Order XXI Rule 43, 64 and 66 of CPC against 2nd Judgment - Debtor, for attachment of movable properties for realization of the decree amount, was ‘Allowed’.

Order XXI Rule 43, 64 and 66 of CPC against 2nd Judgment - Debtor, for attachment of movable properties for realization of the decree amount, was ‘Allowed’.

Even as per the decision in Hansaguri Prafulchandra Ladhani and others vs. Oriental Insurance Company Limited and others2 relied on by the revision-petitioner, the Insurance Company is under the obligation to furnish a Certificate to the claimant, as prescribed, to enable the claimant to avail the benefit of tax deduction at source or to claim refund of the tax as per law. In the case on hand, the Insurance Company did not discharge its obligation nor placed any proof before the Tribunal that the Insurance Company has remitted the said amount i.e., the disputed amount to the Income Tax Department towards Income Tax Deductible at Source (TDS) on the interest payable to the decree-holder.

HIGH COURT OF ANDHRA PRADESH

MONDAY ,THE TWENTY SEVENTH DAY OF FEBRUARY

TWO THOUSAND AND TWENTY THREE

PRSENT

THE HONOURABLE SRI JUSTICE B V L N CHAKRAVARTHI

CIVIL REVISION PETITION NO: 3598 OF 2016

Between:

1. UNITED INDIA INS CO LTD., DIVL MGR, ANANTHAPURAMU United

Indian Insurance Company Ltd.,

Ananthapuramu

...PETITIONER(S)

AND:

1. Y RANGA REDDY, ANANTHAPURAMU & ANR S/o. Chinnapa Reddy,

D.No. 12-115-B-3B, Sainagar,

Ananthapuramu

2. Divisional Engineer, 0/o S.E. (Operations)

A.P.S.E.B., Ananthapuramu

...RESPONDENTS

Counsel for the Petitioner(s): UPENDRA RAO MANUKONDA

Counsel for the Respondents: G VENUGOPAL REDDY

The Court made the following: ORDER

2023:APHC:6510

HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

****

CIVIL REVISION PETITION NO.3598 OF 2016

Between:

The Divisional Manager, United Indian Insurance Company

Limited, Ananthapuramu.

… Petitioner/Respondent No.2/J.Dr No.2

 Versus

1. Y.Ranga Reddy, S/o.Chinnapa Reddy, D.No.12-115-

B-3B, Sainagar, Ananthapuramu.

... Respondent/Petitioner/D.Hr

2. Divisional Engineer, O/o. S.E. (Operations),

A.P.S.E.B., Ananthapuramu.

 ... Respondent/Respondent No.1/J.Dr No.1

* * * * *

DATE OF ORDER PRONOUNCED : 27.02.2023.

SUBMITTED FOR APPROVAL:

 HON'BLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

1. Whether Reporters of Local Newspapers

 may be allowed to see the Order? Yes/No

2. Whether the copy of Order may be

 marked to Law Reporters/Journals? Yes/No

3. Whether His Lordship wish to see the

 fair copy of the Order? Yes/No

B.V.L.N.CHAKRAVARTHI, J

2023:APHC:6510

Page 2 of 10

* HON'BLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

+ CIVIL REVISION PETITION NO.3598 OF 2016

% 27.02.2023

# Between:

The Divisional Manager, United Indian Insurance Company

Limited, Ananthapuramu.

… Petitioner/Respondent No.2/J.Dr No.2

 Versus

1. Y.Ranga Reddy, S/o.Chinnapa Reddy, D.No.12-115-

B-3B, Sainagar, Ananthapuramu.

... Respondent/Petitioner/D.Hr

2. Divisional Engineer, O/o. S.E. (Operations),

A.P.S.E.B., Ananthapuramu.

 ... Respondent/Respondent No.1/J.Dr No.1

! Counsel for the Revision

 -petitioner/J.Dr No.2 : Sri Upendra Rao Manukonda

^ Counsel for the

 Respondent No.1/D.Hr : Sri G.Venugopal Reddy

^ Counsel for the

 Respondent No.2/

 J.Dr No.1 : Notice served to R.2/J.Dr No.1

 but, no Vakalat filed on his behalf.

< Gist:

> Head Note:

? Cases referred:

Civil Revision Petition No.3598 of 2016, dt.22.04.2014 on

the file of High Court of Andhra Pradesh.

This Court made the following:

2023:APHC:6510

Page 3 of 10

THE HON'BLE SRI JUSTICE B.V.L.N.CHAKRAVARTI

CIVIL REVISION PETITION NO.3598 OF 2016

O R D E R:

This Civil Revision Petition is directed under Section 115

of the Civil Procedure Code, 1908 (for brevity ‘CPC’) against the

Order, dated 04.07.2016 in E.P.No.5 of 2007 in O.P.No.445 of

2002 on the file of the I Additional District Judge,

Anantapuramu, where under the execution petition filed under

Order XXI Rule 43, 64 and 66 of CPC against 2nd Judgment -

Debtor, for attachment of movable properties for realization of

the decree amount, was ‘Allowed’.

