JUDGMENT : Hemant M. Prachchhak, J. 1. Present appeal is filed by the appellant - insurance company under Section 30 of the Workmen Compensation Act, 1923 (hereinafter be referred to as “the Act”) challenging the impugned judgment and order dated 06.01.2012 passed by the learned Workmen Compensation Commissioner, Labour Court, Himmatnagar in “Workmen Compensation (Non-Fatal) Case No. 3 of 2005 whereby the learned Commissioner has allowed the claim petition filed by the claimant and awarded the compensation of Rs.2,71,656/- along with the penalty and interest. 2. Being aggrieved and dissatisfied with the impugned judgment and order of the learned Commissioner, the present first appeal is filed by the appellant – insurance company on the grounds that learned Commissioner has committed an error in fastening the interest and penalty upon the insurance company. 3. Heard Mr.K. V. Gadhia, learned counsel appearing for the appellant – insurance company and Mr.Harshad Patel, learned counsel appearing for respondents – claimants at length. 4. Mr.Gadhia, learned counsel appearing for the appellant has submitted the same facts which are narrated in the memo of appeal and has submitted that as per the terms of the insurance policy at Ehibit 35, the insurance company is not liable for the payment of interest and penalty and thus the learned Commissioner has committed serious error of law and facts in awarding 12% interest, which was fastened upon the appellant instead of original employer. Mr.Gadhia, learned counsel has referred to and relied upon Sections 4 read with Section 5 of the Act which provides the method of calculating the wages. Section 4 and Section 5 of the Act reads as under:- “ 4. Amount of compensation. Mr.Gadhia, learned counsel has referred to and relied upon Sections 4 read with Section 5 of the Act which provides the method of calculating the wages. Section 4 and Section 5 of the Act reads as under:- “ 4. Amount of compensation. - (1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:- (a) where death results from the injury An amount equal to [fifty per cent.] of the monthly wages of the deceased [employee] multiplied by the relevant factor: or an amount of [one lakh and twenty thousand rupees], whichever is more; (b) where permanent total disablement results from the injury An amount equal to [sixty per cent.] of the monthly wages of the injured [employee] multiplied by the relevant factor; or an amount of [one lakh and forty thousand rupees], whichever is more: [Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount of compensation mentioned in clauses (a) and (b).] Explanation I. - For the purposes of clause (a) and clause (b), “relevant factor, in relation to [an employee] means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the [employee] on his last birthday immediately preceding the date on which the compensation fell due. (c) where permanent partial disablement result from the injury (i) in the case of an injury specified in Part II of Schedule I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury; and (ii) in the case of an injury not specified in Schedule I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury; Explanation I.-- Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries. Explanation II.-- In assessing the loss of earning capacity for the purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I; (d) where temporary disablement, whether total or partial, results from the injury : a half monthly payment of the sum equivalent to twenty-five per cent. of monthly wages of the *[employee], to be paid in accordance with the provisions of sub-section (2). (1A) Notwithstanding anything contained in sub-section (1), while fixing the amount of compensation payable to a *[employee] is respect of an accident occurred outside India, the Commissioner shall take into account the amount of compensation, if any, awarded to such *[employee] in accordance with the law of the country in which the accident occurred and shall reduce the amount fixed by him by the amount of compensation awarded to the *[employee] in accordance with the law of that country.] *[(1B) The Central Government may, by notification in the Official Gazette, specify, for the purposes of sub-section (I), such monthly wages in relation to an employee as it may consider necessary.] (2) The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on the sixteenth day -- (i) from the date of disablement where such disablement lasts for a period of twenty-eight days or more, or (ii) after the expiry of a waiting period of three days from the date of disablement where such disablement lasts for a period of less than twenty-eight days; and thereafter half- monthly during the disablement or during a period of five years, whichever period is shorter: Provided that-- (a) there shall be deducted from any lump sum or half-monthly payments to which the *[employee] is entitled the amount of any payment or allowance which the *[employee] has received from the employer by way of compensation during the period of disablement prior to the receipt of such lump sum or of the first half-monthly payment, as the case may be; and (b) no half-monthly payment shall in any case exceed the amount, if any, by which half the amount of the monthly wages of the *[employee] before the accident exceeds half the amount of such wages which he is earning after the accident. Explanation.