Summary: Insurance Ordinance, 2000—Ss. 118(2), 130(1) & 156—Federal Ombudsman Institutional Reforms Act, 2013—S. 9(4)—Constitution of Pakistan, 1973—Art. 185(3)—Takaful claim—Nominee/beneficiary—Repudiation of claim—Alleged concealment and misrepresentation—Burden to substantiate repudiation—The Federal Constitutional Court held that where the deceased policyholder had obtained a life/Takaful policy, his death was admitted, and the respondent was the sole nominee duly recorded in the policy documents, the insurer could not lawfully repudiate the claim on bare allegations of concealment, delayed intimation, or alleged drug addiction without producing independent, contemporaneous, and reliable documentary evidence in support of such grounds. The Court observed that the insurer had failed to place on record any material substantiating misrepresentation or concealment at the time of obtaining the policy, and even the investigation report did not disclose any such incriminating material. In these circumstances, the Federal Insurance Ombudsman had rightly allowed the complaint and directed payment of the claim amount to the nominee under S. 130(1) of the Insurance Ordinance, 2000, together with liquidated damages under S. 118(2), while also referring the matter to SECP for action under S. 156 read with S. 9(4) of the Federal Ombudsman Institutional Reforms Act, 2013. Insurance law—Nominee—Entitlement to policy proceeds—The Court held that once the respondent’s status as sole nominee under the policy was undisputed, and the death of the insured was also admitted, her entitlement to receive the insured amount stood established, particularly when the insurer failed to prove any legally sustainable ground for avoiding the contract or denying liability. The mere assertion that the nominee was not the “real sister” of the deceased did not dislodge her position as the recorded beneficiary under the policy. Insurance law—Delayed intimation of death—Whether sufficient to defeat claim—The Court held that the principal objection regarding non-immediate intimation of death was, by itself, insufficient to justify rejection of the claim. In the absence of proof that such delay caused legal prejudice or was tied to any proved breach going to the root of the contract, repudiation of the claim on that basis alone was unsustainable. Insurance law—Allegation of drug addiction—Unsubstantiated allegation—The Court further held that the insurer’s plea that the deceased was a drug addict remained wholly unsubstantiated, because no medical record was produced to show that the death was attributable to addiction or that any relevant fact had been concealed at the proposal stage. Mere allegation, unsupported by medical or other documentary evidence, could not defeat the nominee’s claim under the policy. Constitutional jurisdiction—Concurrent challenge and enforcement proceedings—High Court judgment affirmed—The Federal Constitutional Court found no illegality in the Islamabad High Court’s judgment whereby the writ petition of the nominee seeking implementation of the Ombudsman’s order was allowed and the writ petition of the insurer challenging the Ombudsman’s order, the review order, and the President’s order was dismissed. The Court, therefore, declined to interfere. Case references—No precedent or case law appears to have been cited in the text provided in this order; accordingly, none can properly be added as judicially relied-upon authorities. Petition dismissed—Leave refused—The Federal Constitutional Court refused leave to appeal and dismissed the petition, maintaining the impugned judgment of the Islamabad High Court and, thereby, the Ombudsman’s direction for payment of the Takaful claim and related relief.

