Bombay High Court
The Oriental Insurance Co. Ltd vs Jacinta Sequira And Anr on 29 July, 2016
WP 3156-2013
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3156 OF 2013
Oriental Insurance Company Ltd. .. Petitioner
V/s
Jacinta Sequira & Anr. .. Respondents
Mr. D.S. Joshi for the petitioner.
Ms. Varsha K. Chavan for respondent no.1.
ig CORAM: D.H. WAGHELA, CJ.
DATE : 29th JULY 2016
ORAL JUDGMENT.:
The petitioner - Insurance Company has filed the present
petition mainly to call into question the order dated 14 th February
2013 of the Motor Accident Claims Tribunal, Mumbai in Execution
Application No. 218 of 2012 in M.A.C.T. Application No. 319 of
1992, whereby the sum of Rs.24,76,146/- was directed to be paid to
the original claimant and the sum of Rs.1,00,000/- was directed to
be deposited with the Income Tax Department towards TDS on the
interest on compensation amount.
2. During the course of hearing, learned counsel appearing
on either side have exchanged their own calculations of interest due
on the principal amount of compensation awarded by the Claims
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WP 3156-2013
Tribunal and enhanced by the order of this Court. After the total
amount of compensation was arrived at, the amount paid by way of
interest to the respondent has also been calculated and the amount
now remaining due, calculating the interest upto 30 th July 2016, has
been worked out. It is jointly submitted by learned counsel that the
total amount now remaining due towards interest from the
petitioner to the respondent comes to Rs.12,24,391/-. That amount
is arrived at without prejudice to the contention of the petitioner
that part of the earlier payments made to the respondent could have
been adjusted against the principal amount of compensation and if
the amount of interest were calculated on that basis, the amount
remaining due would come to a lesser figure.
3. On the issue of deduction of TDS by the petitioner, the
order dated 17th December 2009 of the Division Bench of this Court in
Civil Application No. 4923 of 2009 in First Appeal No. 1857 of 2009
(Mrs. Gauri Deepak Patel & Ors. v/s New India Assurance Co. Ltd. &
Anr.) has to be followed and complied with. It is directed in
paragraph 6 of the the said order as under:-
"6. Accordingly, we direct that the following
procedure as laid down in the case of Hansaguri
(supra) shall be followed in the present case and in
all the similar cases arising in future before the
Motor Accidents Claims Tribunal:-
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WP 3156-2013
(i) .....
(ii) ....
(iii) If the interest payable to any claimant
during any particular financial year exceeds
Rs.50,000/-, the Tribunal shall permit the
insurance companies/owners to pay over the
amount liable to be deducted at source under
section 194-A(3)(ix) to the Income Tax
Department in respect of that particular claimant
for the particular year, without prejudice to the
claimant's case that he is not liable to pay any
income tax for that year."
4. Even as learned counsel for the respondent has sought to
argue on the basis of the judgment dated 2nd June 2016 of the Madras
High Court in CRP (PD) No. 1343 of 2012 and the judgment dated
13th September 2012 of the Allahabad High Court in Income Tax
Appeal No. 441 of 2006 that the claim under the Motor Vehicles Act
regarding compensation or death or injury is a statutory liability and
the award of compensation could not be regarded as income. The
arguments on this line could not be accepted in the face of the
express direction issued by the Division Bench of this Court after
adverting to the Division Bench judgment of Gujarat High Court in
Hansaguri Prafulchandra Ladhani & Ors. v/s Oriental Insurance
Company & Ors., 2007 ACJ 1897, which in turn relied upon the
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decision of the Apex Court in Rama Bai v/s Commissioner of Income
Tax, AP, (1990) 181 ITR 400.
5. Therefore, following the decision of this Court in Mrs.
Gauri Deepak Patel (supra), the petition is partly allowed. Taking
into consideration the payments admittedly made by the petitioner
to the respondent, the amount towards interest finally remaining
due as on 30th August 2016, i.e. Rs.12,24,391/-, is ordered to be paid
by the petitioner to the respondent after the necessary Deduction of
Tax at Source (TDS) in accordance with the provisions of section
194-A of the Income Tax Act, along with the principal amount of
Rs.8,42,486/- which is admittedly remaining due. Such payment of
the total amount of Rs.20,66,877/- shall be made by the petitioner
on or before 30th August 2016 and any further delay will incur
additional interest at the rate of 3% per annum till the date of
payment. The calculation submitted by learned counsel is taken on
record and marked "X".
6. The petition stands partly allowed and disposed
accordingly with no order as to costs.
(CHIEF JUSTICE)
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