Facts of the Case

The appellant, Sadhna Jayesh Raichura, was a tenant in a building ('India House') taken up for redevelopment by the respondent, Rise2Sky Developers LLP, under an agreement for permanent alternate accommodation. After obtaining the Occupation Certificate, the developer raised a demand of Rs. 7,97,840/- towards GST, along with other charges, and allegedly stopped paying transit rent and refused to hand over possession of the alternate flat. The appellant filed a suit and sought a temporary mandatory injunction directing the developer to pay the GST demanded (if applicable) and hand over possession; the trial court rejected the interim application, holding it would effectively decree the suit. This appeal followed. While GST is central to the factual dispute, the Court expressly notes that the liability to pay GST had 'yet not crystallized' — it does not rule on whether GST was actually payable, by whom, or in what amount.

Issues Involved

  1. Whether the trial court was right to refuse a temporary mandatory injunction for payment of GST and handover of possession.
  2. How to balance the parties' interests where the GST liability itself remained undetermined, while the tenant was kept out of the redeveloped accommodation.

Petitioner's Arguments (Appellant/Tenant)

  • She was entitled to the permanent alternate accommodation under the signed agreement, and was ready to abide by any terms the Court considered fit, including an undertaking regarding the GST amount.

Respondent's Arguments (Developer)

  • An undertaking by the tenant to deposit the GST amount only if and when demanded was of no comfort, since the developer itself would face coercive GST recovery action if the tax was not paid promptly, and non-payment would attract interest and penalty.
  • The developer sought either a direction that the tenant pay the amount forthwith pursuant to the demand, or permission to withdraw and deposit funds itself with the tax authorities, undertaking to return them if the tenant ultimately succeeded in the suit.

Court Order / Findings

  • The Court accepted the tenant's written undertaking that she would deposit any GST amount demanded by the competent authority, in the City Civil Court, within four weeks of being informed in writing by the developer.
  • It disposed of the appeal on terms: the tenant to deposit the GST amount before the trial court upon a demand being raised and communicated; the developer at liberty to apply to withdraw and deposit that amount with the tax authorities, undertaking to return it if the tenant is later held not liable; the developer to hand over possession of the permanent alternate accommodation within two weeks; and the tenant to pay the other disputed charges (share money, society registration, meters, development charges) subject to the trial court's final decision.
  • The trial court was requested to expedite the suit itself, with a target disposal date.

Important Clarification

This order does not decide whether GST was actually payable on the transaction, in what amount, or by whom as between landlord/developer and tenant — that liability remained (in the Court's own words) 'not crystallized' and was left to the statutory GST process and the trial court's final decision on the suit. It is essentially a possession-and-security arrangement pending trial, not a ruling on GST law.

Sections Involved

  • General principles governing temporary/mandatory injunctions in civil suits
  • Redevelopment/Permanent Alternate Accommodation Agreement framework

Decision – In Favour of

Disposed of by consent-like terms benefiting both sides: the tenant secured possession and a workable GST-deposit mechanism, while the developer secured protection against being left to bear the GST demand alone — without any decision on the underlying GST liability.

Case Details

Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case No.: Appeal From Order No. 94 of 2023 with Interim Application No.1313 of 2023
Coram: Hon'ble Mr. Justice N.J. Jamadar
Date of Order: 6 April 2023

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