1. SHAFIUR RAHMAN, J.-Leave to appeal was granted to consider whether- "(i) the appellant was under a statutory duty under Life Insurance (Nationalization) Order, 1972 to insure the employees of the respondent-company inter alts with regard to :heir non-occupational, non-accidental, natural disability, as envisaged by Standing Order 10-B.
(ii) whether in fact there was a concluded contract of group insuranc between the contesting parties whereby the appellant had insured th permanent employees of the respondent company even against non-occupational, non-accidental, natural disability.
(iii) whether the High Court could justifiably on facts established direct the appellant to discharge its statutory obligation by making payment of claims preferred to it as contemplated by 10-B of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance."
2. ' The respondent is a public limited Company incorporated under the Companies Act, 1913 with its registered office at Karachi. The appellant is a statutory Corporation having exclusive privilege of conducting life insurance business including compulsory group insurance and is governed by Life Insurance (Nationalization) Order, 1972 (hereinafter referred to as the Order). Standing Order 10-B of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (hereinafter referred to as the Ordinance), as it stood at the beginning of 1979 required the employer to have "all the permanent workmen employed by him insured against death and injury arising out of contingencies not covered by Workmen Compensation Act, 1923 (VIII of 1923) or the West Pakistan Employers Social Security Ordinance, 1965 (W. P Ordinance No, X of 1965)". In discharge of this obligation the respondent sought on 7-11-79 the group insurance cover for all its permanent employees and obtained in the same day from the appellant when the latter confirmed "having today assumed risk on the lives of your all full time, permanent employees who are actively at work". On the 13-1-1980 eleven permanent employees of the respondent and on 20- 1-1980 one more, making a total of twelve, were declared by a medical board as disabled, unfit for work and their services were terminated as from 30-1-1980. There was a refusal by the appellant to pay the insurance on the ground that it had covered the risk of only accidental disability (excluded by Workmen's Compensation Act and Social Security Ordinance) and did not insure against natural disabilities. The formal insurance policy dated 28-1-1980 which the appellant handed down did not in fact contain such a cover and within the period of 15 days prescribed by the appellants for pointing out omissions or errors the respondent brought it to the notice of the appellant that the policy document should have contained a rider as hereunder :- "Notwithstanding anything contained to the contrary under this policy the policy holder is fully covered in respect of his liability under all the provisions of Standing Order 10-B of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and the insurer will assume all responsibility and liability for payment of all monies which the policy holder is or may be or may become liable to pay to any person under the provisions of the said Standing Order 10-B.
3. ' In the event of any conflict between this clause and any other provisions of this Policy, the provisions of this clause shall prevail."
4. ' The appellant regretted on 17-2-80 its inability to incorporate such a rider and the reasons given were as follows :- "We would like to advise you that as far as the State Life's liability is concerned, it is governed by the terms and conditions of the Group Policy which specify the contingencies on which the death or accidental injury benefit becomes payable according to the scale of benefits mentioned in the Policy schedule.
(2) The provision of the Standing Order 10-B makes the employer liable for certain compensation to his employees in the event of certain contingencies. A part or all of these compensations, provided they can be specified precisely, are insurable with the State Life. Your present policy covers the death due to any non-occupational cause and permanent disablement on account of off-duty accidental injury. It does not make the State Life liable for all the compensation under any enactment to which the employer may have been liable. The State Life's liability is restricted to the terms and conditions of the. Group Policy No, SLG-3160. We are, therefore, unable to incorporate the clause as suggested by you giving a blanket cover under any law.
5. ' As per your discussions, we understand that you wish us to cover the permanent disability due to natural causes. On account of the lack of preciseness of the cover (1. e. The contingencies and the quantum of benefits), we are unable to grant a blanket cover for permanent disability due to natural causes. We would, however, be prepared to grant this cover for specified disabilities and these are as follows :-
(1) Total blindness ;
(2) Total and permanent paralysis-functional loss of limb ; ' In order to provide this cover, we would charge an additional premium of Rs, 0.50 per thousand sum assured. If you wish us to grant this cover, please let us know when we shall be pleased to send you the relevant endorsement."
6. ' As regards the disability claim of the twelve employees discharged on 30-1-1980 the appellant informed the respondent on 14-2-80 as follows :"We may inform you that this Policy does not cover the contingency that has given rise to these claims and, as such, we regret or inability to entertain these claims."
