STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1.       Capt. K.K. Bhasin s/o late Shri N.D. Bhasin

2.       Preeti Bhasin d/o Capt. K.K. Bhasin

          Both residents of House No.166, Sector 33-A, Chandigarh 160020

…..Appellants/Complainants

V e r s u s

1.       Shriram Group of Companies (through) its office in Mohali (SAS Nagar) delivering prosperity Shriram Fortune Solutions Ltd. SCF No. 101-102, 3^rd Floor, Phase 11, Mohali Punjab

2.       Sh. Jaswinder Singh Sondhi, M/s City Investments Cabin No.10, SCO No.60-61-62, Sector 17-C, Chandigarh.

                        ....Respondents/OPs

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:     JUSTICE SHAM SUNDER, PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

S.  JAGROOP  SINGH   MAHAL, MEMBER.

Argued by: Appellant No.1 in person alongwith Sh. Rajbir Singh Arya, Adv.        

                   Sh. Munish Kumar, Adv. for respondent No.1

                   Service of respondent No.2 dispensed with vide order dated 17.10.2011.

PER  JAGROOP  SINGH   MAHAL, MEMBER

                    This appeal is directed against the order dated 1.8.2011, rendered by the ld. District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter referred to as the District Forum) vide which it dismissed the complaint filed by the complainants/appellants.

2.                     The facts, in brief, are that the complainants got their investments renewed through OP No.2 and also gave copies of their PAN cards. However, upon maturity of the 15 FDRs, as mentioned vide para No.1 of the complaint, OP-1/company deducted some amount from the principal amount deposited by them, whereafter complainant No.1 approached the OP company for its refund and also wrote letter dated 23.6.2010 to this effect, but the same was not replied. On persistent enquiries, it was verbally told that the deductions were made from principal amount as TDS, which was totally illegal and unjustified. When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) was filed.

3.                     In its written reply, OP No.1 admitted the factual matrix of the case and submitted that the deductions from the deposits of the complainants were made legally as the complainants, while making the deposits, neither filled up form 15-G, as per Rule 29-C of Income Tax Act i.e. declaration under Sub Section (1) and (1A) of the Section 197-A of the Income Tax Act, nor ever handed over their PAN Nos. to the company. Thus the company, as per law, on maturity of the deposits deducted the amount of TDS. Remaining averments were denied being wrong. Pleading that there was no deficiency in service or unfair trade practice on its part, prayer for dismissal of the complaint was made.

4.                      In his separate written reply OP No.2 admitted that he was the authorized broker of M/s Shriram/OP No.1 and that the FDRS mentioned in the complaint were got renewed by him. It was admitted that the copies of PAN card were handed over to Shri Vishal, an executive of OP No.1 at the time of renewal. OP No.2 in his reply supported the version of the complainants and pleaded that despite his efforts to resolve the issue, OP No.1 did not act positively.

5.                     Parties led evidence in support of their contentions.

6.                     After hearing the ld. Counsel for the contesting parties and on going through the evidence on record, the ld. District Forum dismissed the complaint, as stated above.

7.                     Feeling aggrieved, the instant appeal has been filed by the appellants/complainants.

8.                     We have heard the ld. Counsel for the parties and have gone through the evidence on record of the case carefully. 

9.                     As per the complainants, there was deficiency on the part of the OP in respect of the following :-

i)             The complainants had made various FDRs of Rs.15,000/- each and one FDR of Rs.25,000. The OPs have deducted income tax out of the said amounts and did not pay even the full amount of the FDRs on maturity.

ii)           The complainants had already furnished PAN No. to the OPs but even then the OPs deducted income tax, though they were not liable to pay any tax.

iii)         The OPs did not furnish the TDS certificates in time to claim the income tax back from the Income Tax Authorities.