Summary: (a) Constitutional Law – Articles 142, 138, Fourth Schedule, Item 29 & 59 – Legislative competence – Taxation of trans-provincial insurance companies – Stamp duty – ConstitutionalityPetitioners, trans-provincial insurance companies regulated by federal law, challenged the jurisdiction of the Province of Punjab to levy or collect stamp duty under the Stamp Act, 1899 on insurance policies. The Court held that the business of insurance is exclusively regulated under federal law as per Item 29 and 59 of the Federal Legislative List. Imposition of stamp duty on such insurance companies by the provincial government violated Articles 141, 142 and the Fourth Schedule of the Constitution. The impugned notices issued under Section 73 of the Stamp Act were ultra vires and unconstitutional.→ Sui Southern Gas Co. Ltd. v. Federation of Pakistan (2018 SCMR 802) relied upon.(b) Constitutional Law – Article 138 – Delegation of public functions – Delegation to private entities – Scope and limitationThe Court observed that public functions, including impounding of instruments and collection of stamp duties, can only be delegated to public officers under Article 138 of the Constitution. The inclusion of private entities such as commercial concerns and companies within the definition of “public office” under Section 2(22A) of the Stamp Act, 1899 was held unconstitutional. Such delegation of public functions to private bodies was contrary to constitutional jurisprudence laid down in Mustafa Impex v. Federation of Pakistan (PLD 2016 SC 808).(c) Statutory Interpretation – Stamp Act, 1899 – Section 2(22A), Section 73 – Audit Rules – Omission of companies from definition of “public office”The Court held that the 2021 amendment to Section 2(22A) of the Stamp Act, which omitted “a body registered under the Companies Act, 1913,” from the definition of “public office,” indicated legislative intent to exclude private companies such as petitioners from audit jurisdiction. The impugned notices, which directed the companies to undergo audit under Section 73, were issued without lawful authority.(d) Provincial Legislation – Stamp duty audit – West Pakistan Stamp Inspection and Audit Rules, 1949 – ScopeUnder Rule 7 of the Audit Rules and Appendix II, only specified public offices such as courts, government departments, and official receivers fall within the audit domain. Private insurance companies were not listed. The stamp auditors appointed by the Board of Revenue lacked legal mandate to audit petitioners’ records.(e) DispositionPetitions allowed. The definition of “public office” under Section 2(22A) of the Stamp Act, 1899, to the extent it included private bodies, declared unconstitutional. Notices issued by the Chief Inspector of Stamps were declared without lawful authority and struck down.

Summary: Insurance Appeal under Section 124 of the Insurance Ordinance, 2000--- Proviso of Sub Section 1 of Section 121 of the Insurance Ordinance, 2000---- Conferment of Power of Insurance Tribunal upon the District or Addl. District & Sessions Judge--- Validity of the decision made by the District & Session Judge as Insurance Tribunal at the touchstone of Sub Section 4 and 6 of Section 121 of the Ordinance ibid--- Held that in absence of constitution of Insurance Tribunal under Section 121(2) of the Ordinance, ibid, the Government has the jurisdiction to confer power of Insurance Tribunal to the District & Sessions Judge/ Addl. District & Sessions Judge to function as Tribunal under proviso to sub Section 1 of Section 121 of the Ordinance. In exercise of such conferred power any proceedings observed or interim or final decision made, such proceedings/ decision cannot be invalidated due to any flaw in constitution of the Tribunal and same are protected under sub section 4 & 6 of the Ordinance ibid. Further the decision of a larger Bench or equal members of Bench is binding upon the subsequent smaller or similar number of a Bench. If subsequent Bench comprising equal number of the members passed dictum contrary to the earlier one, the latter decision will have no binding force. This issue is settled accordingly. -----Background: This appeal addresses the legality of the constitution of Insurance Tribunals under the Insurance Ordinance, 2000, specifically focusing on whether tribunals not composed as per Section 121(2) fulfill the mandate of the law. An appellant raised concerns that the Insurance Tribunals were not constituted with the required Chairperson (a High Court Judge) and two expert members, questioning their jurisdiction and the validity of their decisions. -----Issues: 1- Whether the Insurance Tribunals, operating without the composition mandated by Section 121(2) of the Insurance Ordinance, 2000, are legally constituted. -----2- Whether the Federal Government has the authority under the proviso of Section 121(1) to confer tribunal powers on District