' IQBAL HAMEED-UR-RAHMAN, J.---The instant appeal has been filed under section 124(2) of Insurance Ordinance, 2000 against the judgment dated 21-11-2007 passed by learned Additional District and Sessions Judge-I with powers of Insurance Tribunal, Punjab, Lahore.
2. It is stated that the instant appeal is the outcome of an Insurance Policy No,504825814-7 for an amount of Rs,100,0000 obtained by the husband of the appellant namely Malik Muhammad Saleem. It is further stated that after the death of the insured Malik Muhammad Saleem on 22-6- 2000, the claim was duly lodged by the appellant instantaneously but the same had been repudiated by the respondents on 29-3-2001, in view of the same, the appellant agitated the matter before the Wafaqi Mohtasib, who passed the findings (?)in favour of the appellant vide order dated 8-9-2001. The same had been assailed by the respondents before the President of Pakistan in appeal. The said appeal of the respondents had been dismissed vide order dated 22-7- 2002. The respondents filed a review application, the same also did not find favour with the President of Pakistan and the same was also dismissed on 20-8-2002. Thereafter, the appellant had lodged a claim without liquidated damages for an amount of Rs,10,70,000 on 16-10-2002.
Thereafter, the appellant claimed an amount of Rs,10,70,000 excluding the claim of the liquidated damages, which was not paid by the respondents to the appellant. In view of the same, the appellant was compelled to again file a complaint before the Wafaqi Mohtasib for nonpayment of the liquidated damages, which was allowed by the Wafaqi Mohtasib vide its findings dated 18-4- 2003 but subsequently the said findings in favour of the appellant had been recalled by the Wafaqi Mohtasib by passing a revised findings against the appellant on 2-6-2004. The appellant assailed the findings of the Wafaqi Mohtasib dated 2-6-2004 before the President of Pakistan and the same was dismissed on 30-11-2005. The said order of the President of Pakistan was thereafter, assailed before this Court in Writ Petition No,1374 of 2006 which was allowed by this Court vide order dated 18-4-2006 and the said case of the appellant is reported as Mst. Nusrat Malik Saleem v. The Federation of Pakistan 2006 CLD 874, holding that under section 118 of the Insurance Ordinance, 2000, the appellant was entitled to liquidated damages in case of delay in payment of insurance claim, from the date of completion of case which could only be refused by promptly paying the claim or it is proved that delay occurred due to circumstances beyond the control of insurer. The respondents assailed the said order passed by this Court in Writ Petition No,1374 of 2006 dated 18- 4-2006 through C.P. No,982/L of 2006 before the honourable Supreme Court of Pakistan, which stood dismissed vide order dated 24-11-2006. Along with the respondents, the appellant had also filed C.P. No,983/L of 2006 before the honourable Supreme Court of Pakistan, in both the petitions leave was refused and it was held that the delay had been caused by the employees of the Corporation in the payment of the claim and resultantly the respondents were directed to pay the liquidated damages, which the respondents paid through cheques for an amount of Rs,1391349 on 29-11-2006.
3. It is stated that thereafter the respondents issued a letter for the recovery of Rs,1145390 on 20-12- 2006. The said letter was impugned by the appellant before the Insurance Tribunal along with the claim for the unliquidated damages. The same has been dismissed vide order dated 9-1-2007. The respondents also filed counter appeal before the Insurance Tribunal. Both the applications were consolidated and consolidated issues were framed and after recording of evidence vide consolidated judgment dated 21-11-2007 the same were dismissed. Hence, the instant appeal has been preferred before this Court.
4. Learned counsel for the appellant submitted that under section 118(1) of the Insurance Ordinance, 2000 the insurance claim was to be paid within a period of 90 days and if the same is not paid within the specified period then under section 118(2), 5% high base rate was to be paid and the same was allowed by this Court in Writ Petition No,1374 of 2006. It is further argued that this Court vide order dated 18-4-2006 has allowed the liquidated damages from 22-6-2000 till the payment; as such, the liquidated damages were to be calculated from the said date till the payment of the liquidated damages and the learned Insurance Tribunal did not comprehend the same and unjustly and unlawfully dismissed the application of the appellant. It is further submitted that through the instant appeal the appellant does not press to the extent of the unliquidated damages but to the extent of the recovery letter dated 20-12-2006 issued in violation of the law as well as the judgment of this Court titled as Mst. Nusrat Malik Saleem v. Federation of Pakistan 2006 CLD 874 as well as law laid down in PLD 1984 SC 403, 2001 CLC 1743, 2001 YLR 731 and 2001 MLD 1,169, this appeal be accepted and the impugned recovery letter dated 20-12-2006 issued by the respondents be declared as null and void and without lawful authority, having no legal effect on the appellant; as such, the appellant is not liable to make refund to the respondents.
