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Judgment
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.
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."
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.
The present revision petition has been filed against this order of the State Commission by the complainant.
Heard the learned counsel for the parties and perused the record.
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 way of compensation not interest as defined in Section 2(28A) of the Income-tax Act."
Learned counsel for the petitioner further stated that it is not possible to submit the documents as ordered by the District Forum as the original owner of the vehicle has expired and the original registration certificate was already deposited with the Insurance Company. It was informed that the police has already submitted the final report in the matter and there is no chance that the vehicle could be recovered. Hence, the exercise of filing the form Nos.29 & 30 is a futile exercise and can be dispensed with. Similarly the letter of subrogation is now not required as there is no possibility of recovery of the vehicle due to passage of such a long time. It was further argued that the executing court cannot add certain conditions for implementation of the order under execution. The original order which is to be implemented does not include any such condition that the petitioner has to deposit certain papers with the Insurance Company before getting the payment. In fact the question of filing any further documents should not have arisen at all as there was no mention of such requirements in the order under execution dated 06.03.2014.
On the other hand, learned counsel for the opposite party, the Insurance Company stated that the instructions issued by the Income Tax Department as per the Income Tax Act clearly state that income under interest is taxable and therefore, Insurance Company is responsible to deduct TDS as per the law. The State Commission has rightly observed that if the petitioner is not a taxpayer, application can be moved before the income tax department for refund of the deposited amount. No Government Department would take any risk by not deducting the income tax as per law and by not depositing the same with the income tax authorities. Till the Income Tax Department issues any general instructions, the Insurance Company would be liable to deduct and deposit the TDS. No prejudice will be caused if the petitioner gets back the TDS amount as refund from the Income Tax Department. Similarly the complainant has to comply with the formalities required before the claim is paid to the complainant. Both the fora below I have given concurrent finding in this regard and the scope under the revision petition is limited.
I have examined the record and have considered the arguments of both the sides. So far as the TDS is concerned, in my view, the Insurance Company has to deduct the TDS as per their internal instructions. In this revision petition this Commission is not required to see the validity of internal instructions of the Insurance Company as this Commission has no power to interpret the provisions of the Income Tax Act and its rules. It is also safer for the Insurance Company to follow the rules rather than not to follow them. Obviously, if they do not follow the law the income tax authorities may also act against them. The State Commission has clearly observed that if the petitioner is not an income tax payer the complainant can always get the refund of the TDS that was deducted. Hence, the balance of convenience lies in observing the law of income tax by the Insurance Company. Therefore, the view taken by the State Commission in this regard is supported by this Commission. So far as the judgment of this Commission in Ghaziabad Development Authority Vs. Dr. N.K.Gupta, (supra) is concerned, it is seen that in the referred case of Ghaziabad Development Authority Vs. Dr. N.K.Gupta, (supra), the question of interest was involved on the amount deposited by the complainant himself. However, in the present case, the amount is on account of Insurance claim and therefore, the two amounts are on different footings and therefore, the judgment of this Commission in Ghaziabad Development Authority Vs. Dr. N.K.Gupta (supra) cannot be directly made applicable in the present matter.
So far as the question of documents is concerned, it has been informed that owner of the vehicle has expired and police has also submitted the final report which has been accepted by the competent court. Enough time has also elapsed since the vehicle was stolen. In these circumstances, in my view, 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, the District Forum shall get the cheque of Rs.9,40,891/- revalidated/reissued and hand it over to the complainant. It is made clear that no further amount will be required to be paid by the Insurance Company in the form of interest as the delay has been caused by the complainants themselves.
The revision petition No.3074 of 2015 stands disposed off in terms of the above order.