IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS FRIDAY, THE 29TH JULY 2011 / 7TH SRAVANA 1933 MFA.No. 72 of 2006 -------------------------- WCC.122/1996 of COMMISSIONER FOR WORKMEN'S COMPENSATION (DEPUTY LABOUR COMMISSIONER) ,THRISSUR .................... APPELLANT(S): 2ND OPPOSITE PARTY. -------------------------------------------------------- THE ORIENTAL INSURANCE CO.LTD., REGIONAL OFFICE, METRO PALACE, GROUND FLOOR, OPP.NORTH RAILWAY STATION, ERNAKULAM, REPRESENTED BY ITS MANAGER. BY ADV. SRI.VPK.PANICKER RESPONDENT(S): 1ST OPPOSITE PARTY AND APPLICANT. ---------------------------------------------------------------------------------- 1. DIRECTOR, DIVINE RETREAT CENTRE, MURINGOOR, CHALAKUDY. 2. JOHNY, S/O.POULOSE, PAINADATH HOUSE, MOTHIRAKKANNI DESOM, PARIYARAM VILLAGE, MUKUNDAPURAM TALUK. R2 BY ADV. SRI.K.M.JAMALUDHEEN SMT.LATHA PRABHAKARAN R1 BY ADV. SRI.A.N.SANTHOSH THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 29/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ. ----------------------------------------- M.F.A.No.72 of 2006 ----------------------------------------- Dated, this the 29th day of July, 2011 J U D G M E N T K.M.Joseph, J. Appellant is the 2nd opposite party in W.C.C.No.122 of 1996 on the file of the Commissioner for Workmen's Compensation, Thrissur. The application was filed by the applicant under Section 22 of the Workmen's Compensation Act, 1923. Compensation was ordered in a sum of Rs.27,626/- with simple interest at 12% per annum from 31.3.1995 till the date of deposit. 2. Aggrieved by the same the appellant is before us. Though four questions of law were raised in the memorandum of appeal, when we heard the learned counsel for the appellant today, he would submit that the only question of law that survives would be the question of interest. It is not in dispute that the entire principal amount ordered was deposited by the appellant and it has been withdrawn by the workman also. As far as the question of interest is concerned, according to the appellant, it is MFA 72/2006 -2- a contract not under the Motor Vehicles Act and what is more the contract specifically contemplates exclusion of liability to pay interest. Learned counsel for the workman does not dispute this proposition. 3. Though served, there is no appearance for the Ist respondent who is the employer. Learned counsel for the appellant also place reliance on the judgment of the Apex Court in New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya & Anr. { III (2006) SLT 665} wherein the Apex Court inter alia held as follows: Where the statute does not provide for compulsory insurance, parties are free to choose their own terms of contract. Contracting out amount of interest is not prohibited. Therefore when the contract excludes the insurer from any liability for interest he is not liable to pay interest. In the light of the admitted position, when the contract between the appellant insurer and the employer excludes the liability to pay interest, the appellant is justified in impugning the direction to pay interest as against the appellant. In the light of the fact that the appellant is excluded from the liability to pay interest, we dispose of the appeal as follows: MFA 72/2006 -3- (i) The Miscellaneous First Appeal is allowed. (ii) We modify the order and direct that the appellant will not be liable to pay interest as ordered. Instead, we make it clear that the Ist respondent will be liable to pay interest from the date of accident at 12% per annum till the date of deposit. (K.M.JOSEPH) JUDGE. (M.L.JOSEPH FRANCIS) JUDGE. MS