By Sri. MOHAMED ISMAYIL C.V., MEMBER
The averments in the complaint is as follows:-
1. The father of the complainant had died in a motor accident. As per the order of Motor Accident Claim Tribunal, Manjeri made in claim petition numbered as OP (MV) 712/2011, the complainant and other legal heirs of the deceased father were entitled for the award amount and the share of the complainant was deposited with the opposite party bank. The share amount was deposited on 18/03/2017 and majority date was on 18/03/2023. The amount deposited with the opposite party was Rs. 6,68,744/- and same will be reached to the tune of Rs. 9,70,200/- at the time of attaining majority. But, after attaining majority, the opposite party credited only Rs. 8,72,852/- to the account of the complainant. So the complainant had issued a notice to the opposite party to get back the balance of Rs. 97,348/-. But the opposite party did not refund balance amount, instead issued a replay notice with false and incorrect statements. It is averred that the ambit of Motor Vehicle Act is to grant compensation for bringing succour to the victim of the accident or the legal representative of the deceased. It is beneficial legislation and charging or changing of the ratio of interest and TDS in the manner as sought is wholly uncalled for. Moreover the compensation awarded by MACT cannot be subjected to TDS and the same cannot be insisted to be paid to the tax authorities since the compensation and interest awarded does not fall under term ‘income’ as defined under the Income Tax Act. The compensation being received under the MV Act either on account of loss of earning or on account of death etc as such receipt is not by way of earning or profit. The compensation awarded is on the basis of principle of restitution to place the claimant in the same position in which she would have been, had the loss of life or injury would not have been suffered . So the complainant has prayed for directions to the opposite party to pay Rs. 97,348/- towards the balance amount withheld with interest at the rate of 12% from the date of default. The complainant has demanded Rs. 50,000/-as compensation from the opposite party for the sufferings of mental agony and hardship and another Rs. 25,000/- as cost of the proceedings.
2. The complaint is admitted, the opposite party appeared and filed version.
3. It is contented by the opposite party that there is no deficiency in service on their part and the challenge made by the complainant is against the provisions contained in the Income Tax Act and Rules. So there is non-joinder of necessary party. It is further contended that the complainant is not a consumer as the fixed deposit receipt was held in the name of the Motor Accident Claims Tribunal, Manjeri. It is admitted by the opposite party that, as per instructions of Hon’ble MACT, Manjeri a FDR No. 20240/3311000557 for Rs. 6,68,744/- was kept with the bank as per order made in OP (MV) No. 712/2011 on 18/03/2017 for a period of 6 years at an interest rate of 6.25% per annum. As per the terms and conditions of the deposit, the deposit shall get maturity on 18/03/2023 and the maturity amount payable on 18/03/2023 shall be Rs. 9,70,200/-. It is contented that the complainant did not submitted any KYC/PAN or other documents to the bank. On 04/03/2023 the opposite party received instructions from Hon’ble MACT, Manjeri to release the amount of FDR without delay. On the basis of request, the opposite party had released the FDR before maturity and paid Rs.8,72,852/- to the complainant on 06/03/2023. It is contended that as per section 194 A of the Income Tax Act, it is the responsibility of the opposite party to deduct the income tax on payment of interest on such deposits, as Tax Deduction at Source (TDS) and to remit the TDS amount to the Government of India on frequent intervals. It is contended that initially an amount equivalent to 10% on the interest amount had to be deducted at source from the account of the customer and paid to the Government. But with effect from 1st April 2019, the Government had instructed to deduct 20% on such interest payments as TDS and to pay to the Government. So a total amount of Rs. 47,365/- was deducted from the interest amount of the deposit and paid to the Government of India. It is contented that tax is not deducted on the award amount of MACT. It is contented that the TDS amount paid by the opposite party to the Government of India, can be refunded by the complainant, if the complainant is eligible for the same as per Income Tax and Rules. It is contented that IT Department is a necessary party in this proceedings.
