K.M. Joseph, J.

1. The appellant is the second opposite party in the proceedings under Section 22 of the Workmen's Compensation Act. Besides ordering payment of compensation amount of Rs.2,71,120/-, the appellant has also been mulcted with liability to pay interest at 12% from 23/5/2008(date of the accident of the employee) till the date of deposit within 30 days of receipt of that order. It is the said direction, which is impugned before us.

2. We heard the learned senior counsel for the appellant and the learned counsel for respondents 1 to 4.

3. The learned senior counsel for the appellant would contend that it is a clear case where there is a contract of insurance. Significantly, there is a clause in the contract by which the insurer has been excluded from the liability to pay interest. This fact is not in dispute. However, the Commissioner has proceeded to award interest on the basis that intimation has been given by the employer and that the matter is delayed by the appellant. He submits that in view of the clear provision contained in the contract, the appellant cannot be called upon to pay interest. He relied on the judgments of the Apex Court in New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya (2006 (2) KLT 667), Kancherla Bhagya v. K.Balakotaiah and another (2004 ACJ 453) and unreported judgment in MFA No. 8/2006.

4. Per contra, the learned counsel for the respondents 1 to 4 would submit that principle of the above mentioned decisions will not apply to the facts of this case. He would submit that it is a case where the employer intimated the appellant about the accident. It is a case of death and nothing stood in the way of the appellant from honouring the obligations, which had incurred under the contract of insurance. Therefore the appellant cannot, at the end of the day, plead exclusionary clause in the contract of insurance in support of its immunity from paying the interest. In this case it is, no doubt, true that the appellant had taken the contention that employer -employee relationship is disputed. But, there is no evidence in support of the same. The appellant has not adduced oral evidence. The Commissioner has in fact found that, initially the appellant denied all the averments in the application, but did not make any objection to the interest claimed by the applicants. It is also found that the contention of the appellant that, the first opposite party has not intimated the alleged accidental injury, is not sustainable in view of Exts.B1 and B3. It is thereafter that the Commissioner proceeded to pose questions as to whether the applicants are eligible for interest from the date of accident and who among the opposite parties are liable to pay interest.

5. The accident was occurred on 23/5/2008. It is also true that it is a case of death. In the case of death and if employer - employee relationship is not in dispute, the Workmen's Compensation Act provides formula for determining compensation. Therefore, ordinarily the insurer, if the contract of insurance is admitted and the insurer has been intimated about the happening of the incident resulting in death and that the facts are not in dispute, should not shrug off its responsibility in honouring the commitments, which are undertaken under the contract of Insurance. This principle comes into more sharp focus when the insurer is a public sector unit and is also aware of the claim under the Workmen's Employees Compensation Act. In this context it is noted that there is liability on the employer to make payment within 30 days failing which the liability to pay interest is incurred from the date of the accident and the insurer has specifically chosen to exclude it in the contract.

6. Notwithstanding the observation which we had made herein before, the fate of this case must be decided with reference to impact of the exclusionary clause. The contention is taken by the learned counsel for the respondents 1 to 4 that when there is a contra