THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN C.R.P.No.4809 OF 2009 DATE: 22-2-2010 Between: The New India Assurance Company Limited, Srikakulam … Petitioner And 1. Savara Paramma and 3 others .. Respondents THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN C.R.P.No.4809 OF 2009 ORDER: Aggrieved by the order passed by the District Judge & Motor Accidents Claims Tribunal, Srikakulam, in E.P.No.24 of 2007 in O.P.No.507 of 2004 dated 13.2.2008, the present revision is filed. E.P.No.24 of 2007 was filed by the petitioners – decree holders pursuant to the decree in M.V.O.P.No.507 of 2004 dated 11.5.2007 for attachment of the movables available in the 2nd respondent’s office and to sell the same and deposit the E.P. amount of Rs.11,17,907-00 with subsequent interest and for costs. Along with the counter affidavit the petitioner herein filed a calculation memo stating that they had deposited Rs.11,02,218-00 after deducting Rs.11,269-00 and Rs.7,968/- towards income tax at 10.3% on Rs.1,09,410/- being interest accrued on Rs.4,24,272- 00 apportioned to the share of the 1st petitioner and TDS at 10.3% on Rs.77,363/-, the interest accrued on Rs.3,00,000/- apportioned to the share of the 2nd petitioner for the period from 11.3.2004 to 17.8.2007. Relying on the judgment of the Gujarat High Court in Hansguri Prafulchandra Ladhani v. Oriental Insurance Company Ltd.[1] the Learned District Judge held that interest on compensation could not be taken to have accrued year after year from the date of filing of the claim application till the date of deposit; the interest accrued had to be calculated on an yearly basis and apportioned amongst the claimants; the income tax liability of each claimant to pay tax on interest accrued on his/her share of compensation would arise if such interest income in each financial year together with his/her other income in that year, exceeded the taxable limit for that year. The Court below observed that, since in the judgment of the High Court the Income Tax Department was a party, the claimants were directed to obtain necessary refund from the Income Tax Department; E.P.No.24 of 2007 was filed prior to deposit of the decretal amount on 27.9.2007; in view of the judgment of the Gujarat High Court the amount deducted towards income tax by the judgment debtor was liable to be paid to the decree holder; and the judgment debtor was liable to pay the amount for which the E.P. was filed. The petitioner herein was directed to deposit the balance amount with interest failing which the decree holder was held entitled to proceed with the execution petition. Sri T.Ramulu, Learned Counsel for the petitioner, would contend that, since the petitioner herein had deducted TDS from out of the interest component of the compensation and had paid the same to the Income Tax Department, the only remedy available to the respondents- claimants was to file an application before the concerned Income Tax authority seeking refund of the income tax component deducted earlier as TDS. He would submit that the Gujarat High Court, in Hansguri Prafulchandra Ladhani1, had issued a similar direction to the claimants. Learned counsel would also rely on New India Assurance Co. Ltd v. Mani[2] wherein the Madras High Court held that the claimants were at liberty to approach the concerned authority for spreading the income over the period for which payment of interest came to be made so that the income for the purpose of assessing tax for the relevant assessment year could be computed and, in case the petitioner was not liable to pay income tax on that score, there was a possibility of the petitioner getting refund of the amount. The Madras High Court further held that it was not within the power of the executing court to direct the insurance company not to deduct TDS and pay the entire amount thereby compelling the insurance company to commit an illegal act violating statutory provisions. Sri A.Rama Rao, Learned Counsel for the respondents, would contend that, pursuant to the orders under revision, the petitioner herein had already deposited the TDS component before the Court below and the respondent- claimants had already withdrawn the said amount. Learned Counsel would submit that, instead of leaving it open to the respondents to seek refund from the Income Tax Department, this Court should direct the petitioner to claim refund from the Income Tax Department. I am afraid I cannot agree. As rightly held by the Gujarat and Madras High Courts, income tax payable by each of the claimants would arise only on the interest from compensation having accrued year after year from the date of filing of the claim application till the date of deposit. It is for the claimants to approach the concerned Income Tax authority and request that the income be spread over the period for which payment of interest came to be made so that the income, for the purpose of assessing tax for the relevant assessment year, could be computed. The Court below has exceeded its jurisdiction in directing the petitioner to deposit the TDS amount deducted from the compensation payable to the respondents-claimants. Sri T.Ramulu, Learned Counsel for the petitioner, would submit that the petitioner had already paid the TDS amount deducted from the respondents – claimants to the Income Tax Department and, as a result of the order of the court below, the petitioner has been mulcted with the liability with regards the TDS amount twice i.e., payment of the said amount both to the Income Tax Department and to the respondents – claimants. As the order of the court below suffers from a patent error of law, and is without jurisdiction, the said order necessitates being set aside. The order in E.P.No.24 of 2007 in O.P.No.507 of 2004 on the file of the District Judge & Motor Accidents Claims Tribunal, Srikakulam dated 13.2.2008 is set aside. It is, however, open to the claimants to approach the Income Tax authorities and make a claim for spread over of the interest and, in case there is no income tax liability, to claim refund. The C.R.P. is, accordingly, allowed. ____________ 22-2-2010 ASP [1] 2007 ACJ 1897 [2] (2004) Vol.270 ITR 394