Bombay High Court
Saifee Developers Pvt. Ltd vs Shanklesha Constructions And 5 Others on 28 February, 2020
Author: G. S. Patel
Bench: G.S. Patel
945-CARBP-1060-19.DOC
Ashwini
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION NO. 1060 OF 2019
Saifee Developers Pvt Ltd ...Petitioner
Versus
Shanklesha Constructions & Ors ...Respondents
WITH
COMM ARBITRATION APPLICATION NO. 2 OF 2020
Saifee Developers Pvt Ltd ...Petitioner
Versus
Shanklesha Constructions & Ors ...Respondents
Mr Karl Tamboly, with Mr Z Jariwala, i/b Dua Associates, for the
Petitioner.
Mr Mayur Khandeparkar, with Mr Ativ Patel, i/b AVP Partners, for
the Respondents Nos. 1,2,4 to 6.
CORAM: G.S. PATEL, J.
DATED: 28th February 2020 PC:-
1. There is an Afdavit dated 4th February 2020 of the Respondents 1, 2 and 4 to 6. The contents of their Afdavit are Page 1 of 7 28th February 2020 ::: Uploaded on - 02/03/2020 ::: Downloaded on - 12/06/2020 09:32:20 ::: 945-CARBP-1060-19.DOC noted and the undertakings in that Afdavit and in particular in paragraph 3 are accepted as undertakings to the Court.
2. In view of the persistent controversy in the matter I believe it is best to incorporate the contents of the Afdavit in this order so that there is not the slightest ambiguity. The Afdavit reads thus:
"I, Manish Mutha, the Respondent No.2 abovenamed, having my ofce at Room No.5, 2nd foor, Maru Bhavan, 55/57 Babu Ganu Road, Mumbai 400002 do hereby solemnly afrm and state as under:
1. I say that I am fling this present Afdavit on behalf of Respondent Nos. 1,2 and 4 to 6 (herein referred to as "these Respondents") pursuant to the assurances given by our Advocate/s at the time of the hearing of this matter on 31st January 2020 as well as the Order dated passed on the said date (hereinafter referred to as thee "said Order") by this Hon'ble Court in the captioned Arbitration Petition In order to facilitate the payment of GST on the amount of Rs. 15 crores received by Respondent No.1 from the Petitioner for purchase of immovable property.
2. I say that the Petitioner is liable to pay an aggregate sum of Rs.2,25,54,238/- (Rupees Two Crore Twenty Five Lakhs Fifty Four Thousand Two Hundred and Thirty Eight Only) as and by way of GST alongwith interest on the principal sum of Rs. 1,80,00,000/- (One Crore Eighty Lakhs Only) after deducting the amount of Rs. 35,50,200/-
already paid by the Petitioner towards the outstanding amount of GST, as on 31st January 2020. The interest is computed at the rate of 18% per annum as per the circular / notifcation bearing number 13/2017 dated 28th June 2017 issued by Government of India, Ministry of Finance. This outstanding GST amount with the applicable interest at the Page 2 of 7 28th February 2020 ::: Uploaded on - 02/03/2020 ::: Downloaded on - 12/06/2020 09:32:20 ::: 945-CARBP-1060-19.DOC relevant time has been communicated to the Petitioner on various occasions and these Respondents have also provided their Chartered Accounts certifcate for the same. Hereto annexed and marked as Exhibits "A " and " B" are copies of the aforesaid GST circular / notifcation dated 28th June 2017 and Chartered Accountant's certifcate certifying that the aforesaid amount is due and payable as on 31st January 2020.
3. I say that these Respondents agree to accept the aforesaid amount of GST plus interest thereon without prejudice to the rights of the Petitioner on merits of the matter. Subject to receipt of the entire aforesaid amount of Rs.2,225,54,238/- (Rupees Two Crore Twenty Five Lakhs Fifty Thousand Two Hundred and Thirty Eight Only) or such additional amount as may be required to be paid by the Petitioner on account of further delay in payment on and after 31st January 2020, I agree and undertake:
a. To pay the entire amount of GST and interest due on thee said Rs. 15 crores as paid by the Petitioner to these Respondents to the GST authorities;
b. To provide the Petitioner with a receipt evidencing the payment of GST, towards both principal and interest, in respect of the transaction of payment of Rs. 15 crores by the Petitioner.
c. Not later than 45 days from the date of completion of the project of these Respondents known as 'Sai Nirvana', fle an application and/or take such steps as may be necessary in accordance with law to recover and/or seek refund of GST, if any, as may become available in respect of amount of GST and / or interest paid by the Petitioner hereunder and to intimate the Petitioner of the Page 3 of 7 28th February 2020 ::: Uploaded on - 02/03/2020 ::: Downloaded on - 12/06/2020 09:32:20 ::: 945-CARBP-1060-19.DOC dates, time and venue of any hearing in relation to such application;
d. To repay the Petitioner any amount received as refund towards GST/interest from the amount paid by it within 3 (three) days of receipt thereof from the GST authority."
