JUSTICE (RETD.) ALI AKBAR QURESHI, CHAIRMAN. This order will dispose of an execution petition filed by Haji Busharatullah, to execute or realize the judgment and decree dated 04.03.2009, passed by the then Insurance Tribunal in the following terms:- "In view of my issues wise findings the application is accepted with costs to the effect that the applicant is entitle to receive policy proceeds from the respondents along with liquidated damages @ 5% (five percent) higher that the prevailing base rate calculated at monthly rests till its realization".
2. The judgment debtor not agreed with the findings of the Insurance Tribunal, referred an appeal before the Hon'ble Lahore High Court Lahore through R.F.A. No.166 of 2009, which was dismissed in terms of judgment dated 24.10.2013. It is pertinent to mention here, that during the proceedings of the R.F.A., the judgment debtor deposited an amount of Rs.2,19,200/- (the sum assured) with the Deputy Registrar (Judicial) of Lahore High Court, Lahore in compliance of the order dated 07.04.2009. The Regular First Appeal, was dismissed on 24.10.2013 and thereafter, the decree holder filed an application seeking permission to withdraw the aforementioned amount which was allowed on 04.11.2013 and the said amount was paid through cheque dated 06.11.2013, by the office of the Deputy Registrar (Judicial) of Lahore High Court, Lahore. The judgment debtor being aggrieved of the judgment dated 24.10.2013 filed a Civil Appeal No.991/2014 before the Hon'ble Supreme Court of Pakistan, which was dismissed on 06.03.2023.
3. Learned counsel for the decree holder submits, that although, the judgment debtor deposited the sum assured in compliance of the order dated 13.12.2012 passed by the Hon'ble Lahore High Court, Lahore during the currency of the R.F.A. and the said amount was too withdrawn by the decree holder, but till today, the liquidated' damages awarded up-to the August Supreme Court of Pakistan have not been given. Lastly, prayed while placing reliance on 2018 CLD 289 (Lahore) and attested copy of judgment passed in Civil Appeal No.929-/2017 of Hon'ble Supreme Court of Pakistan, submits that since the matter has finally been concluded uptil apex Court of Pakistan, therefore, no reason is left with the judgment debtor to withhold the amount of the liquidated damages already awarded by the courts.
4. In response thereof, learned counsel for the judgment debtor submits, that undeniably, the decree holder received the principal amount on 06.11.2013, by filing an application before the Hon'ble Lahore High Court, Lahore and is enjoying with the said amount, hence, is not entitled to ask for the liquidated damages.
5. Heard. Record perused.
6. Deeper appreciation of the record reveals that, undeniably, the petitioner/decree holder received the amount of Rs.219,200/- from the office of Deputy Registrar on 06.11.2013 and there is no record available in the file to show that the said amount was received by the petitioner under protest or subject to any condition. As appears from the record, the matter pertaining to the liquidated damages remained pending and finally decided in faovur of the decree holder up-to august Supreme Court of Pakistan. The question to our mind requires consideration as to whether the petitioner is entitled to claim the liquidated damages after the date i.e. 06.11.2013, when the principal amount was happily received/withdrawn from the office of the Deputy Registrar by the petitioner. Section 118 of the Insurance Ordinance, 2000, is relative for this purpose, which grants or imposes the penalty of liquidated damages in case, the claim of the policy holder is not decided within the time stipulated in the Section i.e. 90 days after filing the claim. For ready reference, section 118 of the Insurance Ordinance, 2000 is re-produced as under:- Section 118(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.
The bare reading of the aforesaid section reveals, that the policy holder is required to file the claim to the Insurance Corporation in terms of Article 86-A and B of the Limitation Act along with all the relevant documents and the insurance corporation is bound to decide the same within 90 days, and if the insurance corporation fails to decide the claim of the policy holder within 90 days, the insurance company will have to pay the liquidated damages as provided under subsection (2) of section 118 of the Insurance Ordinance, 2000, which speaks as under:- 118(2) The liquidated damages payable under subsection (1) shall be payable for the period during which the failure continues and shall be calculated at monthly rests at the rate five per cent higher than the prevailing base rate.
