1997 PLP 1118 (MLD)

(1) State Life Insurance Corporation v. Mst. Aziz Anjum Haider (PLD 1989 SC 244). (2) Messrs Pakistan Tobacco Company Ltd. v. State Life Insurance Corporation (1981 PLC 244). (3) Mrs. Shreen G. Kandawala and others v. Federation of Pakistan (PLD 1989 Kar. 471) and (4) M.H. Abidi v. The State Life Insurance Corporation (1990 MLD 563). Conversely learned counsel for the respondent‑Corporation referred to the cases of State Life Insurance Corporation v. Mst. Sarwat Kazmi (1979 SCMR 295) and Norwich Union Life Insurance Society v. Mst Zainab Bibi (1981 CLC 1722).

7. In the case at Serial No.1, Supreme Court dealing with a Civil Petition for Leave to Appeal from an order passed by the Lahore High Court in a Civil Revision observed that the state of health of insured, with whatever ailment he was suffering, could be presumed to be also known to the insurers and if they accepted him for life insurance they in their own business thought it a risk worth taking on the rate of premium and under the other relevant conditions specified in the contract. In the facts of the case it was held that with all these assumptions insurers could not repudiate and avoid the liability. It may be observed that the aforesaid case arose out of an insurance claim in connection with the life insurance policy obtained by Dr. Haider Ali Chowdhary a prominent Specialist practising at Lahore in which the High Court recorded the concession note of the learned counsel appearing for the Insurance Corporation as under:‑‑-- "When questioned learned counsel for the petitioner conceded that the petitioner‑ Company would have insured Dr. Haider Ali Chowdhary even if he had disclosed that he was suffering or had suffered from high blood pressure."

8. It was in this context that the High Court held that the Insurance Corporation was in full knowledge of the state of health of the insured and if they accepted ho for life insurance in their own business they thought it a risk worth taking on the rate of premium and under the other relevant conditions. In the present case, there is nothing on record to indicate that the respondent Corporation was aware of the ailment of the deceased who though examined by an authorised Medical Officer of the Corporation at Hyderabad possibly could not detect this serious and fatal disease from which the deceased was suffering and in good faith believed the statements made by the deceased on page 3 of the proposal form Annexure R/1 to the counter‑affidavit.

9. In Pakistan Tobacco Company Limited a Division Bench of this Court held that functions of State Life Insurance Corporation, as prescribed by Legislature, to carry on life insurance business and to exercise its powers to secure that such business is developed to best advantage of community do not pertain to contractual rights and can be enforced through writ jurisdiction.

10. In the case at Serial No. 3 which is a case under Economic Reforms Order, it was held that Constitutional petition under Article 199 cannot be dismissed on the ground of laches, without examining dictates of justice in claim of each party in addition to examination of law and jurisdictional points involved in the case as held by the Supreme Court in the case of Pakistan Post Office v. Settlement Commissioner and others reported in 1987 SCMR 1119. There can be hardly any cavil with the proposition of law laid down in the aforesaid case and we are not unmindful of the facts forming the backgrounds of this petition and the points in controversy between the parties.

11. Learned counsel also relied on another observation in this judgment to the effect that the technical objection which may non‑suit 'a petitioner is to be raised by a respondent at the earliest opportunity so that the petitioner may .rectify the technical defect either by amending the petition or if necessary by filing some other competent proceedings after withdrawing the petition. The Bench consisting of Ajmal Mian and Abdul Rahim Kazi, JJ. further observed that the Court will be reluctant to entertain a technical objection to the maintainability of the petition at a late stage. We may point out here that the respondents have not raised any technical objection to the maintainability of the petition and resistance is based on actual facts of the case in which the deceased deliberately suppressed true facts at the time of obtaining Life Insurance Policy. It may further be made clear that the counter‑affidavit was filed by the respondents at the stage of pre‑admission notice and without any delay which touches the root of the petition rather than a technical objection. At any rate neither we are dismissing the petition on technical grounds nor can it be said that the objection was not raised at the earliest stage of the proceedings. The observation is thus of no avail to the petitioner.

