Jubilee Life Insurance Company Vs Arshad Khan

Judgment Sheet

IN THE PESHAWAR HIGH COURT,

PESHAWAR.

JUDICIAL DEPARTMENT.

JUDGMENT

FAO No.159-P/2022.

Date of hearing 11.09.2025.

Jubilee Life Insurance Company(Ltd) through Javaid Ahmad, M.D, Peshawar through authorized person Mr.Zahid Barki Group Head (Risk Management, Compliance & Quality Assurance).

Vs Arshad Khan.

Petitioner (s) by: Syed Hamid Ali Shah & Siraj Hussain Advocates.

Respondent(s) by: In person.

WIQAR AHMAD, J:-. This First Appeal Against Order has been instituted under Section 124 of the Insurance Ordinance, 2000, against the judgment and decree dated 28.05.2022 rendered by the learned Judge, Insurance Tribunal, Peshawar, in Insurance Petition No. 01/ITP/2021. By impugned decision, the Tribunal decreed claim of respondent/insured partly, awarding Rs. 2,100,000/- less Rs. 500,000/- already received, together with Rs. 1,613,140/- as interest at the prevailing bank rate from 17.09.2020. The appellant company prays that impugned decree be set

aside, arguing that Tribunal gravely misapplied principles of evidence and contract law, relied upon inadmissible oral assurances in disregard of written policy documents, and awarded an interest liability without contractual or statutory basis.

3.In addition to appeal, a cross objection has been preferred by respondent under Order XLI Rule 22 CPC, seeking enhancement of the decree.

Respondent contends that Tribunal erred in not awarding him full relief as per alleged assurance of doubling of principal or annual profit of 20-30%. He prays that decree be enlarged to include profit at such rate from 2016 till realization on the deposited sum of Rs. 1,604,855/-, along with litigation expenses.

Since both the appeal and cross objection have been filed against one and same judgment and decree, therefore, both the cases shall be decided through this single judgment.

4.Material facts giving rise to this litigation are that respondent, an Advocate by profession, purchased four insurance/takaful plans of the appellant between 2016 and 2017. These included two Saving Plus plans requiring annual contributions of Rs. 100,000/– each and an Opal Takaful plan

requiring a lump sum of Rs. 1,200,000/-. According to respondent, sales representatives of appellant induced him by assuring that e plans would mature in three years, promising either doubling of invested sum or guaranteed annual profits of 20-30%. On the basis of such representations, he claims to have invested Rs. 2.1 million. In September 2020, on expiry of three years, respondent sought encashment but was informed through letter dated 17.09.2020 that the payable surrender value was Rs. 1,604,855/- only. Feeling deceived, he instituted proceedings before the Insurance Tribunal seeking recovery of Rs. 2.1 million with additional profits and punitive reliefs. Appellant contested petition by producing membership documents, policy schedules and proposal forms (Ex. P/1-P/4), duly signed by respondent, all of which clearly provided a maturity period of twenty-one years, not three years. They further provided that in case of premature encashment, only surrender value would be payable.

Appellant’s witness RW-1 Zahir Shah, Deputy Manager, testified that these terms were explained at the outset. The respondent relied upon his own statement and testimony of individuals claiming to

have heard the oral promises. Learned Tribunal, after hearing parties, partially decreed the petition, holding as if policies had matured in three years and further awarding interest at prevailing bank rate. Aggrieved from impugned judgment, appellant has filed instant appeal while respondent has filed cross objection.

5.Arguments heard and available record gone through.

6.The pivotal issue requiring determination is whether the Tribunal was justified in disregarding written contractual stipulations in favour of alleged oral representations. It was case of respondent before learned Insurance Tribunal that the insurance policies had been purchased by him in pursuance to receipt of assurance from agents of appellant-company regarding payment of 100% profit and that he had not been informed about the policy regarding investment of fund in stock, determination of units’ price and returning the units’ price etc. He had also contended in his petition that terms of policy had not been fully explained to him and that he had hoodwinked due to concealment of relevant facts. He had also claimed that policy had attained maturity and could be surrendered.

