Facts of the Case

This judgment is not a GST ruling — it is a private civil dispute over ejectment and lease renewal, disposed of on the basis of a settlement between the parties, in which GST on rent featured only as a term of the new commercial lease. Indian Oil Corporation Limited (through its Chief Divisional Retail Sales Manager) had filed Regular First Appeal No.232 of 2019 against a judgment and decree dated 01.12.2018 passed in O.S. No.5179/2012 by the XXII Additional City Civil and Sessions Judge, Bengaluru, which had decreed a suit for ejectment against the appellant (as sub-lessee) along with arrears of rent/damages of Rs.3,10,500/- and ongoing damages of Rs.2,00,000/- per month. During pendency of the appeal, the appellant and the plaintiff/respondent no.1 (the property owner) negotiated a settlement: a fresh lease for 10 years from 08.03.2024 at Rs.36/sq.ft. for 6457.50 sq.ft. (amounting to Rs.2,32,470/- per month) with a 10% escalation every three years, GST on the rent to be borne by the appellant, and payment of Rs.51,36,040/- as differential rent for the intervening period (plus applicable GST and TDS). The matter was decided on 25.04.2026 (a corrigendum/updated hearing) by a single judge.

Issues Involved

  1. Whether the compromise/settlement arrived at between the appellant and respondent no.1 could be recorded and the impugned judgment and decree be substituted accordingly.
  2. Whether respondent no.2, who was not a party to the settlement, had any claim over the property.

Petitioner's Arguments

  • The appellant sought to have the joint memorandum of settlement recorded, under which it would enter into a fresh 10-year lease at a negotiated rent (plus applicable GST), pay differential rent for the interim period, and continue in possession as a tenant, in place of the ejectment decree.

Respondent's Arguments

  • Counsel for respondent no.1 (the property owner) accepted the terms of settlement and confirmed the compromise had been voluntarily entered into.
  • Counsel for respondent no.2 (arrayed as a co-defendant/respondent) clarified on instructions that respondent no.2 had no claim over the property and was accordingly not a party to the settlement.

Court Order / Findings

  • The Court perused the terms of the Joint Memorandum of Settlement filed as I.A.No.1 of 2023 and found no impediment to accepting them.
  • The submission that respondent no.2 had no claim over the property, and was hence not a party to the settlement, was accepted and placed on record.
  • The impugned judgment and decree dated 01.12.2018 were substituted in terms of the compromise decree agreed between the parties.
  • The appeal was disposed of accordingly, with the Registry directed to draw up the decree and refund the full court fee deposited by the appellant.

Important Clarification

This is a compromise decree, not an adjudication of any legal issue — the Court simply recorded a settlement the parties had already reached and substituted it for the earlier decree. GST on the renewed lease rent is mentioned only as a standard commercial term the parties agreed to between themselves; the judgment does not decide any question of GST law or liability.

Sections Involved

  • Code of Civil Procedure, 1908 — Section 96 read with Order XLI (regular first appeal); recording of compromise
  • No GST statute was interpreted or applied in this order.

Decision – In Favour of

Disposed of on the basis of a mutual, voluntary compromise between the Appellant (Indian Oil Corporation Limited) and Respondent No.1 — the appeal was allowed by consent and the trial court's ejectment decree was substituted with the terms of settlement; this is not a decision on merits by contest.

Case Details

High Court of Karnataka at Bengaluru | Regular First Appeal No.232 of 2019 (RES) | Coram: Hon'ble Mr. Justice Anant Ramanath Hegde | Date: 25 April 2026.

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