Bajaj Allianz General Insurance ... vs Bhanuben Bachubhai Chauhan

Gujarat High Court

Bajaj Allianz General Insurance ... vs Bhanuben Bachubhai Chauhan on 25 September, 2025

                                                                                                             NEUTRAL CITATION




                              C/SCA/5026/2018                                 ORDER DATED: 25/09/2025

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                                     IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                       R/SPECIAL CIVIL APPLICATION NO. 5026 of 2018

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                                 BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED
                                                       Versus
                                        BHANUBEN BACHUBHAI CHAUHAN & ORS.
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                       Appearance:
                       MR VIBHUTI NANAVATI(513) for the Petitioner(s) No. 1
                       MR MOHSIN M HAKIM(5396) for the Respondent(s) No. 1,2,3
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                          CORAM:HONOURABLE MR.JUSTICE MOOL CHAND TYAGI

                                                          Date : 25/09/2025

                                                           ORAL ORDER

1. The present petition is filed against the impugned orders dated 24.10.2017 and 25.10.2017 passed by the learned Tribunal below applications Exhs.16 and 18 tendered in M.A.C.P (Execution) Petition No.192 of 2017 arising out of M.A.C.P. No. 527 of 2013.

2. Heard learned advocates for the parties.

3. Mr.Vibhuti Nanavati, learned advocate for the petitioner, submitted that the entire awarded amount was deposited after deducting the TDS amounting to Rs.42,908/-. He further submitted that the amount was deducted on account of TDS because the claimants could not furnish the details of their Pancards in time, and therefore, a sum of Rs.42,908/- was deducted on account of TDS. He further submitted that the said detail was furnished before the learned Tribunal.

NEUTRAL CITATION C/SCA/5026/2018 ORDER DATED: 25/09/2025 undefined However, the learned Tribunal, vide orders dated 24.10.2017 and 25.10.2017, rejected the application below Exh.18 filed by the Insurance Company and the learned Tribunal further directed for issuance of Jangam Milkat Warrant of Rs.27,591/-. He further submitted that the Insurance Company submitted that the legal position in respect of TDS has been settled down by the Gujarat High Court in judgment rendered in the case of Oriental Insurance Company Ltd Versus Chief Commissioner of Income Tax (TDS) reported in 2023 (2) GLR 1019. He further submitted that in view of the settled legal position, the Insurance Company is ready and willing to deposit the amount deducted on account of TDS with the learned Tribunal.

3. Mr.Mohsin Hakim, learned advocate for the original claimants, submitted that he has no objection, if the impugned orders are set-aside, subject to condition that the Insurance Company shall deposit the amount of TDS within a period of three weeks from today.

4. Having considered the submissions of learned advocates for the parties, it is to be noted that the issue raised by the petitioner is no res-integra and settled by the Division Bench in the case of Oriental Insurance Company Ltd Versus Chief Commisioner of Income Tax (TDS) reported in 2023 (2) GLR 1019, wherein in Paragraph Nos.73 & 74 of the judgment, the Court has observed as under:-

"73. The upshot of the aforesaid discussion is that the compensation received under the Motor Vehicles Act is either Page 2 of 4 Uploaded by GIRISH K PARMAR(HC00954) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 02:12:55 IST 2025 NEUTRAL CITATION C/SCA/5026/2018 ORDER DATED: 25/09/2025 undefined on account of loss of earning capacity on account of death or injury or on account of pain and suffering and such receipt is not by way of earning or profit. The award of compensation is on the principle of restitution to place the claimant in the same position in which he would have been as the loss of life or injury would not have been suffered.

74. Our final conclusion may be summarized as under:-

[a] The interest awarded by the Motor Accident Claim Tribunal u/s 171 of the Motor Vehicles Act 1988 is not taxable under the Income Tax Act, 1961.

[b] The interest awarded in the motor accident claim cases from the date of the Claim Petition till the passing of the award, or in the case of Appeal, till the judgment of the High Court in such appeal, would not be exigible to tax, not being an income. This position would not change on account of clause (b) of Section 145A of the Act as it stood at the relevant time amended by Finance Act, 2009, which provision now finds place in sub-section (1) of Section 145B of the Act. Neither clause (b) of Section 145A, as it stood at the relevant time, nor clause (viii) of sub-section (2) of Section 56 of the Act make the interest chargeable to tax, whether such interest is income of the recipient or not. Section 194A of the Act is only a provision for deduction of tax at source. Any provision for deduction of tax at source in the said section would not govern the tax ability of the receipt. The question of deduction of tax at source would arise only if the payment is in the nature of income of the payee.

NEUTRAL CITATION C/SCA/5026/2018 ORDER DATED: 25/09/2025 undefined [c] The Insurance Companies or the owners of the motor vehicles depositing the requisite amount in due compliance with the awards of the Motor Accident Claims Tribunals shall deposit the full amount with the Tribunal and shall not deduct tax u/s 194A of the Income Tax Act on the interest awarded by the Motor Accident Claims Tribunal."

5. In view of the above settled legal position, the impugned orders dated 24.10.2017 and 25.10.2017 passed below Exhs.16 & 18 are upheld, however, the Insurance Company is granted three weeks time to deposit the said amount of TDS with the concerned learned Tribunal.

With the aforesaid directions, the present petition stands disposed of, accordingly. Interim relief, if any, stands vacated.

(MOOL CHAND TYAGI, J) GIRISH Page 4 of 4 Uploaded by GIRISH K PARMAR(HC00954) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 02:12:55 IST 2025