THE NATIONAL INSURANCE COMPANY LIMITED Vs. YELIMINTI APPANNA

JUDGEMENT

(1.) THIS revision petition is directed against the order dated 28.11.2011 passed by the learned Principal District Judge -cum -Chairman, Motor Accidents Claims Tribunal, Srikakulam ('the Tribunal', for short) in E.P. 79 of 2011 in M.V.O.P. No. 144 of 2008. The issue involved in the revision is in regard to the correctness or otherwise of the income tax deducted [or to be deducted] at source, the position of law and the correct procedure that ought to be followed by the Insurance Company at the time of the deduction of tax at source from the amount of compensation/interest awarded to the claimant/s by the Motor Accidents Claims Tribunal under the provisions of the Motor Vehicles Act.

(2.) THE facts necessary for consideration for the disposal of the present revision petition and the relevant exposition of law, in brief, are as follows: "The claim petition filed by the 1st respondent/claimant/Decree Holder was allowed by the Tribunal and compensation was awarded to the claimant. After the award had attained finality, the National Insurance Company/Judgment Debtor/Revision Petitioner herein had deposited certain amount towards part satisfaction of the awarded compensation amount along with interest and costs to the credit of the Original Petition before the Tribunal. However, while making such deposit, the Insurance Company had deducted certain sum towards Income Tax Deductible at Source ('TDS' for short). In fact, the Insurance> Company in its calculation shown in the execution proceedings had admitted that a sum of Rs. 19,626/ - was deducted towards TDS and that apart a balance amount of Rs. 13,898/ - is still to be deposited by it towards the balance decree debt. However, the Decree Holder disputed inter alia such tax deduction at source as contrary to Law and not correct. The Tribunal having followed the Division Bench decision of the High Court of Gujarat in the case of Hansaguri Prafulchandra Ladhani and Others v. Oriental Insurance Company Limited and others : 2007 ACJ 1897 negatived inter alia the contention of the insurance Company that its action in deducting the income tax at source is correct. Accordingly, the Tribunal had directed the Insurance Company and also the Decree Holder to file fresh calculation memos in the execution proceedings in accord with the directions in the orders, which are impugned, so that a further direction, to deposit the balance amount, if any, can be given to the Insurance Company, after hearing on such memos. Aggrieved of the orders of the Tribunal to the extent and to the effect that the deduction of income tax by the Insurance Company was against Law, the Insurance Company had preferred the present Revision Petition.

(3.) I have heard the submissions of the learned counsel for the revision petitioner/Insurance Company. None appeared for the decree holder, though notice was served. The learned counsel submitted that there are successive pronouncements of this Court in support of the case of the Insurance Company and that, therefore, the Tribunal had erred in following the decision of the High Court of Gujarat.