Mst. Kaneez Bibi Vs Ms Jubilee Life Insurance Company Limited etc.

StereoHCJDA 38

Judgment Sheet

IN THE LAHORE HIGH COURT, LAHORE.

JUDICIAL DEPARTMENT

RFA No. 84374 of 2023.

Mst. Kaneez Bibi. v. M/s Jubilee Insurance Co. Ltd. Etc.

JUDGMENT

Date of hearing: 15.09.2026.

Appellant by: Mr. Ehsan Ullah Ranjha, Advocate.

Respondents by: Mr. Muhammad Mohsin Malik, Advocate.

Shireen Imran, J: - Through the instant appeal, filed under section 124 of the Insurance Ordinance, 2000, the appellant has called in question judgment dated 21.11.2023, passed by the Insurance Tribunal, Lahore, whereby her petition for recovery of insurance claim was dismissed solely on the ground of limitation.

2.Briefly, Muhammad Nawaz, husband of the appellant, obtained life insurance policy No.8097850 dated 13.12.2018 from respondent No.1 for the sum assured pleaded before the Tribunal. He died on 09.08.2019. The appellant, being beneficiary under the policy, lodged the insurance claim, which was repudiated by the respondent-Company vide letter dated

30.01.2020. She thereafter approached the Federal Insurance Ombudsman and pursued the remedy before the said forum.

Those proceedings culminated on 17.11.2022, whereafter the appellant approached the Insurance Tribunal by filing petition on 13.02.2023. The respondents contested the petition not only on limitation but also on merits, inter-alia alleging concealment/non-disclosure of pre-insurance ailment. The learned Tribunal accordingly framed seven issues, including limitation, alleged concealment and entitlement of the appellant to recover the insurance amount. Evidence was produced by the parties. The learned Tribunal, however, decided the controversy only on the question of limitation and, having held the petition barred by sixteen days even if limitation was reckoned from repudiation of the claim, considered it unnecessary to decide the remaining issues.

3.Learned counsel for the appellant contends that the appellant had been diligently pursuing her claim before the Insurance Ombudsman; that the proceedings remained pending before that forum until 17.11.2022; and that she approached the Insurance Tribunal pursuant to the course indicated in those proceedings. It is argued that the appellant could not justly be non-suited without examining the effect of the proceedings bona fide pursued before the Ombudsman.

4.Conversely, learned counsel for the respondents supports the impugned judgment and submits that Article 86(a) of the Limitation Act, 1908 prescribes three years for the claim and that proceedings before the Insurance Ombudsman cannot attract section 14 of the Limitation Act. Relies on Shafaatullah Qureshi v. Federation of Pakistan (PLD 2001 SC 142).

5.We have heard learned counsel for the parties and examined the available record.

6.The pivotal question is whether, in the peculiar circumstances of the case, the appellant's claim could appropriately be terminated solely on limitation without adjudication of the remaining issues on merits. It is not disputed that the appellant invoked the remedy available before the Insurance Ombudsman and remained before that forum for a considerable period. The proceedings were not shown to have been instituted merely as a device to overcome limitation.

Rather, according to the case set up before the Tribunal itself, the proceedings initiated in the year 2020 remained pending until 17.11.2022, whereafter the appellant approached the Insurance Tribunal. The operative part of the order dated 17.11.2022, passed by the Federal Insurance Ombudsman, reads as under: -

“3.*****During hearing, the representative of the Respondent Company stated that the Death Claim was rejected on the basis of non-disclosure of ailment. In support of their contention, they provided reports of ESR & HCV from Laboratory of Kot Momin. This Forum advised the representative of Respondent Company to compensate the widow to a reasonable extent. Honouring the advice of this Forum, they offered to pay full paid premium amounting to Rs.200,000/- on humanitarian grounds. However, this offer of the Respondent Company was rejected by the Complainant on the ground that the reports provided by them are fake and she insisted that full amount of Death Claim be paid to her. The representative of the Respondent Company suggested the Complainant to approach Insurance Tribunal for redressal of her grievances where facts/reports of ESR and HCV issued by the Laboratory can be verified, which was accepted by the Complainant.”

7.This circumstance had a direct bearing upon the question of limitation and required consideration in its proper legal perspective.

8.Before examining the effect of the proceedings pursued before the Insurance Ombudsman, another material aspect of the matter requires consideration. During pendency of those proceedings, the respondent-Company made an offer to the appellant to pay Rs.200,000/- representing the full paid premium which is evident from order dated 17.11.2022 (reproduced above). The offer was made in the proceedings between the parties concerning the very insurance policy and claim forming subject matter of the present controversy. Though the appellant did not accept the amount and continued to assert her entitlement

to the full death claim, the offer made by the respondent- Company constituted acknowledgment of its subsisting obligation arising out of the insurance relationship. Its effect for purposes of limitation, therefore, could not have been ignored merely because the parties remained at variance regarding the extent of liability.

