IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN MONDAY, THE 31ST MAY 2010 / 10TH JYAISTHA 1932 MFA.No. 42 of 2009() ------------------------------ W.C.C. 67/2001 OF THE COMMISSIONER FOR WORKMEN'S COMPENSATION (DEPUTY LABOUR COMMISSIONER), ERNAKULAM. .............. APPELLANT(S): 2ND OPPOSITE PARTY -------------------------------- THE NEW INDIA ASSURANCE COMPANY LTD, MUNNAR NOW REP; BY ITS MANAGER,REGIONAL OFFICE, M.G.ROAD, KOCHI-11. BY SRI.MATHEWS JACOB, SENIOR ADVOCATE RESPONDENT(S): APPLICANT AND 1ST OPPOSITE PARTY -------------------------- 1. K.G.BABU, S/O.GOPALAN, KAPPADATHOTTIYIL HOUSE, KEERAMPARA.P.O, KOTHAMANGALAM. 2. K.O.ANTO, KOTTAM HOUSE, VARAPPETTY.PO, KOTHAMANGALAM. ADDL. R3 TO R5 IMPLEADED. 3. SMT.LISSY, W/O. LATE K.A.ANTO , KOTTAM HOUSE, VARAPETTY P.O., KOTHAMANGALAM. 4. MISS. TINTU, D/O. LATE K.A.ANTO , DO. DO. 5. MISS. ROSU, D/O. LATE K.A.ANTO, DO. DO. ADDL. R3 TO R5 ARE IMPLEADED AS PER ORDER 31/05/2010 IN IA. 3786/2009. R1 BY ADV. SRI.C.DILEEP ADV. SRI.PEEYUS A.KOTTAM FOR R3-5 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 31/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON IA. NO.527/2009 IN MFA. NO.42/2009 DISMISSED 31/0/2010 SD/- M.N.KRISHNAN, JUDGE TRUE COPY P.A. TO JUDGE tss M.N. KRISHNAN, J. = = = = = = = = = = = = = = M.F.A. NO. 42 OF 2009 = = = = = = = = = = = = = = = Dated this the 31st day of May, 2010. J U D G M E N T This is an appeal preferred against the order of the Workmen's Compensation Commissioner, Ernakulam in W.C.C. 67/01. The claimant who sustained injuries had been awarded a sum of Rs.99,830/- with 12% from 8.12.99 to 28.11.01 from R2 in appeal and from 29.11.2001 till the date of deposit of the amount by the insurance company. The appeal is preferred only on the question of the liability to pay interest by the insurance company. It is contended by the insurance company that the terms and conditions of the policy does not make the insurance company liable to pay interest. For the purpose of perusal a copy of the policy is given to me and it is very clearly stated therein that “the liability of the insurance company is not extended to include any interest and or penalty imposed on the insured on M.F.A.. 42 OF 2009 -:2:- account of his/their failure to comply with the requirements laid down under the Workman's Compensation Act, 1923”. The said clause had come up for consideration before the Hon'ble Supreme Court of India in the decision reported in New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya (2006 (2) KLT 667). The Hon'ble Supreme Court held that, “The terms of the contract of insurance would depend upon the volition of the parties. A contract of insurance is governed by the provisions of the Act. In terms of the provisions of the insurance Act, an insured is bound to pay premium which is to be calculated in the manner provided for therein. With a view to minimize his liability, an employer can contract out so as to make the insurer not liable as regards indemnifying him in relation to certain matters which do not strictly arise out of the mandatory provisions of nay statute. Contracting out, as regards payment of interest by an employer, therefore is not prohibited by law.” M.F.A.. 42 OF 2009 -:3:- Therefore when a contract is entered into between the insurer and insured whereby the insurance company has moved out of the contract to pay the liability of interest thereafter insurance company cannot be saddled with the liability. Therefore the finding of the Workman's Compensation Commissioner directing the insurance company to pay interest has to be set aside and I do so. It does not mean that the claimant is not entitled to interest. That has to be paid by the owner. Since the owner is dead if there are any assets in the hands of the legal representatives of the owner that shall be realisable from that assets. It is made clear that the owner will not be liable to pay the interest between the time of dismissal of default and till date of restoration. The M.A.C.A. is disposed of accordingly. Sd/- M.N. KRISHNAN, JUDGE. ul/- [true copy] P.A. To Judge.