Summary: S.9,10,22 Recovery of Finances Ord,2001:Amount of insurance should not be included in installment--free insurance--effect

Summary: (a) Insurance Ordinance, 2000 ----Ss. 118(2), 130(1) & 156---Federal Ombudsman Institutional Reforms Act, 2013---S. 9(4)---Federal Insurance Ombudsman---Life takaful claim---Nominee/beneficiary---Settlement of claim and liquidated damages---Referral for regulatory action --- Death cover under takaful plan---Claim denial by insurer---Ombudsman’s jurisdiction and directions---Held, Federal Insurance Ombudsman, upon complaint, could direct payment of claim amount to nominee within statutory period under section 130(1) and could award liquidated damages under section 118(2) for inordinate and unlawful delay---Matter could be referred for legal/disciplinary action under section 156 read with section 9(4) of the 2013 Act where wilful violation/non-compliance was found---Orders of Ombudsman upheld; review and representation having been dismissed did not warrant interference. (b) Insurance law ----Principle of utmost good faith---Alleged concealment/misrepresentation---Burden to substantiate repudiation---Documentary proof---Contemporaneous evidence -- Repudiation of takaful claim---Insurer’s plea of concealment of health condition and vitiation of contract---Held, mere allegation of concealment/drug addiction or non-disclosure, without independent or contemporaneous documentary evidence, insufficient to lawfully deny claim---Insurer failed to place material on record substantiating grounds of rejection conveyed through letter dated 01.10.2021---Investigation report relied upon by insurer did not disclose material indicating misrepresentation or concealment at inception of policy---Findings of Federal Insurance Ombudsman on these aspects found correct and affirmed. (c) Insurance contract ----Nominee’s entitlement---Recorded beneficiary---Death of policyholder admitted---Effect of delayed intimation---Grounds for rejection --- Nominee/legal beneficiary---Right to receive insured amount---Held, respondent being sole nominee recorded in policy documents entitled to receive insured amount where death and nomination admitted and no lawful ground of repudiation established---Objection of delayed intimation, by itself, held insufficient to justify rejection of claim---Allegation of drug addiction remained unsubstantiated; no medical record produced to link death with addiction. (d) Constitutional jurisdiction and appellate interference ----High Court’s writ jurisdiction---Concurrent findings---Leave to appeal---Scope --- Interference with High Court judgment affirming Ombudsman’s order---Held, no exception taken to Islamabad High Court judgment which allowed nominee’s writ for implementation and dismissed insurer’s writ assailing Ombudsman’s orders---Leave refused where insurer failed to demonstrate illegality or perversity in impugned judgment and record supported Ombudsman’s conclusions. Disposition: Leave to appeal refused; petition dismissed; impugned judgment dated 29.09.2025 of Islamabad High Court upheld; consequentially, Ombudsman’s direction for payment of claim amount (Rs. 38,50,000/-) and liquidated damages stood maintained (F.C.P.L.A. No. 275 of 2025, order dated 26.01.2026).