4. The opposite party has contended that, the complainant had received Rs. 2,04,108 /- from the opposite party as interest on the deposit and additional amount of Rs. 47,365/- was paid by the opposite party to the Income Tax Department as per Section 194A of Income Tax Act. It is contended that the actual maturity date was on 18/03/2023 i.e., the date of completion of 6 years. Accordingly, Rs. 9,70,200/- is the total amount on attaining majority. But here, the amount was withdrawn on 06/03/2023 instead of 18/03/2023. So there will be no interest for the period from 06/03/2023 to 18/03/2023. As a result, the maturity amount shown in the FDR receipt cannot be claimed by the complainant. It is contended that if the FDR is prepaid before the date of maturity, then interest will be paid 1% less than the rate which was applicable at the time of placing the deposit for the period for which the deposit has actually run or contracted rate which is lower. Accordingly, an amount of Rs. 30,933/- was reduced from the amount shown on the FDR receipts on account of change of interest. On the basis of above made contentions the opposite party stand for dismissal of the complaint.
5. The complainant and the opposite party filed affidavit in lieu of their respective evidence. The documents on the side of complainant is marked as Ext. A1 to A3 documents. Ext. A1 document is the copy of order of the Hon’ble High Court of Kerala made in WP (C) No.8280 of 2013. Ext.A2 document is the copy of legal notice dated 13/03/2023 issued by the complainant to the opposite party. Ext. A3 document is the copy of reply notice dated 16/03/2023 issued by the opposite party. The documents produced by the opposite party is marked as Ext. B1 to B7 documents. Ext. B1 document is the copy of the communication dated 16/03/2017 issued by the Hon’ble MACT, Manjeri to the opposite party. Ext. B2 document is the copy of FD receipt issued by the opposite party to the Hon’ble MACT, Manjeri. Ext. B3 document is the copy of Special Term Fixed Deposit details issued by the opposite party to the MACT, Manjeri. Ext. B4 document is the copy of request dated 04/03/2023 issued by Hon’ble MACT, Manjeri to the opposite party. Ext. B5 document is the copy of Account details dated 06/03/2023 issued by the opposite party to the complainant. Ext. B6 document is the copy of Circular dated 29/09/2018 issued by Bank of Baroda, Head office, Mumbai to the opposite party. Ext. B7 document is the copy of deposit policy issued by the bank of Baroda, Head office, Mumbai.
6. Heard both sides in detail. The Commission gone through documents and affidavits on the parties. The following points are considered by the Commission to adjudicate the matter.
- Whether the act of the opposite party is amounted to deficiency in service?
- Relief and cost?
7. Point No.(i) & (ii):-
The Commission is considering the both points together for the sake of brevity. The argument of the complainant is that on the basis of order of Hon’ble MACT, Manjeri, Rs. 6,68,744/- was deposited as term deposit with the opposite party bank. The date of deposit was on 18/03/2017 and maturity date was on 18/03/2023. According to the complainant, after attaining majority, she will be able to collect Rs. 9,70,200/- from the opposite party. But after attaining majority the opposite party credited only Rs. 8,72,852/- to the account of the complainant. So the complainant issued Ext. A2 notice to the opposite party demanding to pay balance of Rs. 97,348/-. But the opposite party denied the legal claim of the complainant by issuing Ext. A3 reply notice. So the complainant argued that the opposite party had committed deficiency in service.
8. At the same time the opposite party has admitted that the complainant had deposited an amount of Rs. 6,68,744/- as per the order made by Hon’ble MACT, Manjeri. The opposite party has produced Ext.s.B1, B2 and B3 documents in respect of deposit made in the bank of the opposite party. Ext. B1 document is the copy of communication made by the Hon’ble MACT, Manjeri to opposite party with regard to the special term deposit of Rs. 6,68,744/-. Ext. B2 document is the copy of term deposit receipt showing the compliance of order made by the Hon’ble MACT, Manjeri in OP (MV) 712/2011. Ext. B3 document is the copy of special term deposit details forwarded to the Hon’ble MACT, Manjeri by the opposite party. Ext. B1 to B3 documents would show that the opposite party had received an order from the Hon’ble MACT, Manjeri to deposit Rs. 6,68,744/- for a period of six years starting from 18/03/2017 to 18/03/2023.
9. It is argued by the complainant that on 10/02/2023, she had filed an application before the hon’ble MACT, Manjeri to release to the FD amount and same was allowed on 28/02/2023. But the opposite party released only Rs. 8,72,852/- instead of Rs. 9,70,200/- as shown in the FD receipt (Ext. B2 document). It is argued by the complainant that, the opposite party is liable to refund balance amount of Rs. 97,348/- with interest at the rate of 12% per annum from the date of default and also liable to pay compensation and cost of the proceedings. It is further argued by the complainant that the opposite party has no right to deduct any amount as TDS from the FD receipt amount as the compensation received under Motor Vehicle Act is on the basis of principle of restitution to place the claimant in the same position in which she would have been, had the loss of life or injury would not have been suffered.
