SAFDAR SALEEM SHAHID, J:---Instant Insurance Appeal has been preferred by the applicant/appellant against the order dated 09.01.2019 passed by learned Additional District Judge/Special Judge Insurance Tribunal, Sialkot, whereby applicant's application under section 118 of Insurance Ordinance, 2000 for recovery of liquidated damages regarding policy No.604102460-0 was dismissed.
2. The brief facts of the case are that the applicant Mst. Zakia Ilyas Raja filed at; application before respondent No. 1/State Life Insurance Corporation of Pakistan, alleging therein that he: husband Raja Muhammad Ilyas deceased obtained the facility of Insurance Policy No.604102460-0 from the respondents/State Life Insurance Corporation and after the death of her husband, she/applicant filed a claim No.L/1 198/2007 for the recovery of insurance amount i.e Rs.5000.000/- which was decided in favour of the applicant on 22.10.2013 by Wafaqi Mohtasib', Lahore.
Thereafter , the respondents filed a representation before the Hon'ble President of Islamic Republic of Pakistan on 02.06.2014 against the order dated 22.10.2013 which was dismissed vide order 01.07.2015. It is alleged by the applicant/appellant that State Life Insurance Corporation did not disburse the insur ance amount to the applicant for a remarkable period and thereafter the respondents paid an amount of Rs. 52,40,000/- and did not pay the liquidated damages as per bank rate. The applicant requested the respondents to pay the liquidated damages under section 118 of Insurance Ordinanc e 2000 as per bank rate but the respondents did not consider the lawful and genuine request of the applicant and delayed the matter on lame excuses. As per section 118 of Insurance Ordinance, 2000, the applicant is entitled to get recover the liquidated damages from the respondents and also to claim profit as per Dank rate but the respondents did not honour the claim of the applicant which was mandatory provisions of Insurance Ordinance. It was further alleged that the applicant filed an application before "Wafaqi Mohtasib", Lahore which was decided on 16.02.2016. On the basis of said order , the applicant filed an application before Insurance Tribunal.
3. The application of the applicant vas contested by the respondents while submitting written reply and prayed for its dismissal.
4. Out of pleadings of the parties, following issues were framed by the learned trial Court:- ISSUES:
1. Whether the applicant is entitled to recover liquidated damages on late settlement of claim under section 118 of Insurance Ordinance on the facts stated in the amended application? OP A
2. Whether the application is not maintainable and not competent? OPR.
3. Whether the application is time barred? OPR
4. Whether , this Tribunal lacks jurisdiction to adjudicate upon the instant matter? OPR.
5. Relief.
The learned Special Judge Insurance Tribunal while deciding the Issue No.1 against the applicant/appellant observed that since there was no fault on the part of the respondents/Insurance Corporation for disbursing the amount of claim, therefore, the respondent/State Life Insurance Corporation was not under obligation to pay any liquidated damages as required under section 118 of Insurance Ordinance, 2000. The learned Special Judge, Insurance Tribunal gave his decision on issue No.1 on the basis of statement of A.W-1 who admitted in his statement that his claim was rejected due to filling of insuf ficient papers, therefore, it cannot be alleged that the delay was caused by the respondent/company and the applicant/appellant has miserably failed to discharge her onus upon her fatal issue and it was decided against the applicant. Issue No.3 was regarding the limitation. The objection was raised by the respondents and onus to prove this issue was upon the respondents but since the respondents did not produce any evidence on this point and also did not press this issue before the learned trial Court, therefore, this issue was decide d against the respondents. The Tribuna l dismissed the application of applicant on the ground that delay for disbursement of insurance amount/claim of applicant was not caused by the respondents/ 'State Life Insurance Corporation, rather , it was on the part of the applicant who had not submitted the complete papers which was the basic requirement for disbursing of insurance amount.