5. On the other hand, learned counsel for the respondents submitted that the respondents were in a fix on the passing of the order by the honourable Supreme Court of Pakistan in C.Ps. Nos.982/L and 983/L of 2006 whereby the respondents were directed to make payment to the appellant within three days of the compliance of the order and inadvertently an excess amount of Rs,1145390 had been paid although the actual calculation as pointed out by the audit, which the appellant was entitled to as liquidated damages was only to the tune of Rs,2,45,959 and since the respondents have paid an amount of Rs,13,91,349; therefore, they have paid an excess amount of Rs,11,45,390 to the appellant, which has been claimed by the respondents-Corporation on the basis of the actual calculation as has been detailed in Exh.R/2 and the Insurance Tribunal has rightly adjudicated the matter and allowed the actual liqudated damages, which the appellant is bound to refund to the respondent-Corporation; that the impugned order does not require any interference by this Court; as such, this appeal merits dismissal.
6. Arguments pro and contra heard, material made available on record perused.
7. It is admitted fact that the claim of the appellant had not been made within the specified period of 90 days as prescribed under section 118(1) of the Insurance Ordinance, 2000 and for ready reference the same is reproduced below:-- "118. Payment of liquidated damages on late settlement of claims.--(1) It shall be an implied term of every contract of insurance that where payment on a policy issued by an insurer becomes due and the person entitled thereto has complied with all the requirements, including the filing of complete papers, for claiming the payment, the insurer shall, if he fails to make the payment within a period of ninety days from the date on which the payment becomes due or the date on which the claimant complies with the requirements, whichever is later, pay as liquidated damages a sum calculated in the manner as specified in subsection (2) on the amount so payable unless he proves that such failure was due to circumstances beyond his control."
Further, subsection (2) of section 118 of the Insurance Ordinance, 2000 also entitles the appellant for a claim of liquidated damages at the rate of 5% on the high base rate. This Court had also determined that the claim of the appellant was to be paid as well as the same has been upheld by the apex Court in C.P. No,982/L of 2006 vide order dated 24-11-2006 that the employees of the Corporation were responsible for not making the payment to the appellant within the specified period of ninety days and the same led to the delay in the payment to the appellant, which the respondent/Corporation could not justify said to be bound the control of the Corporation; as such, the calculation is to be made from 22-6-2000, the date of the death of Malik Muhammad Saleem to 29-11-2006 along with the rate of interest in accordance with law. Thereafter, the respondents paid an amount of Rs,13,91,349 although the respondents alleged that the same is not according to the calculation but they have not placed before the Insurance Tribunal nor before this Court any basis of their making a calculation to the tune of Rs,2,45,959. The respondents have not been able to substantiate their stance through any supporting material or law. Even otherwise the payment has been made to the appellant; therefore, the respondents cannot make any recovery from the appellant. Reliance is placed on Controlling Authority, N.-W.F.P. Board of Technical Education, Peshawar and another v. Abdul Salam. Secretary, N.-W.F.P. Board of Technical Education PLD 1993 SC 200, Muhammad Shakir and others v. Administrator, District Council, Rajanpur and another 2002 PLC (C.S.) 302. In the Engineer in Chief Branch through Ministry of Defence, Rawalpindi and another v. Jalaluddin PLD 1992 SC 207, it has been held that:- "Recovery of amount paid on basis of incorrect order and the recipient had received same on a bona fide belief that he was entitled to it. Payer was not entitled to recover the amount from the payee during the period when incorrect order remained in field and principle of locus poenitentiae would be applicable to the case."
8. In the above perspective this appeal is accepted and the judgment dated 21-11-2007 passed by the learned Insurance Tribunal is set aside. Resultantly, the impugned recovery memo dated 20-12- 2006 issued by the respondents is declared null and void, without lawful authority and having no effect on the appellant and the respondents are restrained from making any recovery from the appellant. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.