ZAFAR IQBAL TARAR, MEMBER (LEGAL). Petitioner has filed this petition contending therein that her husband, namely, Ghulam Mustafa purchased Life Insurance Policy No. 44-08660012845, amounting to Rs. 25,00,000/-, under Askari Takaful Plan for the premium payment term of 10 years, commencing from 19.11.2019, against the annual premium of Rs.5,00,000/-, and he declared her as his nominee; that the insured paid the first premium, but unfortunately, the policy holder passed away on 10.3.2021 at Punjab Institute of Neurosciences, Ferozpur Road, Lahore, due to Cardio Pulmonary Arrest, whereupon, respondent was intimated of the death who issued the claim papers, which were duly filed with the respondents. That after inquiry conducted by the insurer, the claim was repudiated by the respondents on the ground of pre-insurance ailment; that before rejection of the claim, the respondent was bound to give notice to the nominee for hearing, but no such notice was served upon her and her claim was arbitrarily rejected, whereupon, the petitioner filed this petition to recover the claim along with liquidated damages as mentioned in section 118 of the Insurance Ordinance, 2000.
2. This insurance petition was resisted by the respondents through written statement, wherein they contended that at the time of making the application, the deceased was required to make declaration about his medical history, whereupon, he incorrectly declared that he has healthy, and also sworn that the information furnished by him was true and accurate about his health; That after purchasing the policy, he paid only one premium and died. After the receipt of the claim, during investigation, it was found that he was known patient of Diabetes, suffering from Ischemic Heart disease, underwent Angioplasty 4 years prior to his death, underwent medical procedure to address his cardiac troubles three years back, whereupon, the claim of the petitioner was repudiated due to misrepresentation of the deceased in the proposal form. It was also contended that the petitioner has not come to the court with clean hands as the deceased made material mis-representation at the time of obtaining insurance policy. Further contended that the deceased breached statutory duty under section 75 of the Insurance Ordinance, 2000, as the insurance policy is based on the utmost good faith; that the deceased obtained the policy plan due to mis- declaration and in terms of section 80 of the Ordinance, 2000. The respondent was empowered to void the policy within 2 years and lastly prayed for dismissal of the application.
3. Out of the divergent pleadings of the parties, following issues were framed by the then learned Insurance Tribunal:-
1. Whether the petitioner is entitled to recover the policy proceeds along with bonuses and liquidated damages under section 118 of Insurance Ordinance, 2000, if so, to what extent? OPA.
2. Whether the petitioner has not come to the court with clean hands? OPR.
3. Whether the policy holder knowingly made concealment of material facts about his health and pre-insurance ailment? OPR.
4. Whether the petitioner has filed this petition only to blackmail and harass the respondents? OPR.
4. Both the parties were directed to produce their evidence in support of their contentions. Akhtar Hameed son of Abdul Hameed, record keeper of the respondent company appeared as AW-1, whereas Amir Shahzad son of Ghulam Mustafa, attorney of the petitioner appeared as AW-2. In documentary evidence, AW-1, produced Ex.A-1 to Ex.A-8. The petitioner also got recorded statements of Khalid Javed as AW-3 and Muhammad Ayyub as AW-4, but learned counsel for the petitioner vide order dated 02.03.2023, got discarded their statements. In rebuttal, Atif Shakoor son of Abdul Shakoor, Regional Sales Manager, of the respondent company appeared as RW-1.
5. We have evaluated the oral as well as documentary evidence of the parties, our findings are as under:-
6. Issues Nos.1 and 3 are inter-linked. The onus of issue No.1 was on the applicant, whereas, that of the issue No.3 was on the respondents. The petitioner averred that her husband Ghulam Mustafa purchased Life Insurance Policy No.4408660012845, with sum assured of Rs.25,00,000/-, under Askari Takaful Plan for the premium payment terms of 10 years, commencing from 19.11.2019, against the annual premium of Rs.5,00,000/-. She was appointed nominee by her husband/insured; that the insured paid first premium of Rs.5,00,000/-, but unfortunately on 10.3.2021, her husband passed away at Punjab Institute of Neurosciences, Ferozpur Road, Lahore, due to Cardio Pulmonary Arrest, whereupon, she intimated the death of the insured to the respondent, who issued the claim papers, which were filed after completion with the respondents, but the respondents repudiated her claim through letter dated 01.06.2021, on the basis of pre- insurance ailment. Attorney of the petitioner appeared as AW-2, produce his power of attorney as Exh.A-8. He supported the contents of the petition. AW-1 produced his authority letter Exh.A-1, proposal form of the deceased Exh.A-2, original medical recommendation of the deceased Exh.A- 3, his death claim form Exh.A-4, Medical report of deceased Exh.A-5, final inquiry report Exh.A-6 and repudiation letter Exh.A-7. In the written reply, the respondents have not denied the issuance of the policy to the deceased and receipt of premium of Rs.5 Lac. They asserted that before purchasing the policy, the deceased was suffering from multiple diseases including that he was known patient of diabetes and also of Ischemic Heart disease and underwent angioplasty 4 years prior to his death. The onus of proof of pre-insurance ailment of the deceased was on the shoulders of the respondents. On behalf of the respondents Mr. Atif Shakoor son of Abdul Shakoor Regional Sales Manager appeared as RW-1 and filed his affidavit. He supported the contents of the written reply on oath. During cross-examination, he admitted that at the time of death of the deceased, policy was in force. He also stated that he did not make any inquiry about the death of the policy holder. He conceded that it was conducted by a third party and he did not know the name of the investigator.
