JUSTICE (RETD.) ALI AKBAR QURESHI, CHAIRMAN. This order will dispose of an execution petition filed by the petitioner/decree holder, to execute and realize the judgment and decree dated 22.05.02017, passed by the Hon'ble Lahore High Court, Lahore, and upheld by the august Supreme Court of Pakistan, vide order dated 06.03.2023, passed in Civil Appeal No.929-L/2017, titled as "State Life Insurance Corporation v. Mst. Razia Ameer and another".
2. Shortly, the facts as stated in the Execution Petition are that, the petitioner Mst. Razia Ameer Ali, widow of Ameer Ali, filed an Insurance Petition on 02.05.2009 for the recovery of group insurance claim of her late husband namely, Ameer Ali that during the currency of the insurance petition, the respondent/corporation paid an amount of Rs.600,000/- on 16.8.2013, on account of group insurance claim but after four years, ten months and nine days of the death of Ameer Ali (insured).
Although, the respondent/corporation paid the claim of group insurance, but the matter pertaining to the liquidated damages remained pending before the then Insurance Tribunal and finally declined on 18.06.2015, by dismissing the insurance petition. Being aggrieved thereof, the petitioner filed an appeal before the Hon'ble Lahore High Court, Lahore, which was allowed, vide judgment date 22.05.2017. The respondent/corporation being dissatisfied of judgment dated 22.05.2017, instituted a Civil Appeal No.929-L/2017 before the apex Court of Pakistan, which was dismissed in terms of order dated 06.03.2023.
3. The execution petition was contested by the respondent/corporation, by filing the objections, which were contested by the decree holder and decided through separate order 20.06.2023.
4. Learned counsel for the decree holder submits, that admittedly, the decree holder has already received the group insurance claim amounting to Rs.6,00,000/- on 18.06.2013, but the liquidated damages awarded up-till august Supreme Court of Pakistan have not been paid to the decree holder. Lastly, prayed that since the matter has finally been adjudicated, therefore, the respondent/corporation has no option to retain the amount of liquidated damages, hence, penal action be taken against the judgment debtor for the recovery of decretal amount to the extent of liquidated damages. Learned Counsel has placed reliance on 2018 CLD 289 (Lahore) and the judgment passed in Civil Appeal No.929-L/2017 of Hon'ble Supreme Court of Pakistan.
5. In response thereof learned counsel for the judgment debtor submits, that admittedly, the amount of group insurance claim has already been paid to the decree holder on 16.8.2013, which was happily received, therefore, the petitioner has no right to ask for the liquidated damages.
6. Heard. Record perused.
7. Deeper appreciation of the record reveals that, undeniably, the petitioner/decree holder received the amount of Rs.6,00,000/- on account of group insurance claim on 18.06.2013 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 declined by the Insurance Tribunal, but thereafter, granted up-to the august Supreme Court of Pakistan. The question arises to our mind requires consideration as to "whether the petitioner is entitled to claim the liquidated damages after the date i.e. 16.8.2013, when the principal amount of group insurance was happily received by the petitioner"? Section 118 of the Insurance Ordinance, 2000, is applicable on the proposition, 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 complete 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.
8. The bare reading of the aforesaid section reveals, that the policy holder is required to file the claim to the Insurance Company in terms of Articles 86-A and B of the Limitation Act, along with all the relevant documents and the insurance corporation is bound to make the payment within 90 days, and if the insurance; corporation fails to make the payment of the policy holder within 90 days, the insurance corporation will have to pay the liquidated damages as provided under section 118(2) of the Insurance Ordinance, 2000, which reads 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.
9. 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.
10. 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.600,000/- on 18.06.2013 during the currency of the insurance petition before the Insurance Tribunal, 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. 18.06.2013, when the principal amount was paid to the petitioner.
11. 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. Learned counsel also referred the prayer clause of the Insurance petition and submitted, that relief granted by the Hon'ble Superior Courts qua the liquidated damages is to be read in the light of prayer clause. The prayer clause was reads as under:- "In the light of the above submission it is humbly prayed that impugned repudiation order dated 02.03.2009 being void ab intio may kindly be set aside and Respondents Nos.1 and 2 may kindly be directed to pay the group claim amounting Rs.600,000/- along with liquidated damages under section 118 of Insurance Ordinance, 2000, from death till realization of claim.
Any other relief which this court deems fit may also be awarded.
12. 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.6,00,000/-. Undeniably, the group insurance claim of Rs.6,00,000/- was paid and received by the decree holder on 18.06.2013, therefore, if the relief granted by the Hon'ble superior courts is read in the light of the prayer clause, the decree holder at the most is entitled to the liquidated damages till the date, the amount of group insurance claim amounting to Rs.6,00,000/- was received i.e. 18.06.2013 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 ordered that the Deputy Registrar (judicial) shall invest the amount in some National Saving Scheme, immediately, so that, the rights of the parties are secured. In the cited case, admittedly, as appears from the judgment, the amount remained deposited with the office of the Deputy Registrar (Judicial) and never paid to the decree holder, whereas, in the present case, the principal amount claimed by the decree holder was paid to decree holder. Thereafter, learned Trial Court, declined the claim of the decree holder to the extent of liquidated damages. 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.
13. In view of the above, the decree holder is only entitled to receive the liquidated damages from the date of filing the claim with State Life Insurance Corporation (SLIC) i.e. on 10.10.2008 till 18.06.2013, when the principal amount of Rs.6,00,000/- was received by the petitioner/decree holder, excluding the period of 90 days available to the SLIC to decide the claim under section 118 of the Insurance Ordinance, 2000. The respondent/corporation is directed to calculate the amount of liquidated damages from 10.10.2008 to 18.06.2013 and submit cheque of the said period. Order accordingly.