M/S. FASHION WORLD versus BANSHIDHAR MULTI BUILDERS PVT. LTD. (17/10/2022) — Supreme Court headnote

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Summary

In an eviction suit under the M.P. Accommodation Control Act, 1961, the tenant paid rent and maintenance but not the GST payable under the lease. On the landlord's application under Section 13(6), the trial court struck off the tenant's defence, and the High Court upheld that order. While issuing notice, the Supreme Court recorded the tenant's offer to deposit about Rs 5.8 lakh of outstanding GST, which the tenant then paid. Because the defence had been struck off only for that default, the Court set aside both orders and let the tenant defend the suit, without deciding whether rent includes tax. To balance the equities, it directed the tenant to pay rent with the 15% three-yearly increase stipulated in the lease, rising from Rs 58,650 to Rs 1,15,958 a month, until the suit is decided within six months.

Issues

Whether the order striking off the tenant's defence under Section 13(6) of the M.P. Accommodation Control Act, 1961 for non-payment of GST should stand after the tenant deposited the outstanding GST.
On what terms as to rent the tenant should be permitted to defend the eviction suit.

Provisions considered

Section 13(6), M.P. Accommodation Control Act, 1961The defence struck off for non-deposit of GST was restored once the GST was deposited under the Court's order, subject to payment of rent with periodic increases. (¶¶ 1, 2, 5, 8)

Held

As the defence was struck off only for non-payment of the balance GST, which the tenant later deposited pursuant to the Court's order, the orders striking off the defence were set aside and the tenant was allowed to defend the suit on merits. (¶¶ 4, 5, 8)
To strike a balance, the tenant must pay rent with the 15% increase every three years provided in the lease, from Rs 58,650 rising to Rs 1,15,958 per month from October 2023, until the suit is finally decided. (¶¶ 6.1, 7, 8)

Result

Appeal allowed; orders striking off the defence set aside, the tenant directed to pay rent at the enhanced rates within six weeks, and the suit to be decided within six months; no costs.