Judgment:-

Dr. Arijit Pasayat, J.

1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned Single Judge of the Madhya Pradesh High Court, Jabalpur Bench, allowing the Misc. Appeal filed by the respondent No.1 (hereinafter referred to as the `Insurance Company). The controversy lies within a very narrow compass.

3. Challenge in the Misc. Appeal before the High Court was to the Award made by the Commissioner for Workmens Compensation, Labour Court No.1 Gwalior (in short the `Commissioner). A sum of Rs.2,21,370/- along with interest at the rate of 12% per annum was awarded. The liability to make the payment was fixed on the Insurance company. In appeal the only ground raised was that in a claim arising under the Workmens Compensation Act, 1923 (in short the `Act) interest is not payable by the Insurance company as there was no contract by the insurer with the insured with regard to the payment of interest. High Court accepted the stand placing reliance on a judgment of this Court in New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya [2006 (5) SCC192]. It was held that the direction for payment of interest by the insurance company was not sustainable and it was held that the insurance company was not liable to pay any interest and if so advised the amount of interest could be recovered by the claimant from the employer.

4. Learned counsel for the appellant submitted that the High Court has erroneously held that the Insurance company had no liability to pay. On the contrary learned counsel for the Insurance company has submitted that the decision in New India Assurance Co. Ltd.s case (supra) has a clear application to the facts of the case.

5. In New India Assurance Co.s case (supra) this Court found as a matter of fact that a contract itself provided that the interest and/or penalty imposed on the insurer on account of his/her failure to make payment of amount payable under the Act is not to be paid by the insurer. This position is clear from the paragraphs 3&4 of the judgment which read as follows:

"3. The two claim petitions came to be filed by the heirs and legal representatives of the deceased driver and the cleaner under the Compensation Act before the Commissioner for Workmens Compensation, Rajgarh District, Sirmur, Himachal Pradesh. The said applications were moved presumably by exercising option available under Section 167 of the Motor Vehicles Act which lays down that:

"167. Notwithstanding anything contained in the Workmens Compensation Act, 1923 (8 of 1923) where the death of, or bodily injury to any person gives rise to a claim for compensation under this Act and also under the Workmens Compensation Act, 1923, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both."

Thus these two applications were in substitution and in place of otherwise legally permissible claims before the Motor Accidents Claims Tribunal functioning under the Motor Vehicles Act. In the said claim applications, the claimants joined the appellant-employer as well as Respondent 9-insurance company as respondents. The Workmens Commissioner after hearing the parties concerned computed the compensation available to the claimant-dependants of the deceased employees. So far as the claim put forward by the heirs of the deceased driver was concerned the Commissioner awarded a sum of Rs.88,968 as compensation. But as the compensation due was not paid either by the appellant-employer or by the insurance company as and when it fell due the Commissioner awarded a penalty of Rs. 41,984 with interest at the rate of 6% per annum from the date of the accident till the date of payment under Section 4-A(3) (a) and (b) of the Compensation Act. The entire amount of Rs.88,968 with penalty of Rs.41,984 and interest thereon was held payable by the insurance company to the claimants jointly and severally with the appellant- employer. The sai