5. The counsel for the applicant/appellant argued that there was no delay on the part of the applicant as the applicant filed the application immediately after the death of Policy Holder; that State Life Insurance Corporation/ respondent did not inform the applicant that her claim application was incomplete or defective in any way; that vide letter dated 31.05.2007 without commenting therein that claim forms submitted by the applicant were insuf ficient or that the claim was rejected on account of providing insuf ficient documents by the applicant. It was further argued that only reason mentioned in repudiatio n letter dated 31.05.2015 was that concealment of material facts were made by the deceased Policy Holder the time of getting the Insurance policy; that nothing was mentioned in the said letter regarding insuf ficient documents, if any, thereafter the Insurance acco mpany paid an amount of Rs.
52,40,000/-through cheque to applicant/appellant without liquidated damages on 09.10.2015; that the respondent/ State Life Insurance Corporation was bound to pay the liquidated damages in terms of section 118 of Insurance Ordinance 2000; that the order of learned Special Judge Insurance Tribunal is not in accordance with the record and evidence available on record; that no objection was raised in the first declining letter regarding insurance amount/claim of applicant qua any incomplete documentation, therefore, respondent/State Life Insurance Corporation was under obligation to pay the liquidated damages of late settlement of claim under section 118 of Insurance Ordinance, 2000. Reliance is placed on the cases reported as "Mst. Nusrat Malik Saleem v.
Federations of Pakistan through Secretary Ministry of law, Justice and Human Rights Division, Islamabad and 3 others" (2006 CLD 874), Jaffar Hussain v. Federations of Pakistan through Secretary Ministry of Law, Justice and Human Rights Division, Islamabad and 3 others (2004 CLC 947, Lahore), Mst. Nusrat Malik Saleem v. State Life Insurance Corporation of Pakistan through Chairman and another (2010 CLD 870 Lahore), Mst. Nusrat Malik Saledn v. Federation of Pakistan through Secretary Ministry of Law, Justice and Human Rights Division, Islamabad and 03 others (2006 CLD 874 Lahore), Messrs Adamjee Insurance Company Ltd. through Authorized Representative v Zia Ullah and another (2019 CLD 526, Lahore) and Universal Insurance Company Limited v . Hamayun Khan (2019 CLD 1216 Lahore).
5. The learned counsel for the respondents on the other hand resisted the arguments advanced by learned counsel for the applicant. While relying on cases reported as "Shafaatullah Qureshi v. Federation of Pakistan"
(PLD 2001 Supreme Court 142), "Dr. Syed Sibtain Raza Naqvi v. Hydrocarbon Development and others"
(2012 SCMR 377), "Wapda through Authorized Attorney and 4-others v. Messrs Crescent Group of Services through Authorized Person and others" (PLD 2013 Lahore 221), "Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan through Chairman" (2007 CLD. 490 Lahore) learned counsel for the respondents argued that respondent No.1 is not responsible for causing any delay for the payment of Insurance amount/claim; that the application of applicant was incomplete because the required documents were not annexed with the application; that the State Life Insurance Corporation/respondents informed the applicant regarding the said defects and thereafter her applicati on was rejected; that the appellant/appli cant filed an application before Ombudsman and much time was consumed in the proceedings before' Ombudsman and thereafter the company approached the President of Pakistan but after rejection of said appeal, the company immediately deposited the insured amount of Rs. 52,40,000/- in the account of the applicant; that there was no deliberate delay on the part of the company for making the payment of insured amount; that infact the delay was caused by the applicant/appellant because she did not submit the document as required by the company at the relevant time; that learned Special Judge Insurance Tribunal has rightly passed the order after proper appreciation of evidence with cogent reason.
