Oriental Insurance Must Pay Rs 5 Lakh Interest

Authority: High Court of Judicature at Bombay (Civil Appellate Jurisdiction)

Order Date: 21 September 2026

Case Overview

• Petitioner: Shabnoor Ayub Pathan filed writ petition No.12184 of 2018 challenging a warrant of attachment issued by the Motor Accident Claims Tribunal, Maharashtra, for recovery of Rs 5 lakh interest component of a motor accident compensation award.
• Respondent: The Oriental Insurance Co. Ltd.
• Issue: Whether the interest component payable under the award is liable to income‑tax deduction at source (TDS). Petitioner had deposited Rs 5,41,838 with the Income Tax Department as TDS.
• Legal precedent: Division Bench judgment in Rupesh Rashmikant Shah v. Union of India (2019 (5) ABR 497) held that interest awarded in motor accident claims is exempt from tax.
• Court’s reasoning: The settled legal position makes the petitioner’s deduction of TDS unjustified; therefore the warrant of attachment is valid.

Final Outcome

• The warrant of attachment stands; Oriental Insurance must pay the Rs 5 lakh interest to the claimant within four weeks from the order date.
• The petitioner may apply to the Income Tax Department for refund of the Rs 5,41,838 TDS already deposited; the department must process the refund within eight weeks of the application, if the petitioner is entitled.
• No order as to costs; the writ petition is disposed.

Topics: Legal Precedent, Taxation, Insurance Claims