ZAFAR IQBAL TARAR, M EM BER LEGAL. Petitioner has filed this petition that her son namely, Haseem Riaz got insurance policy Sehat Bakhair Vitality Membership No.20002885 for a period of 20 years from the respondent company with a sum assured of Rs.10,50,000/- with annual contribution of Rs.50,000/- on 09.04.2021 and he paid first premium; that unfortunately, her son died on 26.05.2021 in Lahore General Hospital due to acute Hepatitis; that the petitioner being the nominee filed death claim with the respondent, but they rejected her claim vide repudiation letter dated 18.11.2021 on the ground of non-disclosure of pre-insurance ailment, thus, she filed this insurance application against the respondent, which was contested by the respondent company through written reply.
They contended that the petitioner is not entitled to the death claim because the insured Haseem Riaz materially concealed his pre-existing medical condition at the time of submission of proposal form, which is violation of the doctrine of good faith under section 75 of the Insurance Ordinance, 2000, as the contract of the insurance is based on utmost good faith and the policy holder is bound to disclose all material facts regarding his health in health declaration form but the insured was suffering from jaundice which was not disclosed by him in his form, it amounted to concealment of material facts, therefore, the claim of the petitioner was rightly rejected by the respondent company; that the petition is false, frivolous and vexatious it should be dismissed with special costs.
2. Out of the divergent pleadings of the parties, the following issues were framed:-
1. Whether this application is merit dismissal as the same has been filed without the prior permission of the SECP as required under section 162 of the Insurance Ordinance, 2000 ? OPR.
2. Whether this application is not maintainable due to concealment of pre-insurance ailment by the policy holder and have breached the duty of utmost good faith? OPR
3. Whether the petitioner is entitled to recover the policy proceeds as prayed for? OPA.
4. Whether the petitioner is entitled to recover the liquidated damages under section 118 of the Insurance Ordinance, 2000 as prayed for? OPA
5. Relief.
3. Parties were required to produce their evidence in support of their case, whereupon, the petitioner herself appeared as AW-1 and submitted her affidavit Exh.AW-1/1. In documentary evidence she tendered documents as ExAW-1/2 to Ex.AW-1/5. In rebuttal, Muhammad Salman Khan. Manager Claims of the respondent company appeared as RW-1 and submitted his affidavit Exh.RW-1/1. In documentary evidence, he produced documents as ExhRW-1/2 to Exh.RW-1/9. Yousaf Jacob, record keeper of General Hospital Lahore appeared as RW-2 and he produced copy of death certificate of deceased Exh.RW-211, call to ICU, request letter Exh.RW-2/2.
4. We have evaluated oral as well as documentary evidence on record our findings are as under:-
5. Issue No.3 is the most important issue of this case, its onus was on the petitioner. The petitioner contended that her son Haseem Riaz got insurance policy Sehat Bakhair Vitality Membership No.20002885 for a period of 20 years from the respondent company with a sum assured of Rs.10,50,000/ - with annual contribution of Rs.50,000/- on 09.04.2021 and he paid first premium; that unfortunately, her son died on 26.05.2021 in Lahore General Hospital due to acute Hepatitis, whereupon, she filed the death claim, which was rejected/repudiated. This application was contested by the respondent/company with the contentions that the deceased was suffering from jaundice about 07 to 08 years prior to getting the policy; which was concealed by the policy holder in his proposal form. The petitioner herself appeared as AW-1/1 filed her affidavit Exh.AW-1/1, in which she supported her claim on oath. She stated that she submitted the claim form along with all the required documents with the respondent company but her claim was repudiated vide letter dated 18.11.2021 by the respondent/company. She produced death certificate of NADRA of the deceased ErILAW-1/2, death certificate of General Hospital. Lahore Exh.AW-1/3, policy documents Exh.AW-1/4 and letter of repudiation Exh.AW-1/5. In her cross-examination she admitted that at the time of admission of her son in the Lahore General Hospital in the history of patient/deceased, it was mentioned that he was having Hepatitis-C, and at the time of childhood he was suffering from Hepatitis-A. She further admitted that she stated to the respondent/company that her son was having Hepatitis since, 06/07 years. She denied that her son concealed his disease from the respondent/company in his health declaration, which is on the record in the policy documents Exh.AW-1/9 at page No.27 of the policy documents. Its simple perusal reveals that the deceased did not disclose any disease in the said form, which means that he concealed his health condition at the time of getting the policy. Under section 75 of the Insurance Ordinance, 2000, the contract of the insurance is based on utmost good faith, which requires both the parties to disclose all the relevant facts truly to each other regarding the terms and conditions of the insurance policy. In view of the forgoing discussion, it is held that the deceased concealed his disease of Hepatitis-A and C at the time of purchasing the policy, which he was bound to disclose. After purchasing the policy in April 2021, he died it the next month May, 2021, just after one month. It is active and glaring concealment of facts, therefore, this claim was rightly rejected by the respondent company.
However, in the given circumstances of the case, we find that the total rejection of the claim would be too harsh. The respondent company received one premium from the deceased. Under section 81 of the Insurance Ordinance, 2000, they are directed to return the received premium of Rs.50,000/ - to the petitioner, as such, this issue is partly decided in favour of the petitioner.
6. Issue No.4 was that whether the petitioner is entitled to recover the liquidated damages, its onus was on the petitioner. As the claim of the petitioner has been rejected, therefore, she is not entitled to any liquidated damages.This issue is decided against the petitioner, issue No. 1. The onus of this issue was on the respondent. It has been contended by them that this petition is liable to be dismissed under section 162 of the Insurance Ordinance, 2000, as the same has been filed without the permission of the SECP. In this regard, it is observed that no such requirement has been stipulated under section 162 of the ibid Ordinance for filing of insurance petition before this Tribunal, therefore, this issue is decided against the respondent, Issue No.2. The onus of this issue was on the respondent. As per our findings on Issue No.3, has been found that the deceased/policy holder concealed his pre-insurance ailment in his proposal form and violated the doctrine of utmost good faith as ordained by section 75 of the Insurance Ordinance, 2000 and the petitioner is not entitled to total death claim, so this issue is also decided in favour of the respondent.
In view of our foregoing reasons and findings on the above issues, this insurance application is partly decreed to the extent of deducted/paid premium amounting to Rs.50,000/-, whereas her prayer for payment of total death claim is dismissed. The liquidated damages are also not awarded. Parties are left to bear their own costs. Copy of this judgment be furnished to both the parties and be sent to the SECP. Now this petition is convened into on execution petition, the judgment-debtor/company is directed to pay the decretal amount on or before the next date.