Facts of the Case

The petitioners, M/s. Kodai Automobiles Limited and S.G. Jayaraj Nadar and Son, approached the Madras High Court seeking a writ of mandamus directing Axis Bank Limited to release the original title deeds relating to their property without insisting upon a revocation letter from the office of the Deputy Commissioner of CGST and Central Excise.

The dispute arose after the parties entered into a One Time Settlement (OTS) with the bank. As part of the settlement conditions, the bank required production of a revocation letter from the GST authorities before releasing the property documents. Alternatively, the petitioners requested extension of time for payment of the second instalment under the OTS settlement.

 

Issues Involved

  1. Whether the bank could be directed to release the property documents without insisting on a revocation letter from the GST authorities.
  2. Whether the petitioners were entitled to extension of time for payment under the One Time Settlement.
  3. Whether the writ petition survived after the parties settled the dispute through the One Time Settlement.

 

Petitioner’s Arguments

  • The petitioners contended that the bank should release the original title documents without insisting upon a revocation letter from the GST Department.
  • Alternatively, they sought extension of time to comply with the second instalment under the OTS payment schedule.
  • During the hearing, the petitioners informed the Court that after filing the writ petition, they had approached the bank for a One Time Settlement, which had been accepted by the bank, thereby resolving the dispute between the parties.

 

Respondent’s Arguments

  • No appearance was recorded on behalf of the respondents.
  • The Court considered the submission of the petitioners that the One Time Settlement had already been accepted by the bank, resulting in settlement of the dispute.

 

Court Order / Findings

The Madurai Bench of the Madras High Court recorded the submission made by the petitioners that the dispute had already been resolved through the One Time Settlement accepted by Axis Bank.

Since the grievance raised in the writ petition no longer survived, the Court held that the writ petition had become infructuous.

Accordingly, the writ petition was dismissed as infructuous, without any order as to costs, and the connected miscellaneous petition was also closed.

 

Important Clarification

  • When the dispute between the parties is settled during the pendency of a writ petition through a One Time Settlement, the writ petition becomes infructuous.
  • Courts ordinarily do not adjudicate issues that no longer survive after settlement between the parties.
  • Acceptance of an OTS by the lending institution may render pending writ proceedings unnecessary if the relief sought has substantially been resolved.

Sections / Provisions Involved

  • Article 226 of the Constitution of India
  • One Time Settlement (OTS) Guidelines
  • CGST Act, 2017 (Reference to GST Charge/Revocation Issue)


Link to download the order - https://www.mytaxexpert.co.in/uploads/1782981271_131compressed.pdf

 

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