1 2025:CGHC:44439 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WP227 No. 451 of 2023 Branch Manager The Oriental Insurance Company Limited Office 16 RSS Market Power House, Bhilai, District : Durg, Chhattisgarh ... Petitioner versus Aarti Sahu W/o Late Mahendra Kumar Aged About 19 Years R/o Panchsil Nagar Nayapara Ward No. 1, Durg, District : Durg, Chhattisgarh ... Respondent For Petitioner : Mr. Pankaj Agrawal, Advocate For Respondent : Mr. Nishikant Sinha, Advocate Hon’ble Shri Justice Rakesh Mohan Pandey Order On Board 01.09.2025 Heard. 1) The petitioner has filed this petition seeking the following relief(s):- “10.a. That, the Hon'ble Court may kindly be pleased to allow the petition by setting-aside the impugned order dated 16.03.2023 (Annexure P/9) passed by First Additional District Judge, Durg (C.G.) in Execution Case No. 246/2019 holding it to be illegal and against Digitally signed by NADIM MOHLE 2 law, because TDS on interest is payable by petitioner and he is bound to deduct it on source as per income tax cannot be treated as balance of payment of compensation directed by either tribunal or Hon'ble High Court as was done by the executing court, in the interest of justice. b. Cost of the petition be awarded and C. Any other relief or direction which the Hon'ble Court may deems fit, be also awarded.” 2) The brief facts of the present case are that on 20.03.2012, a claim was preferred by wife, children and parents of deceased Mahendra Kumar Sahu seeking compensation of Rs. 37,60,000/-. The Claims Tribunal, vide award dated 20.11.2012, awarded Rs. 2,95,500/- with interest @ 6% per annum from 20.03.2012 till payment. Against the award, the claimants preferred an appeal before this Court registered as MAC No. 407/2013. This Court, vide judgment dated 18.01.2019 (Annexure P/1), enhanced the compensation from Rs. 2,95,500/- to Rs. 12,08,000/-. In compliance, the petitioner- Insurance Company deposited Rs. 12,25,100/- (including interest) before the Tribunal on 12.03.2020 (Annexure P/5). The execution proceeding was initiated by the claimants on 06.12.2019 (Annexure P/3). Subsequently, on 04.03.2021, an application for attachment of movables of the petitioner was filed by the claimants (Annexure P/4). The petitioner filed reply dated 23.04.2022 (Annexure P/6) stating that TDS on the interest portion amounting to Rs. 78,150/- was deducted in accordance with law, as per Section 194A of the Income Tax Act, 1961 and Circulars issued by CBDT 3 under the Finance Act, 1992. A TDS certificate dated 31.03.2020 (Annexure P/8) was also issued. Despite the above, the executing Court, by the impugned order dated 16.03.2023 (Annexure P/9), directed the petitioner to deposit the deducted amount holding that deduction of TDS was not proper from the compensation payable to the claimants. Hence, the present petition. 3) Learned counsel for the petitioner submits that as per Section 194A(3) (ixa) of the Income Tax Act, deduction of TDS is exempted only when the interest payable on compensation awarded by the Motor Accident Claims Tribunal does not exceed Rs. 50,000/- in a financial year. He submits that in the present case, the interest component is Rs.3,90,700, far above the threshold, and therefore deduction of 20% TDS amounting to Rs. 78,150/- was legally justified. 4) On the other hand, learned counsel for the respondent submits that the petitioner has illegally deducted TDS without even demanding the PAN card of the claimants. It is contended that the deduction has deprived the claimants, who are dependents of the deceased, of the awarded compensation, and the executing Court has rightly directed refund. It is further argued that the claimants are a widow, children, and aged parents of the deceased and they are facing extreme financial hardship due to non- receipt of full compensation. 4 5) I have heard learned counsel for the parties and perused the documents on record. 6) From a perusal of the award, it appears that the learned Claims Tribunal vide award dated 20.11.2012 awarded compensation of Rs. 2,95,500/- with interest @ 6% per annum. This Court, vide judgment dated 18.01.2019 in MAC No. 407/2013, enhanced the compensation to Rs. 12,08,000/-. The petitioner thereafter deposited Rs. 12,25,100/- on 12.03.2020, after deducting Rs. 78,150/- towards TDS on the interest component of Rs.3,90,700. 7) Section 194A (3) (ixa) of the Income Tax Act reads as under: (3) The provisions of sub-section (1) shall not apply- (ixa) to such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees .” 8) Thus, where the interest exceeds Rs. 50,000/- in a financial year, deduction of TDS is mandatory. 9) In the present case, the total interest component was Rs.3,90,700, and even after division among the claimants, the share of each claimant exceeded Rs. 50,000/-. Therefore, the deduction of 20% TDS by the petitioner was justified and in accordance with law. 5 10) The executing Court, therefore, fell in error in directing the petitioner to refund the TDS amount of Rs. 78,150/-. The claimants are, however, at liberty to seek refund of the deducted amount from the Income Tax Department in accordance with law. 11) Taking into consideration the above-stated facts and relevant provisions of the Income Tax Act, this Court has no hesitation to hold that the impugned order dated 16.03.2023 passed by First Additional District Judge, Durg in Execution Case No. 246/2019 is unsustainable in law and is hereby set aside. 12) Consequently, the present petition is allowed. Sd/- (Rakesh Mohan Pandey) JUDGE Nadim