2. The decree-holder filed E.P.No.5 of 2007 under Order XXI

Rule 43, 64 and 66 of CPC for attachment and sale of the E.P.,

schedule movable properties belonging to the judgment-debtor

No.2 i.e., the revision-petitioner herein, for recovery of a sum of

Rs.5,44,607/- as due under the decree in O.P.No.445 of 2002.

3. The revision-petitioner, who is the 2nd respondent/

Judgment-Debtor No.2, opposed the E.P. The contention of the

revision-petitioner is that the entire amount due under the

decree was deposited in the Tribunal. The contention of the

decree-holder is that the judgment-debtor No.2 i.e., the revision2023:APHC:6510

Page 4 of 10

petitioner deposited only a sum of Rs.4,03,342/- and therefore,

the revision-petitioner is still liable to pay a sum of Rs.99,123/-.

4. The decree-holder was examined as P.W.1 in the E.P.,

proceedings. No evidence was adduced for the Insurance

Company/revision-petitioner. During cross-examination of

P.W.1, a suggestion was made that the disputed amount was

deducted towards Income Tax Deductible at Source (for brevity

‘TDS’) payable on interest earned on the compensation amount

payable to the decree-holder. P.W.1 in the re-examination

deposed that he did not receive any information in writing from

the Insurance Company regarding deduction of amount towards

TDS payable on the interest earned on the compensation

amount payable to the decree-holder.

5. The Trial Court held that the Insurance Company did not

file any material establishing that the disputed amount was

paid to the Income Tax Department towards TDS payable on

interest and rejected the said contention of the Insurance

Company. The Tribunal allowed the execution petition ordering

attachment of the EP schedule movable properties belonging to

the Insurance Company, as the Insurance Company is still

liable to pay a sum of Rs.99,123/-.

2023:APHC:6510

Page 5 of 10

6. The learned counsel for the revision-petitioner submitted

that the Insurance Company is obligated to deduct income tax

at source on the amount of interest payable to the claimant

thereon accrued up to the date of payment or deposit as per

rules and therefore, the Insurance Company deducted the

disputed amount towards TDS on interest payable to the

claimant.

7. The learned counsel for the decree-holder submitted that

the Insurance Company did not furnish any information either

to the decree-holder or to the Tribunal to enable the decreeholder either to avail the benefit of tax payable at source or to

claim refund of the tax, as the case may be and therefore, in the

absence of any information, the Insurance Company is liable to

deposit the amount and therefore, the Trial Court did not

commit any error in its Order while allowing the execution

petition.

8. In the light of above contentions, the point for

consideration is as under:

“Whether the Executing Court committed any

irregularity in the Order, dated 04.07.2016 passed

in E.P.No.5 of 2007 in O.P.No.445 of 2002?”

2023:APHC:6510

Page 6 of 10

9. P O I N T:-

The Award amount as per the Order of this Court in

M.A.C.M.A.Nos.1297 and 1977 of 2007 is Rs.3,85,000/-. This

Court reduced the interest from 9% to 7.5% on the award

amount. Therefore, the interest from the date of petition i.e.,

18.12.2002 to till the date of Stay Order i.e.,18.10.2007 for a

period of 58 months at the rate of 7.5% per annum comes to

Rs.1,39,562/-. The total amount, including costs, due as on

18.10.2007 is Rs.5,27,719/-. The Insurance Company deposited

a sum of Rs.25,000/- at the time of filing appeal and later

deposited another sum of Rs.2,42,825/- as per Stay Order on

22.10.2007. The total amount deposited by the Insurance

Company as on 22.10.2007 is Rs.2,67,825/-. Therefore, the

outstanding amount as on 22.10.2007 is Rs.2,59,894/-; The

Insurance Company is liable to pay the said sum with interest

at 7.5% per annum from 23.10.2007 to till the date of deposit

i.e., 23.02.2015 for a period of 88 months; The interest on the

said sum of Rs.2,59,894/- for the said period is of

Rs.1,42,941/-. Hence, the total amount due is Rs.4,03,342/-

including EP costs of Rs.507/-. The amount deposited by the

Insurance Company on 13.04.2015 is Rs.3,04,219/-. Therefore,

the amount due as on 13.04.2015 is Rs.99,123/-. The

contention of the Insurance Company that a sum of

2023:APHC:6510

Page 7 of 10

Rs.41,266/- (Rs.33,044 + Rs.8,222) was deducted towards

Income Tax payable on interest. Hence, the Insurance Company

is still liable to pay a sum of Rs.57,857/-.

