M/S. Jyothi Stores vs. Sri. Jagadguru Renukadi Panchacharya

Held

The Court upheld the judgment of the Court of Small Causes, subject to the terms of the compromise. The compromise was found to be lawful and not opposed to any law. The petitioner was permitted to remain in possession until December 31, 2022. The terms regarding the payment of electricity bills and the enhanced rent were recorded in the compromise. Regarding GST on the enhanced rent, the Court noted the petitioner's submission that GST is not payable, but if it is payable as per law, the petitioner would comply without further demand. The petition was disposed of in terms of the compromise, and a decree was to be drawn accordingly. The Court did not expressly decide on the GST applicability but recorded the parties' positions.

Facts

The petitioner, M/s. Jyothi Stores (defendant), filed a Civil Revision Petition challenging a judgment and decree from the Court of Small Causes, Bangalore. The original suit, SC No.1214/2016, was filed by Sri Jagadguru Renukadi Panchacharya, Free Boarding Trust (landlord/plaintiff), for ejectment. The Small Causes Court had allowed the landlord's petition, directing the tenant to vacate the premises within two months. During the pendency of the revision petition, the parties explored settlement and arrived at a compromise. The compromise involved payment of arrears of rent, refund of security deposit upon vacating, payment of electricity charges by the petitioner until December 31, 2022, and an undertaking not to sub-let. The petitioner agreed to pay a monthly rent of Rs. 40,000/- and vacate by December 31, 2022.

Key Issues

1. Whether the compromise arrived at between the petitioner (tenant) and the respondent (landlord) is lawful and can be upheld by the Court? The petitioner argued that GST is not payable on the enhanced rent. The respondent contended that if GST is applicable to the enhanced rent, the petitioner should pay it. The Court had to decide on the validity and enforceability of the compromise terms, particularly concerning the payment of GST on the enhanced rent, which was a point of contention raised by the respondent's counsel and addressed by the petitioner's submission.