--Any payment or allowance which the [employee] has received from the employer towards his medical treatment shall not be deemed to be a payment or allowance received by him by way of compensation within the meaning of clause (a) of the proviso. [(2A) The employee shall be reimbursed the actual medical expenditure incurred by him for treatment of injuries caused during course of employment.] (3) On the ceasing of the disablement before the date on which any half-monthly payment falls due there shall be payable in respect of that half-month a sum proportionate to the duration of the disablement in that half-month.] (4) If the injury of the *[employee] results in his death, the employer shall, in addition to the compensation under sub- section (1), deposit with the Commissioner a sum of *[not less than five thousand rupees] for payment of the same to the eldest surviving dependant of the [employee] towards the expenditure of the funeral of such [employee] or where the *[employee] did not have a dependant or was not living with his dependant at the time of his death to the person who actually incurred such expenditure.] [Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount specified in this sub-section.] 5. Method of calculating wages.-- [In this Act and for the purposes thereof the expression "monthly wages" means the amount of wages deemed to be payable for a month's service (whether the wages are payable by the month or by whatever other period or at piece rates), and calculated] as follows, namely:-- (a) where the [employee] has, during a continuous period of not less than twelve months immediately preceding the accident, been in the service of the employer who is liable to pay compensation, the monthly wages of the [employee] shall be one-twelfth of the total wages which have fallen due for payment to him by the employer in the last twelve months of that period; [(b) where the whole of the continuous period of service immediately preceding the accident during which the [employee] was in the service of the employer who is liable to pay the compensation was less than one month, the monthly wages of the [employee] shall be the average monthly amount which, during the twelve months immediately preceding the accident, was being earned by [an employee] employed on the same work by the same employer, or, if there was no [employee] so employed, by a workman employed on similar work in the same locality;] [(c)] [in other cases [including cases in which it is not possible for want of necessary information to calculate the monthly wages under clause (b)]], the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceding the accident from the employer who is liable to pay compensation, divided by the number of days comprising such period. Explanation.--A period of service shall, for the purposes of [this section] be deemed to be continuous which has not been interrupted by a period of absence from work exceeding fourteen days.” 4.1 Mr.Gadhia, learned counsel has referred the decision of the Hon’ble Supreme Court in the case of New India Assurance Company Limited Vs. Hiralal Gomaji Moriya (REGAR) and others, 2011 (2) CLR 21 and submitted that the insurance company cannot be held liable for the payment of interest in W.C. policy. He has submitted that the insured is required to submit claim form, age proof, wage proof, wage register etc., but in the present case, the employer as well as the claimant has not submitted any documents to settle the claim. He has submitted that the insured is required to submit claim form, age proof, wage proof, wage register etc., but in the present case, the employer as well as the claimant has not submitted any documents to settle the claim. He has submitted that the learned Commissioner has misinterpreted Section 4-A(3) of the Act and held insurance company responsible for interest as the insurance company has not deposited the compensation within 30 days from the date of incident. He has submitted that as per the said section, the employer is liable to deposit the amount of compensation within 30 days from responsible for the interest. He has submitted that the learned Commissioner has erred in passing the award on the basis of the affidavit filed by the claimant, but as per the Act, the deposition on affidavit is not permissible. He has submitted that the learned Commissioner has awarded 12% interest and liability was fastened upon the insurance company which is not just and proper. Mr.Gadhia, learned counsel has urged to allow the appeal and to quash and set aside the impugned judgment and order passed by the learned Commissioner. He has referred to the order dated 19.06.2025 passed by this Court in First Appeal No. 2630 of 2014 wherein this Court has exonerated from the liability of the interest. 