10.                  As regards the first contention, there is no dispute about it that 14 FDRs were of Rs.15,000/- each and one of Rs.25,000/-. When the FDRs matured, the complainants were entitled not only to the principal amount but also to interest accrued thereon. It is, however, very strange that in view of Annexure C-1 to C-4, the OPs refunded an amount of Rs.14,939/- in respect of the FDRs for Rs.15,000/- and Rs.24,881/- in respect of the FDR for Rs.25,000/-. Needless to mention that income tax is to be deducted from the income (i.e. interest) derived out of the aforesaid FDRs and the complainant was, therefore, entitled to 80% of the interest in addition to the amount of the FDRs.  It is, however, very strange that instead of paying interest, even the full principal amount has not been paid by the OPs.  There is, therefore, clear deficiency on the part of the OPs in this respect.  The complainants are entitled to the full amount of the FDRs.

11.                  The contention of the ld. Counsel for the OP/respondent No.1 is that in view of Section 197A of the Income Tax Act, 1961, it was necessary for the complainants to furnish the copy of the PAN card and also form No.15G to claim exemption from deduction of income tax at source which were not supplied.  As against it, the contention of the complainants is that they had provided their PAN No. to the OPs, as is mentioned in para 4 of the complaint and the affidavit attached therewith.  The reinvestments  was made through OP-2 who furnished the reply supporting this fact and also submitted his affidavit (of Jaswinder Singh) in which also it was categorically stated in paras 2 & 3 that the copy of the PAN card was supplied to the OPs.  In this manner, the PAN No. had already been supplied, but there is no evidence to suggest if form No.15G was filled up by the complainants.  It was, therefore, their fault if they did not claim exemption from deduction of tax at source.

12.                  The next deficiency, alleged by the complainants, is that the TDS certificates were not supplied to them by OP-1.  OP-1 did not mention anywhere if the said certificates were provided to the complainants by them. Rather the contention of OP-1 is that the same should have been collected by the complainants from their office at Mohali.  We do not find any merit in this argument of the ld. Counsel for OP-1.  Relevant portion of Section 203 of the Income Tax Act provides as follows :-

“203. (1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.

It is, therefore, the responsibility of OP-1 to furnish the TDS certificates to the complainants.  It is not the case of OP-1 if they had sent the same to the complainants by post or by courier.  We cannot expect the depositors to go on making rounds of the OP company for obtaining the said certificates.  The time for filling up the income tax return, and to claim deduction, was over when the present complaint was filed and the complainants have been deprived from claiming the refund of the said amount.  It was, therefore, deficiency on the part of the OP-1. 

13.                  The ld. Counsel for OP/respondent No.1 has also argued that its branch office is at Mohali with head office at Mumbai; that no part of cause of action accrued at Chandigarh and, therefore, the ld. District Forum had no jurisdiction to entertain and try this complaint. This contention was not discussed or decided by the ld. District Forum. The contention of the complainants is that OP-2 is the agent of OP-1 to collect the deposits and the investment was made through OP-2 who is located at Chandigarh.  OP-2 produced the certificate (Ex.OP-2/1) regarding their appointment as business associate containing the terms and conditions of the appointment.  It was entitled to receive the commission from OP-1 on the deposits procured by it.  Ex.OP-2/5 is the list of the present deposits procured by  OP-2, for OP-1, on which it got commission.  Since the deposits were made by the complainants at Chandigarh, through OP-2, the ld. District Forum, therefore, has the territorial jurisdiction to try this complaint.

14.                  In view of the above discussion, we are of the opinion that there was deficiency in service on the part of OP-1 in so far as the TDS was deducted from the principal amount and secondly the TDS certificates were not furnished to the complainants.  The ld. District Forum did not appreciate this deficiency on the part of OP-1 and wrongly dismissed the complaint which was liable to succeed.  The impugned order, therefore, cannot stand and the same is accordingly set aside with costs.  Since the complaint was liable to succeed we accordingly allow the complaint and direct the OP-1 to pay to the complainant Rs.973/- (854+119), which has been wrongly deducted out of the principal amount and also pay Rs.5,000/- towards compensation for causing them mental harassment and tension.  OP-1 shall also pay Rs.7,000/- as costs of litigation throughout.  

15.                  This order be complied with by OP-1 within thirty days from the date of receipt of its copy failing which they shall pay the aforesaid amount to the complainant with interest @ 12% per annum w.e.f today till the actual payment is made to the complainants.

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

Pronounced.

30^th January, 2012

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER