JUDGMENT : 1. This is an appeal filed under Section 30 of the Workmen’s Compensation Act, 1923 challenging the impugned order and award dated 31.07.2009 passed by the Commissioner of Workmen’s Compensation, Labour Court, Jamnagar in Workmen Compensation Fatal Case No.20/1998. 2. Heard learned advocate Mr. Maulik J. Shelat for the appellant. Though served, none appears for the respondent. 3. The brief facts of the case are as under:- 3.1. The workman-Devji Kanji Savasariya was in the employment of original opponent No.1 and he workman during the course of employment died on 26-27/03/1997. The workman expired while working on the barge. The heirs of deceased workman claimed the compensation of Rs.2,62,000/- with penalty and 18% interest from the original opponents. Upon service of notice, original opponent No.1 filed Written Statement at Exhibit-11 and denied their liability of paying compensation to the heirs of deceased workman. Subsequently, during the pendency of the proceedings, the Insurance Company was joined as opponent No.2 and appellant filed its Written Statement at Exhibit-12. Issues were framed at Exhibit-23. The original claimant submitted affidavit-in-lieu of examination-in- chief at Exhibit-31 and also submitted documentary evidences. Original opponent No.1-Employer submitted documents such as copy of policy and the voucher indicating payment being made to the legal heirs of deceased-workman. Opponent No.2- Insurance Company also submitted copy of policy. After considering the oral as well as documentary evidence, the learned Commissioner partly allowed the application and directed the original opponent Nos.1 and 2 to pay Rs.1,05,324/- with 7.5% interest from the date of application till realization together with cost and original opponent No.1 was further directed to pay Rs.10,500/- towards 10% penalty to the original claimants. 3.2. Being aggrieved and dissatisfied with the fastening of liability of interest upon the Insurance Company, the present appellant is before this Court. 4. Learned advocate for the appellant has submitted that the appellant had issued a Workmen Compensation Policy in favour of the respondent No.2 and during the period of policy, the workman-Devji Kanji Savasariya died during the employment on 26-27/03/1997. It is further submitted that thereafter, the heirs of the deceased filed the application for compensation from the original opponents. It is further submitted that the policy being a Workmen Compensation Policy, the award of interest upon the Insurance Company is bad in the eye of law and the learned Commissioner has exercised its jurisdiction not vested in it. It is further submitted that thereafter, the heirs of the deceased filed the application for compensation from the original opponents. It is further submitted that the policy being a Workmen Compensation Policy, the award of interest upon the Insurance Company is bad in the eye of law and the learned Commissioner has exercised its jurisdiction not vested in it. Learned advocate for the appellant has submitted that the challenge in the present Appeal is with regard to the fastening of liability of interest upon the Insurance Company. 4.1. In support of his submissions, learned advocate for the appellant has placed reliance upon the decision in the case of New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya & Anr reported in 2006 (5) SCC 192 and the decision in the case of Distt Panchyat Deleted V/s Shantiben Bhimabhai reported in 2000 LawSuit(Guj) 404. 5. Having considered the submissions and having gone through the impugned judgment, the deceased-Devji Kanji Savasariya had died on 27.03.1997 during the employment of respondent No.1. The learned Commissioner has observed that since the occurrence of accident was known to the respondent No.2, and did not comply with the provision of law of depositing the amount within stipulated time, the respondent No.2 was saddled with 10% penalty. However, while considering the question of interest, the learned Commissioner observed that the present appellant was impleaded in the original proceedings in the year 2006 and the Insurance Company was in the knowledge of occurrence of accident, however, no amount was deposited by the respondent No.2 and thus, the Insurance Company was saddled with the liability of interest along with respondent No.2. 6. The question about imposing interest upon Insurance Company is no more res integra in view of the decision of New India Assurance Co. Ltd. (supra), wherein the Hon’ble Supreme Court has observed as under; “14. By reason of the provisions of the Act, an employer is not statutorily liable to enter into a contract of insurance. Where, however, a contract of insurance is entered into by and between the employer and the insurer, the insurer shall be liable to indemnify the employer. The insurer, however, unlike under the provisions of the Motor Vehicles Act does not have a statutory liability. Section 17 of the Act does not provide for any restriction in the matter of contracting out by the employer vis-a-vis the insurer. 15. The insurer, however, unlike under the provisions of the Motor Vehicles Act does not have a statutory liability. Section 17 of the Act does not provide for any restriction in the matter of contracting out by the employer vis-a-vis the insurer. 15. The terms of a contract of insurance would depend upon the volition of the parties. A contract of insurance is governed by the provisions of the Insurance 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 any statute. Contracting out, as regards payment of interest by an employer, therefore, is not prohibited in law. 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. 20. The views taken by us find support from a recent judgment of this Court in P.J. Narayan v. Union of India and Ors. 2006 (5) SCC 200 , wherein it was held: "1. This writ petition is for the purpose of directing Insurance Company to delete the clause in the Insurance Policy which provides that in case of compensation under the Workmen's Compensation Act, 1923, the Insurance Company will not be liable to pay interest. We see no substance in the writ petition. There is no statutory liability on the Insurance Company. The statutory liability under the Workmen’s Compensation Act is on the employer. An insurance is a matter of contract between the Insurance Company and the insured. We see no substance in the writ petition. There is no statutory liability on the Insurance Company. The statutory liability under the Workmen’s Compensation Act is on the employer. An insurance is a matter of contract between the Insurance Company and the insured. It is always open to the Insurance Company to refuse to insure. Similarly they are entitled to provide by contract that they will not take on liability for inter est. In the absence of any statute to that effect, insurance Company cannot be forced by Courts to take on liabilities which they do not want to take on. The Writ Petition is dismissed. No order as to costs." 