and Additional District & Sessions Judges temporarily. -----Holding/Reasoning/Outcome: The Court held that under the proviso to Section 121(1) of the Insurance Ordinance, 2000, the Federal Government, in consultation with the High Court Chief Justices, has the authority to temporarily confer Insurance Tribunal powers on District and Additional District & Sessions Judges. This arrangement is valid until a fully constituted tribunal under Section 121(2) is established. The Court ruled that the previous judgment invalidating the tribunals was inconsistent with binding precedent and did not consider the legislative intent behind the proviso of Section 121(1), which allows a temporary arrangement. The Court reaffirmed that any tribunal constituted under the proviso is legally empowered to adjudicate insurance cases, ensuring no jurisdictional gap until a tribunal is composed as per the Ordinance. -----Citations/Precedents: Premier Insurance Limited through Authorized Officer Vs Messrs Ihsan Yousaf Textile Private Limited (2023 CLD 135) Province of Sindh v Shahzad Hussain Talpur (2022 SCMR 439) Haji Muhammad Hanif Vs State Life Insurance Corporation of Pakistan through Chairman (2007 CLD 490) State Life Insurance Corporation of Pakistan through Chairman and another Vs Mst. Naseem Begum (2009 CLD 1413) State Life Insurance Corporation Vs Razi-ur-Rehman (2011 CLD 746) Multiline Associates Vs. Ardeshir Cowasjee and 2 others (PLD 1995 SC 423) Qaiser & Another Vs The State (2022 SCMR 1641) Mst. Samrana Nawaz v. M.C.B. Bank Ltd. (PLD 2021 SC 581) Wak Limited Multan Road Lahore V. Collector Central Excise and Saks Tax Lahore (now Commissioner Inland Revenue LTU Lahore) (2018 SCMR 1474) Union of India & others v. S.K. Kapoor (2011 4 SCC 589) Ardeshir Cowasjee and 10 others Vs. Karachi Building Control Authority KMCL Karachi and 4 others (1999 SCMR 2883) Muhammad Jawad Hamid Vs Mian Muhammad Nawaz Sharif & Others (PLD 2018 Lahore 836)

Summary: Background: The case involved a dispute between an insurance company (petitioner) and an insured outlet owner (respondent No.3) regarding a burglary claim. The outlet, located on Talagang Road, Chakwal, insured under a Fire Policy by the petitioner, experienced a burglary on November 10, 2018. A surveyor, appointed by the petitioner and authorized by the Securities and Exchange Commission of Pakistan, confirmed the incident but noted discrepancies in the security requirements stipulated by the policy and the claimed amount. The surveyor's report eventually led to a significant reduction in the claimed amount. Following this, respondent No.3 filed a complaint with respondent No.2, which was decided on merits, leading to an appeal by the petitioner against the decision up to the President's office, which was also turned down. Consequently, the petitioner approached the Islamabad High Court challenging the jurisdiction and decisions of respondent No.2. ----Issues: 1. Did respondent No.2 have jurisdiction to decide on the matter involving disputed questions of fact? 2. Was there mal-administration by the petitioner that justified respondent No.2's intervention? ----Holding/Reasoning/Outcome: The court held that: Disputed questions of fact inherent in the insurance claim necessitated adjudication by a judicial body capable of evidentiary review, specifically the Insurance Tribunal as per the Insurance Ordinance, 2000. Respondent No.2 lacked jurisdiction to decide the matter as the issues involved required detailed evidentiary proceedings, which are beyond the scope of the Insurance Ombudsman’s powers aimed primarily at addressing mal-administration. The nature of the dispute, centered around the factual correctness and entitlement under the insurance claim, could not be settled without formal evidence, making it inappropriate for resolution by the Insurance Ombudsman. The petition was allowed, and the decisions made by respondent No.2 were set aside. The complaint filed by respondent No.3 was dismissed, underscoring the necessity for such disputes to be resolved within the judicial system, specifically the Insurance Tribunal. ----Citations/Precedents: M/s Capital Insurance Co. Ltd. Vs. Securities and Exchange Commission of Pakistan and 4 others (2013 CLD 1075) Atlas Insurance Limited Vs. Federal Insurance etc. (W.P. No.23312 of 2014) Shafaatullah Qureshi Vs. Federation of Pakistan (PLD 2001 Supreme Court 142) Regional Manager, Adamjee Insurance Company Ltd. Vs. Presiding Officer, District Consumer Court, Lahore and 3 others (2012 CLD 846) Judicial Review of Public Actions by Justice Fazal Karim (PLD 1975 SC 49) Mehram Ali etc. Vs. Federation of Pakistan etc. (PLD 1998 SC 1445) Dr. Zahid Javed Vs. Dr. Tahir Riaz Chaudhry etc. (PLD 2016 SC 637) Habib Bank Limited Vs. Federation of Pakistan etc. (2022 CLD 769) Shafaat Ullah Qureshi Vs. Federation of Pakistan (PLD 2011 SC 142) Mst. Parveen Akhtar Vs. Subash Chandar and others (2016 MLD 1596) United Bank Limited through Manager Vs. Banking Mohtasib Pakistan and another (2006 CLD 1226)

