Facts of the Case

This is a multi-party real-estate/NBFC recovery dispute, not a GST case. Thirty-eight petitioners — homebuyers in a residential project called 'Unishire Weave' developed by Unishire Promoters Private Limited (Respondent No. 15) — challenged an auction sale notice dated 20.06.2020 issued by an NBFC (Altico Capital India Ltd., Respondent No. 5) against the mortgaged project land, arraying various Union and State authorities, banks, and the developer's directors as respondents.

After extensive negotiation, the petitioners and Respondent Nos. 15 and 28 (a limited liability partnership entrusted with completing construction) filed a detailed joint memo recording a comprehensive settlement: the developer undertook to complete the project by June 2024, homebuyers agreed to make balance payments into a dedicated RERA escrow account, prior statutory dues were treated as settled, and — relevant here — the memo recorded that homebuyers 'undertake to pay the Goods and Service Tax applicable on the Balance payments', while the developer agreed not to seek any additional payment for taxes already paid unless a retrospective change in taxation applied.

Issues Involved

  1. Whether the writ petition challenging the auction sale notice could be disposed of in terms of the settlement reached between the petitioners and the developer respondents.
  2. How future GST liability on balance payments under the home-purchase agreements would be allocated between the parties, as recorded in their own settlement.

Petitioner's Arguments

  • The petitioners, having reached a settlement with the developer for completion and handover of their respective apartments by June 2024, sought disposal of the writ petition in terms of the joint memo, subject to the developer's undertakings being honoured.

Respondent's Arguments

  • Respondent Nos. 15 and 28 (the developer and the LLP undertaking construction) confirmed their undertakings recorded in the joint memo, including completion of the project, use of a dedicated escrow account, and their agreement to bear liability for any delay-related compensation ordered by the Real Estate Regulatory Authority (RERA).

Court Order / Findings

  • With the parties and their counsel present in Court and having affixed their signatures on the order sheet in token of acceptance, the Court disposed of the writ petition in terms of the joint memo filed by the parties.
  • The Court did not independently examine or rule on the GST clause in the settlement — it simply gave effect to the parties' own commercial agreement, which happened to include a mutually agreed allocation of future GST liability on balance payments.

Important Clarification

The GST reference in this case is a term the private parties themselves negotiated into their settlement — it reflects that homebuyers would bear GST on future instalments as per the applicable rate, consistent with how GST is ordinarily charged on under-construction real estate. The Court neither interpreted any GST provision nor decided any dispute about GST liability; it simply recorded and gave legal effect to the parties' consensual settlement.

Sections Involved

  • Real Estate (Regulation and Development) Act, 2016 (escrow account and project registration requirements referenced in the settlement)
  • Article 226 of the Constitution of India, 1950

Decision – In Favour of

Disposed of by consent — the writ petition was resolved entirely on the basis of the parties' joint settlement memo, without any contested adjudication, including on the GST clause in that memo.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 8900 of 2020 (GM-RES)
Neutral Citation: NC: 2023:KHC:34718
Coram: Hon'ble Mr. Justice R. Nataraj
Date of Order: 23.09.2023

Link to Download the Order

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