Summary: (a) Insurance Ordinance, 2000: ----Ss. 118(2) & 124(2)---Crop Loan Insurance Scheme---Calamity---Scope of liability--- Respondent/borrower obtained a crop loan of Rs. 262,000 from Zarai Taraqiati Bank (ZTBL), compulsorily insured with Adamjee Insurance under the State Bank-mandated Crop Loan Insurance Scheme. Following the 2014 floods, which destroyed crops and livestock in Moza Maasan (declared calamity-affected by Punjab Government), the respondent claimed compensation. Insurance Tribunal accepted the claim for Kharif 2014 crop loss and awarded Rs. 131,000 with liquidated damages @5% from October 2014. High Court upheld the Tribunal's view, holding that the insurance claim fell squarely within the scheme's indemnity clause, particularly Clause 13 of the Crop Loan Insurance Agreement. Held: Insurer liable to pay indemnity where loss was caused in a government-declared calamity-hit area, and indemnity limits were defined under the scheme. Cited case: Pakistan through Chairman FBR v. Hazrat Hussain (2018 SCMR 939). (b) Law of Evidence: ----Public documents---Presumption of correctness---Admissibility--- Objection raised by insurer regarding authenticity of documents produced through counsel was repelled—Court held that official notifications and certified public records issued by government authorities or maintained by public functionaries carry a presumption of truth under law—Such documents are per se admissible and do not require formal proof unless specifically challenged on valid grounds. (c) Civil Procedure Code, 1908: ----O. VII R. 11---Rejection of plaint---Scope--- Application under Order VII Rule 11 CPC for rejection of the insurance claim was rightly dismissed by the Tribunal—Insurance claim involved triable questions and required recording of evidence—Claim was not ex facie barred by law, hence Rule 11 CPC was not applicable. (d) Judicial Restraint: ----Departmental appeals---Policy of discouragement---Wastage of public resources--- Court disapproved of filing frivolous appeals by insurance companies in petty claims—Reminded that institutions should not litigate routinely to deny genuine relief, especially where evidence supports the claim and the matter is statutorily covered—Public interest mandates restraint in unnecessary litigation to avoid wastage of judicial time and taxpayer money. ----Disposition: Appeal dismissed. Judgment of Insurance Tribunal affirmed. No order as to costs.

Summary: (a) Civil Procedure Code (V of 1908): ----O. XLVI, R.1---Maintainability of Reference---Insurance Tribunal, Multan referred legal questions to High Court under O.XLVI, R.1, C.P.C for guidance---Held, provision only applicable where decree is not subject to appeal and question of law or usage having force of law arises that causes reasonable doubt---In instant case, claim was filed under the Insurance Ordinance, 2000, wherein remedy of appeal to High Court is explicitly provided under S.124(2) of the Ordinance---Since appeal lies against decisions of the Insurance Tribunal, Reference to High Court under O.XLVI, R.1, C.P.C was not maintainable---Reference lacked statutory sanction and was liable to be returned to Tribunal without addressing the questions raised therein. ----Cited Cases: • Barju Biswal v. Kanja Behari Mahapatra A.I.R. 1931 Patna 353 • Mukanda v. Birdychand A.I.R. 1953 Hyd. 271 (b) Insurance Ordinance, 2000: ----S.124(2)---Remedy of Appeal---Decision of Insurance Tribunal---Any aggrieved party, if claim or penalty involved is not less than Rs. 100,000, has a statutory right of appeal to High Court within 30 days---Held, existence of this appellate remedy excluded jurisdiction of the High Court to entertain Reference under O.XLVI, R.1, C.P.C---Proper forum for redressal of legal issues arising out of Tribunal proceedings is appellate jurisdiction under the Ordinance, not advisory jurisdiction under C.P.C. ----Disposition: Reference held not maintainable; returned to Insurance Tribunal for further proceedings in accordance with law.