Summary: Background: The appellant, a government authority, filed an appeal challenging the order of a civil court that granted an interim injunction restraining the encashment of a performance guarantee issued by an insurance company on behalf of the respondent contractor. The dispute arose from a contract for the widening and strengthening of a highway. The contractor failed to meet deadlines despite multiple warnings, leading the appellant to terminate the contract and request the encashment of the performance guarantee. -----Issues: 1- Whether the interim injunction against the encashment of the performance guarantee was justified. -----2- Whether the terms of the performance guarantee allowed the appellant to seek its encashment without further adjudication. -----Holding/Reasoning/Outcome: The Islamabad High Court set aside the civil court’s order, ruling that the performance guarantee was an autonomous and irrevocable contract enforceable on its own terms. Performance guarantees are independent contracts, separate from the underlying disputes of the principal contract. The terms of the guarantee clearly allowed the appellant to seek encashment upon a declaration of default without requiring proof of default or an adjudicatory process. The civil court erred in failing to examine the terms of the performance guarantee and the appellant’s right to encash it. Any disputes regarding the contractor’s performance or the appellant's entitlement to the guarantee amount should be resolved through the contract’s dispute resolution mechanisms. The appeal was allowed, and the interim injunction restraining the encashment of the performance guarantee was dismissed. -----Citations/Precedents: Sambo Construction Co. Ltd. v. Laraib Energy Ltd. (2021 CLC 1914) Montage Design Build v. Republic of Tajikistan (2015 CLD 8) Standard Construction Co. (Pvt.) Ltd. v. Pakistan (2010 SCMR 524) Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. (PLD 2003 SC 191) Pak Consulting & Engineering (Pvt.) Ltd. v. Pakistan Steel Mills (2002 SCMR 1781) National Construction Ltd. v. Aiwan-e-Iqbal Authority (PLD 1994 SC 311) Pakistan Real Estate Investment and Management Company Private Limited v. M/s Sky Blue Builders (2021 CLD 518) Husein Industries Ltd. v. Sui Southern Gas Co. Ltd. (PLD 2020 Sindh 551) Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. (2003 CLD 1) Sirafi Trading Establishment v. Trading Corporation of Pakistan Ltd. (1984 CLC 381)

Summary: Limitation period within the context of an insurance claim --- The discussion extensively delves into the insurer's conduct, drawing insights from specific legal precedents, notably "Muhammad Asif and others v. State Life Insurance Corporation of Pakistan through Chairman and another," "Jubilee General Insurance Co. Ltd., Karachi v. Ravi Steel Company, Lahore," and "State Life Insurance Corporation and others v. Mst. Syeda Muzhara Fatima."The primary points of contention include the commencement of the limitation period, the potential time-bar status of the respondent's case, the applicability of the doctrine of merger, the permissibility of condoning delay, and the legal standing of interest awarded on the claim. The court underscores the substantive nature of the Limitation Act and the foundational principles of uberrimae fidei (utmost good faith) inherent in insurance contracts.An intricate examination is conducted regarding Article 86(a) of the Limitation Act, specifying the period within which claims on insurance policies become time-barred. The judgment reflects on the insurer's role in the repudiation of claims, emphasizing the significance of timely responses and transparent communication.The court opines that the appellant cannot successfully invoke the defense of limitation, particularly in instances where the insurer itself has caused delays in repudiating a claim, citing pertinent legal authorities such as "Jubilee General Insurance Co. Ltd., Karachi" and "State Life Insurance Corporation and others v. Mst. Syeda Muzhara Fatima."The legal analysis extends to the respondent's procedural choices, acknowledging the complexities surrounding jurisdictional ambiguities and the intricacies of choosing the proper legal forum for the claim.Furthermore, the judgment critically examines the merits of the case, addressing contentions related to eligibility criteria for the insurance scheme, and concludes that the respondent's claim was unjustly rejected, mandating the appellant to fulfill its contractual obligations.Lastly, the court, while setting aside the award of compound interest due to legal constraints, upholds the compensatory costs for the respondent, seeking to restore a semblance of justice in light of the insurer's delayed and contentious repudiation of a genuine claim.

