2026 PLP 699 (CLD)

JUSTICE (RETD.) CH. MUHAMMAD TARIQ, (CHAIRMAN).

Re-facts of the case as mentioned in this petition are that Mst. Tahira Batool, daughter and nominee of deceased, Muhammad Ashraf instituted this insurance petition alleging that her father received the insurance policy plan for Financial Security (VFS) bearing No.47254179 for a sum assured of Rs.500,000/- against yearly premium Rs.50,000/- on 28.12.2020; the insured suddenly fell ill and brought to hospital Aziz Bhatti Shaheed Teaching Hospital, Gujrat on 12.11.2022 at 08:50 A.M. and on the same day, at 10:00 A.M., the insured died because of cardiopulmonary arrest; the insurance company was informed about the death by the petitioner through an application dated 03.03.2023 and in response thereof, the respondent/company requisitioned certain documents, which were provided promptly; the death claim of the petitioner was repudiated on 03.05.2023, on the allegation of pre-insurance ailment and that the deceased did not disclose the material information of his ailment at the time of purchasing the policy; that along with the repudiation letter a cheque amounting to Rs. 100,000/- was also sent, which was not accepted by the petitioner, the petitioners requested to pay the death claim as per terms of the policy.

2. The respondent/company submitted its written reply, on the ground of pre insurance ailment that the deceased/insured was known patient of Hepatitis (HCV), Hypertension (HTN) prior to issuance of the policy but this fact was concealed and by this way has violated the settled principle of good faith.

3. Out of the divergent pleading of the ponies, the following issues wore framed:-

1. Whether the policy holder concealed his pre-existing medical condition at the time of obtaining the policy? OPR

2. Whether the policy holder was suffering from Hypertension and Hepatitis-C before purchasing the policy in question? OPR.

3. Whether the deceased policy holder was habitual smoker for the last 30 years? OPR.

4. Whether the principle of 'doctrine of utmost good faith' under section 75 of Insurance Ordinance, 2000 is only applicable upon the policy holder and not on insurance company? OPR

5. Whether the petitioner is entitled to recover insurance claim of his late father amounting to Rs.500,000/- as prayed for? OPA.

6. Whether the petitioner is entitled to recover liquidated damages under section 118 of Insurance Ordinance, 2000? OPP

7. Relief.

4. After framing the issues, both the parties were directed to produce their respective evidence, whereupon, AW-1 tendered the documents i.e. copy of policy documents Exh.AW-1/2, second year payment receipt Exh.AW-1/3, written intimation of death of deceased to the respondent Exh.AW-1/4, letter dated 09.03.2023 to the respondent requiring documents Exh.AW-1/5, copy of death certificate Exh.AW-1/6, copy of claimant statement Exh.AW-1/7 and letter of repudiation of claim Exh.AW-1/8.

5. In rebuttal Muhammad Salman, Claim Manager appeared as RW-1 and tendered only policy documents along with schedule Exh.RW-1/2 (20 pages).

6. This Tribunal after hearing both the sides decreed the claim of the petitioner to the tune of Rs.5,00,000/- along with liquidated damages on 14.02.2024. Feeling aggrieved from the judgment, the respondent impugned judgment of the Tribunal before the Hon'ble Lahore High Court, who after hearing the appellant as well as respondent allowed the appeal, set aside the impugned judgment dated 14.02.2024, vide order dated 07.04.2025, passed in R.F.A. No.11866/2024 and remanded the case back to the Tribunal with the direction to decide the matter afresh through legal and speaking orders.

7. On receipt of record, the parties were summoned and heard. Both the sides submitted written arguments along with evidence adduced by both the sides.

8. Learned counsel for the petitioner submitted that a life insurance policy i.e. VFS (Vision for Financial Security) bearing No. 47254179 amounting Rs. 500,000/- against yearly premium Rs.50,000/- was obtained by the Applicant's father namely Muhammad Ashraf from respondents/IGI Life Insurance on 28.12.2020. Total two premiums were paid. Applicant being daughter of insured was appointed as a nominee. Policy holder suddenly passed away on 12.11.2022 at Aziz Bhatti Teaching Hospital Gujrat due to heart attack. Insurance Company was intimated about the sudden demise of insured through an application dated 03.03.2023. On receiving the said application, insurer sent a letter to claimant for seeking requisite documents in terms of letter dated 09.03.2023. The required documents including claim form (claimant's and Physician's statement) were promptly supplied to the insurer on 31.03.2023 and 05.04.2023 for their further necessary action. Thereafter Insurer/IGI insurance repudiated the claim in terms of letter dated 03.05.2023 leveling the allegation that the policy holder was a known patient of Hepatitis-C (HCV). Hypertension (HTN) and non-disclosure of material information. Premium refund voucher of Rs. 100,000/- was also sent along with repudiation letter but the said offer was not acceptable thus regretted to receive the said amount. Resultantly, the claim application was filed before this Hon'ble Tribunal on 26.06.2023 with the prayer that:- insurer may kindly be directed to make the payment of death claim amounting Rs.500,000/- along with liquidated damages from date of death i.e. 12.11.2022 till its realization over the amount of sum assured i.e. Rs. 500,000/.