7. The language of the subsection clearly depicts the intention of the law, that the liquidated damages are payable for the period during which, the failure continues, meaning thereby, that the insurance corporation shall be penalized by imposing the liquidated damages for the period, the amount which was required to be paid to the policy holder, was retained by the insurer to earn the profit by utilizing the same in commercial activities.
8. There is another important and vital aspect of the case that, if the insurance corporations retain the amount payable to the policy holder for no reason, and invest or utilize in its commercial activities or retain in the bank to earn the profit, is liable to pay the liquidated damages to the policy holder for using the amount of the policy holder, as provided in section 118 of the insurance Ordinance, 2000. In fact, in our humble view, the- amount of policy proceeds becomes ownership or vests into the policy holder or the legal heirs of the deceased insured, on the eve, the policy becomes mature or the policy holder dies, as the case may be. Therefore, the legislature in fact, by inserting section 118, has restrained the Insurance Corporations to retain or use the amount of policy holder and in case of violation imposed the heavy damages along with the interest. In this case, admittedly, the decree holder received the proceeds of group insurance (principal amount) amounting to Rs.2,19,200/- on 06.11.2013 from the office of the Deputy Registrar (Judicial) of Lahore High Court, Lahore, thus it can safely be observed that thereafter, neither the principal amount retained nor utilized by the judgment debtor into the commercial activities to earn the profits, therefore, the insurance corporation is not liable to pay the liquidated damages after the date i.e. 06.11.2013, when the principal amount was received by the petitioner/ decree holder.
9. Learned counsel for the decree holder time and again referred judgments passed by the Hon'ble Lahore High Court Lahore and august Supreme Court of Pakistan, whereby, the liquidated damages were granted to the petitioner/decree holder. In order to ascertain the period from which the liquidated damages were granted by the Hon'ble Superior Courts, the judgments were perused with the assistance of the learned counsel for the decree holder and found, that the Hon'ble Courts, no doubt, have granted the liquidated damages but without mentioning any period.
10. The decree holder while filing the insurance petition has claimed the liquidated damages, as appears from the contents, till the realization of the group insurance claim, amounting to Rs.2,19,200/-. Undeniably, the group insurance claim of Rs.2,19,200/- was deposited and received by the decree holder on 06.11.2013, from the office of Deputy Registrar (Judicial) of Lahore High Court, Lahore, therefore, if the relief granted by the Hon'ble Superior Courts, the decree holder at the most is entitled to the liquidated damages till the date, the amount of group insurance claim amounting to Rs.2,19,200/- was received i.e. 06.11.2013 by the decree holder. Learned counsel for the decree holder has relied upon the judgment cited as 2016 CLD 1678 (Lahore), which is respectfully, submitted, is not applicable and distinguishable. In the cited case, the judgment debtor filed an appeal before the Hon'ble Lahore High Court, wherein, the Hon'ble Lahore High Court during the pendency of the appeal, directed the judgment debtor to deposit the decretal amount with the Deputy Registrar (Judicial) and subsequently received by the decree holder on 06.11.2013. As earlier observed that the Hon'ble judgments of the Superior Courts of Pakistan are silent qua the period of payment of liquidated damages to the decree holder.
11. In view of the above, the decree holder is only entitled to receive the liquidated damages from the date of filling the claim with State Life Insurance Corporation (SLIC) on 21.05.2007 till 06.11.2013, when the principal amount of Rs.2,19,200/- was received by the petitioner/decree holder excluding 90 days available to the SLIC to decide the claim under section 118 of Insurance Ordinance, 2000.
The respondent/corporation is directed to calculate the amount of liquidated damages from 21.05.2007 to 06.11.2013 and submit cheque to that extent. Order accordingly.