He also did not participate in the inquiry of the death claim. He further conceded that they paid the cash value of the policy to the petitioner, but rejected her death claim. It is observed that the RW-1 neither investigated the claim nor he conducted any inquiry of the death claim. He deposed in examination-in-chief that the deceased was suffering from several pre-insurance ailments, which were not declared by him at the time of his health declaration while purchasing the policy. No medical record of the deceased has been produced by the respondents. The petitioner produced the record Keeper of the respondent/company as AW-1 who produced Medical record of the deceased, which is on the record as Exh.A-5. Only the photo copy of the record of Punjab Institute of Neurosciences Lahore was produced by AW-1, which shows that the deceased remained under treatment of Prof. Dr. Anwar Chaudhary, but neither he nor any of his team member appeared in the witness box in support of the medical record of the deceased and the record of the hospital has not been proved by the respondent in accordance with law, as envisaged by Articles 78/79 of the Qanun-e-Shahadat Order, 1984. The onus of proof of this fact was on the respondent, but they have failed to discharge the same. The copy of the record produced by AW-1 was of December 2020 and January 2021, after the insurance policy. No medical record of the insured prior to the insurance policy has been brought on the record and investigation report of the claim is on the record as Exh.A-6, which was conducted by Claim Examiner ljaz Ahmad Malik, but he has also not appeared in support of his report. Investigation report Exh.A-6 shows that the investigator based his findings on the alleged statements of neighbors of the deceased, but none of so called neighbors has been produced in the witness box. In such circumstances, this report is of no help to the respondents and has no evidential value. The respondent has failed to discharge the onus of the pre-insurance ailment of the deceased. On the other hand, learned counsel for the respondents has argued that under section 75 of the Insurance Ordinance, 2000, the contract of insurance is based on utmost good faith, but the deceased failed to disclose his health and made false declaration of his health. He has relied upon the judgments cited as PLD 2020 SC 324, AIR SC 1962 and 1981 SLC 1722. On the other hand, learned counsel for the petitioner has argued that the respondent has failed to produce any admissible evidence regarding the pre-insurance ailment of the deceased, written statement could not be regarded as evidence. He has relied upon the, judgment cited as 1997 CLC 636. Careful perusal of the afore referred judgments reveals that no doubt, both the parties to the contract of insurance are bound to make correct declarations regarding all the relevant matters and the insured is also hound to make correct declaration of his health, but in the case in hand, the respondent has failed to prove that the deceased made the material concealment pertaining to his medical condition.
7. Otherwise, the respondents have paid the cash value of the policy amounting to Rs.64,623.95/- to the petitioner but have rejected her claim. The payment of cash value to the petitioner amounts to the admission of the claim by the respondents, but surprisingly, the claim was rejected by the respondents on the ground of pre-insurance ailment, which they failed to prove. As the claim was rejected on the ground of pre-insurance ailment, then the petitioner was not entitled even to the cash value of the policy. It appears that the respondents tried to pacify the petitioner by paying her a meager amount of cash value of the policy. Thus, this fact also shows that the respondents wrongly rejected the claim of the petitioner. In these circumstances, issues Nos. 1 and 3 are hereby decided in favour of the petitioner.
8. So far as issues Nos.2 and 4 are concerned, the onus of proof of both these issues was on the respondents. As per our foregoing findings the respondents failed to prove that the petitioner has not come to the court with clean hands and she filed this petition to blackmail or harass the respondents, therefore, both these issues are also decided against the respondents and in favour of the petitioner.
9. So far as liquidated damages are concerned, although no issue has been framed in this regard, however, the petitioner prayed for liquidated damages from the date of death of the deceased i.e 01.06.2021 till realization of the amount as provided under section 118 of Insurance Ordinance, 2000.
The petitioner could not be held responsible for such a long delay in recovery of her claim it is the respondents who rejected the claim of the petitioner, whereby the delay occasioned in payment of the claim, so she is entitled to recover the liquidated damages from the respondents as provided under section 118 of the Insurance Ordinance from 90 days after tiling the claim.
RELIEF
10. In view of the above, we hold that the petitioner has successfully proved her claim against the respondents which is decreed as prayed for the recovery of Rs.25,00,000/- with costs along with liquidated damages provided under section 118 of the Insurance Ordinance, 2000, from 90 days after filing the claim till the realization of the amount.