Summary: (a) Civil Procedure Code (V of 1908) – S. 12(2) – Fraud and misrepresentation – Setting aside judgment Application under S. 12(2), CPC – Judgment obtained through fraud – Respondent, while obtaining judgment dated 03.11.1992 in W.P. No.819/1972, deliberately failed to implead the applicant as respondent despite specific court direction to do so – Instead, applicant was falsely shown as co-petitioner by altering party memo – No notice issued to applicant, and judgment passed without hearing it – Held, any judgment or decree obtained through concealment, fraud, or misrepresentation is a nullity and liable to be set aside – Impugned judgment set aside. Cited cases: Nawab Syed Raunaq Ali v. Chief Settlement Commissioner PLD 1973 SC 236; Lahore Development Authority v. Firdous Steel Mills 2010 SCMR 1097; Mst. Nazeeran v. Ali Bux 2024 SCMR 1271 (b) Limitation Act, 1908 – Art. 18 – Applicability to S. 12(2) CPC applications – Fraud exception Limitation – Start of limitation period – Applicant filed application under S. 12(2), CPC upon discovery of fraud – Held, no limitation applies against a void or fraudulent judgment – Time begins from the date of knowledge – Application filed within time – Objection to limitation overruled. Cited cases: Salamat Ali v. Muhammad Din PLD 2022 SC 353; Mst. Rabia Gula v. Muhammad Janan 2022 SCMR 1009; Shabla v. Ms. Jahan Afroz Khilat 2020 SCMR 352 (c) Constitution of Pakistan – Art. 269 – Validation of Presidential Orders – Life Insurance (Nationalization) Order, 1972 Nationalization of life insurance – Constitutional protection – Life Insurance (Nationalization) Order, 1972 promulgated on 18.03.1972 – Validated under Art. 269(1), Constitution of Pakistan, 1973 – Held, Order of 1972 protected from judicial scrutiny and cannot be challenged on any ground – Jurisdiction of High Court barred. Cited cases: The Chief Settlement Commissioner v. Raja Fazil Khan PLD 1975 SC 331; Muhammad Baran v. Member (Settlement) PLD 1991 SC 691; Mansab Ali v. Amir PLD 1971 SC 124 (d) Life Insurance (Nationalization) Order, 1972 – Arts. 4, 5, 6, 45 – Bar of jurisdiction – Public property Jurisdiction of courts – Public assets – Property in dispute vested with Central Government following nationalization – Under Art. 45 of the Order, jurisdiction of courts including High Court and Supreme Court is barred – Held, courts cannot entertain writs or suits in relation to nationalized insurance assets – Writ petition not maintainable. Cited provisions: Articles 4, 5, 6 & 45 of Life Insurance (Nationalization) Order, 1972 (e) Equity – Duty of disclosure – Clean hands doctrine – Public property Fraudulent concealment – Respondent failed to disclose that it had received full compensation for the nationalized property and had pursued separate civil litigation for further recovery – Held, concealment of material facts disentitles party from any relief – Courts are guardians of public interest and must act to prevent misuse of public property – Petition rightly dismissed. Cited cases: Mst. Shahida v. BISE Larkana PLD 2001 SC 26; Sayed Abbas Taqi Mehdi v. Sabahat Batool 2010 SCMR 1840; Abdul Haq Indher v. Province of Sindh 2007 SCMR 907 Disposition: Application under S. 12(2), CPC allowed – Judgment dated 03.11.1992 set aside – Writ Petition No.819/1972 dismissed as not maintainable due to fraud, misrepresentation, and constitutional bar on jurisdiction.

Summary: (a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---Ss. 2-A & 9---Life Insurance (Nationalization) Order (X of 1972), Art. 14(2)(e)---State Life Insurance Corporation of Pakistan---Whether “financial institution”---Plaintiffs originally included National Bank of Pakistan, Habib Bank Limited, United Bank Limited, Muslim Commercial Bank Limited, Allied Bank Limited and State Life Insurance Corporation of Pakistan---After settlement of claims of plaintiffs Nos.1 to 4, question arose whether State Life Insurance Corporation could independently maintain its claim under the Financial Institutions (Recovery of Finances) Ordinance, 2001---State Life relied upon Art.14(2)(e) of the Life Insurance (Nationalization) Order, 1972, which empowered it to advance or lend money on security or otherwise---Held, mere power to advance or lend money did not make State Life a banking company or financial institution within the meaning of S.2-A of the Ordinance, 2001---Entire thrust of the definition of financial institution was on banking business or business associated or ancillary thereto---State Life did not fall within such definition. (b) Banking Companies Ordinance (LVII of 1962)---S. 7(1)(a)---Life Insurance (Nationalization) Order (X of 1972), Art. 14(2)(e)---Advancing or lending money---Similarity of wording---Effect---Plaintiff-State