N G SARDANA Vs. ANSAL HOUSING CONSTRUCTION LTD

JUDGEMENT

(1.) In this execution application filed by the complainants for execution of the order of this Commission passed on 29.8.1996 whereby their Complaint Case No.34 of 1994 was allowed and the opposite party was directed to refund the amount received from the complainants alongwith interest at the rate of 18% p. a. from the dates of payment till the date of refund alongwith an amount of Rs.50,000/- awarded by way of compensation and Rs.5,000/- as costs. Against the aforesaid order dated 29.8.1996 appeal has been filed before the Hon'ble National Commission and an interim direction has also been issued. In view of that, after verifying the position from the learned Counsel for the parties, we passed the following order on 30.5.1997 : "by our order dated 29th August, 1996 complaint filed by Mr. Sardana and others was allowed and Ansal Housing Construction Ltd. Company was directed to 'refund the amount received from the complainants alongwith interest at the rate of 18% per annum from the dates of payment till the date of refund and further award a compensation of Rs.50,000/- for the pecuniary loss, mental agony and inconvenience suffered by the complainants. The complainants shall also be entitled to costs of this litigation which are quantified as Rs.5,000/-'. Mr. Chandgothia, learned Counsel appearing on behalf of the respondent-Ansal Housing Construction Company states that against our order appeal has been entertained by the Hon'ble National Commission and party stay order has been granted, i. e. there will be an injunction only in respect of the direction given by the State Commission that the appellant shall pay a compensation of Rs.50,000/- to the complainant- respondents. There will be no stay in other respects. In view of the aforesaid order passed by the Hon'ble National Commission, Mr. Chandgothia, learned Counsel for the respondent-Company has handed over today a Bank draft in the sum of Rs.5,77,825/- dated 29th May, 1997 to Mr. N. G. Sardana complainant. This according to the respondent-Ansal Housing Company covers the amounts quantified as other reliefs granted by this Commission except the sum of Rs.50,000/- by way of compensation. Since the amount has not been verified by the complainant, this draft has been retained by him subject to the calculation to be made in due course, as per orders of the Hon'ble National Commission. In case any amount is found due, the respondent shall pay the same. Adjourned to 4th July, 1997".

(2.) Thereafter, the learned Counsel for the complainants brought to our notice that the opposite party M/s. Ansal Housing Construction Ltd. had deducted an amount of Rs.36,541/- from the total amount by way of income tax deducted at source. This deduction, according to the learned Counsel for the complainants, is contrary to the law laid down by a Division Bench of the Punjab and Haryana High Court in Income-tax Reference No.150 of 1979, Commissioner of Income-Tax V/s. Chiranji Lal Multani Mal Rai Bahadur (P) Ltd. , decided on 15.12.1988 and reported as 1989 (Tax Man - Tax Reports) 156. According to this judgment, interest awarded by the Courts on the basis of contracts or a statute is no doubt taxable but if the same is awarded for loss suffered on account of deprivation of property it amounts to compensation, though called interest it is not taxable under the Income-Tax Act. We entirely agree with the law laid down by Hon'ble the High Court and on that basis direct M/s. Ansal Housing Construction Ltd. to remit the amount of Rs.36,541/- to the applicant within 15 days from today. M/s. Ansal Housing Construction Ltd. may, if they are so advised, send a copy of our order alongwith the copy of the aforesaid judgment of the Punjab and Haryana High Court to the concerned Income-tax authorities. The execution application stands disposed of accordingly.