7.Appellant had rebutted contention of respondents and relied on terms of contract earlier signed by respondent. The respondent in support of his case appeared before Insurance Tribunal and recorded his statement as PW.1. He exhibited the policy membership form in respect of four policies purchased by him as Ex.PW.1/1 to Ex.PW.1/4.

Compliance notice was exhibited as Ex.PW.1/5 and the Press release of SECP was brought on record as Ex.PW.1/A. He stated in his examination in chief that defendant No.5 Mudassir Javid, Assistant Manager, Jubilee Life Insurance Company (RW.2) had initially approached him as representative of the appellant, regarding Takaful Insurance Policy. That he had also subsequently met with defendant No.3 (Zonal Manager) and defendant No.4 (Regional Manager) in their offices, where he had been briefed regarding Saving Plus Takaful Policy and informed that after lapse of one year, the invested amount alongwith 20 to 30% profit could be withdrawn and that no reduction would be made from the principal amount.

He added that on this assurance he had purchased three policies in the names of his children by investing Rs.900,000/- (nine lac) till 2018. He added

that he had also been briefed regarding another policy (Opal Takaful) by above defendants (representative of appellant) regarding investment, on which he also invested Rs.400,000/-, which had increased to Rs.12,00,000/- and above representatives had also assured him regarding withdrawal of principal amount after three years. He contended that when he had applied for withdrawal of principal amount with profit after four years of the investment, the appellant informed him for payment of principal amount with reduction of Rs.500,000/- vide letter dated 23.09.2020. He further stated that after complaining to SECP as well as availing other remedies, he issued legal notice to appellant but appellant failed to pay the amount of Rs.16,00,000/- though respondent had already withdrawn cash amount of Rs.500,000/- from company out of his principal amount. He added that despite lapse of 4/5 years, appellant company was reluctant to give the outstanding amount to respondent. In his cross examination, he was however unable to point out any provision in the contract regarding the profit claimed by him. He also admitted that relevant documents had been in his possession and that he was free to

have read its contents and that he could not produce any evidence in black & white showing that the claimed rate of profit had been guaranteed to him by competent officer of the appellant company. One Mudassir Javid appeared as RW.2. He in his examination in chief narrated that while being serving as ABM in appellant company, he had brought numerous persons to the concerned Branch for meeting with Zonal Manager and Regional Manager of Jubilee Insurance Company. He stated that Managers (posted at that time) had assured respondent that after one year, he could withdraw his principal amount with profit whereas regarding second policy (Opal Takaful), respondent had been briefed by said personnel that after three years, he could withdraw double profit with principle amount.

He stated that respondent had rightly filed a suit, who was entitled to principal amount alongwith profit. In his cross examination the witness admitted his signature on the policy document. He was also asked regarding the proof in respect of promises made to respondent namely Arshad Khan but this witness could not produce any proof in writing. He also admitted in his cross examination that respondent

Arshad Khan was his friend, which friendship had been existing for 15 to 20 years. From company side one Zahir Shah, Deputy Manager (posted in company) was examined as RW.1, who had rebutted the claim of respondent as raised in his petition and the evidence.

8.Claim of respondent was mostly based on oral assertion, in respect of which he has mainly placed reliance on his oral testimony as well as oral testimony of his witness, whose statement was recorded as RW.2. Since there had been a written contract in existence between the parties therefore, oral testimony cannot be given effect so as to nullify the terms of contract. No promise could be pointed out by respondent in written contract (exhibited in evidence) to the effect that he had ever been promised the profit at the rate claimed in petition filed before learned Insurance Tribunal. Article 102 of Qanun-e-Shahadat Order 1984, was providing that when terms of a contract have been reduced to form of a document, (in a case where any matter was required by law to be reduced to the form of a document) then no evidence should be given regarding its contents, except the documents itself or

secondary evidence of its contents in the cases in which secondary evidence admissible. Relevant part of said Article is also reproduced herein:

102.Evidence of terms of contracts, grants and other disposition of property reduced to form of documents. — When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.