9.Section 19 of the Limitation Act, 1908 provides that where, before expiry of the prescribed limitation period, the party against whom a right or liability is claimed makes a written and signed acknowledgment of that right or liability, a fresh period of limitation begins from the date on which the acknowledgment was signed. Section 19 ibid, for facility of reference is reproduced herein: -

“19. Effect of acknowledgment in writing.

(1)Where, before the expiration of the period prescribed for a suit or application in respect of any property or right an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by same person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2)Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Evidence Act, 1872, oral evidence of its contents shall not be received.”

10.The import of section 19 is that an acknowledgment made within the prescribed period furnishes a fresh starting point of limitation from the date of such acknowledgment. In the present case, the respondent-Company, during proceedings before a statutory forum, offered to refund the entire premium paid under the policy. Such offer was not made in isolation but arose directly out of the insurance claim being pursued by the appellant. Thus, notwithstanding that the respondent-Company disputed its liability to satisfy the entire death claim, its written offer acknowledging an obligation flowing from the policy constituted a material subsequent event and furnished a fresh cause for computation of limitation. The learned Tribunal, while reckoning limitation only from the repudiation letter dated 30.01.2020, did not examine the legal effect of this subsequent acknowledgment.

The petition, therefore, could not have been held barred by limitation merely by counting the period from the original repudiation while leaving this material circumstance out of consideration.

11.The judgment of this Court in Aamer Shahzad Dhody v.

Adamjee Insurance Co. and others (2020 CLD 1329) is of much importance. In that case also the insurance claim had been terminated on the sole question of limitation. This Court observed that limitation, in the circumstances before it, was a

mixed question of law and fact and specifically noticed that applicability of sections 14 and 19 of the Limitation Act required adjudication. It was further held that law favours adjudication of controversy on merits instead of technicalities and that once issues had been framed and the Court had entered upon recording of evidence, the lis ought ordinarily to be taken to its logical conclusion instead of terminating it summarily. Reliance was also placed upon Jubilee General Insurance Co. Ltd., Karachi v.

Ravi Steel Company, Lahore (PLD 2020 SC 324) for the principle that law favours adjudication of controversies on merits rather than trapping litigants in technicalities.

12.There is yet another, and independent, aspect of the matter.

Even apart from the effect of the acknowledgment referred to above, the appellant had admittedly remained before the Federal Insurance Ombudsman in pursuit of her insurance claim until 17.11.2022. The effect of the period bona fide consumed in those proceedings was, therefore, also required to be examined in the context of section 14 of the Limitation Act, 1908.

13.Section 14 of the Limitation Act, 1908 embodies the principle that a litigant bona fide and diligently pursuing a remedy before a forum which ultimately cannot entertain the matter should, subject to fulfilment of the statutory requirements,

receive exclusion of the period so consumed. The said section, for facility of reference is reproduced here-under:- “14. Exclusion of time of proceeding bona fide in Court without jurisdiction.—

(1)In computing the period of limitation prescribed for any suit, the time during which the plaintiff has been prosecuting with due diligence another civil proceeding whether in a Court of first instance or in a Court of appeal, against the defendant, shall be excluded, where the proceeding is founded upon the same cause of action and is prosecuted in good faith in a Court which, from defect of jurisdiction, or other cause of a like nature, is unable to entertain it.

(2)In computing the period of limitation prescribed for any application, the time during which the application has been prosecuting with due diligence another civil proceeding, whether in a Court of first instance or in a Court of appeal, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a Court which, from defect of jurisdiction, or other cause of a like nature is unable to entertain it.”

14.We are conscious that the expression employed in section 14 is “Court” and that proceedings before an Ombudsman do not, merely by that fact, become judicial proceedings before a Court.

Nevertheless, the matter does not end there. In the peculiar circumstances obtaining here, the appellant had invoked a statutory forum concerned with insurance maladministration and thereafter approached the Insurance Tribunal for adjudication of her insurance claim. Section 122 of the Insurance Ordinance, 2000, moreover, clothes the Tribunal, while exercising civil jurisdiction, with the powers vested in a Civil Court and requires

it, where the Ordinance does not provide the procedure, to follow the Code of Civil Procedure, 1908. The said section for facility of reference is reproduced herein below: -

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.

15.The appellant's resort to the Insurance Ombudsman was, therefore, not an extraneous proceeding having no nexus with the insurance claim. She had pursued the statutory mechanism available to her and remained before that forum until 17.11.2022.

Upon culmination of those proceedings, and upon being advised to seek adjudication before the Insurance Tribunal, she approached the Tribunal. The period so consumed and the bona fide pursuit of the remedy were circumstances having direct bearing upon the question of limitation and could not have been left out of consideration.

16.The above principle assumes greater significance in the present case. The Tribunal had framed specific issues regarding alleged concealment of ailment, validity of the claim, entitlement to the insurance amount and ancillary relief. Evidence of the parties had also been brought on record. Nevertheless, all those issues were left undecided merely because the petition, when calculated from the repudiation letter dated 30.01.2020, was considered delayed by sixteen days. In doing so, the learned Tribunal neither accorded due weight to the intervening proceedings pursued by the appellant before the Insurance Ombudsman and their termination on 17.11.2022 nor examined the effect of the acknowledgment subsequently made by the respondent-Company during those proceedings.