Life contended that its statutory power to advance or lend money under Art.14(2)(e) of the Life Insurance (Nationalization) Order, 1972 was similar to the power of banking companies under S.7(1)(a) of the Banking Companies Ordinance, 1962---Held, such argument overlooked that S.7(1) applied to banking companies only---State Life Insurance Corporation was admittedly not a banking company in respect of incorporation, establishment, approvals, licences, sanctions, functions, powers or business---Similarity in one lending function did not convert an insurance corporation into a banking company or financial institution. (c) Bankers’ Books Evidence Act (XVIII of 1891)---Ss. 2(3), 2(8) & 4---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9---Statement of account---Certified entries in bankers’ books---State Life Insurance Corporation---Bankers’ books are books used in ordinary business of banks and certified copies of entries therein are receivable as prima facie evidence in legal proceedings---Books of State Life Insurance Corporation were not books used in ordinary business of a bank---State Life, being an insurance corporation and not a bank, could not claim the statutory sanctity attached to certified bankers’ books under the Bankers’ Books Evidence Act, 1891---Consequently, State Life could not institute a suit under S.9 of the Ordinance, 2001 on the basis of its own statement of account as if it were a bank’s certified statement. (d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---S. 9(1) & (2)---Institution of banking suit---Requirement of certified statement of account---Suit under S.9 must be supported by a statement of account duly certified under the Bankers’ Books Evidence Act, 1891---Since State Life Insurance Corporation’s books were not bankers’ books within the statutory meaning, it had no statutory authority to certify its entries under the Bankers’ Books Evidence Act for purposes of S.9 of the Ordinance, 2001---In absence of such statutory basis, State Life had no locus standi to sue under the special banking recovery law. (e) Civil Procedure Code (V of 1908)---O. I, R. 10---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2-A & 9---Plaintiff lacking locus standi---Deletion from array of parties---State Life Insurance Corporation, though part of a consortium arrangement, could not maintain an independent claim under the Financial Institutions (Recovery of Finances) Ordinance, 2001 because it was not a financial institution within the meaning of the Ordinance---Its name and claim were deleted and struck off from the plaint under O. I, R. 10, C.P.C. (f) Banking suit---Consortium finance---Risk of conflicting judgments---Effect on maintainability---Plaintiff-State Life argued that finance/loan had been disbursed by all plaintiffs through one agreement and exclusion of State Life could expose parties to conflicting judgments---Held, such consideration could not confer jurisdiction or locus standi where statute did not recognize State Life as a financial institution competent to sue under the Ordinance, 2001---Maintainability under special banking law had to be determined strictly with reference to statutory definition and procedural requirements. Disposition: Claim of plaintiffs Nos.1 to 4 had already been dismissed as not pressed due to settlement. State Life Insurance Corporation of Pakistan, plaintiff No.6, was held to have no locus standi to institute suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001; its name and claim were deleted and struck off from the plaint under O. I, R. 10, C.P.C. Suit was ordered to proceed only in respect of claim of Allied Bank Limited against the defendants, the subject-matter being above Rs.50 million.

Summary: The petitioner, Mst. Razia Begum, filed an application for the issuance of a succession certificate after the death of her son, Muhammad Jahangir Khan, who had a life insurance policy worth Rs. 10,00,000. The petitioner, as the mother of the deceased, claimed her rightful share (1/6th) of the insurance policy. However, the insurance policy named the respondent, Mst. Sana Mukhtar (the deceased's wife), as the nominee. The trial court dismissed the petitioner's application and directed the insurance company to pay the entire amount to the nominee (respondent). The petitioner appealed, but the appellate court upheld the trial court's decision. As a result, the petitioner filed the current civil revision petition. ----- Issues: ----- 1) Whether the proceeds of an insurance policy are considered part of the deceased's inheritance ("Tarka"). ----- 2) Whether a nominee can exclude other legal heirs of the deceased from receiving a share of the insurance policy. ----- 3) Whether the nominee acts as a trustee or