5. On 20.04.2012, this Court [Coram: Hon’ble Mr.Justice KS Jhaveri] has admitted the appeal and granted ad-interim relief in terms of para 4(a) of the civil application. 6. The contention with regard to calculating compensation on the basis of wages as mentioned under Section 5 of the Act, I am of the opinion that it is required to be considered and the appropriate modification is required to be made in the impugned award. So far as the contention with regard to the interest is concerned, it is not res integra. So far as the liability to pay the interest of the insurance company is concerned, it is not liable on the part of the insurance company, but it is liable on the part of the insured and he has to pay the interest at the rate of 12% from the date of award till final realization of the award. 6.1 So far as the liability to pay interest is concerned, in view of the decision of the Hon’ble Supreme Court in the case of New India Assurance Company Limited Vs. 6.1 So far as the liability to pay interest is concerned, in view of the decision of the Hon’ble Supreme Court in the case of New India Assurance Company Limited Vs. Harshadbhai Amrutbhai Modhiya reported in (2006) 5 SCC 192 , the said liability is of respondent No.2 and, therefore, the impugned judgment and award is modified to the extent. 7. In the case of Harshdbhai Amrutbhai Modhiya (supra), the Hon’ble Supreme Court has held and observed in paras – 9, 10, 11, 12, 13, 14 and 24 as under:- “ 9. Section 3 of the Act provides for the employer's liability to pay compensation in the event a workman suffers personal injury by an accident arising out of and in the course of his employment. The amount of compensation is required to be calculated in accordance with the provisions contained therein. 10. Section 4 of the Act provides for the mode and manner in which the amount of compensation is to be calculated. While so calculating, the Workmen's Compensation Court is required to take into consideration the factors enumerated therein. 11. Section 5 provides for the method of calculating wages. 12. Section 8 stipulates the manner in which the amount of compensation would be distributed. Sub-sec. (4) of Sec. 8 reads as under: "4) On the deposit of any money under sub-sec. (1), as compensation in respect of a deceased workman the Commissioner shall, if he thinks necessary, cause notice to be published or to be served on each dependant in such manner as he thinks fit, calling upon the dependents to appear before him on such date as he may fix for determining the distribution of the compensation. If the Commissioner is satisfied after any inquiry which he may deem necessary, that no dependant exists, he shall repay the balance of the money to the employer by whom it was paid. The Commissioner shall, on application by the employer, furnish a statement showing in detail all disbursements made." 13. Section 12 of the Act provides for the mode and manner of payment of compensation by a principal employer and/ or his contractor. Section 17 of the Act nullifies contracting out in the following terms: "Contracting out. Any contract or agreement whether made before or after the commencement of this Act, whereby a workman relinquishes any right o24. Section 12 of the Act provides for the mode and manner of payment of compensation by a principal employer and/ or his contractor. Section 17 of the Act nullifies contracting out in the following terms: "Contracting out. Any contract or agreement whether made before or after the commencement of this Act, whereby a workman relinquishes any right o24. 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. 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. 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.f compensation from the employer for personal injury arising out of or in the course of the employment, shall be null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under this Act." 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. 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. 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.” 8. In view of the aforesaid facts and circumstances of the case and the decision cited at the Bar, the appeal requires consideration. 9. In the result, the appeal is allowed in part. So far as the amount of interest which is deposited by the insurance company is concerned, the same shall be refunded to the insurance company and the same shall be recovered from respondent No.3 and if it is not deposited, the same shall be deposited within four weeks before the concerned Court. The learned Commissioner shall consider such application that may be filed by the appellant and decide the same in accordance with law. Registry is directed to transmit back the record and proceedings to the concerned Court forthwith. Pending civil application/s shall stand disposed of accordingly. Interim relief, if any, granted earlier stands vacated forthwith.