Hon’ble Supreme Court of Pakistan while giving its judgment in case of “Muhammad Akbar and others Versus Province of Punjab through DOR, Lodhran and others” reported as 2022 SCMR 1532 has held that documentary evidence took precedence over oral evidence and that oral assertions which were found in conflict with documentary evidence, could not be relied upon. For reference sake, relevant observation recorded in said judgment are also reproduced herein:

It has time and again been held by this Court that documentary evidence takes precedence over oral evidence. This is especially so when oral evidence/assertions are in direct conflict with documentary evidence i.e., the Award/Settlement. Reliance in this regard is placed on Sher Muhammad v. Muhammad

Khalid (2004 SCMR 826 Supreme Court) wherein, this Court held the following:- '5. The concurrent findings of the said learned Courts are based on the overwhelming documentary evidence available on record. Both the Courts were one in holding, and rightly so, that oral evidence which was contrary to the documentary evidence could not be given preference over the said documentary evidence. The only two entries i.e. relating to Rabi 1973 and Kharif 1973 which stood in favour of the petitioner-plaintiff were directed to be removed by the Collector of the District on an appeal filed before him. He had further ordered that the entries as they existed in Rabi 1972 should be restored. This order of the Collector was maintained in the second appeal filed by the petitioner before the Additional Commissioner of Sargodha who had dismissed the said appeal through an order dated 13-6-1979. In this view of the matter, the Honourable High Court and the learned Appellate Court were justified in holding that the oral evidence offered by the petitioner- plaintiff which was not supported by the strong documentary evidence available on record, could not be given any credit. The concurrent conclusions reached and the reasons offered therefore could not be said to be based either on misreading or non- reading of evidence." (Underlining is ours) In case in hand also, respondent was relying on his oral testimony as well as oral testimony of RW.2, which was in contradiction with terms of written contract earlier entered between the parties.

Execution of said contract is also an admitted fact and no reason exist on the basis of which terms of written contract would be overlooked and reliance may be placed on the oral testimony. Additionally, no support could have been obtained by respondents

from the Bancassurance Regulations 2015 or any other valid instrument or law in the field. The Insurer had signed the proposal form and other valid documents, paid the premia and concluded the agreement. He had not raised any objection for long period of three years and remained under the life insurance cover. The policy holder i.e, respondent herein, had agitated the matter on 17.09.2020 for the first time when he had issued a legal notice to appellant company. Same had been responded on 13.10.2020. He has also been informed vide document Ex.PW.1/5 about the cash value on surrender on the date of 23.09.2020. In such circumstances, the order of Insurance Tribunal could not be deemed justified on any principle of law. In the case of “Anandrao Ramachandra Salunke Vs Life Insurance Corporation of India” reported as AIR 2019 SC 1801, Hon’ble Supreme Court of India, had explained the misconception, which normally existed regarding investment aspect of Insurance Policy, in the following words:

“A policy holder may believe (as appellant in this case) that their surrender value will be as equal to total amount paid as premium. Such expectation is misconceived. Simply put, Life Insurance operates on the basis of law of averages. Premium is collected from

all policy holders in order to create common fund. Payouts from the fund are received only by those who suffer the panic which is insured. The economic loss suffered by a few is divided amongst many. Premia is fixed by insurer on the basis of expected mortality rates. Hypothetically speaking, if mortality rates of all individuals were to be equal irrespective of age and every one paid same premium, the mortality rates increase with age. The premium from of younger age, the amount if collects is higher than the amount it paid out towards claim. The difference is reserved. The policy surrendered before the agreed term entitled the shareholder, their share in the reserves as surrender value.”