administrator, responsible for distributing the insurance proceeds among all legal heirs. ----- Holding/Reasoning/Outcome: Proceeds of Insurance Policy as "Tarka": The court ruled that the proceeds of an insurance policy fall under the definition of "Tarka" and should be treated as part of the deceased’s estate. The court emphasized that an insurance policy proceeds are inheritable assets and must be distributed according to Islamic inheritance laws. It was established that the insurance policy proceeds do not solely belong to the nominee but are subject to division among all legal heirs. ----- Role of the Nominee: The court held that the nominee, under Section 72 of the Insurance Ordinance, 2000, is merely a person authorized to collect the insurance proceeds. The nominee acts as a trustee or administrator and does not inherit the policy's proceeds exclusively. The nominee’s responsibility is to distribute the proceeds according to Islamic inheritance laws. The court emphasized that the concept of a nominee is alien to Islamic law, which mandates that inheritance be distributed among all legal heirs. ----- Decision: The court overturned the decisions of the lower courts and held that the petitioner (mother of the deceased) is entitled to her share of the insurance proceeds. The trial court was directed to issue a succession certificate in accordance with Islamic law, ensuring that all legal heirs receive their rightful shares. The court concluded that the insurance policy proceeds form part of the deceased’s estate ("Tarka") and should be distributed according to Sharia law. The nominee is only a trustee and not the sole beneficiary of the policy. ----- Citations/Precedents: Mst. Amtul Habib and Others v. Mst. Musarat Parveen and Others (PLD 1974 SC 185) Malik Safdar Ali Khan v. Public at Large and Others (2004 SCMR 1219) Mst. Ameeran Khatoon v. Mst. Shamim Akhtar and Others (2005 SCMR 512) Muhammad Umar v. IGI and Others (2023 CLD 420) Mirza Muhammad Ameen, etc. v. Government of Pakistan (PLD 1982 FSC 143) Wafaqi Hakoomat-e-Pakistan v. Awamunnas (PLD 1991 SC 731)

Summary: Civil Procedure Code (V of 1908)--- ----O. XVII, R. 3---Application for recovery of insurance amount---Closure of evidence---Scope---Evidence of the applicants was not available on the dates fixed for production of the same---Trial Court granted six opportunities to the applicants to produce evidence but they failed to adduce the same---Despite availing several opportunities applicants failed to examine even a single witness---Applicants had failed to point out any unavoidable/compelling circumstances or reasonable grounds due to which they could not produce evidence---Right of evidence of the applicants was rightly closed by the Trial Court---Impugned order did not suffer from any infirmity---Appeal was dismissed in circumstances. Syed Tahir Hussain Mehmoodi and others v. Agha Syed Liaqat Ali and others 2014 SCMR 637 rel. ------ Background: The appellants, Messrs Al-Saeed Cotton Industries and others, filed an application seeking recovery of insurance proceeds worth Rs. 25,000,000 under Section 118 of the Insurance Ordinance, 2000. The trial court framed issues and granted the appellants six opportunities to produce their evidence. Despite these opportunities, the appellants failed to present any witnesses or evidence. As a result, the trial court closed the appellants' right to produce evidence under Order XVII, Rule 3 of the Civil Procedure Code (CPC), and dismissed the application for want of evidence. The appellants then filed this First Appeal against Order (FAO), challenging the trial court's decision. ------ Issues: ------ 1) Whether the trial court was justified in closing the appellants' right to present evidence and dismissing the application under Order XVII, Rule 3 of the CPC. ------ 2) Whether the appellants had compelling reasons for not producing evidence despite several opportunities. ------ Holding/Reasoning/Outcome: The Lahore High Court dismissed the appeal, holding that the appellants had been given ample opportunities to present their evidence but failed to do so. Over a period of more than three years, they were unable to examine even a single witness, which amounted to an abuse of the court process. The court found that the appellants had not demonstrated any unavoidable or compelling circumstances to justify their failure to produce evidence. Therefore, the trial court was correct in closing their right to evidence under Order XVII, Rule 3 of the CPC, which penalizes litigants for not complying with court orders regarding evidence production. The court referred to the Supreme Court’s ruling in Syed Tahir Hussain Mehmoodi and Others v. Agha Syed Liaqat Ali and Others (2014 SCMR 637), which held that the provisions of Order XVII, Rule 3 of the CPC are penal in nature and should be strictly enforced. The court emphasized that leniency should not be extended in cases where the litigant’s conduct falls squarely within the scope of these penal provisions. The court concluded that the trial court's decision did not suffer from any legal or factual infirmity and that the appellants were not entitled to any relief. ------ Citations/Precedents: Syed Tahir Hussain Mehmoodi and Others v. Agha Syed Liaqat Ali and Others (2014 SCMR 637)

