19 May 2025 Insurance >> Personal Law  

This case of Gopal Dikshit v/s United India Insurance Company Ltd. involves an appeal filed by an appellant (the homeowner) against the dismissal of their insurance claim by the National Consumer Disputes Redressal Commission (NCDRC). The homeowner's property, insured for Rs. 1.50 crores, suffered significant damage due to water inundation in the basement between August 25 and August 31, 2016, following heavy rainfall in New Delhi.

Upon returning to their home, the homeowner discovered the basement flooded with approximately three feet of water, damaging furniture, fittings, and other belongings. A booster pump was installed to drain the water, but the flooding persisted.

Initial surveys and reports from various experts concluded that heavy rainfall and subsequent flooding were the cause of the damage. The first surveyor's report dated September 6, 2016, explicitly stated that water entered the premises from the flooring due to heavy rains on August 25, 2016. Additionally, reports from M/s International Consultants & Technocrats Pvt. Ltd. and M/s Chordia Engineering Consultancy Services corroborated that flooding due to heavy downpour was the cause of the damage.

However, the insurance company (respondent) repudiated the claim based on a later survey report dated October 18, 2016, which attributed the damage to "seepage". The insurance company argued that "seepage" was not a covered peril under the policy and relied on a certificate from Unique Consulting Engineers, which mentioned water seepage affecting structural elements.

The appellant contended that the rapid accumulation of three feet of water in the basement could not be classified as "seepage" and that the second survey was conducted ten days after the incident without proper justification, contradicting the initial findings. They also highlighted that the Unique Consulting Engineers' report focused on general structural integrity and not the basement's condition or the cause of the immediate damage.

After reviewing the evidence, the court found that the initial survey and expert reports consistently pointed to flooding due to heavy rainfall as the cause of damage. The court deemed the second survey report, which introduced "seepage" as the cause, to be arbitrary and lacking a proper basis, especially since it failed to explain the deviation from the first report's findings.

Consequently, the court set aside the NCDRC's dismissal of the complaint, concluding that the damage was a direct result of heavy rainfall and flooding, not structural defects or seepage. The matter has been sent back to the NCDRC to determine the appropriate compensation payable to the homeowner.