Herein, we report a C-H bond functionalization strategy for the construction of oxo- and aza-spirocyclic compounds from diazo compounds as coupling partners. Our method comprises ortho sp2 C-H bond activation of arylacyl ammonium salts, followed by coupling with two types of cyclic diazo compounds i.e. 4-diazoisochroman-3-imines and 4-diazoisoquinolin-3-ones, respectively. The mechanism involves the formation of dual metal carbene intermediates in situ with the breakage of oxidizing C-N bonds in arylacyl ammonium salts. The cascade C-H activation/annulation process gave a variety of novel spiro[indene-1,4'-isochromane]-3,3'(2H)-diones and spiro[indene-1,4'-isoquinoline]-3,3'(2H)-diones in good to excellent yields. Readily available starting materials, broad substrate scope, and operationally simple and mild reaction conditions are the prominent features of this method.