AMBALAL SARABHAI ENTERPRISES LTD vs KAMALA BALARAMAN

ALL these five appeals have been filed against a common order passed by the District Forum in O.P. Nos. 191,192,193,194 & 195/1995. Excepting the petitioners being different, the opposite party in all the petitions is the same, and as stated by the District Forum in its order, the facts and the points of law involved in all these matters are also same. Hence these five appeals can also be disposed of in one common order.

THE respondents (complainants) are the debenture holders of the appellant (opposite party) Company. THEir case is that on the interest payable to them, the Company had deducted Income Tax at source without notice to them. THEy were not Income Tax assessees and they were not liable to pay income tax. THE said act of the opposite party in deducting income tax from their interest amounts to deficiency in service on their part. To get the tax thus deducted at source refunded, they underwent a lot of trouble. Thus alleging, the complaints were filed for compensation. The opposite party contended that the complainants are not consumers within the meaning of the Consumer Protection Act and therefore the complaints are not maintainable. They further contended that there was no deficiency in service on their part and they deducted the tax as per the law and therefore there was no fault on their part. Therefore the complaints were liable to be dismissed.

The District Forum held that the Company should not have deducted tax without the knowledge of the complainants and that the said act of the opposite party amounted to deficiency in service on their part. It further held that on account of the act of the opposite party, the complainants should have suffered mental agony. In the result, it passed an award directing the opposite party Company to pay a sum of Rs. 500/- as compensation and Rs. 300/- as costs to each of the complainants.

NOW in the appeal, it is contended that the order of the District Forum is against the law and it is not sustainable. The material portion of Section 193 of the Income Tax Act reads as follows : "193. The person responsible for paying any income by way of interest on securities shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income- tax at the rates in force on the amount of the interest payable."

NOW the complainants have not given any declaration as stated in Section 197-A in which case no Income Tax shall be deducted. In these circumstances, it would appear that rightly the opposite party Company has deducted Income- Tax from the complainants at source. It follows that there was no deficiency in service on their part. Nextly, the opposite party Company is not a Bank or a financial institution. Therefore, the complainants depositing their money and getting the debentures from the Company will not amount to availing of any services within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act.

FOR the above said reasons, it will not be correct to hold that any deficiency in service as defined in the Consumer Protection Act on the part of the opposite party Company has arisen. It follows therefore that the award passed by the District FORum cannot be upheld as correct. In the result therefore, all the appeals A.P. Nos, 77, 78, 79, 80 & 81/1997 are allowed, the orders of the District Forum are set aside and the complaints are dismissed. However, there will be no order as to costs. Appeals allowed.