P L D 2026 Federal Constitutional Court 88 (PLP)

MUHAMMAD KARIM KHAN AGHA, J.

Messrs Pak Qatar Family Takaful Limited ("petitioner"), through the present petition for leave to appeal, calls into question the judgment dated 29.09.2025 ("impugned judgment") passed by the Islamabad High Court. By the impugned judgment, the Islamabad High Court allowed the writ petition filed by respondent No. 1, Arshia Kanwal ("respondent"), and dismissed the writ petition filed by the petitioner.

2. The brief facts are that the respondent is the nominee and legal beneficiary of late Muhammad Waqas Anjum ("the deceased") who, on 05.03.2019, obtained a Takaful Plan bearing No. CL-201900948966 from the petitioner. The plan was acquired on the basis of a regular contribution for three years, with a membership term of five years, providing a death cover of Rs. 38,50,000/- against payment of an annual contribution of Rs. 11,639/-. Unfortunately, the deceased passed away on 08.05.2019, only a few days after commencement of the policy. The death intimation was conveyed to the petitioner through email by Muhammad Khalid, the stepfather of the respondent. The claim lodged by the respondent was, however, denied by the petitioner vide letter dated 01.10.2021 on the following grounds: (i) that the nominee, Ms. Arshia Kanwal, though nominated, was not the real sister of the deceased; (ii) that the requisite medical record regarding the admission of the deceased at DHQ Hospital, Mandi Bahauddin, had not been provided; and (iii) that the deceased was allegedly a drug addict.

3. Aggrieved by the non-settlement of her claim, the respondent filed a complaint dated 08.10.2019 before the Federal Insurance Ombudsman against the petitioner, alleging failure to honour the Takaful claim arising from the death of her brother. The said complaint, bearing No. 1733 of 2019, was allowed by the Federal Insurance Ombudsman vide order dated 06.06.2022, whereby the petitioner was directed, in terms of Section 130(1) of the Insurance Ordinance, 2000 ("Ordinance"), to pay the claim amount to the nominee, Ms. Arshia Kanwal, within thirty days. The Ombudsman further held that the petitioner had inordinately delayed payment without any lawful justification and was, therefore, liable to pay liquidated damages to the complainant under Section 118(2) of the Ordinance. It was also observed that the petitioner had willfully violated the law, and accordingly, the matter was ordered to be referred to the Securities and Exchange Commission of Pakistan (SECP) for necessary legal and disciplinary action under Section 156 of the Ordinance, read with Section 9(4) of the Federal Ombudsman Institutional Reforms Act, 2013. The review application filed by the petitioner was dismissed vide order dated 20.07.2023. The representation subsequently filed before the President's Secretariat was also rejected vide order dated 28.11.2023.

4. Thereafter, the respondent filed a writ petition seeking issuance of directions for implementation of the order dated 06.06.2022 passed by the Federal Insurance Ombudsman, including payment of the insurance claim amounting to Rs. 38,50,000/- along with liquidated damages. Further directions were sought for SECP to initiate disciplinary proceedings under Section 156 of the Ordinance against the petitioner, for non-compliance with the Ombudsman's order within the statutory period. Simultaneously, the petitioner also filed a writ petition assailing the order dated 06.06.2022 passed by the Federal Insurance Ombudsman in Complaint No. 1733 of 2019, the order dated 20.07.2023 passed in Review Petition No. 4 of 2022, and the order dated 28.11.2023 passed by the President's Secretariat dismissing its representation. By the impugned judgment, the writ petition filed by the respondent was allowed, whereas the writ petition filed by the petitioner was dismissed by the Islamabad High Court.

5. Learned counsel for the petitioner has raised two main arguments. The first concerning the Federal Insurance Ombudsman's lack of jurisdiction to hear cases concerning disputed insurance claims and the second whether on the non-disclosure/misrepresentation/ concealment of the deceased being a former drug addiet on his insurance application debarred any claim under his insurance policy.

6. We have heard learned counsel for the petitioner and perused the record.

7. At the outset it is well settled that the question of jurisdiction can be raised at any time. We do however find it disturbing that the issue of the Federal Insurance Ombudsman lack of jurisdiction in hearing cases concerning disputed insurance claims was not raised before him at the time of hearing the case, in the application on review which was declined as time barred and even before the petitioners appeal before the President's secretariat. Even during the hearing of the impugned judgment this jurisdictional issue was not raised by the petitioner and is only now being raised after three concurrent findings against the petitioner.

8. At this stage since we are deciding the impugned judgment which was passed in the writ jurisdiction we do not consider it necessary to determine this jurisdictional issue which concerns the jurisdiction of the Federal Insurance Ombudsman and the President's Secretariat decision which we shall ignore by way of abundant caution and leave it to any concerned Insurance company to raise this jurisdiction issue, if so advised, before the Federal Insurance Ombudsman when in the future a case is brought before it concerning a disputed insurance claim.