Summary: Background: The appellant, a department, filed an appeal under Article 185(2)(d) of the Constitution of Pakistan, challenging the judgment passed by the Lahore High Court on 15.10.2020. The High Court had allowed an insurance appeal filed by the respondent (the widow of the deceased) and decreed her claim along with liquidated damages under Section 118 of the Insurance Ordinance, 2000. The deceased had purchased an insurance policy from the appellant in 2001 but passed away in a road accident in 2003. Despite the respondent fulfilling the procedural requirements for the claim, the insurance company failed to pay the due amount. The Insurance Tribunal dismissed the respondent's claim in 2015, which led her to appeal to the High Court, where she succeeded. -----Issues: 1- Whether the High Court's judgment misread or ignored the evidence on record. -----2- Whether the High Court failed to consider the provisions of Articles 117, 118, 119, and 122 of the Qanun-e-Shahadat Order, 1984. -----3- Whether the burden of proof to establish the cause of death was improperly shifted to the insurance company. -----4- Whether the High Court's decision was in line with established principles of insurance law. -----Holding/Reasoning/Outcome: The Supreme Court dismissed the appeal, affirming the High Court's judgment. It held that the insurance company failed to dispute the validity of the death certificate and other official documents. The High Court had properly evaluated the legal and factual aspects of the case, concluding that the respondent was entitled to the insurance claim. The Court also noted that in cases of accidental deaths, post-mortem examinations are often avoided by legal heirs. The appellant, as the insurer, had the responsibility to ensure a post-mortem was conducted if deemed necessary. The appellant's failure to make the due payment in compliance with Section 118 of the Insurance Ordinance, 2000, resulted in the imposition of liquidated damages. -----Citations/Precedents: Khurshid Ali and 6 others v. Shah Nazar (PLD 1992 SC 822) Articles 117, 118, 119, and 122 of the Qanun-e-Shahadat Order, 1984 Section 118 of the Insurance Ordinance, 2000

Summary: (a) Insurance Ordinance, 2000: ----Sections 45, 46, and 158; Issuance of shares and compliance with approval conditions---Failure to meet conditions for share issuance---Appellant obtained approval for issuance of shares in cash but failed to comply with the condition, engaging in sequential debit and credit transactions without actual receipt of funds---Bench held that the appellant's actions violated the conditions of approval and did not meet the statutory requirements under the Ordinance---Contention that funds could be received in tranches was deemed irrelevant as the appellant failed to substantiate compliance with the condition of cash issuance. (b) Securities and Exchange Commission of Pakistan Act, 1997: ----Section 33; Appellate jurisdiction---Principle of double jeopardy---Bench rejected the appellant's argument that the impugned order constituted double jeopardy, noting that the earlier penalty related to non-compliance with minimum paid-up capital requirements, while the impugned order addressed violations of separate provisions of the Ordinance---Mere overlap of facts in the orders does not preclude enforcement of relevant legal provisions for distinct contraventions. (c) Constitutional Law ----Article 10A; Right to fair trial---Principle of fair trial and due process---Bench held that the appellant's claim of violation of Article 10A was unfounded, as a show-cause notice was issued to the appellant and its directors, fulfilling the procedural requirements for a fair trial under the Constitution. -----Disposition: Appeal dismissed; impugned order upheld, with no order as to costs.