10. It is not the case of the Insurance Company/revisionpetitioner that it has furnished a Certificate to the claimant

either under Form No.16A or of such form as may be prescribed

applicable to the case intimating him the details of the TDS and

to enable him either to avail the benefit of tax deducted at

source or to claim refund of the tax. The Insurance Company

also did not produce any evidence before the Tribunal during

enquiry of the execution petition to substantiate its claim

regarding deduction of the disputed amount towards TDS on

interest payable to the decree-holder.

11. As per law, the Insurance Company is obligated to deduct

tax at source from the amount of interest only, if only, the

amount of interest payable to each claimant, if it exceeds the

amount prescribed in vogue at the relevant point in time. But,

in the case on hand, though the Insurance Company claimed

that they have deducted a sum of Rs.99,123/- towards TDS on

interest payable to the decree-holder, did not adduce any

evidence to prove its case. It also did not inform the decreeholder nor furnished the Certificate, as may be prescribed, to

2023:APHC:6510

Page 8 of 10

enable him to avail the benefit of tax deducted at source or to

claim refund of tax.

12. This Court in The National Insurance Company

Limited, represented by its Divisional Manager,

Visakhapatnam vs. Yeliminti Appanna and another1 held

as under:

“6. To sum up, the Tribunals have to take note of

the following guidelines while dealing with the aspect

of determination of correctness or otherwise of the TDS

(Tax Deducted at Source) in cases of Motor Accident

Compensation claims.

(1) The person or insurance company paying

or depositing the compensation is not obligated to

deduct any income tax at source on the actual

compensation amount awarded.

(2) Such person or insurance company is

obligated to deduct tax at source from the amount of

interest only, if only, the amount of interest payable to

each claimant exceeds Rs.50,000/-. However, such

lump sum interest amount that had accrued up to the

date of payment or deposit can be taken into

consideration in case of each such claimant for

purpose of TDS and such lump sum interest arrived at

in case of each claimant need not be spread over on

annual basis even in cases where the interest accrued

and payable relates to a period of more than one year.

1 Civil Revision Petition No.994 of 2012, dated 22.04.2014.

2023:APHC:6510

Page 9 of 10

(3) In a case where the claimant is an income

tax assessee and is having a PAN and furnishes the

required details, then, in case of such a claimant, the

percentage of deduction of tax at source shall be at the

rate of 10%. But, where such claimant is not having a

PAN and also fails to furnish the required form, in case

of such claimant, the deduction of tax at source shall

be at the rate of 20%. Thus, in cases where the Decree

Holder/claimant concerned fails to submit the PAN or

the required form to the Insurance Company or the

payer, as the case may be, then the TDS shall be at

the rate of 20%, at present.

Be it noted that in case a claimant furnishes a

declaration, on Form No.15G of R.29C of the IT Rules

in terms of Section 197 (1A) of the IT Act or such other

declaration on such Form as may be applicable, for

each financial year, either to the person concerned or

in the office of insurance company, in such a case the

person/the insurance company is relieved of his/its

obligation of payment of TDS.

It is appropriate to mention that the TDS deducted on

interest shall be deposited within the statutory period

and the Person/the insurance company shall also file

either the quarterly return or such return as

prescribed and applicable to the case and shall furnish

to the claimant a certificate either on Form No.16A or

on such form as may be prescribed and applicable to

the case to enable the claimant to either avail the

benefit of the tax deducted at source or to claim refund

of the tax as the case may be.”

2023:APHC:6510

Page 10 of 10

13. Even as per the decision in Hansaguri Prafulchandra

Ladhani and others vs. Oriental Insurance Company

Limited and others2 relied on by the revision-petitioner, the

Insurance Company is under the obligation to furnish a

Certificate to the claimant, as prescribed, to enable the claimant

to avail the benefit of tax deduction at source or to claim refund

of the tax as per law. In the case on hand, the Insurance

Company did not discharge its obligation nor placed any proof

before the Tribunal that the Insurance Company has remitted

the said amount i.e., the disputed amount to the Income Tax

Department towards Income Tax Deductible at Source (TDS) on

the interest payable to the decree-holder.

14. In that view of the matter, this Court is of the considered

opinion that there are no grounds to interfere with the Order of

the Tribunal. Consequently, the CRP is to be dismissed.

15. In the result, the Civil Revision Petition is ‘Dismissed’.

There shall be no order as to costs.

As a sequel, miscellaneous applications pending, if any,

shall stand closed.

B.V.L.N.CHAKRAVARTHI, J

27th February, 2023.

DNB

2 2007 ACJ 1897.

2023:APHC:6510