Summary: Insurance Ordinance (XXXIX of 2000)--- ----S. 79---Insurance claim---False information---Scope---Insurance company assailed judgment passed by Insurance Tribunal in favour of respondent/applicant allowing insurance claim of her deceased husband---Plea raised by Insurance company was that facts stated by deceased insured were false---Validity---Deceased husband of respondent/applicant himself filed application to Chairman Insurance Tribunal conceding about furnishing of incorrect details of insurance policy--- Insurance company issued insurance policy on the basis of false information--- Deceased insured was not owner of any land and was just holding land on lease--- Such fact was also confirmed from deposition of attorney of respondent/applicant-- -High Court set aside judgment passed by Insurance Tribunal---Appeal was allowed, in circumstances. ---- The respondent, Mst. Mai Bhagan, filed a claim for the insurance amount of her deceased husband under a life insurance policy issued by State Life Insurance Corporation. The deceased had purchased a life insurance policy of Rs. 500,000 but passed away shortly after its issuance. The insurance company rejected the claim, arguing that the policy had been obtained based on false information. The respondent approached the Insurance Tribunal, which ruled in her favor, granting her the insurance claim and damages. State Life Insurance Corporation filed an appeal against this judgment. ----- Issues: ----- 1) Whether the insurance claim was valid despite the false information provided by the deceased in the insurance application. ----- 2) Whether the Insurance Tribunal erred in allowing the respondent's application for the claim and damages. ----- Holding/Reasoning/Outcome: The Lahore High Court allowed the appeal filed by the insurance company, setting aside the judgment of the Insurance Tribunal. The court reasoned: The deceased had provided false information about owning 45 acres of agricultural land, which was a key factor in the issuance of the policy. It was later revealed that the deceased only held land on lease, which was confirmed by the testimony of the respondent's attorney. The court emphasized that fraud or false information in the insurance application vitiates the contract, and as such, the insurance company was not liable to honor the claim. The case was supported by the precedent in Malik Muhammad Faisal and another v. State Life Insurance Corporation (2008 SCMR 456), which holds that false statements in an insurance proposal absolve the insurance company of liability. ----- Outcome: The appeal was allowed, and the judgment of the Insurance Tribunal was set aside. The respondent was not entitled to the insurance claim due to the provision of false information by the deceased in the insurance application. ----- Citations/Precedents: Malik Muhammad Faisal and another v. State Life Insurance Corporation (2008 SCMR 456)

Summary: Insurance Ordinance (XXXIX of 2000)--- ----Ss. 118(2) & 2(viii)---Payment of liquidated damages---Calculation of liquidated damages "at monthly rests at the rate five per cent higher than the prevailing base rate" per S. 118 of the Insurance Ordinance, 2000---Interpretation---Compounding of interest---"Monthly rests", application of---Scope---Compounding of interest was not part of law of Pakistan and law did not countenance compounding of interest as the same resulted in multiplication of liability---Construction that should be put on S. 118(2) of the Insurance Ordinance, 2000 was to calculate liquidated damages separately by adding monthly rests and each calculation of monthly rests was to be added to the next calculation on liquidated damages and would not be added so as to compound the effect of the interest---Base rate for calculation of liquidated damages must therefore be calculated for each monthly rest separately and applied accordingly----Insurance Tribunal must not determine liquidated damages by giving definition of "monthly rests" as a compounding effect. Messrs State Life Insurance Corporation of Pakistan v. Mst. Anwar Gulzar 2012 CLD 1014 rel. Imtiaz Rashid Siddiqui and Umer Kasuri for Appellant. Muhammad Mustafa Khalid and Liaqat Ali Butt for Respondent No.1.