2006 PLP 874 (CLD)

MUHAMMAD MUZAMMAL KHAN, J.

This judgment proposes to decide two constitutional petitions, one in hand and the other W.P. No.1375 of 2006 as both these petitions raise similar questions of law/facts, require interpretation of same provisions of law and are directed against the same set of respondents. Both the writ petitioners were declined payment of liquidated damages in spite of payment of respective death claims of their husbands which were payable on account of delay in payment of claims as per section 118 of the Insurance Ordinance, 2000. Succinctly, relevant facts are that husbands of the writ petitioners purchased Life Insurance Policies bearing No.504825814-7 for an amount Rs.5,00,000 commencing from 22-12-1997 and Policy No.507651935-9 for the value of Rs.6,00,000 commencing from 24-4-1994, respectively, in their life times. Husband of writ petitioner Mst. Nusrat Malik Saleem died on 22-6-2000 whereas husband, of Mst. Rukhsana Kausar died on 9-3-1997 and both of them lodged their respective death claims, which were repudiated by respondents Nos.3 and

4. Writ petitioners were forced to approach the Wafaqi Mohtasib, who decided the matter in their favour on 8-9-2001 and 6-12-2000 respectively. Representations of the' State Life Insurance Corporation were turned down by the President of Pakistan and consequently, death claims were paid to the writ petitioners but they were declined payment of liquidated damages, noted above, necessitating filing of petitions under decision. Respondents Nos.3 and 4 who are the real contestants in response to notice by this Court appeared and were represented through their counsel. I have heard the learned counsel for the parties and have examined the record, appended herewith. Undisputedly, both the writ petitioners have been paid the death claims against the Insurance Policies purchased by their husbands and now question which hinges for determination is, as to whether respondents Nos.3 and 4 are also liable to pay liquidated damages. Relevant provisions of law applicable are contained in section 118 of the Insurance Ordinance, 2000 which reads as under:- "

118. Payment of liquidated damages on late settlement of claim.

(1) It shall be an implied term of every contract of insurance that where payment on a policy issued by an insurer becomes due and the person entitled thereto has complied with all the requirements including the filing of complete papers for claiming the payment the insurer shall if he fails to make the payment within a period of ninety days from the date on which the payment becomes due or the date on which the claimant complies with the requirements, whichever is later pay as liquidated damages a sum calculated in - the manner specified in subsection (2) on the amount so payable unless he proves that such failure was due to circumstances beyond his control." Minute scrutiny of the above reproduced provision of law clearly demonstrated that claimant under an insurance policy is entitled to liquidate damages in case of delay in payment of insurance claim, from the date of completion of case which could only be refused by promptly paying the claim or it is proved that delay occurred due to circumstances beyond the control of insurer. In the case in hand death claims of both the writ petitioners were paid after throwing them into litigation. Record revealed that decision of the Wafaqi Mohtasib was not complied instantly and the respondents Nos.3 and 4 opted to make representation to the President of Pakistan, which was declined. The objections on the basis of which repudiation was done by the respondents-Corporation were thrashed and turned down by the Wafaqi Mohtasib while deciding the controversy in favour of the writ petitioners, after payment of death claims to the writ petitioner. Respondents remained un successful in the representation before the President and controversy inter parties to that extent has come to an end whereafter the provisions of section 118 of the Ordinance (ibid) for -payment of liquidated damages equivalent to sum calculated in the manner specified in its subsection (2) were to be complied because the said respondents could not show that failure/delay to make death claims was beyond their control whereas, the delay was deliberate and the claims were paid after thrusting the petitioners into litigation. In the peculiar circumstances of the case respondents Nos.3 and 4 failed to demonstrate that their conduct in payment of petitioner's death claims was covered by the only exception created by above referred provision of law i.e. the delay was beyond their control hence they were obliged to pay the claimed liquidated damages as per section 118(2) of the Insurance Ordinance, 2000. For the reasons noted above, respondents Nos.3 and 4 being bound to pay liquidated damages to the writ petitioners, did discharge their statutory commitments hence, both these petitions are accepted and the respondents Nos.3 and 4 are directed to pay the liquidated damages according to law within a period of three months. There will, be no order as to costs. M.H./ N-39/L Petition allowed.