Hon’ble Islamabad High Court, Islamabad while giving its judgment in case of “Jubilee Life Insurance Company Limited Versus Office of the President (Public) and others (Writ Petition No.3670 of 2023) has also dealt with a somewhat similar issue where the insured had cried foul that he had been offered engagement of policy in a sum lower than the total Premia, while he had been promised a double payment at the relevant time. On the fact of said case, Hon’ble Islamabad High Court had held:

“8. It is not disputed that the insurance contract between the parties included the Illustration of benefits sheet, which posited three scenarios of varying gross rates of return with the maturity value of the policy changing accordingly. As noted above, the unit price is a function of the performance of the market instruments comprising a given statutory fund and, depending on the nature of the fund and the mix of the market instruments comprising such fund, the unit price will of necessity be a fluctuating value

from year to year. Therefore, the equitable premise on which the impugned order was passed was fundamentally flawed vis-à-vis the true nature of investment-linked contracts.

9.I therefore, find that there was no valid legal basis for the President’s Secretariat to conclude that the cash value of the policies must have equaled the total sum of the premia paid up until the premature surrender of those policies.”

9.Returning back to facts of the case in hand we found documentary record produced by appellant (all bearing respondent’s signatures) explicitly stipulated a maturity period of twenty-one years.

These documents constituted binding contracts, executed freely and voluntarily. The plea that sales representatives had orally promised earlier maturity with enhanced profits stands negated by respondent’s own execution of such documents. Respondent is not a lay consumer. He is an Advocate, fully conversant with implications of signing written contracts. A legally trained person cannot plead ignorance of the contents of documents he has signed. The claim that he was misled is implausible and unsupported by credible testimony. The witnesses produced by him were neither independent nor reliable. Their depositions lacked consistency and contradicted the documentary record. Conversely, the testimony of the appellant’s witness was categorical and

corroborated by the policies themselves. It is therefore manifest that the Tribunal misread evidence and ignored binding documents while resting its decision upon unsubstantiated oral statements.

10.The award of interest at the prevailing bank rate was another grave error. Section 34 of the Code of Civil Procedure permits award of interest only where it arises from express contract, statutory provision, or established mercantile usage. The policies in question contained no such stipulation. To saddle the appellant with liability of interest at bank rates was to rewrite the contract between the parties.

It is settled law that courts cannot import into a contract terms which parties never agreed upon. The Insurance Tribunal’s award of interest was thus devoid of lawful authority and cannot stand.

11.As to the cross objection, respondent urges that he should be granted profit at 20-30% annually from 2016 till date of realization. This contention is equally untenable. No clause in contract supports such a claim, no statutory provision imposes such liability and Tribunal had already erred in treating the policies as matured after three years. Respondent would however be entitled to balance surrender value

recalculated till the year in which he will receive same. The cross objection is accordingly disposed of.

12.The objection raised regarding

maintainability of appeal due to lack of authorization is without substance. Record demonstrates that Chief Executive Officer of appellant company was empowered through Board Resolution dated 27.04.2017 and Articles of Association to institute and defend proceedings and duly authorized the Compliance Officer to file this appeal. Even if there was a technical defect in signing initially, same has already been allowed to be regularized by this Court vide order dated 11.06.2025 with costs. The appeal is thus competently instituted.

13.The inevitable conclusion is that Tribunal misapplied the law, misread and non-read evidence, and granted relief contrary to the contract. Instant appeal is therefore allowed, the judgment and decree dated 28.05.2022 are set aside and Insurance Petition No. 01/ITP/2021 stands dismissed. The cross objection filed by respondent is also disposed of with the above observations. However, the costs of Rs.100,000/- imposed earlier upon the appellant in CM No. 762 of 2023 shall remain payable to

respondent as directed, being compensatory in

nature.

Announced.

-Sd-

JUDGE

-Sd-

JUDGE

“A.Qayum PS” (DB) Hon’ble Mr. Justice Sahibzada Asadullah and Mr.Justice Wiqar Ahmad.