12. In M.H. Abidi's case another Division Bench of this Court observed that contractual rights/obligations emanating from statute are justiciable in writ jurisdiction. While dealing with the case arising out of a claim of Group Insurance the Bench observed as under:‑‑ "Likewise, the element of a contract being prior or subsequent to July, 1973 when direct contracts with Government or autonomous bodies were precluded would have no bearing, for then the relevant circumstances would only be whether in actuality the contract was concluded directly and not through agency. But these all are questions of fact and controversial at that. Neither of the parties has produced any of the Group Insurance Contracts, not even the one in dispute here. We can neither enter into disputed questions of fact involving minute details nor can we decide facts of which no foundation is laid. These are the limitations of Constitutional jurisdiction."

13. We have the least difference of opinion with the view expressed in earlier D.B. judgment of this Court and following the principle of law laid down therein we are of the view that contractual rights/obligations between the parties arising out of Insurance Policy can be adjudicated in the exercise of writ jurisdiction with a reservation however that in case the facts pleaded in a petition are in controversy and require factual investigation this Court will not enter into such exercise while sitting in writ jurisdiction.

14. In Mst. Sarwat Kazmi's case reported in 1979 SCMR 295 Hon'ble Supreme Court quoted a passage from Houseman's Law of Life Assurance, 8th Edition, page 35 as under: "An important exception to the general rule applies however to all contracts of insurance. Here the party seeking to cover the risk has information as to the nature of the risk with which the insurer is not and cannot be acquainted unless it is disclosed. The law will not allow the proposer, by non‑disclosure of material information, to lead the insurer to make a bargain which the insurer would not entertain in the light of fuller knowledge of the risk. Each contracting party must, therefore, observe the utmost good faith. There must on both sides be what is known as uberrima fides." Dismissing the petition for leave to appeal Supreme Court took the view that deliberate concealment of information would in a given case be a ground for avoiding a contract.

15. In the second case cited on behalf of the respondents Ajmal Mian, J. (as his Lordship then was) expressed the following view:‑‑ "In this view of the matter the appellants were entitled to obtain good health declaration as a condition precedent to the reviving of the two lapsed insurance policies. Since the above two insurance policies were revived inter alia on the basis of the health declarations given by the deceased insured, which proved to be false according to the finding of the learned Civil Judge quoted hereinabove, in my view the appellants were entitled to repudiate the two insurance policies on the above ground. " His lordship further observed that the contracts of insurance including that of life are of 'uberrima fides' i.e. of the utmost good faith. The special facts upon which the risk is to be estimated by an insurance company are normally within the knowledge of the insured only. He is required to disclose all information facts, which may persuade or dissuade an insurance company from accepting or not accepting the risk involved in the contract of insurance. Non disclosure or suppression of such information/facts will constitute fraud rendering the insurance policy as void or entitling the insurance company to repudiate its liability. In a life insurance contract, the state of the insured health is a very material fact. No insurance company will enter into a contract of life insurance if it is told that the proposed insured is suffering from a serious ailment.

16. Similar view was expressed in Burjor Ardeshir Industries v. Employers' Liability Assurance Corporation (PLD 1970 Karachi 642) and State Life Insurance Corporation v. Mamoor Khan (1993 CLC 790) (Peshawar).

17. Judged in the light of aforesaid case‑law on the subject, the contract of insurance between the parties and the fact that the deceased did not disclose his ailment at the time of obtaining the policy law and equity disentitles him as well as his nominee to the benefits of the policy. The petitioner, therefore, is not entitled to the discretionary relief in the exercise of writ jurisdiction. Needless to observe that since we are dismissing the petition on merits, we do not find called upon to deal with the aspect of laches on the part of the petitioner. The petition is accordingly dismissed alongwith two C.M.L.As. A.A./S‑50/K Petition d