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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Prem Narain, Presiding Member
Janko Devi and Ors.—Petitioners
versus
National Insurance Company Limited and Anr.—Respondents
Revision Petition No.3074 of 2015
(Against the Order dated 01/09/2015 in Appeal No. 335/2015 of the State Commission Rajasthan)
Decided on 5.4.2019
Counsel for the Parties:
For the Petitioners:Mr. Nimit Mathur, Advocate
For the Respondent Nos.1 and 2:Mr. S.K. Ray, Advocate
IMPORTANT POINT
TDS can be deducted from the interest payable to the complainant in the form of compensation.
Headnote:Consumer Protection Act, 1986 – Section 21(b); Section 27 – Insurance-theft of vehicle – District Forum allowed the complaint – State Commission dismissed appeal – Hence, execution was filed – Insurance Company deducted TDS from the interest payable and insisted for certain formalities – District Forum allowed execution application, but State Commission allowed the appeal of the Insurance Company and directed that TDS can be deducted from the interest payable to the complainant and the complainant was also required to observe certain formalities. Hence, Revision by the complainant.
Held, interest is required to be deducted from the interest in the form of compensation, as per internal instructions of the Insurance Company. (Para 9)
The validity of the internal instructions cannot be gone into by the Commission. The Commission has no authority to interpret the Income Tax Act and Rules.
Further held, so far as required documents are concerned, that since the original owner of the vehicle has expired, the purpose will be served if the LR of the registered owner of the vehicle files a letter of subrogation and an affidavit in respect of the Registration Certificate of the vehicle. Once these two documents are submitted to the Insurance Company to the satisfaction of the District Forum. (Para 10)
Result: Revision disposed off.
This revision petition has been filed by the petitioner Janko Devi and others against the order dated 01.09.2015 passed by the State Consumer Disputes Redressal Commission, Rajasthan, (in short ‘the State Commission’) in FA Nos.286 & 335 of 2015.
2. Brief facts of the case are that the vehicle of the petitioner was insured with the respondent Insurance Company and during the currency of the insurance policy on 20.08.2006 the vehicle was stolen. The Insurance claim was repudiated by the Insurance Company. The complainant then filed the consumer complaint before the District Forum and the District Forum allowed the complaint vide its order dated 06.03.2014. The Insurance Company was directed to pay Rs.6,60,000/- along with 9% per annum interest to the complainant. In addition to this Rs.7,500/- as compensation and Rs.2,500/- as cost of litigation was also ordered. Both the sides preferred appeal before the State Commission against the order of the District Forum. The State Commission dismissed both the appeals vide its order dated 20.10.2014. The complainant then preferred execution application before the District Forum. The Insurance Company submitted a cheque of Rs.9,40,891/- after deducting the TDS from the interest being paid to the complainant. It was contended by the complainant that TDS was not deductible from the interest as this was the compensation granted by a court. The Insurance Company also insisted on certain formalities to be completed before the amount could be paid. The cheque of Rs.9,40,891/- was deposited with the District Forum and the District Forum passed the following order on 25.02.2015:—
“While deciding the original claim this forum has found that the claim was payable to the complaint as per rules. Therefore, the complainant would have to submit later subrogation, succession certificate, Special Power of Attorney, Form No.29 & 30 for transfer of ownership after recovery of vehicle, RC surrender certificate after getting HP endorsement removed from the financer and the documents for surrender or RC would have to be given but the plea of exemption from deduction of TDS, taken by the complaint is not liable to be admitted because the complaints are farmer and in the light of case law (1993) 203 ITR 0881 and 2008 (02) TAC 515 (Guj.) the respondents cannot deduct TDS from the compensation amount payable to the complaint.
Therefore the application under Section 27 of Consumer Protection Act, 1986 is decided with a direction that the respondent would not deduct TDS from the compensation amount. The respondents would pay Rs.9,40,000/- along with the deducted TDS and interest to the complainant within 15 days of this order. The complainant can get cheque of Rs.9,40,891/- vide a cheque no.396885 from the forum wherever they want to.”
3. Aggrieved by the above order of the District Forum, both the parties preferred appeals before the State Commission. The State Commission vide its order dated 01.09.2015 allowed the appeal filed by the Insurance Company and dismissed the appeal of the complainant. The State Commission observed that the TDS was deductible from the interest being paid to the complainant and that the complainant was also required to submit the relevant documents as ordered by the District Forum.
4. The present revision petition has been filed against this order of the State Commission by the complainant.
5. Heard the learned counsel for the parties and perused the record.
6. The learned counsel for the petitioner stated that the interest being paid is in the shape of compensation and no TDS can be deducted from this amount. In support of this contention the learned counsel referred to the judgment of this Commission in Ghaziabad Development Authority Vs. Dr. N.K. Gupta, RP No.2244 of 1999, decided on 18.09.2002. It has been observed that:—
“Taxation-Deduction of TDS by GDA on the award of interest by way of compensation. Held-Section 194A of the Income-tax Act not applicable. Award of interest by
