Law: Insurance Ordinance, 2000

Section: 118

(a) Insurance Ordinance (XXXIX of 2000)--S.118--Liquidated damages---Entitlement---Pre-condition---Claimant under insurance policy is entitled to liquidated damages in case of delay in payment of insurance claim, from the date of completion of case, which could only be avoided by promptly paying the claim or it is proved that delay occurred due to circumstances beyond the control of insurer. (b) Insurance Ordinance (XXXIX of 2000)--- ----S. 118---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Liquidated damages---Entitlement---Petitioners were forced to file complaint with Wafaqi Mohtasib against delay being caused by insurers in payment of insurance claim---Wafaqi Mohtasib directed the insurers to make payment but instead insurers preferred representation before the President of Pakistan which too was dismissed---Petitioners sought recovery of liquidated damages on the ground that they received their claims after litigation---Validity---Insurers could not show that failure/ delay to make death claims was beyond their control whereas, delay was deliberate and claims were paid after thrusting petitioners into litigation---Insurers failed to demonstrate that their conduct in payment of petitioner's death claims was covered by the only exception created by law i.e. the delay was beyond their control, hence they were obliged to pay the claimed liquidated damages as per 5.118 (2) of Insurance Ordinance. 2000---High Court directed the insurers to pay liquidated damages to petitioners according to law within three months---Petition was allowed accordingly. ORDER MUHAMMAD MUZAMMAL KHAN, J.---This judgment proposes to decide two constitutional petitions, one in hand and the other W.P. No.1375 of 2006 as both these petitions raise similar questions of law/facts, require interpretation of same provisions of law and are directed against the same set of respondents. Both the writ petitioners were declined payment of liquidated damages in spite of payment of respective death claims of their husbands which were payable on account of delay in payment of claims as per section 118 of the Insurance Ordinance, 2000. Succinctly, relevant facts are that…

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