MUSHIR ALAM, J. This petition for leave to appeal arises out of judgment dated 17.5.2017 passed by Lahore High Court, Lahore since reported as [State Life Insurance Corporation of Pakistan and others v. Mst. Shazia Mir Arshed (2017 CLD 1483 )] in Insurance Appeal No. 201 of 2016 whereby the decision of the Additional District Judge/ Insurance Tribunal, Lahore dated 6.1.2016 was maintained.
2. Brief facts giving rise to present controversy appear to be that one Mir Arshad Pervaiz (deceased) acquired Life Insurance Policy No.507880632-1 for a sum of Rs.2,00,000/- from the petitioner-Insurance Corporation of Pakistan on 01.7.2005 against a yearly premium of Rs.16,014/-. Insured died on 7.9.2008. Insurance claim filed by the respondent No.1, widow of the deceased insured, which was declined on the ground, inter alia, that the contract of insurance was obtained fraudulently through concealment of material facts. Consequently , respondent No.1 filed a claim before the learned Insurance Tribunal, Lahore for the recovery of Rs. 2,00,000/- with Family Income Benefit (F.I.B) @15% for nineteen years along with liquidated damages. The claim was accepted along with claim of liquidated damages under section 1 18 of Insurance Ordinance, 2000.
3. Mr. Muhstaq Ahmad Mohal, learned ASC appearing for the petitioners contend that the contract of the insurance is based on utmost trust and since the deceased-insured made a misstatement and deliberately failed to disclose his health state in his statement, according to him it was a fraudulent act on the part of the insured, per learned ASC petitioners' insurer was very well justified to avoid the contract of Insurance where policy was procured by misrepresentation and concealment as to State of insured health in terms of section 79 of the Insurance Ordinance, 2000. Learned Bench of the High Court through impugned judgment elaborately dealt with the contention as raised by the petitioners. When the attention of the learned counsel was drawn to section 80 of the Insurance Ordinance, 2000, it was stated that evidence has come on record that the deceased was suffering from various ailments as reported by claims examiner , therefore, policy was rightly repudiated on 30.3.20 10 had such ailment had been disclosed, the policy would have been declined.
4. We have heard the arguments and perused the record. Indeed a contract of Life Insurance is a Special Contract and section 79 of the Ordinance, 2000 gives option to insurer to avoid contract where a policy holder; (a) failed to comply with duty of disclosure or (b) made a fraudulent misrepresentation to the insurer before the contract was entered into. Such option to repudiate or annul policy is subsequent to limitation of two years per section 80 ibid after policy was effected. Section 80 of the Insurance Ordinance, 2000, makes section 79 ibid subservient to conditionality laid down under section 80 of the Insurance Ordinance, 2000, which makes the policy incontestable on the ground that the statement was inaccurate or false or that it was fraudulentl y made by the policyholder . The option to seek annulment of the policy is available to the insurer in case of a life insurance policy within a period of two years. Thereafter the policy becomes incontestable on the ground available in terms of section 79 of the Insurance Ordinance, 2000 unless the insurer shows "that such statement was on a material matter or suppressed facts, which it was material to disclose and that it was fraudulently made by the assured and he knew at the time of making it that the statement was false or that it suppressed facts, which it was material to disclose". In a case reported as P. C. Chacko and another v. Chairman, Life Insurance Corporation of India and others (2008) 1 Supreme Court Cases 321, the Supreme Court of India was confronted with an analogous provision contained in section 45 of the Insurance Act, 1938 since repealed and succeeded by Insurance Ordinance, 2000 in Pakistan, which is in paramateria to section 80 of the Insurance Ordinance, 2000. The Court came to a conclusion that a life policy cannot be called in question on the ground, inter alia, that certain material facts were suppressed at the time of making statement to procure life policy , after two years. The Supreme Court of India in paras 13 and 14 thereof laid down the three conditions applicable under the relevant provisions which read as follows: "13. Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia, on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy-holder or that the policy-holder knew at the time of making it that .the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy . It takes into account the social security aspect of the matter .
14. There are three conditions for application of second part of section 45 of the Insurance Act which are: "(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently "made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose."
5. Insurance Contract is made voidable under section 79 of the Ordinance, 2000, which is again subject to limitation of two years from the date policy becomes effective. Generally any contract induced by fraud or misrepresentation could be avoided within three years from the date such fraud or misrepresentation becomes known to a party to the contract in terms of section 91 of the Limitation Act, 1908. However , section 80 of the Insurance Ordinance, 2000 is a special law, which sets down a different period of limitation, which is two years from the date of policy is issued and not from the date of knowledge. In the instant case the petitioners were medically examined by a Medical Specialist as approved by the petitioner-Insurance Company before the policy was issued, opinion of the claim examiner that deceased insured met with accident and fractured his leg in 1994 has no correlation with cause of death mentioned in death 'certificate i.e. Diabetes mellitus CLO/re-compensated liver"
(Page 17 C.M.A. 7663 of 2017) and any subsequent investigation report after the claim was filed of the respondent that he was suffering from various ailments and illnesses was not substantiated on record by producing the cogent evidence. It has been conclusively held by the learned Insurance Tribunal that the previous ailment of the insured before the insurance policy has not been proved.
6. For the foregoing reasons, finding no merit in this petition which is dismissed and leave to appeal is refused.