United India Insurance Company Ltd. V. Smt. Hira Dassi and Anr.

CMPMO/596/2024

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In this case, United India Insurance Company Ltd. filed a petition challenging an order by the Employee's Compensation Commissioner, Shimla, which had directed the insurer to pay a compensation amount to the claimant, Smt. Hira Dassi, without any deductions. The insurer had initially deducted TDS from the compensation amount, which led to the execution petition by the claimants. The executing court ruled that TDS should not be deducted from the compensation amount, leading to the current petition by the insurer. The Department of Income Tax, represented in the proceedings, acknowledged that TDS should not have been deducted and agreed to refund the amount once the petitioner completed the necessary formalities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 686707 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 01-04-2025
• Assessment Year: misc
• Laws Referred To: Employee's Compensation Act, Motor Vehicles Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: N D SHARMA; NEERAJ SHARMA; ISHAN KASHYAP
• Assessee Lawyers: JAGDISH THAKUR
• Keywords: Compensation; Execution petition; TDS Deduction; Employee's Compensation Commissioner
• Section: 45-10

Judgement Text

" ( 2025:HHC:8615 ) IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CMPMO No. 596 of 2024. Decided on : 1 st April, 2025. United India Insurance Company Ltd. ...Petitioner. Versus Smt. Hira Dassi & Anr. ....Respondents. Coram: The Hon’ble Mr. Justice Satyen Vaidya, Judge. Whether approved for reporting?1 For the Petitioner: Mr. Jagdish Thakur, Advocate. For the respondents: Mr. N.D. Sharma, Advocate, for respondent No.1. Mr. Neeraj Sharm and Mr. Ishan Kashyap, Advocate, for respondent No.2. Satyen Vaidya, Judge (Oral). By way of this petition, the petitioner has prayed for following reliefs:- “It is, therefore, respectfully prayed that this petition may very kindly be allowed and the impugned order dated 17.09.2024 as contained in Annexure P-5 passed by the learned Employee’s Compensation Commissioner (CJM), Shimla at Shimla, H.P. in Execution Petition No. 45-10 of 2022, titled as Smt. Hira Dassi vs. United India Insurance Company Limited & Ors may very kindly be quahsed and set aside and the petitioner may be held not liable to pay any further sum towards compensation amount to the respondent/petitioner or in alternate 1 Whether reporters of the local papers may be allowed to see the judgment? after allowing the application separately moved by the petitioner for impleadment of The Commissioner of Income Tax (TDS), Aayakar Bhawan, Bay No. 43 to 48, Sector-2, Panchkula, Haryana as respondent No.2 may directed to refund the amount of Rs./1,40,023/- along with interest to enable the petitioner to deposit the same in the present case or this Hon’ble Court may please to pass any such or further order which may be deemed just and proper in the facts and circumstances of the case.” 2. The petitioner/insurer has suffered an Award passed by the Employees’ Compensation Commissioner, Shimla. The claimant/respondent No.2 was held entitled to compensation, to be paid by the petitioner/insurer. The amount of compensation was paid to the claimant by the petitioner/insurer after deducting TDS to the tune of Rs.1,40,023/-. 3. The claimants preferred execution petition on the premise that the amount of TDS could not have been deducted from compensation awarded in their favour. In execution, learned executing Court passed the order dated 17.09.2024 in following terms:- “In view of above discussed settled legal position, it can be said that the JD is not entitled to deduct TDS on the interest payable on the compensation amount. In other words, the JD has not fully complied with the …2… ( 2025:HHC:8615 ) Award dated 06.10.2021 passed by this Court in Petition No. 90011/2015 under Employee’s Compensation Act. Let, therefore, warrant of attachment of movable or immovable property of JD be issued on taking steps within 15 days and report be awaited for 21.10.2024.” 4. In this backdrop, the instant petition has been filed for the reliefs as noticed above. 5. Mr. Neeraj Sharma, Advocate, is representing respondent No.2 i.e. Department of Income Tax, who has been impleaded as respondent by this Court vide order dated 26.12.2024. Learned counsel for respondent No.2 has fairly submitted that as per the settled legal position, income tax is not to be deducted by way of TDS from the amount allowed in favour of the victim as compensation under the Motor Vehicles Act or the Employees Compensation Act. He submits that the insurer i.e. petitioner in the instant petition has deducted the TDS and now in order to rectify the records as per the procedure, the petitioner herein has been communicated the requirements for refund of the TDS amount and as soon as the said requirements are fulfilled, respondent No.2 shall immediately refund the amount. …3… ( 2025:HHC:8615 ) 6. In view of the stand taken on behalf of respondent No.2, this petition is disposed of with direction to petitioner to complete the necessary formalities in accordance with the Rules at the earliest and respondent No.2 is directed to refund the amount deducted as TDS to the petitioner within one week from the date of completion of formalities by petitioner. 7. It is noticed that in compliance to order dated 06.10.2024, the petitioner/insured as deposited a sum of Rs. 1,90,815/- in the Registry of this Court. In view of the disposal of this petition in the aforesaid terms, no fruitful purpose shall be served by retaining the said amount in the Registry. Accordingly, the same is ordered to be released in favour of claimants/respondent NO.1 on her furnishing the details about her bank account to the Registry, after due verification. (Satyen Vaidya) Judge 1st Apirl, 2025. (jai) …4… ( 2025:HHC:8615 ) "