State Consumer Disputes Redressal Commission
National Insurance Company Ltd. vs Balwant Singh Son Of Bhagwan Dass on 29 April, 2011
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
S.C.O. NO. 3009-10, SECTOR 22-D, CHANDIGARH.
Revision Petition No.73 of 2010
Date of institution : 11.10.2010
Date of decision : 29.4.2011
National Insurance Company Ltd. having its Regional Office at SCO No.332-334,
Sector 34-A, Chandigarh through its Manager and duly constituted attorney Shri
Manmohan Singh Kalsi, Manager.
.......Petitioners
Versus
Balwant Singh son of Bhagwan Dass, resident of House No.250-A, Beant Nagar,
Jalandhar.
......Respondent
Revision Petition against the order dated 26.7.2010
and 15.9.2010 passed by the District Consumer
Disputes Redressal Forum, Jalandhar.
Before :-
Hon'ble Mr. Justice S.N. Aggarwal President.
Mrs. Amarpreet Sharma, Member.
Mr. B.S. Sekhon, Member.
Present :-
For the petitioners : Shri P.S. Saini, Advocate with Shri Parminder Singh, Advocate.
For the respondent : Ms. Dilraj Kaur, Advocate for Sh. K.C. Malhotra, Advocate.
JUSTICE S.N. AGGARWAL, PRESIDENT:
Balwant Singh respondent had filed a complaint (Complaint No.52-DF of 2004) against the petitioners. It was contested by the petitioners. It was accepted by the learned District Consumer Disputes Redressal Forum, Jalandhar (in short "District Forum") vide judgment dated 12.9.2005 (Annexure P-1) by passing the following operative order:-
"15. As such, we allow the complaint to the extent of Rs.1,55,000/- as assessed by the surveyor with 8% interest from the date of the complaint till payment. Complainant is also awarded Revision Petition No.73 of 2010. 2 Rs.2,000/- as cost of litigation expenses. Interest would serve as compensation. Compliance of the order be made within one month from the receipt of the copy of this order. Copies of the order be sent to the parties free of costs under the rules. File be consigned to the record room."
2. The petitioners made the payment of Rs.1,55,000/- as principal amount. The interest amount came to be Rs.65,783/-. The petitioners deducted the TDS on the interest amount at the rate of 20% to the tune of Rs.13,157/-. The petitioners, therefore, deposited a sum of Rs.1,84,626/- in the District Forum.
3. The respondent filed an application for seeking the amount of Rs.13,157/- which was deducted by the petitioners on account of tax deducted at source. The petitioners had taken the plea that under the income tax law they were bound to deduct this amount as tax deductions at source. However the learned District Forum vide impugned order dated 26.7.2010 directed the petitioners to refund the amount of Rs.13,157/- to the respondent. The petitioners had also filed an application in the District Forum for review and that application was dismissed by the learned District Forum vide impugned order dated 15.9.2010.
4. Hence the petition.
5. Submission of the learned counsel for the petitioners was that the income tax amount of Rs.13,157/- on the interest amount of Rs.65,783/- was deducted by the petitioners in accordance with law and, therefore, the petition be accepted and the impugned orders dated 26.7.2010 and 15.9.2010 be set aside.
6. On the other hand, the submission of the learned counsel for the respondent was that there was no merit in the present petition and the same be dismissed.
7. Record has been perused. Submissions have been considered.
8. The admitted facts are that the complaint filed by the respondent against the petitioners was accepted by the District Forum vide order dated 12.9.2005. That order had become final. Under that order the petitioners were to make the payment of Rs.1,55,000/- as the insurance claim while Rs.65,783/- were calculated Revision Petition No.73 of 2010. 3 as the interest amount and Rs.2,000/- as costs. The total amount payable was Rs.2,22,783/- (Rs.1,55,000/- + Rs.65,783/- + Rs.2,000/-). Out of which Rs.25,000/- were deposited by the petitioners at the of filing of appeal on 6.10.2003. Therefore the net payable amount comes to Rs.1,97,783/- (Rs.2,22,783/- minus Rs.25,000/-) out of which Rs.65,783/- were the interest amount. The petitioners deducted 20% as income tax out of the interest amount of Rs.65,783/- and made the payment of remaining amount of Rs.1,84,626/-.
9. The version of the respondent was that the petitioners were not entitled to deduct income tax at source out of the interest amount and, therefore, he be got paid the amount of Rs.13,157/- deducted by the petitioners as TDS.
10. On the other hand, the version of the petitioners was that the petitioners were legally bound to deduct 20% of the interest amount as tax deducted at source and, therefore, by deducting an amount of Rs.13,157/- they have only complied with the statutory requirement. Learned District Forum vide impugned order dated 26.7.2010 has directed the petitioners to refund the amount of Rs.13,157/- to the respondent.
11. In support of his plea that the income tax cannot be deducted at source out of the interest amount, learned counsel for the respondent placed reliance on the judgment of the Hon'ble Supreme Court reported as "Ghaziabad Development Authority v. Chander Bhan Singh" 2004(2)CPC 466 (decided on 18.8.2004). Para 7 of this judgment reads as under:-
"7. We are told that interest at the rate of 12% per annum has been paid vide cheques dated 5th September, 2000 for Rs.96,000/- and dated 4th September, 2002 for Rs.53,793/-. The appellants have, however, deducted T.D.S. The appellants must now pay interest at the rate of 18% per annum calculated from the date they received each deposit till date of payment. The appellants are directed to refund the T.D.S. amount Revision Petition No.73 of 2010. 4 deducted along with interest at the rate of 18% per annum thereon to the respondent for reasons set out in our judgment delivered today in Civil Appeal No.8400 of 2002. Along with the payment they should also hand over a calculation sheet to the respondent showing how they have calculated the interest amount."
12. In this judgment the Hon'ble Supreme Court has directed the paying authority to refund the amount of TDS deducted by them to the claimant respondent.
13. The submission of the learned counsel for the petitioners was that the Hon'ble Supreme Court has specifically observed in para 8 of the Chander Bhan's case (supra) that this judgment was not to be a precedent. Therefore no benefit can be taken by the respondent out of this judgment.
14. It appears that the Hon'ble Supreme Court had laid the principle of interest also. Therefore this judgment was not to be treated as a precedent for any other matter on that account. But so far as the non-payment of TDS out of the interest amount is concerned, the Hon'ble Supreme Court was also pleased to observe in subsequent judgment reported as "HARYANA URBAN DEVELOPMENT AUTHORITY v. RAJ MEHTA" I(2005)CPJ 16 (SC) in which it was held that the interest is awarded to the complainant in lieu of compensation and, therefore, the amount of interest was not subject to deducting the income tax at source. It was held towards the end of para 7 of this judgment as under:-
"Also as stated in so many matters appellants cannot deduct TDS as these are payments towards compensation/damages for mental agony and harassment and escalation in costs of construction."
15. In view of the facts of this case and the law discussed above, it is held that the petitioners were not entitled to deduct the income tax at source and, therefore, the petitioners are directed to remit the amount of Rs.13,197/- to the respondent. Revision Petition No.73 of 2010. 5
16. There is no merit in the present petition and the same is dismissed.
17. The arguments in this case were heard on 19.4.2011 and the order was reserved. Now, the order be communicated to the parties.
(JUSTICE S.N. AGGARWAL)
PRESIDENT
(MRS. AMARPREET SHARMA)
MEMBER
April 29 , 2011 (BALDEV SINGH SEKHON)
Bansal MEMBER