The defect rectification manager told me that it is normal for water level to reduce during ponding test & such reduction does not mean leakage.  The water level reduced bout 1-2cm within 18 hours.  Is what he said is true?  Any one with experience in this, please give your valuable comment.  Thanks

The proper way to check water leakage after ponding test is by looking for sign of leakage not the water level reduce or not.
If you can spot sign of leakage, then your developer shall repair it , no need to argue on the water level.