
1. Cause of Damage: The Supreme Court found that the damage was a direct consequence of unprecedented and heavy rainfall, which led to the flooding of the basement, not an inherent structural defect or mere seepage1516.
2. Reliability of Survey Reports: The Court noted that the first survey report (dated 6 September 2016) had comprehensively assessed the damage and correctly identified heavy rain as the cause5…. There was no evidence to suggest this first report was deficient1617.
3. Arbitrary Reassessment: The Court criticised the respondent for commissioning a second survey without reasonable or valid grounds, especially since the first was comprehensive. The second survey report (dated 18 October 2016) “deviated from the reasons of the first survey report and curiously recorded that the damage… was caused by seepage”1718. This abrupt change in findings, without explanation or new material facts to warrant a reversal, raised serious concerns about its reliability and objectivity1718. The Court also highlighted that one of the expert certificates relied upon by the respondent only pertained to structural elements and did not address the basement’s condition or the cause of damage there7….
4. No Basis for Rejection: The Court concluded that the belated reassessment by the respondent was “arbitrary and without due basis”1718.
Conclusion The Supreme Court set aside the NCDRC’s contrary findings and also the second survey report17…. The matter was remanded 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 law17…. The appeal was thus allowed21.