Summary: (a) Insurance Ordinance, 2000: ----Sections 12(1)(d) & (e), 12(4), 12(5)(a), 45(6), and 156---Maintenance of records by insurance companies---Penalty for non-compliance---Inspection revealed violations, including improper record maintenance, failure to provide complete data and claims, and unauthorized relocation of records without Board approval---Appellant cited urban flooding and COVID-19-related challenges as extenuating circumstances---Bench held that force majeure events and pandemic-related disruptions do not absolve the insurer of its statutory obligations under the Ordinance---Penalty of Rs. 500,000/- upheld to reinforce compliance requirements. (b) Regulatory Compliance: ----Force majeure and unforeseen circumstances---Effect on compliance obligations---Bench acknowledged the challenges posed by urban flooding and the COVID-19 pandemic but emphasized that regulatory compliance is a fundamental obligation irrespective of unforeseen events---Appellant's proactive measures for future compliance (e.g., scanning and digital preservation) noted but deemed insufficient to mitigate past violations. (c) SECP Act, 1997: ----Section 33; Appellate powers---Scope of review---Bench affirmed the penalty imposed by the Director/HOD, Adjudication-I, noting that the violations were evident and justified action under the Ordinance---No interference warranted in the Impugned Order as the penalties aligned with legal provisions and regulatory objectives. -----Disposition: Appeal dismissed; penalty upheld to reinforce adherence to statutory requirements and ensure integrity of insurance operations.

Summary: Background:The case of M.N. Construction Company v. Government of Balochistan and others (PLD 2024 Balochistan 38) involves a constitutional petition filed by M.N. Construction Company, which contested the requirements for bid security during the procurement process for two major dam projects in Balochistan?Panjgur Storage Dam and Awaran Dam. The company argued against the exclusive demand for bid security in the form of Bank Guarantee or Deposit at Call, proposing instead to use an Insurance Bond/Guarantee from an AA-rated insurance company.---Issues:The primary issue was whether the bid security requirement limiting forms of security to Bank Guarantees or Deposits at Call, without allowing for Insurance Bonds/Guarantees, constituted a discriminatory and restrictive practice in the context of the Balochistan Public Procurement Rules, 2014, specifically Rules 37 and 41. The petitioner argued that this restriction hindered competitive bidding by potentially reducing the number of qualified bidders.---Holding/Reasoning/Outcome:The Balochistan High Court ruled in favor of the petitioner, holding that the restriction to only Bank Guarantees or Deposits at Call as forms of bid security was too restrictive and not in line with the principles of competitive bidding as outlined in the Balochistan Public Procurement Rules, 2014. The court permitted M.N. Construction Company to provide bid security in the form of an Insurance Bond/Guarantee from an AA-rated insurance company, thereby enabling them to participate in the bidding process for the two projects. This decision was aimed at ensuring that the procurement process remained competitive and fair, adhering to the rules which advocate for non-discriminatory and inclusive bidding practices.---Citations/Precedents:Balochistan Public Procurement Rules, 2014 (Rr. 37 & 41)Judgment in C.P. No.757/2021 regarding bid security optionsStandard Form of Bidding Documents (Civil Works) issued by the Pakistan Engineering Council (PEC) and approved by the Executive Committee of the National Economic Council (ECNEC)Various procurement rules comparisons from other Pakistani provinces and the Federal Government, highlighting inconsistencies with Balochistan's procurement rules