9. Conversely, the respondent side, in its written arguments mainly contended that the policy holder is not entitled to claim the policy amount because the policy holder not only concealed the relevant facts, but he is guilty of misrepresentation. It was further contended that the policy holder (the deceased) was suffering from Hepatitis/C, high blood pressure as he was a smoker of HUQQA and because of blood pressure and Hepatitis/C, he died, but these facts were not provided at the time of filing of relevant form.

10. We have minutely gone through the record of the case and also written arguments submitted by the parties minutely. Since, all the issues are interconnected, therefore, they are dealt simultaneously. We observed the following material facts from the record of the file:- i) It is frankly admitted by the respondent side that the policy holder Muhammad Ashraf was issued a life insurance policy after approval from the concerned quarter. ii) The respondent company received two installments from the policy holder without any objection. iii) The insurance policy was issued on 28.12.2020, while the policy holder died on 12.11.2022. On 03.03.2023, the insurance company was intimated about the death of the policy holder when the respondent company issued repudiation fetter on 03.05.2023 after lapse of more than 02 years from issuance of the policy. Denial to pay the death claim is violation of Section 80 of the Insurance Ordinance, 2000, because policy of life insurance effected after the commencement date shall not be called in question after the expiry of two years from the date, on which it was effected.

11. This Tribunal further observed that during this period, the respondent company did not take any action in relation with the health condition of the policy holder. We further observed that during the cross examination of applicant, learned counsel for the respondent company particularly, puts suggestions upon RW-1 that is it correct that policy holder was suffering from Hepatitis/C, which was denied by the RW-1. Petitioner further confirmed that it is incorrect to suggest that the death of her father (policy holder) occurred due to hypertension, Hepatitis/C and smoking.

12. In the circumstances, the respondent company, obliged to prove its allegations through solid and un-shattered evidence because when AW-1 denied the allegations levelled by the respondents, the onus to prove the allegations shifts on the respondent side, who can also summon the record of the hospital and could produce other evidence in support of their allegations, but respondent failed to do so. Neither the record of the hospital nor doctor was summoned by the respondent company, hence, the applicant succeeded to prove her claim. Relied on law laid down by the Hon'ble Supreme Court reported as PLD 2023 SC 628 and 2007 SCMR 1820.

13. Merely, providing allegations in the pleadings have no status in the eye of law because pleadings of the parties are not substantive piece of evidence unless and until averments made in the pleadings are proved with convincing evidence in the court or admitted by the other party. It is held by the Hon'ble august Court that pleadings are neither substantive evidence nor substitute of evidence as held in judgment reported as 2007 SCMR 870 and 2007 SCMR 1719.

14. The death certificate which was produced by the petitioner as Exh.AW-1/6 is a legal document. The presumption of truth is attached to the death certificate, which was never challenged by the respondent company. We further observed that the conduct of the respondent company did not sent a healthy message to the applicant nor to the public at large by denying the payment of death claim to the applicant. Relief.

15. The upshot of the above discussion is that this Tribunal is unanimous of the view that respondent company has failed to prove issues Nos.1 of 4, therefore, answered in negative while, applicant has succeeded to prove issues Nos.5 and

6. The applicant is also succeeded to establish her claim with cogent evidence, while the respondent company badly failed to prove its allegations, therefore, the application is decreed to the tune of Rs.5,00,000/- in favor of the applicant with costs and against the respondent. The applicant is also entitled to the liquidated damages as provided under Section 118 of the Insurance Ordinance, 2000, after three months from the date of occurrence/death till realization of the decree' amount. Copy of this judgment be furnished to the parties. The judgement debtors we directed to pay the decreetal amount within two weeks from today. MQ/4/IT-Lah Application allowed.