Stereo. H C J D A-38.
JUDGMENT SHEET
IN THE LAHORE HIGH COURT, LAHORE
JUDICIAL DEPARTMENT
Writ Petition No. 4937 of 2014
State Life Insurance Corporation of Pakistan
Versus
Additional District Judge, Lahore & another
JUDGMENT
Date of hearing: 12.10.2015.
Petitioner by: Mr. Ibrar Ahmed, Advocate.
Respondents by: M/s Liaquat Ali Butt, Advocate, Akhtar Ali
Kureshi, Standing Counsel for Pakistan, and
Muhammad Ejaz, Assistant Advocate General.
MUHAMMAD SAJID MEHMOOD SETHI, J.: This consolidated
judgment shall dispose of instant writ petition along with following
connected writ petitions as common questions of law and facts are
involved in these cases:
1. W. P. No.8816 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore & another.
2. W. P. No.8919 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore & another.
3. W. P. No.13458 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore & another.
4. W. P. No.30906 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore etc.
5. W. P. No.31511 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore etc.
6. W.P. No.31512 of 2014. State Life Insurance Corporation of
Pakistan v. The Additional District Judge-1, Lahore etc.
2. Brief facts for disposal of this writ petition are that the
deceased wife of respondent No. 2, namely, Jameela Kausar,
purchased two life insurance policies from petitioner. Respondent
No.2 has been named as her nominee. The policy-holder died on
25.06.2009. Respondent No.2 lodged a death claim thereafter, being
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nominee in the insurance policy, which claim has been repudiated
by petitioner. Respondent No.2 assailed this repudiation of
insurance claim, before respondent No.1, which is still pending
adjudication. Petitioner filed an application under Section 162 (2)
of the Insurance Ordinance, 2000 (“Ordinance”), read with Order
7 Rule 11 CPC for rejection of the insurance application being not
maintainable, as having been filed without previous sanction of the
Securities & Exchange Commission of Pakistan (“SECP”), in
terms of Section 162 of the Ordinance. Petitioner’s application has
been dismissed by respondent No.1 vide order dated 28.01.2014.
Through the instant petition, petitioner has assailed the aforesaid
order, with the following prayer:-
“a) The impugned Order dated 28.01.2014 passed by the
respondent No.1 while exercising powers of Insurance Tribunal
Punjab may please be declared illegal, arbitrary and ultra vires
of the provision of Insurance Ordinance 2000 being passed
without lawful authority and consequently of no legal effect.
b) The writ petitioner’s application filed under Section
162 (2) of the Insurance Ordinance 2000 read with Order 7 rule
11 CPC for rejection of insurance application filed by the
respondent No.2 may please be accepted.
c) Any other relief, which this Hon’ble Court may deem
fit and appropriate, may also be awarded to the writ petitioner
against the respondents to meet the ends of justice.”
3. Learned counsel for petitioner submits that prior permission /
sanction of the SECP is mandatory before initiating any
proceedings before the Insurance Tribunal against an insurer, in
terms of Section 162 of the Ordinance. In this regard, learned
counsel for petitioner has relied upon Muhammad Huzafa v.
American Life Insurance Company (Pakistan) Ltd. (ALICO)
through Chairman / General Manager / Managing Director and
another (2013 CLD 1470). He further submits that impugned order
has been passed in violation of Section 162 of the Ordinance and
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Writ Petition No. 4937 of 2014.
case law referred above. In support of his contention, learned
counsel for petitioner has further relied upon Syed Saghir Ahmad
Naqvi v. Province of Sindh through Chief Secretary, S & GAD,
Karachi and another (1996 SCMR 1165) and UBL Insurers
Limited v. Ashiq Hussain and another (2014 CLD 1155).
4. On the other hand, learned counsel for respondent No.2
submits that Section 162 of the Ordinance falls in Part XIX
(Offences and Penalties) of the Ordinance. This part starts from
Section 156 and the last Section of this part is 163. He further
submits that only in criminal prosecution, prior permission /
sanction of SECP is required, and it is not required for filing
insurance claims in the Insurance Tribunal. Learned counsel for
respondent No.2 has relied upon Ismail Ebrahim Alloo and others
v. The State (PLD 1959 (W,P.) Karachi 440), State Life Insurance
Corporation of Pakistan & 04 others v. Mst. Sartaj Begum (R.F.A.