10. Conversely, the opposite party has argued that amount was deposited as per the order of the hon’ble MACT, Manjeri for a period of 6 years starting from 18/03/2017 to 18/03/2023. On the date of maturity, the complainant was entitled for Rs. 9,70,200/- and same was shown in Ext. B2 document. But, instead of 18/03/2023, the complainant had released Rs. 8,72,852/- on 06/03/2023 on the basis of the order of hon’ble MACT, Manjeri. It is argued by the opposite party that interest rate was fixed at the rate of 6.25% per annum for the term of 6 years. Ext. B2 document would show the rate of interest fixed by the opposite party. But the complainant released the amount prior to maturity period. So the complainant is not entitled for the amount shown in Ext.B2 document as per condition of Term Deposit of the bank. It is further argued by the opposite party that as per Section 194 A of Income Tax Act, the opposite party was bound to deduct the income tax on payment of interest on such deposits as Tax Deduction at Source and to remit the TDS amount to the Government on frequent intervals. Moreover the Government had instructed to deduct 20% from 1st April, 2019 onwards instead of 10%. So the opposite party had deducted a total of Rs. 47,365/- from the amount of Term Deposit and same was handed over to the Government. It is further argued by the opposite party that Income Tax Department is a necessary party in this proceedings for just and proper adjudication of the matter.
11. It can be seen from evidence of the parties that matter is involved with law of Direct Income Tax in the country. The pleadings of the complainant revolved around the allegations of unauthorised deduction of TDS from the interest amount of the term deposit by the opposite party. It is specifically pleaded in the complaint that the opposite party had no right to charge any amount as TDS from the compensation amount accrued on the basis of order made by hon’ble MACT, Manjeri in OP (MV) 712/2011. The Commission also considering the argument of the opposite party that as per Section 194 A of the Income Tax Act , they were bound to deduct Income Tax on payment of interest on term deposits of the complainant as TDS and to remit the TDS amount to the Government of India. So the Commission find that the dispute between the complainant and the opposite party is involved issue related to Income Tax law. Moreover the opposite party had already deducted an amount from the deposit of the complainant as TDS and handed over to the Government. In the light of the facts and circumstances of the case, the Commission find that there is no jurisdiction to this Commission to entertain the complaint and dispute was related to taxation policy of the country. Hence complaint stands dismissed.
Dated this 26th day of April, 2024.
MOHANDASAN K., PRESIDENT
PREETHI SIVARAMAN C., MEMBER
MOHAMED ISMAYIL C.V., MEMBER
APPENDIX
Witness examined on the side of the complainant : Nil
Documents marked on the side of the complainant : Ext.A1to A3
Ext. A1 : Document is the copy of order of the Hon’ble High Court of Kerala made in
WP (C) No.8280 of 2013.
Ext.A2: Document is the copy of Legal notice dated 13/03/2023 issued by the
complainant to the opposite party.
Ext. A3: Document is the copy of reply notice dated 16/0/2023 issued by the
opposite party.
Witness examined on the side of the opposite party : Nil
Documents marked on the side of the opposite party : Ext. B1 to B7
Ext. B1: Document is the copy of the communication dated 16/03/2017 issued by the
Hon’ble MACT, Manjeri to the opposite party.
Ext. B2: Document is the cop03/2023. Ext. B3 document is the copy of Special Term
Fixed Deposit details issued by the opposite party to the MACT, Manjeri.
Ext. B4: Document is the copy of request dated 04/03/2023 issued by Honble MACT,
Manjeri to the opposite party.
Ext. B5: Document is the copy of Account details dated 06/03/2023 issued by the
opposite party to the complainant.
Ext. B6: Document is the copy of Circular dated 29/09/2018 issued by Bank of
Baroda, Head office, Mumbai to the opposite party.
Ext. B7: Document is the copy of issued by the bank of Baroda, Head office, Mumbai.
MOHANDASAN K., PRESIDENT
PREETHI SIVARAMAN C., MEMBER
MOHAMED ISMAYIL C.V., MEMBER
