Ywc Gym Management PVT LTD vs. Anil Kumar Jain

Facts

The Petitioner, YWC Gym Management Pvt Ltd, filed a petition under Article 227 of the Constitution of India challenging an order dated 18.08.2023 passed by the ADJ-01, East District, Karkardooma Courts, Delhi. This order, issued in execution proceedings (Ex. No. 256/2021), directed the attachment of the Petitioner's movable and immovable properties. The Respondent, Anil Kumar Jain (decree holder), sought to recover Rs. 33,45,451/-, including arrears of Tax Deducted at Source (TDS). The Petitioner contended that this amount did not account for a security deposit of Rs. 12,75,000/- lying with the Respondent, which was duly recorded in a lease deed dated 06.01.2020 and paid through banking channels. The Petitioner also argued that the Respondent included applicable GST charges on monthly rent from April 2021 onwards, which are payable to the government and not recoverable by the Respondent. An application seeking adjustment of the security amount was pending before the Executing Court.

Held

The Court took on record the statement and undertakings of the Petitioner and judgment debtor no.2. The Petitioner was bound by these undertakings. The Court granted the Petitioner two weeks to comply with the payment and deposit commitments made, including a demand draft of Rs. 14,96,704/-, GST amount of Rs. 4,46,247/-, and TDS amount of Rs. 1,27,500/-. Subject to compliance within this period, the operation of the impugned order dated 18.08.2023 was stayed. The Court clarified that any default in compliance would automatically vacate the stay. The Petitioner was directed to move an application before the Trial Court to place the order on record, and the Executing Court was to fix a date after 20.11.2023 to verify compliance. The Court did not explicitly decide the merits of the adjustment of the security deposit or the recoverability of GST charges, but rather facilitated a conditional stay based on the Petitioner's undertakings and proposed deposits.

Key Issues

1. Whether the Executing Court erred in issuing warrants of attachment against the Petitioner's properties without accounting for the security deposit of Rs. 12,75,000/- which the Petitioner claims was paid and admitted for adjustment by the Respondent. 2. Whether the Executing Court erred in allowing the recovery of GST charges on monthly rent from April 2021 onwards, as these are payable to the government and not recoverable by the Respondent. Petitioner's Arguments: The Petitioner argued that the security deposit of Rs. 12,75,000/- should be adjusted from the amount sought in execution, citing a lease deed and correspondence dated 07.06.2021 and 02.07.2021. They further contended that the GST charges included in the recovery are not recoverable by the Respondent as they are government dues. The Petitioner also stated their intention to deposit Rs. 14,96,704/- via demand draft, Rs. 4,46,247/- as GST, and Rs. 1,27,500/- as TDS with the appropriate authorities by 20.11.2023. Respondent's Arguments: None appeared for the Respondent.