118. Payment of liquidated damages on late settlement of claims.—

(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 as specified in sub­section (2) on the amount so payable unless he proves that such failure was due to circumstances beyond his control.

Explanation: for the purposes of this sub­section, failure or delay by any person in making payment (including without limitation payment under a contract of reinsurance) to an insurer shall not constitute circumstances beyond the control of the insurer.

(2) The liquidated damages payable under sub­section (1) shall be payable for the period during which the failure continues and shall be calculated at monthly rests at the rate five per cent higher than the prevailing base rate.

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— Suit for insurance claim — Payment of liquidated damages on late settlement of claims — Scope — Husband of the respondent appointed the respondent as a nominee while purchasing an insurance policy from the insurer — Unfortunately, the insured, met with a road accident and passed away — The incident was reported to the police by a stranger — The details were also covered in various newspapers — Deceased’s sons, who received this information, arrived at the scene and provided statements to the police — However, they chose not to conduct a post-mortem examination of their father — This information was conveyed to the insurer — Claim of respondent with the insurer could not succeed — Respondent, thereafter, filed a suit for recovery of insurance claim in the court of Civil Judge which was ultimately returned being coram non judice — Respondent filed an application before the Insurance Tribunal which was dismissed, however, High Court on appeal allowed the same — Contention of insurer was that the burden of proof to establish the cause of death was on the respondent under the Insurance Ordinance, 2000 which she failed to discharge — Validity — Insurer had never challenged the validity of death certificate; entry in the death register of concerned union council and the report lodged at police station which were official documents and presumption of truth was attached with them, as such, they were rightly taken into consideration — Generally where a person dies in accident or an unnatural death, his legal heirs ordinarily avoid for conducting post-mortem examination — However, if the insurer deemed it to be necessary, it should have been done by itself in order to protect its rights — Insurance claim was lodged by the respondent with the insurer by complying with all procedural requirements, however, the insurer had badly failed to make due payment as prescribed under the law — Appeal was dismissed. [2024 SCLR 2 = 2024 SCP 1]

122. Powers of Tribunal.—(1) A Tribunal shall:

(a) in the exercise of its civil jurisdiction, have in respect of a claim filed by a policy holder against an insurance company in respect of, or arising out of a policy of insurance, all the powers vested in a civil Court under the Code of Civil Procedure, 1908 (Act V of 1908);

(b) in the exercise of its criminal jurisdiction, try the offenses punishable under this Ordinance and shall, for this purpose, have the same powers as are vested in the Court of Sessions under the Code of Criminal Procedure, 1898 (Act V of 1898);

(c) exercise and perform such other powers and functions as are, or may be, conferred upon, or assigned to it, by or under this Ordinance; and

(d) in all matters with respect to which procedure has not been provided for in this Ordinance, follow the procedure laid down in the Code of Civil Procedure, 1908 (Act V of 1908) or the Code of Criminal Procedure, 1898 (Act V of 1898) as the case may be.

(2) The jurisdiction of a Tribunal shall not extend to appeals to which section 33 and section 34 of the SECP Act apply.

(3) No Court other than a Tribunal shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Tribunal extends under this Ordinance, including a decision as to the territorial limits and the execution of a decree, order or judgment passed by a Tribunal:

Provided that for the purposes of this section a Small Claims Settlement Committee established under section 117 shall not be deemed to be a Court.

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— Suit for insurance claim — Payment of liquidated damages on late settlement of claims — Scope — Husband of the respondent appointed the respondent as a nominee while purchasing an insurance policy from the insurer — Unfortunately, the insured, met with a road accident and passed away — The incident was reported to the police by a stranger — The details were also covered in various newspapers — Deceased’s sons, who received this information, arrived at the scene and provided statements to the police — However, they chose not to conduct a post-mortem examination of their father — This information was conveyed to the insurer — Claim of respondent with the insurer could not succeed — Respondent, thereafter, filed a suit for recovery of insurance claim in the court of Civil Judge which was ultimately returned being coram non judice — Respondent filed an application before the Insurance Tribunal which was dismissed, however, High Court on appeal allowed the same — Contention of insurer was that the burden of proof to establish the cause of death was on the respondent under the Insurance Ordinance, 2000 which she failed to discharge — Validity — Insurer had never challenged the validity of death certificate; entry in the death register of concerned union council and the report lodged at police station which were official documents and presumption of truth was attached with them, as such, they were rightly taken into consideration — Generally where a person dies in accident or an unnatural death, his legal heirs ordinarily avoid for conducting post-mortem examination — However, if the insurer deemed it to be necessary, it should have been done by itself in order to protect its rights — Insurance claim was lodged by the respondent with the insurer by complying with all procedural requirements, however, the insurer had badly failed to make due payment as prescribed under the law — Appeal was dismissed. [2024 SCLR 2 = 2024 SCP 1]