6. We have carefully examined the contentions as adduced on behalf 'of the parties in the light of relevant provisions of law and record of the case. We have scanned the entitle evidence and perused the impugned judgment of the learned trial court. The learned Special Judge Insurance Tribunal decided issue No.1 against the appellant/applicant, whereby , claim of the appellant/applicant was dismissed, and it was held that the respondents/State Life Insurance Corporation was not liable for causing delay in the payment of insurance amount and was not under obligation to pay the liquidate damages of late settlement of claim under section 118 of Insurance Ordinance, 2000. In support of issue No.1, Muhammad Iqbal, Special Attorney of appellant Mst. Zakia Ilyas Raja appeared as AW-1 and submitted his special attorney as Exh.A-1 and narrated all facts regarding the submission of the claim. According to AW-1 the husband on applicant/appellant, Raja Muhammad Ilyas purchased the policy on 01.07.2005 and also paid the premium of said policy . On 02.02.2006 Raja Muhammad Ilyas died and then the applicant/appellant approached the State Life Insurance Corporation/respondents and filed the claim. 'The claim was filed within the time. He (AW-1) tendered all the relevant documents in his evidence. It 'was further alleged that in the year 2007, Insurance Corporation rejected the claim of the applicant/appellant. Feeling aggrieved, the appellant approached Ombudsman where the matter remained under consideration for one year. On 22.10.2013 the Ombudsman decided the matter . A.W-1 submitted the copy of decision Exh.A-2. The respondents filed an appeal before President of Pakistan which was dismissed on 01.07.2015 and thereafter respondents on 10.10.2015 deposited an amount of Rs. 52,40,000/-in the account of applicant/appellant. The grievance of the appellant was that respondent No.1/bank only deposited the insured amount whereas liquidated damages were not awarded to the applicant and for that the applicant/appellant again approached Ombudsman and on the direction of Ombudsman, the applicant/appellant filed an application before learned Special Judge Insurance Tribunal. On behalf of respondents the said witness was subjected to cross-examination. Durin g cross-examination' A.W-1 has categorically stated that after the death of policy holder the applicant/appellant filed the claim papers immediately and there was no delay on the part of the applicant for filing the claim before the respondents. The said witness was cross-examined at length but his evidence could not be shaken during the process of cross-examination regarding the delay if any on the part of the applicant/appellant and nothing was brought on record that the policy was obtained by concealment of facts. Through the cross-examination only proceedings before different forums i.e Ombudsman and President of Pakistan between the parties were questioned. On behalf of State Life insurance Corporation, Muhammad Afzal Manager , State Life Insurance Corporation of Pakis tan, appeared as DW-1. He has deposed that according to section 15 of Policy Bond, the State Life Corporation has a right to investigate regarding the worth of the policy if someone expired within the period of two years after getting the policy . According to D.W-1 the State Life Insurance Corporation inquired the matter and found that the policy holder was not eligible to obtain the policy of an amount of Rs.50-lacs. On this ground the State Life Corporation rejected the claim of the legal heirs of the Policy Holder . In this regard he submitted the document Exh.D-2. D.W-1 further deposed that there was no fault on the part of the company for issuing the amount of claim late and infact the original required amount of Rs.
52,40,000/- was disbursed to the policy holder . Record reveals that neither the inquiry report regarding the authenticity of the policy was brought on record by the respondents/State Life Corporation nor the person who allegedly inquired the matter and A prepared the report on behalf of State Life Insurance Corporation, was produced in the witness box which prima facie negates the version of the respondents that the policy was obtained by concealment of facts. In this regard reliance is placed on case law reported as "Ghulum Raza Sajid v. State Life Insurance Corporatio of Pakistan and another" (2010 CLD 792 ).
