BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01/11/2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)No.8505 of 2009 and M.P.(MD)No.1 of 2009 M/s.United India Insurance Company Ltd., Represented by its Divisional Manager, No.30, Ramakrishnapuram (North), Karur. ... Petitioner Vs. 1.The District Collector, Karur. 2.The Divisional Revenue Officer, Karur. 3.The Deputy Commissioner of Labour, Tiruchirapalli. 4.P.Ravichandran 5.V.Murugan ... Respondents PRAYER Writ Petition is filed under Article 226 of the Constitution of India praying for the issue of a Writ of Certiorari, to call for the records in proceedings in Na.Ka.No.H1/7977/2009, dated 21.05.2009 on the file of the first respondent and quash the same. !For Petitioner ... Mr.R.Srinivasan ^For Respondents 1to3 ... Mr.S.C.Herold Singh Government Advocate For Respondent No.5 ... Mr.P.Arun Jayatram ********* :ORDER
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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.
2. 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 Company Limited vs. Harshadbhai Amrutbhai
Modhiya and another reported in AIR 2006 Supreme Court 1926.
3. 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.
4. 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.
5. 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.
6. 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:-
“19. 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.”
7. 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 under Section 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.
SML
To
1.The District Collector,
Karur.
2.The Divisional Revenue Officer,
Karur.
3.The Deputy Commissioner of Labour,
Tiruchirapalli.