Pitambar Pradhan & Anr. V. New India Assurance Co. Ltd., Cuttack

WP(C)/21218/2024

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The case involves a dispute over the withholding of a compensation amount of \\u20b91,35,065 by the New India Assurance Co. Ltd. from the total compensation awarded to the Petitioners, Pitambar Pradhan and another, in a motor accident claim. The accident resulted in the deaths of Muliram Pradhan and his son, Tuku Pradhan, leading to a compensation claim under the Motor Vehicles Act. The Tribunal awarded a compensation which was later partially paid by the Insurance Company after deducting TDS as per Section 194A of the Income Tax Act. The Petitioners contested the deduction and the delay in receiving the full compensation amount, leading to this writ petition under Articles 226 and 227 of the Constitution of India.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 798146 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 11-04-2025
• Assessment Year: misc
• Other Referred Cases: Concord of India Insurance Co. Ltd. v. Nirmala Devi, Bai Damiyanti Jayantibhai Sharma v. United India Insurance Co. Ltd
• Laws Referred To: Articles 226 and 227 of the Constitution of India, 1950, Motor Vehicles Act, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: G P DUTTA
• Assessee Lawyers: P K MISHRA
• Keywords: Compensation; Motor Accident Claims Tribunal; Natural Justice; Statutory deduction; TDS Deduction
• Section: 194A

Judgement Text

" Page 1 of 9 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 21218 of 2024 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). Pitambar Pradhan & Anr. …. Petitioner(s) -versus- The Divisional Manager, New India Assurance Co. Ltd., Cuttack …. Opposite Party (s) Advocates appeared in the case through Hybrid Mode: For Petitioner(s) : Mr. P. K. Mishra, Adv. For Opposite Party (s) : Mr. G. P. Dutta, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-25.03.2025 DATE OF JUDGMENT:-11.04.2025 Dr. S.K. Panigrahi, J. 1. The present Writ Petition concerns the withholding of a sum of ₹1,35,065/- from the total compensation awarded to the Petitioners in MAC Case No. 155 of 2002 by the learned 2nd Motor Accident Claims Tribunal (MACT), (Northern Division), Sambalpur vide award dated 31st December, 2024, which had been confirmed in MACA No.780 of 2015 by this Court. I. FACTUAL MATRIX OF THE CASE: 2. The brief facts of the case are as follows: Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 2 of 9 (i) The deceased individuals, Muliram Pradhan and his son Tuku Pradhan, tragically lost their lives in a road accident on 06.05.2001, while travelling in a tempo bearing registration number OR-06-D-2140. The accident occurred due to the rash and negligent driving of the tempo driver, resulting in a head-on collision with an incoming truck (registration no. OR-05-E-6595). (ii) Following the accident, the legal heirs of the deceased filed a claim petition before the 2nd MACT, Sambalpur, which was later transferred to the 1st MACT, Dhenkanal, and renumbered as MAC No. 155 of 2015, seeking compensation for the untimely and wrongful deaths. (iii) On 31.12.2014, the MACT allowed the claim petition and directed the Opposite Party–Insurance Company to pay a sum of ₹5,45,800/- along with interest at the rate of 6% per annum from the date of application, i.e., 11.07.2002, until the date of realization. (iv) This award was subsequently challenged by the Insurance Company in MACA No. 780 of 2015, which was dismissed by this Court on 05.01.2022, thereby affirming the Tribunal’s award in its entirety. (v) Following the dismissal of the appeal, the Insurance Company initially issued a single cheque for ₹10,59,785/- in favour of all the claimants. However, the Tribunal returned this cheque, directing the Company to issue separate cheques to each claimant. While the cheques were drawn on 14.09.2023, they were only deposited with the Tribunal on 16.10.2023, resulting in an unexplained delay. (vi) Based on their calculation, the petitioners submitted that the total amount payable, including 6% interest from 11.07.2002 to 01.02.2023, Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 3 of 9 stood at ₹11,94,850/-. However, only ₹10,59,785/- was paid by the insurer, leaving a shortfall of ₹1,35,065/-, for which no justification or legal explanation was provided. (vii) Consequently, the petitioners approached the Tribunal on 05.02.2024, seeking a direction to the Insurance Company to release the withheld amount. Despite repeated representations, the application remains pending without disposal. (viii) In response, the Insurance Company has disputed the petitioners' computation, asserting that the correct total compensation inclusive of interest is ₹11,88,281/-, and not the higher figure claimed by the petitioners. (ix) Out of this amount, the Company states that ₹1,28,496/- was deducted as TDS