7. Perusal of record shows that policy holder purchased the policy on 01.07.2005 whereas first premium i.e Rs.
3,59,950/- of said policy was also paid. After about six months, on 02.02.2006 the policy holder was expired and within the required time the applicant/wife of the deceased filed the requisite claim. The State Life Insurance Corporation/ respondents were responsible for the payment of the claim within the prescribed period as the application was filed within the time but it is observed that they objected on the claim and through document, Exh.D-2 letter dated 31.05.2007, the claim was rejected. On perusal of letter Exh.D-2 it reveals that the application of the policy holder was rejected on the ground that policy holder did not provide the correct information at the time of obtaining the policy . So the State Life Insurance Corporation regrets from the payment of claim. The version of the respondents/State Life insurance Corporation while appearing in the witness box although was different, yet they did not produce any evidence according to their objection. No evidence was produced by the respondents in order to establish that the applicant legal heir of deceased/policy holder filed the policy claim late. So-far-as the objection of the respondents that the policy holder did not provide the correct information and some facts were concealed by the policy holder at the time of obtaining the policy is without force and same is afterthought because it was not the time for making an inquiry regarding genuineness or un-genuineness of the policy , rather , before issuance of policy as per company conditions contain inquiries are conducted then the policy is issued. The respondents/ State Life Corporation received the first premium i.e Rs.13,59,950/- of said policy and did not object regarding anything at that time and as well as in the life time of policy holder . Keeping in view the facts and circumstances of the case, we are of the considered view that the letter Exh.D-2 was not a proper reply to the claim application of the policy holder . The respondents/State Life Insurance Corporation were responsible for causing delay in the payment of insurance amount. The relevant provision of section 118 of Insurance Ordinance 2000 is reproduced as under:- "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 complied 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.
Explanation. For the purposes of this subsection, failure or delay by any person in making payment (including without limitation payment under a contra ct of reinsurance) to an insurer shall not constitute circumstances beyond the control of the insurer"
Since the agreement between policy holder and State Life Corporation was intact and it was not struck down through any means, no legal notice was issued by the State Life Corporation for striking down the agreement with the policy holder . Neither any notice/intimation was given to the policy holder in his life time regarding disclosing of wrong information for obtaining the policy nor after his death or immediately after filing of the claim, rather after passing of the considerable period through letter dated 31.05.2007 Exh.D-2 it was informed to the applicant/appellant by the respondents that the requisite claim was rejected .by the company on account of concealments of facts. The respondents were failed to rebut the evidence of applicant/appellant because as per record the applicant filed the application within time and on wrong interpretation the applicant's claim was rejected and due to that reason the applicant/appellant had to file an application before Ombudsman and much time was' consumed for that process and delay was caused due to the act of the respondents for which the applicant/appellant cannot be made liable. is pertinent to mention here that the company/respondents made the payment to the applicant to the extent of insured amount but with delay and did not raise any objection at that time qua the concealment of facts. The company was under obligation to make the payment within a period of 90-days under section 118 of Insurance Ordinance, 2000 which they have failed to do so and that the company was also not justified to establish that the delay was caused due to the act of applicant/appe llant. The case laws referred to by learned counsel for the respondents are not applicable to the present proposition because the application for requisite claim was filed within the time by the applicant/appellant and through evidence on record the applicant has proved the same. Keeping in view the evidence' available on record, we are justified to hold that learned Special judge Insurance Tribunal while deciding the issue No.1 had committed material irregularity as no cogent evidence was produced by the responden ts to rebut the evidence of the appellant. The document Exh.D-2 on the basis of which the claim was rejected is available and its verdict is clear which has no nexus with the issue framed by the court because it is straight away mentioned that due to conce.-.1ment of facts the claim was rejected whereas there is no issue of filing the incomplete papers and it cannot interpreted in any way in the light of document Exh.D-2, therefore, findings recorded by learned trial court on issue No.1 are reversed and same is decided in favour of the applicant/appellant against the respondents, whereas, all the remaining issues have already been decided in favour of the applicant/appellant, therefore, we are of the considered view that the applicant's claim was genuine.
8. In view of what has, been discussed above, instant appeal is accepted and order dated 09.01.2019 passed by learned Special Judge Insurance Tribunal Sialkot is set aside and applicant/ap pellant is held entitled for the liquidated damages along with profit as per present bank rate as required under section 118 of the 'Insurance Ordinance, 2000. No order as to costs.