The Lahore High Court (LHC) has upheld the right of widows and legal heirs of deceased policyholders to receive statutory interest on delayed group insurance payments, dismissing four appeals filed by the State Life Insurance Corporation of Pakistan. Justice Raheel Kamran issued the ruling in cases linked to insurance disputes dating back to the late 1990s involving widows and heirs of deceased State Life employees and sales officers.

Justice Raheel Kamran issued the ruling in cases linked to insurance disputes dating back to the late 1990s involving widows and heirs of deceased State Life employees and sales officers.

According to the judgment, the corporation had initially rejected the group insurance claims, forcing the families to pursue lengthy litigation before the Wafaqi Mohtasib, insurance tribunals, the president, and courts for several years.

Although State Life later paid the principal insurance amounts following intervention by courts and the ombudsman, it refused to pay statutory interest under Section 47B of the Insurance Act, 1938, for delayed settlements.

Trial courts had earlier ruled in favor of the claimants and directed State Life to pay interest at a rate five percent higher than the prevailing bank rate from the date of death of each insured person until payment.

State Life challenged the verdicts, arguing that Section 47B had become ineffective after being declared repugnant to Islamic injunctions by the Federal Shariat Court and later upheld by the Supreme Court’s Shariat Appellate Bench.

However, the LHC rejected the argument, observing that the earlier judgments relied upon by the insurer had later been set aside in review proceedings and remanded for fresh determination.

Justice Kamran further noted that implementation of the Federal Shariat Court’s decision regarding interest-related laws had been deferred until Dec 31, 2027.

The court held that the insurance claims had accrued when Section 47B remained fully enforceable, giving beneficiaries vested statutory rights protected under Section 6 of the General Clauses Act.

The judge also dismissed objections regarding limitation and maintainability, stating that the claimants had pursued legal remedies in good faith despite confusion over the proper legal forum.

Consequently, the LHC upheld the decrees granting statutory interest to the widows and heirs of Riaz Hussain, Aslam Shah, Syed Alamdar Hussain Taqi and Muhammad Azam.

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