under Section 194A of the Income Tax Act, since the interest component exceeded ₹50,000/-, triggering mandatory tax deduction at source. This, according to the Company, was done in strict compliance with statutory requirements. (x) Therefore, the Insurance Company maintains that the net amount of ₹10,59,785/-, after deducting TDS, has been duly deposited with the Tribunal, and no further amount is outstanding. It does not dispute the procedural history or the finality of the award, but contends that its actions post-award are in accordance with prevailing tax laws and do not amount to any violation of the Tribunal’s or Court’s directives. II. SUBMISSIONS ON BEHALF OF THE PETITIONER(S): 3. Learned counsel for the Petitioner(s) earnestly made the following submissions in support of his contentions: Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 4 of 9 (i) The Petitioners contend that the Opposite Party Insurance Company has arbitrarily and illegally withheld ₹1,35,065/-, without citing any justification, in direct contravention of the orders passed by both the MACT and the High Court. (ii) It is submitted that the insurance company was not legally entitled to make deductions from the awarded compensation amount without prior permission or direction of the court or the tribunal. This act, according to the Petitioners, amounts to a violation of the principles of natural justice. (iii) The Petitioners assert that the computation of interest on the awarded sum was clear and straightforward, and any deviation from the total amount payable constitutes non-compliance with the judicial directions. (iv) The failure of the learned Tribunal to take up or decide the petition dated 05.02.2024 despite repeated approaches by the Petitioners amounts to denial of justice and delay in enforcing a valid and final decree of the court. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY(S): 4. The Learned Counsel for the Opposite Party(s) earnestly made the following submissions in support of his contentions: (i) The Insurance Company strongly contends that it was legally bound to deduct TDS on the interest component since it exceeded the threshold of ₹50,000, in accordance with Section 194A of the Income Tax Act. Therefore, the alleged “shortfall” claimed by the petitioners is not an arbitrary deduction but a statutory deduction. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 5 of 9 (ii) It is asserted that the Insurance Company, being a public sector undertaking, operates within the framework of law and is duty-bound to comply with statutory tax obligations. Any non-deduction of TDS would attract consequences under the Income Tax Act. (iii) The Opposite Party refutes the allegation that its actions violate the directions of the MACT or the High Court. It reiterates that there was no violation of judicial orders, as the entire due amount, after legitimate statutory deductions, was deposited. (iv) As a conciliatory gesture, the Opposite Party offers that if the petitioners submit their PAN and Aadhaar card details, the Company would be willing to revise the TDS return (TDR), thereby ensuring that the deducted TDS reflects in the PAN accounts of the respective claimants and is available for credit or refund through the Income Tax Department. (v) The Insurance Company maintains that the petitioners never objected before the Tribunal about TDS, nor has the Tribunal found any violation of orders by the Insurance Company. Therefore, the grievance raised through this writ petition is unwarranted and ought to be rejected. IV. COURT’S REASONING AND ANALYSIS: 5. Heard Learned Counsel for parties and perused the documents placed before this Court. 6. An important facet of the Motor Vehicles Act lies in its character as a piece of welfare legislation. It is not merely a statutory framework for regulation of road transport or for enforcement of traffic norms. It is Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 6 of 9 equally an instrument of social justice designed to mitigate the hardship and financial ruin that often follow in the wake of motor accidents. The legislation serves as a remedial mechanism, particularly for those who suffer loss of life or limb, or for dependents of persons who meet with untimely deaths due to motor accidents. The guiding principle must, therefore, be that where the statute seeks to alleviate hardship and offer restitution, the approach must be purposive and liberal. The quantum of compensation should be so determined as to ensure that the victim or the bereaved family is able to preserve at least a semblance of the life that has been disrupted. 7. This view has found affirmation in the decisions of the Supreme Court as well as various High Courts in a series of authoritative pronouncements. A notable illustration is the case of Concord of India Insurance Co. Ltd. v. Nirmala Devi1, wherein it was held as follows: “The jurisprudence of compensation for motor accidents must develop in the direction of no-fault liability and the determination of the quantum must be liberal, not niggardly since the law values life and limb in a free country in generous scales.”