RASAAL HASAN EYED, J.---This appeal under section 124 of the Insurance Ordinance, 2000 (the "Ordinance") assails order dated 13.10.2020 passed by the Insurance Tribunal.
2. The respondent filed an application on behalf of her deceased husband Muhammad Javed for payment of group claim amounting, to Rs.1,250,000/- under Compulsory Group insurance, Self-Subscribed, Compulsory Group Insurance and Voluntary Self-Subscribed Additional Group Insurance Schemes along with liquidated damages under section 118 of the Ordinance from the date of death of her husband i.e. 21.12.2016, till realization. The appellants in their written reply raised certain preliminary and legal objectio ns and also controverted the admissibility of the claim of respondent on merits. The Tribunal framed following issues, in light of the position taken by the parties on 23.2018: "1. Whether the petitioner has no cause of action to file this petition, therefore, the same is liable to be rejected under Order VII, rule 1 1, C.P .C.? OPR
2. Whether the petition is liable to be dismissed due to mis-joinder and non-joinder of necessary parties? OPR
3. Whether the petition is liable to be dismissed due to his word and conduct? OPR
4. Whether the petitioner has not come to the court with clean hands, therefore, she is not entitled to any relief?
OPR
5. Whether this court, has got no jurisdiction to entertain this petition? OPR
6. Whether this petition is liable to be dismissed due, to lack of court fee? OPR
7. Whether this petition was time barred. OPR
8. Whether this, petition is frivolous and vexatious, therefore, the respondents are entitled to special cost of Rs.20,0001- each? ORR Whether the petitioner is entitled for Compulsory Group Insurance (SLG-5807) of Rs.250,000/-, Self-Subscribe Compulsory Group Insurance (VFG-0006) of Rs.400,000/- and Voluntary Self-Subscribed Additional Group Insurance Scheme (FSG-00015) of Rs.600,000/- as prayed for? OP A
10. Relief."
3. During pendency of case the appellant company made payment of the claimed amount of Rs.1,250,000/- claimed against three Group Insurance Schemes including 2,50,000/- under the. Compulsory Group Insurance, Rs.4,00,000/- under the Self-Subscribed Compulsory Group Insurance and Rs.600,000/- under the Voluntary Self- Subscribed Additional Group Insurance Scheme. The claim of respondent, as such , to the extent of the payment of the insurance amount stood fruition. The Insurance Tribunal also recorded its findings accordingly but observed that the appellant company had not paid the claimed liquidated damages while discharging the amount of Rs.1,250,006/- through the three cheques bearing No.97626871 dated 19.6.2020, No.97627340 dated 25.8.2020 and No.10569049 dated 17.9.2020. By the impugned order the Tribunal held the appellant company liable to payment of liquidated damages on the principal amount of Rs.1,250,000/- and directed payment thereof for the period from failure to pay till realization of the claim. This order is under challenge in appeal.
4. Learned counsel for the appellants states that the Tribunal has seriously erred in making an order for payment of liquidated damages as the claim of the petitioner was based on three Schemes, specifically intended for company employees that did not fall in the definitio n of Insurance Policy under the provisions of , the Ordinance. It is further submitted that in fact the respondent was never refused payment of the amount of insurance but was asked to provide necessary documents for the release of the amount which was not done. As such, there was no delay on part of the appellant company and that it was decided as a matter of principle to pay off the claimed amount of insurance to the respondent during pendency of the case which did not amount to retraction of the stance taken in the written reply and that, as such, the Tribunal went seriously wrong in treating the payment of the principal amount as ipso facto sufficient cause for ordering the liquidated damages which were not admissible in the facts and circumstances involved. It is also submitted that the claim of insurance being under special schemes reserved for company employees section 118 of the Ordinance was not attracted as the said provision pertains to insurance policies of which the schemes under reference were not a type.
5. Learned counsel for the respondent has controverted this stance by submitting that the respondent had provided all necessary documents required for processing of the claim of insurance and that the responsibility for delay was on part of the insurance company and its own agencies and that, as such, there was clear delay and that in the circumstances the claim of liquidated damages was justifiably granted.
6. Perusal of the impugned order indicates that the matter with regard to liquidated damages has been treated under issue No.9 in which no specific analysis has been made of evidence on the basis of which the claim of liquidated damages was being allowed. The main thrust of the argument espoused by the learned Additional District Judge for grant of liquidated damages appears to be that as during pendency of the case the appellant company decided to pay the claimed amount of insurance to the tune of Rs.1,250,000/-, the very act of doing so be taken as withdrawal of the stance of company in the written reply and automatically entitled the respondent to liquidated damages on the principal amount. This approach does not sit well legally as the claim of liquidated damages required a specific finding qua the historical moment at which all formalities at the end of the respondent stood fulfilled so as to shift the burden of responsibility on the appellant company to pay the insured amount especially when it was specifically controverted that the respondent had met the prerequisites and the stance taken by the appellant company was that the respondent had not completed the documentation which absolved the appellant company of the liability of liquidated damages. A perusal of the impugned order shows that no specific issue was framed on the question of admissibility of liquidated damages. If this had been done it would have enabled the parties to lead specific evidence in this respect so as to enable the Tribunal to make a reliable determination of the claim qua liquidated damages. This included establishing on record the necessary ingredients of when the payment became due by fulfilment of requirements by the respondent, including the filing of complete papers, the failure of the appellant company to make the payment within ninety days from the date on which such payment became due or the date on which the respondent complied with the requirements, whichever was later. In the absence an issue on liquidated damages or availability of any evidence pro and contra qua liquidated damages, the adverse inference drawn by the Tribunal a priori on the predicate of mere payment of the insurance amount by the appellant during pendency of the case does not shine as an instance of safe administration of justice. This appeal is therefore allowed. The impugned order is set aside. The case is remanded to the Insurance Tribunal who shall frame specific issue with regard to the legal and factual admis sibility , of the claim of liquidated damages in the circumstance of the case and context of the schemes under which the insurance claim was operative and after providing fair opportu nity to the parties to lead evidence on this score will record its findings through a well-reasoned and speaking order within two months of the date of first post-remand attendan ce of the parties who shall appear before the Insurance Tribunal on 06.10.2021 for further proceedings.