Sadhna Jayesh Raichura vs. Rise2Sky Developers LLP

Facts

The Appellant (Plaintiff) was a tenant in a building undergoing redevelopment. An agreement for permanent alternate accommodation was executed between the Appellant and the Respondent (Defendant). The Respondent issued a letter dated July 15, 2022, demanding Rs. 7,97,840/- towards GST, along with other charges. The Appellant alleged that after this demand, the Respondent stopped paying transit rent and refused to hand over possession of the permanent alternate accommodation. The Appellant filed a suit seeking declarations and directions to the Respondent to pay GST (if applicable) and hand over possession. The Appellant also filed a Notice of Motion for temporary injunctions. The trial court rejected the Notice of Motion, deeming it a claim for a temporary mandatory injunction, which is granted only in exceptional circumstances and would amount to decreeing the suit. The Appellant appealed this order.

Held

The Court acknowledged that the liability to pay GST had not yet crystallized. Based on the Appellant's undertaking to deposit the GST amount before the trial court upon demand by the competent authority, and the Respondent's liberty to withdraw and deposit this amount with the tax authorities under an undertaking to return it if the Appellant is not liable, the Court disposed of the appeal. The Respondent was directed to hand over possession of the permanent alternate accommodation within two weeks. The Appellant was directed to pay other claimed amounts subject to the trial court's decision. The trial court was requested to expedite the hearing of the suit by March 31, 2024. The Court found it expedient to dispose of the appeal by imposing terms based on the Appellant's undertaking regarding GST payment.

Key Issues

1. Whether the trial court erred in rejecting the Notice of Motion for a temporary injunction, considering the Appellant's claim for possession of permanent alternate accommodation and the Respondent's demand for GST. Contentions: Appellant (Plaintiff): Argued that the trial court wrongly characterized the relief sought as a mandatory injunction and that the Appellant was entitled to possession. The Appellant also filed an undertaking to deposit the GST amount if demanded by statutory authorities. Respondent (Defendant): Contended that the Appellant's undertaking to deposit GST was insufficient, as the Respondent would still face coercive action under the GST Act for non-payment. The Respondent argued that the Appellant should be directed to pay the GST demand or the Respondent should be allowed to deposit it with tax authorities, with an undertaking to return it if the Appellant succeeds in the suit. The Respondent emphasized that non-deposit incurs interest and penalty.