CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR
(A/11/2337)
Appeal No.56/2011
Instituted on 03.02.11
Smt. Leelawati, W/o Late Shri Samaylal,
R/o: Vill. Bhaiyathan Road, Surajpur,
Dist. SURGUJA (C.G.) ... Appellant.
Vs.
1. Divisional Manager, Oriental Insurance Co. Ltd.,
Divisional Office, Opp. High Court, Nr. Bus Stand,
BILASPUR (C.G.)
2. Branch Manager, Oriental Insurance Co. Ltd.,
Banaras Chowk, Ambikapur,
Dist. SURGUJA (C.G.) ... Respondents.
PRESENT: -
HON'BLE JUSTICE SHRI S.C. VYAS, PRESIDENT
HON'BLE SHRI V.K. PATIL, MEMBER
COUNSEL FOR THE PARTIES: -
Shri S.K. Sharma, for appellant.
Shri Anil Gaikwad, for respondents.
ORDER
Dated: 22 /10/2011
PER: – HON’BLE JUSTICE SHRI S. C. VYAS, PRESIDENT
This appeal has been preferred against order dated 11.01.2011 of
District Consumer Disputes Redressal Forum, Surguja-Ambikapur
(hereinafter called “District Forum” for short) in an unregistered
execution case of 2007 for execution of award dated 21.03.07 of the
District Forum, passed in complaint case No.147/04.
2. The contention of the appellant herein is that an award of
Rs.5,00,000/- was passed along with interest in favour of the appellant
herein against the insurance company. The insurance company, on
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05.05.07, deposited Rs.25,000/- before the District Forum for filing
appeal before this Commission. Prayer of the appellant / complainant
before District Forum as well as before us, is that this amount be first
adjusted against the amount of interest and not against the principal
amount of award.
3. We have heard arguments of both parties on this question and
perused the impugned order.
4. The District Forum vide the impugned order has recorded
finding that if the deposited amount Rs.25,000/- is deducted from the
principal amount, then the principal amount remains only
Rs.4,75,000/- and then interest on that amount, if it is calculated for
three months and twenty eight days @ 9% p.a., then it comes to
Rs.14,012.50p. If that amount of interest, rest of the principal amount
and the amount of cost is taken into consideration then the amount
which has been deposited in the case by the insurance company, so far,
is the payment, in full satisfaction of the order of District Forum.
5. The contention of the appellant / complainant is that the
amount of Rs.25,000/- was required to be adjusted in the amount of
interest and interest was required to be calculated on the whole
awarded amount of Rs.5,00,000/- and the District Forum has
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committed a mistake in making calculation on the basis that the
deposited amount would be adjusted first against the principal
amount and then interest would be calculated on rest of the principal
amount. We do not find any substance in the arguments advanced by
counsel for the appellant. The amount which was deposited by the
insurance company can either be adjusted against the interest or
against the principal amount, as the case may be and as the District
Forum has chosen to adjust the deposited amount against the principal
amount first and then to calculate amount of interest on the rest of the
principal amount for three months and twenty eight days, then such
calculation of interest cannot be said erroneous and such amount has
already been paid by the insurance company.
6. The second contention of learned counsel for the appellant is
that the insurance has deducted Rs.14,691/- as TDS and has paid the
remaining amount only. He submitted no TDS was required to be
deducted by the insurance company on the amount of award, because
that amount was required to be paid as per orders of the District
Forum and it was an amount of decree of a Court, so the insurance
company was not required to deduct any amount from the decretal
amount.
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7. In this regard, counsel for the insurance company has drawn
our attention towards a Press Release, No.402/92/2006-MC(04 of
2010), dated 20.01.2010 of Government of India, Ministry of Finance,
Department of Revenue, Central Board of Direct Taxes and it has been
submitted that as per this Press Release, the insurance company was
required to deduct tax at source @ 20% or the higher of the prescribed
rate, where Permanent Account Number (PAN) of the deductee was
not mentioned. Provisions of section 194A of the Income Tax Act, 1961
has also been referred by counsel for the respondent to show that the
amount was required to be deducted against tax deduction at source,
on the amount of interest.
8. Section 194A of the Income Tax Act, 1961 provides as under : –
“194A (1) Any person, not being an individual or a
Hindu undivided family, who is responsible for
paying to a resident any income by way of interest
other than income [by way of interest on
securities], shall, at the time of credit of such
income to the account of the payee or at the time
of payment thereof in cash or by issue of a cheque
or draft or by any other mode, whichever is
earlier, deduct income-tax thereon at the rates in
force:”
Then certain provisions for such deduction have been
mentioned under which no such deduction would be made. Provision
(ix) says that no such deduction would be made from the amount of
interest on the amount of compensation awarded by M.A.C.T. when
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such amount of interest is less than Rs.50,000/-. But when we
minutely go through this provision, then we find that in this provision
of Law nothing is said in respect of amount payable under an order of
a Court, so when some amount is required to be paid under an order
of a Court, then it is no more applicable and in the present matter,
payer was not required to deduct any amount as income tax, because
in such case the liability of payment of tax will be shifted upon the
person, who receives payment of the amount which is required to be
deposited in a Court of Law from where it is to be paid to the
concerning person. Therefore, such amount in the hand of the payee,
cannot be said to be an income of interest and payable to someone else
by the payee, from which compulsory deduction of tax was necessary.
Thus, we find that the respondent insurance company has committed
mistake in deducting amount of TDS and then paying remaining
amount.
9. Therefore, on this limited ground, the appeal succeeds and is
allowed. The respondents are directed to pay the amount which has
been deducted by way of TDS to the complainant / appellant along
with a certificate that no Tax has been deducted at source and it will be
liability of the complainant / appellant to pay any tax, if payable
under the provisions of Law. With this observation, the appeal is
disposed of. No order as to cost.
(Justice S.C.Vyas) (V.K. Patil)
President Member
/10/2011 /10/2011