9. Instead we will focus on the Impugned Judgment which was mentioned earlier and was decided in the writ jurisdiction which the High Court did have jurisdiction to determine the matter and like wise based on the particular facts and circumstances of the case we find that we also have jurisdiction to decide the correctness of the Impugned Judgment which had been decided under the constitutional jurisdiction of the concerned High Court through a detailed speaking order deciding the case on merits.

10. The second main argument of the petitioner is that the deceased was allegedly a drug addict and he failed to disclose this in his application and since he died very shortly after making his application and the issue of his insurance policy he had died on account of a drug over dose which would void his policy as this was a material non disclosure/misrepresentation/concealment which had the petitioner been aware of at the time of processing the application it might have declined to insure the deceased.

11. Section 79 of the Insurance Ordinance, 2000 (as amended in 2007) deals with remedies open to an insurance company in case a misrepresentation/non disclosure/concealment is made in the application for insurance which leads to the grant of an Insurance policy which is set out below for ease of reference; "Section

79. Remedies for non-disclosure or misrepresentation. (1) This section shall apply where the person who became the policy holder under a contract of insurance upon the contract being entered into: (a) failed to comply with the duty of disclosure; or (b) made a misrepresentation to the insurer before the contract wus entered into. (2) The insurer may not avoid a contract of insurance by reason only to the failure to comply with the duty of disclosure or the misrepresentation if: (a) the insurer would have entered into the contract, for the same premium and on the same terms and conditions, even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into; or (b) the failure to comply with the duty of disclosure or the misrepresentation was not fraudulent: Provided that in circumstances to which clause (b) refers, the insurer shall be entitled to be placed, in such manner, not otherwise inconsistent with this subsection, as may be prescribed, in a position in which the insurer would have been if the failure had not occurred or the misrepresentation had not been made. (3) Subject to subsection (2), if the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract. (4) Nothing in this section shall affect any right of an insurer to recover damages from any person in respect of loss suffered by the insurer as a result of a fraudulent act by that person, or any criminal liability to which any person may be subject be reason of a fraudulent act by that person.

12. Thus, the burden falls on the insurance company to establish fraudulent non disclosure/concealment/misrepresentation by the person seeking to be insured through reliable and trustworthy evidence.

13. Insurance contracts are made in up most good faith and as such insurance companies should not make every effort to wriggle out of them especially when they are taking a hefty premium or when the amount insured is relatively minor as in this case being about 38 lacks as is made clear by Section 75 of the Ordinance which is set out below for ease of reference; Section

75. Duty of utmost good faith,

(1) A contract of insurance is a contract based on the utmost good faith and there shall be implied in such a contract a provision requiring each party to it to act towards the other party, in respect of any matter arising under or in relation to it, with the utmost good faith. (2) If reliance by a party to a contract of insurance on a provision of the contract would be to fail to act with the utmost good faith, the party may not rely on the provision. (3) In deciding whether reliance by an insurer on a provision of the contract of insurance would be to fail to act with the utmost good faith, the Tribunal shall have regard to any notification of the provision that was given to the policy holder, whether or not the insurer was required by this Ordinance to give such notification. (4) The effect of this section is not limited or restricted in any way by any other law, including the subsequent provisions of this Part, but this section does not have the effect of imposing on a policy holder, in relation to the disclosure of a matter to the insurer, a duty other than the duty of disclosure.

14. In his application form the deceased did not mention that he was a former drug addiet but the question arises whether he was a drug addict at all as alleged by the petitioner or at the time of his death and if is so whether his death had any nexus to him being a drug addict. His cause of death is noted as natural causes and makes no mention of his death being a result of drug addiction/narcotics. Hence, there is no nexus of his death having any nexus to him allegedly being a drug addict.

15. Equally of significance is that despite the onus being on the petitioner to prove that the deceased was a drug addict the petitioner produced no evidence to suggest that the petitioner had ever been a drug addict and if so was still a drug addict and if so his drug addiction had a nexus to his death and as such the petitioner has failed to discharge its burden under section 79 of the Ordinance with regard to their allegation of non disclosure/misrepresentation or concealment.

16. It is observed that when an applicant seeks medical insurance/life Insurance it would be but prudent and good practice for insurance so that the insurer could detech any illness/ailment and thereby either decline to insure the person or fix the insurance premium at an appropriate level depending on how much money the person is seeking insurance for.

17. As such we find the petition to be without merit, refuse leave to appeal and dismiss the same and uphold the impugned judgment. UN/6/FCC Petition dismissed.