IN THE HIGH COURT OF SINDH, KARACHI

M.A. No.03 of 2012

[ M/s. EFU Life Assurance Ltd. v. Mrs. Anwar Begum]

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

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Appellant : Through Mr. Muhammad Aziz Khan,

Advocate.

Respondent : Nemo

Dates of hearing : 15.10.2026

Date of decision : 15.10.2026

JUDGEMENT

ARSHAD HUSSAIN KHAN, J. Through the instant Miscellaneous Appeal, preferred under Section 124(2) of the Insurance Ordinance, 2000, the Appellants have challenged the judgment and decree dated 08.05.2012 passed by the learned District Judge, Karachi-Central/Insurance Tribunal for Sindh at Karachi, in Suit No.5 of 2008, whereby the suit instituted by the Respondent for recovery of insurance benefits and sums assured under Insurance Policy Nos.36876/53-IP and 36641/53-LP, amounting to Rs.3,180,000/- and Rs.500,000/-, respectively, along with liquidated damages, was partly decreed in favour of the Respondent to the extent of Rs.3,180,000/- and Rs.500,000/-, respectively, with costs.

2. Brief facts giving rise to the instant appeal are that the Respondent, widow and nominee of Muhammad Asghar Chachar (hereinafter referred to as “the insured”), instituted Suit No.5 of 2008 before the learned Insurance Tribunal for recovery of benefits under two insurance policies issued by Appellant No.1, EFU Life Assurance Limited, namely, Investment Plan No.36876/53-IP and Life Care Plan No.36641/53-LP, carrying benefits of Rs.3,180,000/- and Rs.500,000/-, respectively. The policies commenced on 01.04.2000, and the insured died on 09.06.2002. The Respondent lodged a claim, which was repudiated by Appellant through letter dated 07.08.2002 on the ground that the insured had concealed material facts concerning his pre-existing illness of hypertension and heart disease. The Respondent challenged the repudiation, maintaining that the insured had undergone medical examination before issuance of the policies and that the claim could not lawfully be declined on the alleged ground of misrepresentation. The Appellants contested the suit, asserting that the insured had deliberately suppressed his medical history. Upon examining the evidence, the learned Tribunal held that the Appellant had failed to establish fraudulent concealment or misrepresentation of material facts warranting repudiation of the policies under Section 80 of the Ordinance. Consequently, through the impugned judgment and decree, the suit was partly decreed for Rs.3,180,000/- and Rs.500,000/-, with costs, while the claim for liquidated damages was declined. Hence, the instant appeal.

3. Upon filing of the instant appeal, notice was issued to the Respondent, pursuant to which learned counsel entered appearance and filed Vakalatnama on her behalf. However, since 13.02.2025, learned counsel for the Respondent has failed to appear before this Court despite repeated notices, nor has any intimation explaining his absence been received. Since the instant appeal pertains to the year 2012 and has remained pending for a considerable period, this Court deemed it appropriate to proceed with the hearing with the assistance of learned counsel for the Appellant and on the basis of the material available on record, rather than keeping the appeal pending indefinitely.

4. Learned counsel for the Appellant, while assailing the impugned judgment and decree, submits that the learned Insurance Tribunal failed to appreciate the material evidence available on record, particularly regarding concealment of the insured's pre-existing illness of hypertension and heart disease, which amounted to a breach of the principle of utmost good faith governing insurance contracts. He contends that the learned Tribunal misread and failed to consider the evidence of the Appellant's witnesses, particularly Dr. Ali Murtaza, and erroneously decreed the suit despite the Respondent having failed to establish her claim through cogent evidence. He further submits that the learned Tribunal erred in awarding Rs.500,000/- under the Life Care Plan, as the said benefit was payable only upon the insured surviving for at least 31 days after contracting a specified critical illness, whereas no such entitlement was established. Moreover, Issues Nos.1 and 2 concerning renewal of the policies and entitlement to benefits were not pressed, yet the claim was decreed without examining the relevant policy conditions. Learned counsel also questions the maintainability of the suit on the ground of limitation, contending that the Respondent instituted fresh proceedings in 2008 instead of pursuing the earlier suit filed in 2003. He maintains that the impugned judgment suffers from misreading and non-reading of evidence and errors of law and, therefore, prays that the appeal be allowed and the impugned judgment and decree be set aside.

5. We have heard learned counsel for the Appellant and examined the impugned judgment and the material available on record. The principal question requiring determination is whether the learned Tribunal was justified in holding that the Appellant had failed to establish fraudulent concealment of material facts by the insured and, consequently, in decreeing the Respondent's claim under both insurance policies. An additional aspect requiring consideration is whether the Appellant can, at the appellate stage, question entitlement under the Life Care Plan on the ground of non-fulfilment of the stipulated survival period, when no such defence was specifically raised in their written statement or made the subject of an issue before the learned Tribunal.