17.There is yet another aspect. The statutory jurisdiction of the Insurance Ombudsman under section 127 of the Insurance Ordinance, 2000 pertains to investigation into allegations of maladministration on the part of an insurance company. The said provision for convenience of reference is reproduced herein below: -

127.Jurisdiction, functions and powers of Insurance Ombudsman.-

(1)The Insurance Ombudsman may on a complaint by any aggrieved person undertake any investigation into any allegation of maladministration on the part of any insurance company:

Provided that the Insurance Ombudsman shall not have any jurisdiction to investigate or inquire into any matters which--

(a)are within the jurisdiction of the Office of the Wafaqi Mohtasib under the Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983 (P.O.1 of 1983); or

(b)are sub-judice before a court of competent jurisdiction or tribunal or board in Pakistan on the date of the receipt of a complaint, reference or motion by him.

(2)For the purposes of this section "mal-administration" includes-

(a)a decision, process, recommendation, act of omission or commission which: -

(i)is contrary to law, rules or regulations or is a departure from established practice or procedure, unless it is bona fide and for valid reasons; or

(ii)is perverse, arbitrary or unreasonable, unjust, biased, oppressive, or discriminatory; or

(iii)is based on irrelevant grounds; or

(iv)involves the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives, such as, bribery, jobbery, favoritism, nepotism and administrative excesses; and

(b)corruption, nepotism, neglect, inattention, inordinate delay, incompetence, inefficiency and ineptitude in the administration or discharge of duties and responsibilities.

(3)Notwithstanding anything contained in sub-section (1), the Insurance Ombudsman shall not accept for investigation any complaint which is brought by or on behalf of an insurance company and which relates to a contract of reinsurance.

(4)Notwithstanding anything contained in sub-section (1), the Insurance Ombudsman shall not accept for investigation any complaint by or on behalf of an employee of an insurance company concerning any matters relating to the insurance company in respect of any personal grievance relating to his service therein.

(5)For carrying out the objectives of this Ordinance and, in particular for ascertaining the root causes of corrupt practices and injustice, the Insurance Ombudsman may arrange for studies to be made or research to be conducted and may recommend appropriate steps for their eradication.

As inaction on the part of respondents amounts to maladministration, the appellant rightly knocked the doors of the Insurance Ombudsman in terms of section 127 ibid; thus, the time spent by her before said forum cannot be termed to be consumed before wrong forum. Further, when the appellant

refused the offer of the company on the ground that the reports produced by the company are fake the controversy could not be resolved without recording of evidence, thus, the Insurance Ombudsman rightly disposed of the matter on willingness of the appellant to approach the Insurance Tribunal which exercises civil jurisdiction in respect of claims arising out of insurance policies. The distinction between the two jurisdictions itself required careful examination before penalizing a claimant who had first pursued the statutory Ombudsman mechanism and thereafter invoked the jurisdiction of the Tribunal.

18.A similar controversy came up before this Court in RFA No.10709 of 2020 wherein this Court vide order dated 07.10.2025, has inter-alia held as under:-

“9.*****Here again, the reasoning adopted in Mst. Undlus Begum is directly instructive. This Court held therein that, given the genuine ambiguity on the correct forum and the ensuring bona-fide prosecution before wrong fora, the time spent is liable to be excluded/condoned; additionally, equitable considerations in insurance matters may also lend support to condonation at the appellate stage.....”

19.We may clarify that the foregoing observations shall not be construed as expression of opinion upon the appellant's ultimate entitlement to the insurance proceeds or upon the respondents' defence regarding alleged non-disclosure or misrepresentation. Those questions were specifically put in issue

but were not decided by the learned Tribunal. It would, therefore, not be appropriate for this Court, in the first instance, to record findings thereon.

20.So far as the case-law cited by learned counsel for the respondents is concerned, the same is inapplicable to the facts and circumstances of present case inasmuch as the referred case pertains to the Wafaqi Mohtasib whereas matter in this case remained pending before Insurance Ombudsman and that too in terms of section 127 ibid; thus, the period consumed before said forum cannot be included towards reckoning the period limitation.

21.For what has been discussed above, we find that dismissal of the appellant's petition solely on the question of limitation, without adjudication of the remaining issues despite the peculiar factual background, the acknowledgment made by the respondent-Company and the proceedings bona-fide pursued before the Insurance Ombudsman, cannot be sustained. The impugned judgment dated 21.11.2023 is consequently set aside.

The matter is remitted to the learned Insurance Tribunal, Lahore, which shall decide all the issues on their own merits, on the basis of the evidence already available on record and, if considered

necessary in accordance with law, such further evidence as may legitimately be permitted.

(Ahmad Nadeem Arshad) (Shireen Imran) Judge Judge

Approved for Reporting.

Judge Judge

GR*