THE ORIENTAL INSURANCE CO. LTD.versusJACINTA SEQUIRA AND ANR

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                      Shabnoor
                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                         CIVIL APPELLATE JURISDICTION

                                       WRIT PETITION NO.12184 OF 2018

                      The Oriental Insurance Co. Ltd.              … Petitioner
SHABNOOR
AYUB                             V/s.
PATHAN                Jacinta Sequira & Anr.                       … Respondents
Digitally signed by
SHABNOOR AYUB
PATHAN
Date: 2026.09.21
17:18:46 +0530        Mr. Devendranath S. Joshi, for the Petitioner.
                      Mr. S. R. Gupta, for Respondents.


                                                  CORAM      : AMIT BORKAR, J.

                                                  DATED      : SEPTEMBER 21, 2026
                      P.C.:

                      1.      The present petition takes exception to the order passed by
                      the learned Member of the Motor Accident Claims Tribunal,
                      Maharashtra, whereby a warrant of attachment has been issued
                      against the petitioner for recovery of an amount of Rs.5 lakh.

                      2.      It is not in dispute that the amount of Rs.5 lakh represents
                      the interest component payable by the insurer to the claimant
                      under the award. The petitioner, however, failed to deposit the said
                      amount before the Tribunal. Instead, the petitioner deposited the
                      said amount with the Income Tax Department towards deduction
                      of tax at source (TDS), on the ground that the said interest amount
                      was liable to be subjected to income tax.

                      3.      The question as to whether the interest component forming
                      part of the compensation awarded in a motor accident claim is
                      liable to income tax is no longer res integra. The said issue stands



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squarely covered by the judgment of the Division Bench of this
Court in Rupesh Rashmikant Shah v. Union of India and Others ,
reported in 2019 (5) ABR 497.

4.    In the said judgment, the Division Bench has specifically held
that the interest awarded in motor accident claims, from the date
of filing of the claim petition till the passing of the final order, or
the interest awarded up to the date of the award passed by the
Trial Court or the final judgment of the High Court in appeal, is
exempt from tax.

5.    In view of the aforesaid settled legal position, the petitioner
was not justified in deducting the interest component towards
income tax. Consequently, the petitioner could not have treated
the said amount as TDS payable to the Income Tax Department
instead of depositing the same with the Tribunal for payment to
the claimant.

6.    In view of the judgment of the Division Bench in Rupesh
Rashmikant Shah (supra), the order impugned in the present
petition cannot be said to suffer from any legal infirmity. The
issuance of the warrant of attachment for recovery of the amount
payable to the claimant therefore calls for no interference.

7.    The petitioner is consequently liable to pay the amount of
Rs.5 lakh to the claimant in terms of the award. However, since an
amount of Rs.5,41,838/- has been deposited with the Income Tax
Department towards TDS in relation to the compensation amount
payable to the claimant, the petitioner shall be at liberty to seek
refund of the said amount from the Income Tax Department.



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8.    In the event the petitioner makes an appropriate application
for refund, the Income Tax Department shall process the same in
accordance with law and, if the petitioner is otherwise entitled to
such refund, shall refund the amount within a period of eight
weeks from the date of filing of such application.

9.    The writ petition is accordingly disposed of. There shall be
no order as to costs.

10.   The petitioner shall deposit the entire amount payable in
terms of the award passed by the Tribunal within a period of four
weeks from today.

11.   All pending interlocutory application(s), if any, stand
disposed of accordingly.


                                             (AMIT BORKAR, J.)




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