6. At the outset, it may be observed that the issuance of the two insurance policies, their commencement from 01.04.2000, receipt of the initial premiums, and death of the insured on 09.06.2002 are not disputed. The principal defence raised by the Appellant before the learned Tribunal was that the insured had concealed his pre-existing illness of hypertension and heart disease at the time of submitting the proposal and declaration forms. According to the Appellant, such concealment constituted a material misrepresentation, disentitling the Respondent to receive benefits under the policies. The learned Tribunal examined this defence in the light of the evidence produced by the parties and the provisions of Section 80 of the Ordinance.

7. Section 80 of the Ordinance regulates the circumstances in which a life insurance policy may be questioned on the ground of misstatement after the expiry of two years from the date on which it was effected. The provision does not impose an absolute prohibition against repudiation after the prescribed period. Rather, it permits the insurer to question the policy where it establishes that the statement concerned a material matter or involved suppression of facts material to disclosure, that such statement or suppression was fraudulent, and that the policyholder knew, at the relevant time, that the statement was false or that material facts had been suppressed. Thus, the mere existence of an undisclosed illness, without proof of the requisite fraudulent knowledge and concealment, would not, by itself, satisfy the statutory requirements.

8. Examining the impugned judgment in the light of the aforesaid provision, we find that the learned Tribunal considered the evidence of the Appellant's witnesses, namely, Arshad Iqbal and Dr. Ali Murtaza, who maintained that the insured had concealed his medical history. However, during cross-examination, the said witnesses acknowledged that the medical examination report produced as Exhibit-11 declared the insured medically fit and did not disclose cardiac hypertrophy. It was also admitted that the proposal form contained particulars of the insured's smoking habit and that the insurance policies had been accepted by Appellant after medical examination. The learned Tribunal further observed that the medical certificates and attending physicians' reports subsequently relied upon by the Appellant had not been proved through examination of their authors or the persons who allegedly conducted the relevant inquiries. In these circumstances, the learned Tribunal found that the Appellant had failed to establish that the insured knowingly and fraudulently concealed material facts concerning his health.

9. We find no sufficient justification to interfere with the aforesaid finding. Although an insurance contract is founded upon the principle of utmost good faith, and deliberate concealment of material facts may furnish a lawful ground for repudiation, the burden of establishing the statutory requirements for questioning a policy after the prescribed period rests upon the insurer. In the present case, the learned Tribunal examined the material relied upon by the Appellants and assigned reasons for finding the allegation of fraudulent concealment unproved. The medical examination conducted before issuance of the policies does not, by itself, conclusively establish the absence of any pre-existing illness; nevertheless, the evidence relied upon by the Appellant was required to establish not merely the existence of such illness but also the insured's knowledge thereof and fraudulent suppression of the same. The learned Tribunal found that these essential ingredients had not been proved. Such finding, being supported by the appreciation of evidence, does not warrant interference merely because another view may be possible.

10. The contention that the Respondent did not personally enter the witness box and instead examined her attorney is also insufficient, by itself, to invalidate the proceedings. Although an attorney cannot ordinarily testify regarding matters exclusively within the personal knowledge of the principal, he may depose to facts within his own knowledge and produce documentary evidence otherwise admissible in law. In the present case, the existence of the insurance contracts, their acceptance by Appellant, and the death of the insured were not disputed. The decisive question concerning repudiation was whether the Appellant had established fraudulent concealment of material facts. The learned Tribunal considered the evidence produced on that issue and found it insufficient. The Respondent's failure to appear personally, therefore, does not, in the circumstances, furnish an independent ground for setting aside the impugned judgment.

11. We have also considered the objection raised by learned counsel for the Appellant concerning the award of Rs.500,000/- under the Life Care Plan bearing Policy No.36641/53-LP. According to learned counsel, the said benefit was payable only upon the insured contracting a specified critical illness and surviving for at least 31 days thereafter, whereas the learned Tribunal decreed the claim without examining whether this contractual condition had been fulfilled. However, a perusal of the record reveals that no such objection was specifically raised by the Appellant in their written statement, nor was any issue framed concerning non-fulfilment of the stipulated survival period. The defence set up before the learned Tribunal was principally founded upon the alleged concealment of material facts concerning the insured's pre-existing illness of hypertension and heart disease.