7. ' Such a refusal by the appellant, on two fronts prompted the respondent to institute constitutional petition (W. P. No, 350/80). The services of two more permanent employees were terminated, of one from 1-2-80 and of the other from 15-3-80, on grounds of disability adjudged so by the medical board. There was again a refusal by the appellant to extend the insurance benefits to them. Hence the respondent filed another constitutional petition (W. P. No, 1307/80) in respect of these two employees. These two petitions were heard together and disposed of by a common judgment. The relief sought was as follows :- "A declaration be issued to the effect that the compulsory group insurance cover provided by the respondent corporation to the petitioner-Company vide Group Insurance Police No, SLG-3160 has been made and is deemed to have been made under Standing Order 10-B of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and that the respondent corporation is under a statutory duty to discharge its complete obligation in terms thereof as contemplated by the aforesaid provision and interpreted by this Hon'ble Court in the case of Muhammad Siddique v. Sind Labour Appellate Tribunal and another (Constitution Petition No, 1041 of 1978, decided on 13-2-1979 PLD 1979 Kar.
8. 560."
9. ' The grounds on which the respondent based his claim were and continue to be as hereunder-
(1) There was a clear statutory duty imposed on the respondent employer to get insured all its permanent workmen in terms of Standing Order 10-B. Its failure to do so had in the past resulted in criminal prosecutions being launched against it under section 7 of the Ordinance.
(ii) The appellant, a statutory body, having the exclusive privilege of carrying on life insurance business in Pakistan (section 32 of the Order) had been charged by law (section 14 ibid) with a general duty "to carry on. Life insurance business" in a manner to secure that life insurance business is developed to the best advantage of the community", could not either refuse to insure the permanent employees of the respondent in terms of Standing Order 10-B or having insured them could decline to extend to them the benefits of insurance to such of the employees as suffered disability like the fourteen who were medically boarded out.
(iii) The scheme of group insurance launched by the appellant, and the contract entered into between the parties, notwithstanding the terms of the formal recital in Group Masters Policy, met in its entirety and fully the requirements of Standing Order 10-B, and the financial liability of the employer arising thereunder had to be shouldered in full by the appellant. .
10. ' The appellant did not file a reply or a written statement to controvert the claim of the respondent.
11. Affidavits were in fact filed. The case of the appellant was as follows :-
(i) The appellant is a statutory body having a general duty to conduct life insurance business in Pakistan but the law (Article 14(3) of the Order) requires that "In the discharge of any of its functions the Corporation shall act as far as may be on sound business principles". Section 25 of the Order further requires that vin the discharge of its functions under the order, a Corporation shall be guided by such directions in the matter of policy involving public interest as the Central Government may give to it in writing, and if any question arises whether a direction relates to a matter of policy involving public interest the decision of the Central Government thereon shall be final. Neither as a part of sound business proposition nor under a direction of the Central Government the appellant ever decided to underwrite the entire financial responsibility of natural disabilities of the permanent employees. As all its unmints/correspondence showed it accepted responsibilities for only accidental, non-occupational disabilities. The appellant could not be compelled to accept and in fact had not accepted the all too vague and indeterminate responsibility for all natural disabilities.
(ii) The statutory obligation of the employer under Standing Order 10-B did not imply nor has the effect of giving rise to a corresponding statutory obligation of the appellant to extend full insurance cover as required under Standing Order 10-B. Neither good business required the acceptance of such a responsibility nor there was a direction of the Central Government in the matter.
(iii) The contract document, starting from the brochure, the proposal, its acceptance and the formal policy document all unmistakably show that only the risk of accidental disabilities was covered and the moment the respondent suggested that full cover as required under Standing Order 10-B be made available as a rider to the Policy conditions it was refused at the very first opportunity. There was therefore no concluded contract so far as benefit of natural disabilities was concerned. As all the fourteen cases submitted by the respondent concerned non-accidental, natural diabilities, the responsibility for them was disclaimed.
12. ' The High Court came to the conclusion that it was the statutory duty of the respondent to seek and of the appellant to provide the insurance cover as required under Standing Order 10-B. It was further held that the respondent in fact sought and the appellant in fact provided as from 7-11-79 the insurance cover in terms of Standing Order 10-B. Having so contracted, the legal duty of the appellant to entertain the claims arising out of even natural disabilities of the permanent workmen followed as a matter of course. Having come to these conclusions the High Court granted the relief in the following terms- "the two petitions are allowed with costs and the respondent corporation is directed to discharge its statutory obligation by making payment of claims preferred to it as contemplated by Standing Order 10-B of the West Pakistan Industrial and Commercial Employment (Standir Orders)
13. Ordinance, 1968."
14. ' The learned counsel for the appellant contended that by casting statutory duty on employers, as was done in Standing Order 10-B, a corresponding statutory day was not cast on the appellant to make out a policy as would conform in all respects to the requirements of Standing Order 10-B.