21. For the reasons aforementioned, the impugned judgment cannot be sustained. It is set aside accordingly. The appeal is allowed. The Appellant is not liable for the interest. However, we make it clear that the employer shall be liable to pay the amount of interest to the claimant. In the facts and circumstances of the case, there shall be no order as to costs. 3(24). Section 17 of the Workmen's Compensation Act voids only a contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment and insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act. As my learned brother has noticed, in the Workmen’s Compensation Act, there are no provisions corresponding to those in the Motor Vehicles Act, insisting on the insurer covering the entire liability arising out of an award towards compensation to a third party arising out of a motor accident. It is not brought to our notice that there is any other law enacted which stands in the way of an insurance company and the insured entering into a contract confining the obligation of the insurance company to indemnify to a particular head or to a particular amount when it relates to a claim for compensation to a third party arising under the Workmen's Compensation Act. In this situation, the obligation of the insurance company clearly stands limited and the relevant proviso providing for exclusion of liability for interest or penalty has to be given effect to. In this situation, the obligation of the insurance company clearly stands limited and the relevant proviso providing for exclusion of liability for interest or penalty has to be given effect to. Unlike the scheme of the Motor Vehicles Act the Workmen's Compensation Act, does not confer a right on the claimant for compensation under that Act to claim the payment of compensation in its entirety from the insurer himself. The entitlement of the claimant under the Workmen’s Compensation Act is to claim the compensation from the employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. Construing the contract involved here it is clear that the insurer has specifically excluded any liability for interest or penalty under the Workmen's Compensation Act and confined its liability to indemnify the employer only against the amount of compensation ordered to be paid under the Workmen's Compensation Act. The High Court was, therefore, not correct in holding that the appellant insurance company, is also liable to pay the interest on the amount of compensation awarded by the Commissioner. The workman has to recover it from the employer.” 7. The law on saddling of liability of interest upon Insurance Company has been discussed in catena of decisions. If the policy issued under the Workmen Compensation Act, the Insurance Company is not liable to pay interest on the compensation as the principal liability to pay the compensation as per the Act is always upon the employer. The learned Commissioner has committed an error by holding that since the employer was duly informed about the death of the workman, the Insurance Company is liable to pay interest on the compensation. Such finding is perversed and against the settled principle of law. Like, the policy under Motor Vehicles Act, the Insurance Company cannot be saddled with the liability to pay interest. This issue has been discussed in the decision of Distt Panchyat Deleted (supra), wherein the Bench has observed as under:- “[15] In case of JAYANTILAL & CO. RAJKOT VS. GARASAI RAJVIRBA UDESINH & ORS. 1991 II CLR 424, this Court has taken the view that the provisions for payment of interest and penalty have been enacted with a view to deter the employer from taking facile pleas and unreasonable defence for avoiding payment of compensation. RAJKOT VS. GARASAI RAJVIRBA UDESINH & ORS. 1991 II CLR 424, this Court has taken the view that the provisions for payment of interest and penalty have been enacted with a view to deter the employer from taking facile pleas and unreasonable defence for avoiding payment of compensation. The insurer cannot be directed to indemnify the insured for payment of interest and penalty. Reference was also made in this case to Division Bench pronouncement in GAUTAM TRANSPORT BHAVNAGAR V. JILUBEN HUSEINBHAI & ORS 1989 ACJ 587 . It was further observed in this case that penalty under Section 4-A(3) of the Act is imposed on the owner of the offending truck for remaining indifferent to his statutory liability to make payment in time. If by his gross negligence the insured or the owner invites or incurs additional liability or responsibility for having violated the statutory requirement, then the Insurance Company cannot be directed to indemnify the insured on that count. [16] In view of the above discussions, I do not find force in the contention of the learned counsel for the appellant that simply because information of the accident was given on the next day to the Insurance Company, liability to pay penalty and interest stood transferred to the Insurance Company. On the other hand, Insurance Company cannot be directed to pay penalty and interest.” 9. Thus, in the totality of the facts and circumstances of the case, the learned Commissioner has committed an error of law in awarding the interest upon the Insurance Company and in view of the above decisions and the settled principles of law, the present First Appeal is partly allowed. The order and award dated 31.07.2009 passed by the learned Commissioner of Workmen’s Compensation, Labour Court, Jamnagar in Workmen Compensation Fatal Case No.20/1998 is hereby modified as under:- (i) The original claimants are entitled to compensation of Rs.1,05,324/- from the original opponents. (ii) The original applicants are entitled to interest @7.5% per annum from the date of accident till realization from the opponent No.1-Employer. (iii) The opponent No.2-Insurance Company is exonerated from the liability of interest. The opponent No.1-Employer is also directed to pay penalty @10% on Rs.1,05,324/- within a period of one month. (iv) The rest of the judgment and order are not disturbed. (iii) The opponent No.2-Insurance Company is exonerated from the liability of interest. The opponent No.1-Employer is also directed to pay penalty @10% on Rs.1,05,324/- within a period of one month. (iv) The rest of the judgment and order are not disturbed. (v) The learned Workmen Compensation Commissioner (SD) Labour Court, Jamnagar is directed to return back the amount which has been deposited by the Insurance Company before the learned Commissioner with accrued interest, if any, to the Insurance Company i.e. the present appellant. 10. R & P be sent back to the concerned Labour Court.