Smt. Ammaiah Vs Punjab National Bank

SMT. AMMAIAH W/O SRI. R. GOPAL REDDY AGED ABOUT 55 YEARS RESIDING AT 'SWAPNA SADANA' # 625A CROSS, MCHS COLONY BTM 2^ND STAGE, BENGALURU-560 076 REP. BY HER GPA HOLDER GANGADHAR S.

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...PETITIONER

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(BY SRI. MANMOHAN P.N, ADVOCATE)

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AND:

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PUNJAB NATIONAL BANK A BANK CONSTITUTED UNDER BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1970 HAVING ITS HEAD OFFICE AT 7, BHIKAIJI CAMA PLACE NEW DELHI-110 066 HAVING ITS BRANCH AT ELECTRONIC CITY BENGALURU REPRESENTED BY ITS GENERAL MANAGER

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…RESPONDENT

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(BY SRI. T.P. MUTHANNA, ADVOCATE)

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THIS REVIEW PETITION IS FILED UNDER ORDER XLVII RULE 1 READ WITH SECTION 114 OF THE CPC, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO (i) REVIEW THE JUDGMENT DATED 16.11.2022 PASSED IN COM AP. No.406/2022 PASSED BY THIS HON'BLE COURT AND ETC.

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THIS REVIEW PETITION HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 03.06.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN J., PRONOUNCED THE FOLLOWING:

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CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE DR. JUSTICE K.MANMADHA RAO

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CAV JUDGMENT

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(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)

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This Review Petition is filed seeking to review the judgment dated 16.11.2022 passed in Commercial Appeal No.406/2022.

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It is contended in the review petition that the direction in the judgment under review that the amount due to the petitioner is including Goods and Service Tax ('GST' for short) is an error apparent on the face of the record. It is contended that the suit was filed by the Review Petitioner/Respondent/Plaintiff, who is the owner of the plaint schedule property. A registered Rental-Cum-Lease Deed was executed on 14.12.2009 in favour of the

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appellant-Bank for a period of 10 years. The rent was fixed at Rs.65,885/- per month excluding service tax for the period from 01.07.2009 to 30.06.2014 and Rs.82,110/- per month excluding service tax for the 5 years commencing from 01.07.2014. It is stated that though the period of the

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lease expired in the year 2019 and the review petitioner sought enhancement of rent or vacating of the premises, neither was done. Ultimately, the suit was filed in the year 2022 and was decreed on 29.08.2022 by the Commercial Court. The operative portion of the judgment of the Commercial Court in Com.O.S.No.23/2022, reads as

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follows:-

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"The suit of the plaintiff is partly decreed with costs.

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The defendant is ordered and directed to quit, vacate and deliver the vacant possession of the schedule premises in favour of the plaintiff within 30 days from the date of decree.

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The defendant is ordered and directed to pay Rs.31,29,068/- to the plaintiff towards arrears of mesne profits for the period from 01-07-2019 to 31-01-2022 with interest @ 6% per annum from 01-02-2022 within 30 days from the date of decree.

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The defendant is ordered and directed to pay the future mesne profits @ Rs.150/- per sq.ft. per month from 01-02-2022 till the date of handing over the vacant possession of the schedule premises.

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If the defendant fails to deliver the vacant possession of the schedule premises, to pay arrears of

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mesne profits and to pay mesne profits from 01-02-2022 within 30 days from the date of decree, the defendant shall be liable to pay interest @ 6% per annum on the amount of mesne profits.

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Draw decree accordingly.

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Office is directed to send copy of the Judgment to both the parties through E-mail as required under Order XX Rule 1 of Code of Civil Procedure."

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3. Though an appeal was preferred by the Bank as

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against the judgment and decree, the appeal was not seriously prosecuted, since the Bank only sought some time to vacate the premises.

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The learned counsel appearing for the review petitioner submits that in the circumstances, the matter was not considered on merits and the judgment and decree of the Commercial Court was confirmed by this Court with the modification of granting six months time from 30.09.2022 to vacate the premises. However, in the operative portion of the judgment, this Court held that the appellant/defendant shall pay Rs.31,29,068/- to the respondent/plaintiff towards arrears of mesne profit from 01.07.2019 to 30.11.2022 at Rs.100/- per sq.ft including GST with interest at 6% per annum from 01.02.2022. Further, the appellant was also

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directed to pay future mesne profits at Rs.150/- per sq.ft including GST from 01.12.2022 till date of handing over of vacant possession of the premises. It is contended that since the decree of the Commercial Court did not mention GST and since the matter was never argued on merits; the direction that the amounts as found by the Commercial Court were to be paid including GST was an error apparent on the face of the record and would not have been passed without a clear reason to interfere with the decree of the Trial Court. It is further submitted that the calculation statements filed by the Bank themselves before this Court at the appellate stage clearly mentioned that the amounts payable as excluding the element of GST and that those calculations form a part of the appellate judgment as well.

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The learned counsel appearing for the Bank, on the other hand, contends that the appellant had been granted six months time to vacate the premises by this Court in appeal. The calculation statements were taken into account and the Court had deliberately modified the decree to make the amounts payable inclusive of GST as well. It is

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submitted that this is clear from the directions issued to the respondent/landlord to deposit the GST to the authorities and file GST returns invoice so that the appellant can claim input-tax credit. The learned counsel would also rely on the calculation statement preferred in this review petition as directed by this Court.

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We have considered the contentions advanced. It

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is clear that the rental/Lease Deed in question was entered into at a time when the GST regime was not in operation. It is clear that GST is a tax on the services which have to be paid by the person, who avails the goods or the services and is a multistage destination based indirect tax. It is therefore, for the Bank, who is paying the rent to pay the GST in respect of the rent paid by them. Clearly 18% GST is payable on rent for commercial properties and the liability to pay the GST on the rent component is on the tenant. GST at the rate of 18% is to be paid on the amount which is due to the landlord by the tenant. In the instant case, the Judgment and Decree of the Commercial Court did not specify the element of GST since it was not an issue raised

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at the relevant time. Therefore, the finding of the Commercial Court was specifically that the landlord is entitled to Rs.100/- per square feet and Rs.150/- per square feet, respectively as mesne profits. Though an appeal had been preferred, it is evident from a reading of paragraphs No.8 and 9 of the judgment under review that the appeal was never argued on merits and it was on the request of the learned counsel for the appellant that the appeal was disposed of granting time to the appellant to vacate the premises.

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In the above circumstances, we are of the opinion that this Court had no occasion to consider the question of payment of GST on merits. Since GST is chargeable on the amount to be paid by the tenant to the landlord, we are of the opinion that the finding that the amount of Rs.100/- and Rs.150/- respectively per square feet is to be inclusive of GST is unfounded and can only be an error committed by the Appellate Court.

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In the result:-

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(i) The Review Petition stands allowed .

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(ii) The judgment dated 16.11.2022 passed by this Court in Commercial Appeal No.406/2022, shall stand reviewed.

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(iii) The judgment and decree of the Commercial Court is confirmed with the modification with regard to time for vacating the premises.

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(iv) The amounts found due as per the Judgment and Decree of the Commercial Court shall be payable by the Bank to the review petitioner. GST, if any payable, shall be collected and paid in accordance with law without including the same in the amounts decreed.

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Ordered accordingly.

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Pending interlocutory applications, if any, shall stand disposed of.

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Sd/-

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(ANU SIVARAMAN) JUDGE

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Sd/(DR. K.MANMADHA RAO) JUDGE

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cp*

Smt. Ammaiah v. Punjab National Bank

Case brief

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Smt. Ammaiah v. Punjab National Bank

Case brief

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