No.43 of 2009), Muhammad Huzafa v. American Life Insurance
Company (Pakistan) Ltd. (ALICO) through Chairman / General
Manager / Managing Director and another (2013 CLD 1470)
(referred above), Surendra Nath Sarkar and others v. Kali Pada
Das (AIR 1940 Calcutta 232), Jaswantray Manilal Akhaney v.
State of Bombay (AIR 1955 Bombay 259), and National Insurance
Company Ltd. v. Narendra Kumar Jhanjhri (1990 Cri LJ 773).
5. Arguments have been heard and record perused.
6. It is evident from bare reading of the scheme of Insurance
Ordinance, 2000, that the Insurance Tribunal and its jurisdiction for
entertaining insurance claim is dealt in Part XV of the Ordinance,
starting from Section 121 to 124. Section 121 deals with
constitution of the Tribunal, Section 122 relates to power of
Tribunal, Section 123 lays down procedure of Tribunal for trial of
an application and Section 124 provides right of appeal to the
aggrieved person against decision of Tribunal before High Court.
Provision of Section 122 clearly lays down that the tribunal shall, in
its exercise of civil jurisdiction, in respect of a claim filed by a
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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 (“CPC”). Provision of
Section 122 (3) says that 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. The Tribunal, for the
purpose of trial of an application, follow such procedure as may be
prescribed and have the same powers as are vested in a Civil Court
trying a suit under the CPC, in respect to summoning and enforcing
the attendance of any person examining him on oath, requiring the
discovery and production of documents and material object,
receiving evidence on affidavits, and issuing commission for the
examination of witnesses or documents.
7. The concept of prior sanction is basically linked with a
criminal prosecution. Provisions which govern the criminal
offences and penalties are in Part XIX of the Ordinance. It starts
from the provision of Section 156 to Section 163 of the Ordinance.
Section 156 deals with penalty for default in complying with, or
acting in contravention of this Ordinance, Section 157 provides
penalty for transacting insurance business in contravention of
Sections 5, 6 and 29, Section 158 lays down penalty for false
statement in document, Section 159 states wrongfully obtaining or
withholding property, Section 160 stipulates power of Tribunal to
order restoration of property of insurer or compensation in certain
cases, Section 161 relates to notice to Commission and hearing.
Section 162 deals with prior sanction of commission for institution
of proceedings and Section 163 deals with power of Court to grant
relief. Provision of Section 162 of the Ordinance is reproduced as
under:-
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Writ Petition No. 4937 of 2014.
“162. Previous sanction of Commission for institution
of proceedings.---
(1). Except where proceedings are instituted by the
Commission no proceedings under this Ordinance against an
insurer or any director, manager or other officer of an insurer
shall be instituted by any person unless he has previous thereto
obtained the sanction of the Commission (which shall not
unreasonably be withheld) to the institution of such proceedings.
(2). Where the proceedings are not initiated by the
Commission or the Commission have not been made a party,
the Tribunal shall before proceeding further in the matter give
notice to the Commission and shall not proceed to hear and
decide the matter without giving the Commission the opportunity
of participating in the proceedings and being heard”.
Reading the Section 162 in juxtaposition with other provisions,
starting from Section 156 to Section 163 of the Ordinance, makes it
clear that prior sanction is confined to criminal prosecution against
insurance companies or its employees, as mentioned therein. It is
not for the purpose of filing insurance claims. Had it been so, it
could have been clearly mentioned in the relevant provisions
dealing with the insurance claims. The object of the legislature
seems to be very clear that prior sanction is required for initiating
criminal proceedings under Chapter XIX of the Ordinance, which
governs the criminal offences and penalties.
8. Perusal of impugned order also indicates that learned
Insurance Tribunal has specifically noted that in Part XIX of the
Ordinance, the concept became very clear as these provisions relate
to other proceedings / disputes against insurance company or its
Directors or officers, whereas the provisions relating to the claims
of insurance are neither subservient to the provisions of Section 162
of the Insurance Ordinance, 2000, but independent, nor any prior
permission from SECP is necessary, for filing of the insurance
claims in the Insurance Tribunals.