15. Statutory duties and obligations as may be commanded by writ of mandamus, or directions of Court, do not follow by implication, are not a matter of inference or conjecture and do not inhere in a requirement from a person other than the one whose duty it is sought to be made. The appellant has its own charter of duties, its own purposes and objects, its own system of regulatory controls, supervision and directions. In order to be its statutory duty, it must find a place in its charter, express, unequivocal and positive. It has been also urged by the learned counsel for the appellant that from the very first document referable to it, viz., the brochure, whenever and wherever mention was made to the statutory requirement of Standing Order 10-B, the benefit identified thereunder was one of accidental disability and not any other. The brochure made a mention of it, the proposal form made a mention of it, the acceptance letter in asking for statement of death and disability figures asked for statement of accidental disability alone and finally the policy document.
16. Even the respondent, according to the learned counsel for the appellant, relied upon no other arrangement, except what transpired on 30-1-80 for incorporating the condition in the nature of a rider. It was not as a part of statutory duty, not as a part of the contract concluded by proposal and acceptance, that its insertion was sought. A novation of the contract could be refused by the appellant. The learned counsel for the appellant vehemently contended that in its elemental form the controversy between the parties was with regard to the terms of the contract, the liabilities arising thereunder and such a. Controversy according to consistent decisions of this Court could not be a fit subject-matter for adjudication in constitutional jurisdiction. Reliance has been placed on Muhammad Idrish v. East Pakistan Timber Merchants Group and another , M. Muzaffaruddin Industries Ltd. v. The Chief Settlement & Rehabilitation Commissioner and another , Shamshad. Ali Khan v. Commissioner Lahore etc. , The Murree Brewery Co. Ltd. v. Pakistan through the Secretary Government of Pakistan Works Division and 2 others and Al-Mahmood Industries (Pakistan) Ltd. v.
17. The Trading Corporation of Pakistan Ltd. And another . Finally, it has been contended that even admitting every fact alleged by the respondent and every finding recorded by the High Court the1 2 3 4 5 relief granted could not be of "making payments of claims preferred." The appellant was within its right and had a right of disclaimer because material information with regard to fitness and good health of the employees had been withheld and in any case the insurer had to be satisfied as a fact about the disability of the employees in respect of whom benefit was sought. It could not be given as a matter of course on the asking of the employer. On the claim that was made and the finding that was recorded only a direction could issue to the appellant, to entertain the claim which it had refused to entertain and to process it in accordance with law.
18. ' As the respondent has been claiming it as a clear statutory duty of the appellant to make available to it an insurance cover as is required by Standing Order 10-B, and in no way short of it, one must necessarily locate it in the Statute itself. Standing Order 10-B casts a statutory responsibility on the employer, and the consequences, civil as well as criminal, are indicated for a failure to perform it. A corresponding statutory duty of the appellant is sought to be necessarily established from it inferentially on the ground that the Legislature itself has created a monopoly of life insurance business' in favour of the appellant. Any failure on the part of the appellant to make available such an insurance cover as is required under Standing Order 10-B would necessarily imply a failure on the part of the respondent to discharge its statutory duty. It is conceded, and an examination of the provisions of the Order bears it out, that the order does not prescribe a clear, specific, peremptory or imperative duty of the appellant to afford the particular insurance cover to an industry or employer as is prescribed in Standing Order 10-B. Article 14 of the Order points out a "general duty" of the appellant to "carry on life insurance business" and "to secure that life insurance business is developed to the best advantage of the community and in discharging its duties the appellant is required "to act as far as may be on sound business principles". Such a general duty as is prescribed in the Order cannot be so interpreted as to lay down a particular duty to make available such insurance policies as are prescribed by Statute for others. Besides, as reproduced, in the last reply of the appellant, there has never been outright refusal on the part of the appellant to extend the insurance benefits as are kequired under Standing Order 10-B. As a matter of fact the appellant wanted the respondent to specify with greater particularity the risks against which the respondent wanted to secure its employee. It was kept as a negotiable matter.
19. The next question whether from the various documents, like the brochure, the proposal, its acceptance, the Insurance Policy and subsequent correspondence coupled with the conduct of the party a contract fully covering all the risks enumerated in Standing Order 10-B came into existence is one which could not be examined or determined in the constitutional jurisdiction of the High Court. It concerned out and out controverted questions of fact, the adjudication on which could take place only after obtaining all types of evidence in the power and possession of the parties. The Courts having plenary jurisdiction in the matter alone were competent to determine this question. On that short ground alone the constitutional petition was incompetent.
20. ' Coming now to the relief granted, even on the findings recorded by the High Court the relief granted could not be one of "making payment of claims preferred to it". There was a refusal by the appellant to entertain the claim. The direction that could more appropriately be given on such a finding was one of entertaining the claim and dealing with it in accordance with law. That would have left the defences of the appellant intact and open for examination and determination against the claim of the respondent.
21. ' On the observations made and findings recorded above, we accept the appeals with costs, set aside the judgment under appeal, recall the writ that issued and dismiss the two petitions. PLD 1968 SC 412 1968 SCMR 1136 1969 SCM R 122 PLD.1972 SC 2791 2 3 4
…and 10 more citing cases