Zile Singh vs. Anguri Devi

Facts

The petitioner, Zile Singh, filed a petition under Article 227 of the Constitution of India challenging an order dated 27.03.2023 passed by the Additional District Judge-cum-Presiding Judge, Exclusive Commercial Court, Gurugram. The Trial Court had granted leave to defend a suit for recovery, but subject to a condition. The petitioner argued that the condition was unreasonable, as no GST was payable during the Covid-19 pandemic period due to no invoices being raised. He contended that the landlord's calculations included a significant amount of GST and TDS, and the rent was reduced to Rs. 1,00,000/- per month during the pandemic, with subsequent payments and acceptance of Rs. 1,50,000/- per month. The petitioner sought to have the condition scrapped or made reasonable.

Held

The Court held that the Trial Court had rightly granted leave to defend as triable issues were involved. However, the condition attached to the leave to defend was found to be not fully justified. The Court reasoned that the Trial Court's direction to deposit one-third of the landlord's calculated amount, which included GST and TDS, was based on unilateral calculations. The issue of tax payment, including GST and TDS, should only arise after the actual amount is determined by the Court after assessing the rival contentions. Therefore, a blanket direction to deposit one-third of the plaintiff's calculation was modified. The Court directed the petitioner to deposit the amount calculated at Rs. 1,50,000/- per month plus payable GST, TDS, and other taxes for the entire period of alleged default within four weeks. Out of this deposited amount, the Trial Court was directed to disburse Rs. 1,00,000/- per month plus taxes and TDS to the plaintiff for the alleged period of default. The Court clarified that its order would not prejudice the final disposal of the suit.

Key Issues

1. Whether the condition imposed by the Trial Court for granting leave to defend the suit for recovery, requiring the deposit of one-third of the disputed amount and furnishing third-party security for the remaining two-thirds, is reasonable and justified, considering the rival contentions of the parties, particularly concerning the calculation of rent, GST, and TDS? (Mixed question of law and fact, turning on principles of civil procedure and contract law). Petitioner's arguments: The condition is unreasonable and unjustified. No GST was payable during the Covid-19 pandemic as no invoices were raised. The landlord's calculations, which form the basis of the condition, erroneously include GST and TDS. The actual rent paid and accepted was Rs. 1,50,000/- per month post-pandemic, and Rs. 1,00,000/- per month during the pandemic. The condition should be scrapped or made reasonable based on these facts. Revenue/State's arguments: No arguments were recorded for the respondent/revenue.