2018 PLP 289 (CLD)

TARIQ IFTIKHAR AHMAD, J.

Muhammad Ameer deceased was government employee in Education Department in BS-17 and had retired from service as S.S.T., thereafter, he passed away on 17.10.2008. Appellant Mst. Razia Ameer, being widow of the deceased, filed an application to claim group insurance as liquidated damages. The said application was contested by the respondent, State Life Insurance Corporation of Pakistan. The learned Insurance Tribunal after completing the proceedings dismissed the application to the extent of liquidated damages, as claimed for.

2. Being aggrieved with the said order, the appellant has filed the present Insurance Appeal on various grounds.

3. It is evident that although the learned Tribunal framed five issues, however, on 07.02.2014 passed an order that appellant had received group insurance amount of her deceased husband and pressed her claim only about liquidated damages in respect of which following issue had already been framed on 16.10.2009:- "Whether the applicant is entitled to liquidated damages as prayed for?"

4. Learned counsel for the appellant contended that learned Insurance Tribunal misinterpreted section 118 of the Insurance Ordinance, 2000 and on quite illegal ground that since Muhammad Ameer was not party to the group insurance policy, thus, his legal heirs were not entitled to receive the liquidated damages under section 118 of the Ordinance.

5. Learned counsel for respondents defended the impugned order and stated that the same is factually and legally correct and submitted that this appeal may be dismissed.

6. After hearing learned counsel for the parties, we carefully perused the record.

7. A careful perusal of impugned order shows that learned Insurance Tribunal refused to grant liquidated damages to the appellant on two folded grounds. First that the deceased employee, predecessor in interest of the appellant was not party to the group insurance policy and second that section 118 of the Insurance Ordinance, 2000 does not provide grant of liquidated damages. A plane reading of section 118 of the Ordinance provides that it shall be an implied term of every contract of insurance that where payment of a policy issued by an insurer becomes due and the person entitled thereto has complied with all 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 of which the claimant complies with the requirements, whichever is later, pay as liquidated damages a sum calculated in the manner as specified in subsection (2) on the amount so payable unless he proves that such failure was due to circumstances beyond his control. Interpretation of the aforementioned provision of law in clear terms provided that on completion of all formalities, if the claim is not satisfied/cleared within ninety days without any fault of the claimant when it becomes due then its implied term of every contract of insurance and that liquidated damages have to be granted.

8. The second reason prevailed with the Insurance Tribunal to dismiss the grievance application was that since deceased predecessor of the appellant was not party to group insurance policy, which contract was entered into between government and the insurance company was incorrect approach, so found not sustainable. It is plain and straight that group insurance is designed to provide monetary benefits to the family of the deceased employee and during his service period, he also contributed in this respect. It may be added that insurance policy amount had already been received by the, appellant, family of the deceased employee, then, under section 118 of the Ordinance, as discussed above, they were also entitled to receive liquidated damages under subsection (2) of section 118 of the Insurance Ordinance, 2000. For these reasons, the impugned order dated 18.06.2015 is not sustainable, so, while allowing this appeal same is set aside. Resultantly, the issue as mentioned above is decided in favour of the appellant. KMZ/R-8/L Appeal allowed.