MRS. NEENA SANDHU, MEMBER

1.       This is a revision petition filed by the OP i.e. National Insurance Company Limited, against the order dated 30.7.2010 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be referred as the District Forum only) in complaint case No. 1101 of 2007 whereby the application of the revision petitioner/OP was dismissed by the learned District Forum, with the following observation :-

          “In view of the order dated 10.11.2009 of the Hon’ble National Commission, the OP would be liable to pay interest @ 9% per annum and not 6%. The interest @ 9% per annum on the amount comes out to Rs.4,05,730/-. After deducting Rs.2,39,711/-, the OP is now liable to pay Rs.1,66,019/-.

          In view of the above discussion, we are of the opinion that the OP is liable to pay Rs.1,66,019/-. By not complying with the order of the Hon’ble National Commission within 6 weeks it has rendered itself liable to pay interest @ 9% per annum. The amount be deposited by 20.8.2010. “

2.          Aggrieved by the order dated 30.7.2010 passed by the learned District Forum, the OP filed the instant revision petition.

3.       We have heard Sh.Parminder Singh, Advocate for the revision petitioner/OP, Sh.Manish Joshi, Advocate for the respondent/complainant and have perused the record, carefully.

4.       The Counsel for the revision-petitioner, submitted that the learned District Forum fell in an error in passing the impugned order dated 30.7.2010 and directing the petitioner Company to pay interest @ 9% p.a, instead of 6% on the amount of compensation, merely, on the ground, that the petitioner did not deposit the entire amount of interest awarded by the Hon’ble National Commission. It was further submitted that the petitioner had deposited the entire amount of interest @ 6% per annum on 8.12.2009 as directed by the Hon’ble National Commission, within the stipulated period of 6 weeks from the date of the order i.e. 10.11.2009. It was further submitted that the petitioner deposited a sum of Rs.59,929/- with the Income Tax Authorities, being an amount of TDS on the total amount of interest i.e. Rs.2,99,640/- in compliance with the provisions of clause (ix) to Section 194-A (3) of the Income Tax Act which was inserted by Finance Act, 2003. He further submitted that thus, the petitioner committed no illegality, in deducting the amount of TDS, from the total amount of interest, payable to the respondent, and, in depositing the same with the Income Tax Authorities.  He further submitted that the order being illegal is liable to be set aside.

5.       On the other hand, the complainant/respondent submitted that the revision petitioner was not entitled to deduct TDS, on the amount of compensation, awarded to the complainant, by way of interest. It was further submitted that the full amount of Rs.2,99,640/- had not been deposited within six weeks and, therefore, the OP was liable to pay interest thereon @ 9% per annum.

6.       After giving our thoughtful consideration of the rival contentions, advanced by the Counsel for the revision-petitioner, and the learned Counsel for the respondent, we are of the considered view that the OP (insurance company) wrongly deducted Rs.59,929/-, being the amount of TDS, out of the total amount of compensation of Rs.2,99,640/-. In Ghaziabad Development Authority Vs. Chander Bhan Singh 2004(2) CPC 466 S.C, the Hon’ble Apex Court laid down the principle of law that the interest awarded was not just interest, on the amount invested, but is a compensation, for harassment and agony caused to the parties, and as such, no TDS could be deducted from the amount of the interest. Clause IX of Section 194-A (3) of the Income Tax Act, does not permit the OP to deduct TDS, from interest awarded on the amount of compensation, by the Consumer Court, on account of mental agony and physical harassment. There is, no doubt, that the OP deposited a cheque in the sum of Rs.2,39,711/- with the learned District Forum-I, UT, Chandigarh on 8.12.2009 vide Annexure P-4 which was within six weeks, from the passing of the order by the Hon’ble National Commission, but at the same time, we cannot lose sight of the fact that the OP still has to pay a sum of Rs.59,929/- to the complainant which it wrongly deducted, in the form of TDS, @ 20% and deposited with the Income Tax Department, from the amount awarded by the Hon’ble National Commission on account of mental and physical harassment. Thus, the OP has not complied with order passed by the Hon’ble National Commission within the stipulated time. Therefore,  the OP is liable to pay the remaining amount alongwith interest @ 9% instead of @6%. However, the OP is at liberty to apply for the refund of the TDS amount of Rs.59,929/- which was wrongly deducted and deposited with the Income Tax Office by the OP.

7.       For the reasons recorded above, we do not find any illegality, in the order, passed by the learned District Forum on dated 30.7.2010. We accordingly dismiss the revision-petition and uphold the order, passed by the learned District Forum.

8.          Copies of this order be sent to the parties, free of charge.

Pronounced.                                                       Sd/-            

20^th April, 2011.