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2025 Supreme(Online)(Kar) 9372
KARNATAKA HIGH COURT
ANU SIVARAMAN, K.MANMADHA RAO, JJ
PUNJAB NATIONAL BANK – Appellant
Versus
SMT. AMMAIAH – Respondent
RP 271 / 2023
For the Appellants/Petitioners: SRI. MANMOHAN P.N
For the Respondents: SRI. T.P. MUTHANNA
The appellate court erred in including GST in the rental amounts without it being contested in the original decree, affirming the need for merits in review petitions.
Headnote:(A) Code of Civil Procedure, 1908 - Order XLVII Rule 1 - Review of judgment - Review petition filed to correct an error apparent on the face of the record regarding GST inclusion in the rental payment - The Commercial Court’s decree did not specify GST, leading to confusion - The appellate court’s modification to include GST was deemed unfounded due to lack of argument on merits. (Paras 2, 6, 7, 8)
(B) Jurisdiction of Appellate Court - The appellate court must consider the merits of the case before modifying decrees, especially in financial matters such as rent and GST obligations. (Paras 3, 4)
Facts of the case:
The petitioner sought a review of the appellate judgment which included GST in the decree for mesne profits, despite it not being raised in the original suit. The Commercial Court had awarded arrears of mesne profits to the landlord, excluding GST.
Findings of Court:
The appellate court’s direction to include GST was an error, as it was not part of the original decree and had not been argued. The judgment of the Commercial Court is confirmed with modifications regarding the time for vacating the premises.
Issues: The primary issue was whether GST should be included in the amounts decreed for mesne profits, which was not originally part of the Commercial Court’s judgment.
Ratio Decidendi: The court held that the appellate court erred in modifying the decree to include GST without it being a contested issue, reaffirming the need for merits in appellate review.
Result: Review Petition allowed.
| Table of Content |
|---|
| 1. review petition filed to correct an error regarding gst in rental payments. (Para 2 , 3) |
| 2. arguments presented regarding inclusion of gst in the appellate judgment. (Para 4 , 5) |
| 3. court's observations on the nature of gst and its applicability. (Para 6 , 7) |
| 4. court's decision to allow the review and correct the appellate judgment. (Para 8) |
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)
This Review Petition is filed seeking to review the judgment dated 16.11.2022 passed in Commercial Appeal No.406/2022.
2. 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 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 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 follows:-
"The suit of the plaintiff is partly decreed with costs.
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.
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.
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.
If the defendant fails to deliver the vacant possession of the schedule premises, to pay arrears of 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. Draw decree accordingly.
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 ."
3. Though an appeal was preferred by the Bank as against the judgment and decree, the appeal was not seriously prosecuted, since the Bank only sought some time to vacate the premises.
4. 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 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 wi
