Prashant Narula vs. Union Of INDIA & Ors.

Held

The Court held that it was not inclined to entertain the writ petition. The dispute arose from a commercial contract and a lease agreement between a landlord and a tenant. While acknowledging that writ petitions can be maintainable against instrumentalities of the State in contractual matters, especially when public duty or arbitrary action is involved, the Court emphasized that discretion lies with the High Court. Citing the Supreme Court's decision in Joshi Technologies International Inc. versus Union of India, the Court reiterated that writ jurisdiction is generally not exercised for purely contractual matters, especially when serious disputed questions of fact require oral evidence, or when a specific mode of settlement is provided in the contract. Money claims per se, arising out of contractual obligations, are normally not entertained except in exceptional circumstances. The Court found no good grounds to entertain the writ petition and granted liberty to the petitioner to pursue recovery of arrears of rent and GST through a civil suit or other available remedies.

Facts

The petitioner, Prashant Narula, a landlord, filed a writ petition against his tenant, Punjab National Bank (respondent no. 2), and its officials (respondents no. 3 and 4). The petitioner sought a mandamus to direct the respondents to comply with GST Acts and Rules, release outstanding GST and rent amounts due since July 2017, and pay interest on the withheld amounts. The petitioner contended that the bank refused to pay rent, claiming the landlord was liable for Service Tax/Goods and Service Tax, a stance the petitioner argued was contrary to law. The bank's liability for GST was based on certain clauses in the lease deed.

Key Issues

1. Whether a writ petition is maintainable against an instrumentality of the State arising out of a contractual obligation, particularly when it involves disputed questions of fact and a consequential monetary claim, under Article 226 of the Constitution of India? 2. Whether the Court should entertain a writ petition concerning a dispute arising from a commercial contract and a lease agreement, where the core issue is the payment of rent and GST, or should the parties be relegated to ordinary civil remedies? Petitioner's Arguments: The petitioner argued that the bank's refusal to pay rent and GST was contrary to law and cited the Delhi High Court's decision in Pearey Lal Bhawan Association vs. M/s Satya Developers Pvt. Ltd. and the Supreme Court's observation in All India Tax Payers Association vs. Union of India that service tax is an indirect tax. Respondents' Arguments: The judgment does not record specific arguments from the respondents. However, it notes the bank's denial of liability to pay Service Tax/Goods and Service Tax based on lease deed clauses.