(Emphasis supplied) 8. It is now a settled principle that the establishment of specialised tribunals under the Motor Vehicles Act is not merely a procedural innovation but a deliberate departure from the rigidity of ordinary civil litigation. The legislative design is animated by a conscious recognition of the gap that often exists between legal formalism and the lived realities of those who suffer personal tragedy due to road accidents. The 1 (1979) 4 SCC 365. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 7 of 9 object of the statute is not to entangle victims in the labyrinth of procedural technicalities but to provide a forum where justice is responsive, accessible, and effective. In this light, in one of its notable pronouncements, the Gujarat High Court, while addressing this concern in the case of Bai Damiyanti Jayantibhai Sharma v. United India Insurance Co. Ltd2., observed as under: “The disposal of a claim petition for a fatal accident which has taken place as back as 1984 after expiry of period of 10 to 11 years and further rigmarole of appeal to the higher Courts and grant of stay of the judgment and award of Tribunal in absolute terms requires immediate attention and self-searching exercise. Every Judge worth his name shall have to put a question to himself as to whether by hearing and deciding the petition for compensation of helpless widow, aged parents or helpless orphans or minor children for the death of the only bread- earner of the family after a period of one decade is in fact doing justice or it is merely a promise of unreality or teasing illusion or a mirage of justice, which keep or at times kill those helpless dependents without a penny, in the fond hope that some day in this life justice will be done to them. In the developed countries, claim petitions which are tried by special Courts are heard and decided within three months from the date of the mishap or accident and the amount of compensation is received directly from the insurance company or the person responsible maximum within six months.” (Emphasis Supplied) 9. When the deceased happens to be the sole bread earner for a family, his sudden demise is not just a personal loss but an economic catastrophe for the survivors. The widow who struggles to make ends meet, the elderly parents who are left without care, and the minor children who 2 (1996)2 GLR 418. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 8 of 9 are deprived of education and sustenance all stand before the law not as claimants of monetary relief but as seekers of subsistence and dignity. If this Court subjects such claimants to prolonged adjudication, where procedural precision overshadows substantive justice, it is akin to allow the law to lose sight of its moral purpose. 10. If this Court applies the established principles and the abovementioned precedents to the case in hand, the delay in final disbursement of the awarded compensation assumes significance far beyond a mere computational dispute. The accident in question occurred in the year 2001. It has now been more than two decades since the unfortunate demise of the deceased, who were father and son. Their surviving family members, who are the petitioners in this writ petition, have since then been caught in a prolonged cycle of litigation, administrative delay, and procedural oversight. From the date of filing of the claim application in 2002 to the present, we now stand in the year 2025; over twenty-three years have elapsed. 11. It is not in dispute that the Motor Accident Claims Tribunal has already passed an award, which has attained finality after dismissal of the appeal by this Court. The only surviving issue concerns the balance amount of ₹1,35,065/-, which the petitioners claim remains unpaid. Whether this amount was withheld in accordance with law, specifically as a statutory deduction under Section 194A of the Income Tax Act, or was withheld without legal sanction, is a matter that must be determined by the Tribunal without further delay. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified Page 9 of 9 V. CONCLUSION: 12. Accordingly, the Writ Petition is allowed and this Court directs the learned Motor Accident Claims Tribunal, Dhenkanal, to take up the pending petition dated 05.02.2024 filed by the Petitioners and dispose of the same in accordance with law within a period of two months from the date of receipt of copy of this judgment. 13. Interim order, if any, passed earlier stands vacated. (Dr.S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 11th April, 2024/ Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 15-Apr-2025 16:40:33 Signature Not Verified "