12. It is a settled principle that parties are ordinarily bound by their pleadings and that a factual controversy not raised before the trial Court cannot be introduced for the first time at the appellate stage, particularly where its determination would require examination of facts upon which the parties had no occasion to lead evidence. The purpose of pleadings and framing of issues is to identify the matters actually in controversy and afford the parties an opportunity to substantiate their respective positions. In the present case, the Appellant neither specifically disputed the Respondent's entitlement under the Life Care Plan on the ground of non-fulfilment of the stipulated survival period nor sought determination of that question through an appropriate issue. Having contested the claim on the ground of alleged fraudulent concealment, the Appellants cannot now seek reversal of the decree by introducing a distinct factual objection which was not put in controversy before the learned Tribunal.

13. It is also pertinent to observe that the insurance claim was repudiated through letter dated 07.08.2002 on the ground that the insured had allegedly concealed material facts regarding his previous illness. The repudiation was not founded upon non-fulfilment of the survival condition under the Life Care Plan. Although the validity of an insurance contract and entitlement to benefits thereunder are distinct matters, and the contractual conditions governing payment cannot be disregarded, the objection now urged by the Appellants necessarily involves a factual inquiry concerning the occurrence of the specified critical illness and the period of survival thereafter. These matters were neither specifically disputed in the written statement nor made the subject of trial. The Appellant, having had the opportunity to raise such defence before the learned Tribunal, cannot ordinarily be permitted to introduce it for the first time in appeal to the prejudice of the Respondent, who had no occasion to meet that objection through evidence specifically directed thereto.

14. The contention that Issues Nos.1 and 2 were recorded as not pressed also does not advance the Appellant's case. Although those issues concerned renewal of the policies and entitlement to benefits thereunder, their non-pressing cannot, by itself, be construed as abandonment of the Respondent's substantive claim, particularly when Issue No.9 expressly concerned her entitlement to recovery of benefits and sums assured under both policies. The learned Tribunal ultimately adjudicated the claim under Issue No.9 after examining the evidence concerning repudiation of the policies. The effect of Issues Nos.1 and 2 having been recorded as not pressed must be considered in the context of the pleadings, the evidence and the controversy actually contested by the parties. In the absence of any specific plea or issue concerning non-fulfilment of the survival condition, the Appellant cannot derive any advantage merely from the fact that those issues were not pressed.

15. As regards the objection concerning limitation, the record reflects that the Respondent initially instituted Suit No.27 of 2003 before the learned Senior Civil Judge, Mirpur Mathelo, following repudiation of the claim on 07.08.2002. The said proceedings subsequently encountered a jurisdictional objection, whereafter the Respondent approached the Insurance Tribunal through Suit No.5 of 2008. The mere institution of the subsequent proceedings in 2008 does not, by itself, establish that the claim was barred by limitation. Such an objection necessarily requires consideration of the applicable period of limitation, the nature and result of the earlier proceedings, and the legal effect of the time spent prosecuting those proceedings before the Civil Court. The Appellant has not demonstrated, on the basis of the material available before us, that the Respondent was disentitled to pursue her claim before the competent forum or that the proceedings were necessarily barred by limitation. Accordingly, the objection concerning limitation does not furnish sufficient ground for interference with the impugned judgment.

16. We are also unable to accept the contention that the impugned judgment is arbitrary, non-speaking or based upon conjectures and surmises. A perusal thereof shows that the learned Tribunal examined the pleadings, considered the evidence produced by the parties and assigned reasons for rejecting the allegation of fraudulent concealment. The Appellant has not demonstrated any material misreading or non-reading of evidence sufficient to displace the findings recorded on that issue. Nor have they established that the learned Tribunal committed any error of law warranting interference with the decree. Mere disagreement with the conclusions reached by the learned Tribunal would not, by itself, justify interference in appeal.

17. In view of the foregoing discussion, we are of the considered view that the learned Tribunal correctly appreciated the material evidence available on record and rightly held that the Appellant had failed to establish fraudulent concealment or misrepresentation of material facts within the contemplation of Section 80 of the Ordinance. The objection concerning non-fulfilment of the stipulated survival period under the Life Care Plan, having neither been specifically pleaded nor made the subject of an issue before the learned Tribunal, cannot, in the circumstances of the present case, furnish a ground for disturbing the decree at the appellate stage. The Appellant has failed to establish any illegality, material irregularity, or misreading or non-reading of evidence warranting interference with the impugned judgment and decree.

18. Consequently, finding no merit in the instant Miscellaneous Appeal, the same is dismissed, and the impugned judgment and decree dated 08.05.2012 passed by the learned Insurance Tribunal for Sindh at Karachi in Suit No.5 of 2008 are maintained. All pending applications, if any, stand disposed of accordingly.

JUDGE