9. The established principle of interpretation of statutes is that
no provision of law, contained in a statute, is to be considered in
isolation, until and unless any Section / provision is a complete
code in itself and any scheme contained in statute is to be
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considered in totality of the scheme. Thus, adhering to this
principle, the Court has to consider all the relevant provisions of
Insurance Ordinance, 2000. One provision of the Section is not to
be considered ignoring its other provisions. Provisions of Section
162 which mandates prior sanction are not to be applied in isolation
but simultaneously in juxtaposition to other Sections starting from
Section 156 to 163. Statute is to be interpreted by making it
consistent with the scheme of the Ordinance. It has to be read as a
whole and not in bits and pieces. Law is to be interpreted and
applied rationally, fairly and not arbitrarily.
10. It is settled law that where literal construction or plain
meaning causes hardship, futility, absurdity or uncertainty, the
purposive or contextual construction is preferred to arrive at a more
just, reasonable and sensible result. Every law is designed to further
the ends of justice and not to frustrate it on mere technicalities.
Though the function of the Court is only to interpret the law and not
to legislate, nonetheless the legislature cannot be asked to sit to
resolve the difficulties in the implementation of its intention and the
spirit of the law. In such circumstances, it is the duty of the Court to
mould or creatively interpret the legislation by liberally interpreting
the statute. The statutes must be interpreted to advance the cause of
statute and not to defeat it. There is consensus that a remedial
enactment is intended to provide relief which was not already
provided for. The remedy is to obviate a defect, anomaly or
hardship, and is designed to bring the existing law in line with the
intention of the legislature. It is the duty of Court to interpret the
various provisions of statute harmoniously in order to advance the
remedy. It has to construe the law beneficial for the said purpose.
11. Any other interpretation of provision of Section 162 of the
Ordinance leads to suppression of remedy that does not seem to be
in conformity with the provisions of Articles 2-A, 3, 4, 5, 9, 18 &
23 of the Constitution of the Islamic Republic of Pakistan, 1973,
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and that will give undue advantage and edge to the Insurance
Company over the bone fide claimant.
12. Learned counsel for petitioner has placed reliance upon the
case of Muhammad Huzafa supra, to contend that no proceedings
can be conducted without prior sanction of the commission under
Section 162 of the Ordinance. The operative part of the said
judgment reads as under:-
“4. The contention of learned counsel for petitioner has
got no force because the provisions of section 162 of the
Insurance Ordinance are very much clear and unambiguous and
no proceedings can be conducted without the sanction of the
Commission. The provision of section 162 is reproduced as
under:-
“Except where proceedings are instituted by the
Commission no proceedings under this Ordinance against
an insurer or any Director, Manager or other Officer of an
insurer shall be instituted by any person unless he has
previous thereto obtained the sanction of the Commission
(which shall not unreasonably be withheld) to the institution
of such proceedings.”
5. So, it is obvious from the above mentioned provision
of section 162 of the Insurance Ordinance, 2002 that no
proceedings shall be lodged by any person without previous
sanction of the Commission (i.e. SECP). Thus, we hold that the
impugned order of learned insurance Tribunal is perfectly in
accordance with law and legal provision, hence, warrants no
interference by this Court in exercise of Constitutional
jurisdiction.”
13. I have carefully gone through the said judgment. Learned
counsel for respondents has brought to my notice another judgment
passed by learned Division Bench of Hon’ble Peshawar High
Court, Peshawar, in R.F.A. No.43 of 2009, titled State Life
Insurance Corporation of Pakistan & 04 others v. Mst. Sartaj
Begum, vide dated 31.01.2012, the operative part of which reads as
under:
“So far as the second objection is concerned that permission
was not obtained from the Commission, that is based on
misconception because that relates to the other disputes against
Insurance Company or its Directors or Officers and does not
speak about such claims of Insurance and this was also rightly
discarded by the Tribunal.”
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14. It appears that the above judgment passed by learned
Division Bench of Hon’ble Peshawar High Court, Peshawar, has
not been brought to the notice of another learned Division Bench of
the same Court in the case of Muhammad Huzafa supra.
15. In my humble opinion, the earlier view of learned Division
Bench of Hon’ble Peshawar High Court, Peshawar, given in the
case of State Life Insurance Corporation of Pakistan (supra), seems
to be more in conformity with the provisions of Section 162 read
with all other enabling provisions of the Insurance Ordinance, 2000.
16. Resultantly, the instant writ petition along with connected
petitions have no merits and the same are hereby dismissed with no
order as to cost.
(Muhammad Sajid Mehmood Sethi)
Judge
Approved for reporting.
*A.H.S.*