3. There are several issues that arise.
4. As regards the amount of Rs. 35,50,200/- paid by the Petitioners to the Respondents towards part of the GST liability and which is GST payable on the 10 fats already registered in Petitioner's name, Mr Khandeparkar makes the following two statements:
(a) that the amount has been paid to GST already and has not been adjusted or otherwise accounted for; and
(b) that by Monday 2nd March 2020 his attorneys will forward to the attorneys for the Petitioner a copy of the relevant challan evidencing payment of this amount of Rs. 35,50,200/- .
5. The remaining controversy is about the GST payable (with accrued interest) on the amount of Rs. 15 crores paid by the Petitioners to the Respondents. It is not necessary to set out the rival contentions since Mr Tamboly now has instructions to state that the amount of GST and accrued interest on this amount will be paid on a without prejudice basis by the Petitioners to the Respondents. He seeks some time to make this payment. I will allow Page 4 of 7 28th February 2020 ::: Uploaded on - 02/03/2020 ::: Downloaded on - 12/06/2020 09:32:20 ::: 945-CARBP-1060-19.DOC him 12 weeks' time to make that payment but the interest up to the date of payment will also be included in the remittance to be made.
6. As a starting point for the computation, Exhibit "B" to the further Afdavit afrmed on 4th February 2020, a Chartered Accountant's certifcate showing the total amount due as of 31st January 2020, will serve as the basis for the calculations going forward.
7. This is subject to certain further conditions:
(a) that within 48 hours receipt of the amount, the Respondents will make payment of the entire amount to the GST authorities;
(b) that they will within 48 hours of receiving the relevant challan forward a copy to the Advocates for the Petitioners;
(c) all the conditions and undertakings in paragraph 3 of the Afdavit extracted above will immediately begin to operate.
8. In view of these statements, upon the Petitioners making payment of the balance amount of GST and accrued interest--
(a) the Respondents will register the 15 fats mentioned in paragraph 17(ii) at Exhibit "G" to the Afdavit in Reply and listed at page 122 of the paper book in favour of the Petitioners.Page 5 of 7
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(b) The stamp duty is to be paid in accordance with the agreement between the parties.
(c) Upon those fats being registered and the stamp duty being paid any original documents being held by the Petitioners will be returned to the Respondents.
(d) If there is any difculty in this regard liberty to the parties to apply either to the Court or to the arbitrator in an appropriate application under Section 17.
9. It goes without saying that all contentions including whether the GST is at all payable by the Petitioners is kept open for an appropriate claim and decision in arbitration.
10. Mr Khandeparkar states that with this statement by Mr Tamboly being accepted, the appeal that the Respondents had fled against the order dated 13th December 2019 will no longer survive. Mr Khandeparkar states that the Respondents will withdraw that appeal at the earliest, the issue having been resolved in this Court.
11. There are protective orders including principally the order of 15th July 2019. The Petitioners are aware that these orders protect them in two signifcant aspects. First is in regard to 15 fats that admittedly the Respondents have agreed to transfer to the Petitioner. The second is a protection of an unsold commercial area of 10,000 sq ft. The order of 15th July also allowed the Respondents to deposit an amount equivalent to the consideration for 19,000 sq feet at Rs. 3,750 per sq foot with interest at 9% per annum. On that deposit being made, the two previous protective directions were to Page 6 of 7 28th February 2020 ::: Uploaded on - 02/03/2020 ::: Downloaded on - 12/06/2020 09:32:20 ::: 945-CARBP-1060-19.DOC stand vacated. No such deposit has been made and therefore those two protective orders for the 15 fats and the 10,000 sq feet continue.
12. I will have to keep the Petition pending since there is a matter of prayer clause (a). A disclosure was ordered by GS Kulkarni J but that has been kept pending by an order of Division Bench. In any case, the matter will have to be kept pending until there is some clarity on whether the GST has been paid or not, for the simple reason that a failure on the part of the Petitioners to pay the GST may have other consequences.
13. Mr Tamboly has a request in regard to the sanctioned plans for the structure. His clients have an apprehension that the commercial area of 10,000 sq ft that is part of paragraph 17 (iii) of Kulkarni J's order of 15th July 2019 is not actually available. That aspect is currently kept pending as well, leaving all contentions open.
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