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Judgment
K. Chandru, J.—The Writ Petition is filed by M/s. United India Insurance Company Limited represented by its Divisional Manager, Karur. In the Writ Petition, the insurer challenged the order of the first Respondent dated 21.05.2009 and sought for setting aside the same. By the impugned order, the first Respondent, the District Collector, Karur directed the Tahsildar, Karur to recover a sum of Rs. 31,976/- from the Petitioner Insurance Company towards the amount payable to the fifth Respondent herein in respect of W.C. No. 307 of 2001.
When the Writ Petition came up for hearing on 27.08.2009, this Court granted an order of interim stay on the basis of the judgment of the Supreme Court in New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and Another, .
The ground raised by the Petitioner Insurance Company was that they are not liable to pay the amount as ordered by the Commissioner. In any event, they have deposited the compensation amount even in the year 2003 and hence, they are not liable to pay interest as per the policy condition.
The fifth Respondent instituted a proceeding under the Workmen''s Compensation Act claiming compensation against the fourth Respondent as well as the Petitioner Insurance Company. The Compensation Commissioner, in W.C. No. 307 of 2001, ordered a sum of Rs. 1,34,050/- payable by the fourth Respondent and since the fourth Respondent is insured by the Petitioner Insurance Company, the Petitioner Insurance Company was directed to deposit the amount within 30 days, by an order dated 30.05.2003. The Petitioner Insurance Company deposited the amount in the Canara Bank as ordered by the Compensation Commissioner. But, however, since the Compensation Commissioner awarded the interest at the rate of 12; from the date of accident till the date of payment, a further sum of Rs. 31,976/- was directed to pay.
It is claimed by the Petitioner Insurance Company that the order was received on 19.06.2003 and they have paid the entire amount on 04.07.2003. Since they have deposited the amount within 30 days, they are not liable to pay interest. The Commissioner, however, held that as the order itself indicates 12% interest from the date of accident till the date of payment, they are liable to pay even that amount. Since the said amount has not been paid, the Revenue recovery proceedings were directed to be initiated by the District Collector, who accordingly, directed the Tahsildar, Karur to recover the amount. Challenging the same, the Writ Petition came to be filed.
On behalf of the second Respondent, a counter-affidavit dated 04.03.2010 has been filed stating that since the entire amount as ordered by the Commissioner was not deposited, the revenue recovery proceedings have to be issued. In the judgment in New India Assurance Company Limited''s case cited supra, upon which reliance was placed, the Supreme Court in paragraph No. 19, has held as follows:
As indicated hereinbefore, a contract of insurance is governed by the provisions of the Insurance Act. Unless the said contract is governed by the provisions of a statute, the parties are free to enter into a contract as for their own volition. The Act does not contain a provision like Section 147 of the Motor Vehicles Act. Where a statute does not provide for a compulsory insurance or the extent thereof, it will bear repetition to state, the parties are free to choose their own terms of contract. In that view of the matter, contracting out, so far as reimbursement of amount of interest is concerned, in our opinion, is not prohibited by a statute.
Though there is no quarrel about the proposition of law propounded by the Supreme Court, in the present case, there is no challenge made to the order passed by the Commissioner in the main W.C., by the Insurance company before this Court u/s 30 of the Workmen''s Compensation Act, wherein interest was ordered to be paid by the Insurance Company. It is not as if the Petitioner is not a party to the proceedings before the Commissioner. On the other hand, having allowed the order to become final, they cannot challenge the consequential proceedings and hence, the Petitioner is bound to pay the amount, failing which, the authorities are at liberty to recover the amount from the Petitioner Insurance Company. Hence, this Writ Petition stands dismissed. Consequently, the connected miscellaneous petition is closed. No costs.