IMPORTANT POINT
In an appeal or revision preferred by a tenant against a order or decree of an eviction passed under the Rent Act it is open to the appellate or the revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent.

Headnote:Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – Section 13(1)(g), 13(3)(a) and (ii) – Appellant Government of Maharashtra, was in occupation of an area of 9000 sq. ft. comprising the sixth floor of a building on a monthly rental of Rs. 5236.58/-, besides water charges at the rate of Rs. 515.35/- per month since 1966 – Respondents 1 to 3 purchased suit premises under a deed of assignment and stepped into the shoes of Landlord – Appellant suffered a decree of ejectment passed by the Court of Small Causes on grounds of default in payment of taxes and water charges and reasonable and bona fide need of landlords, respondents 1 to 3 for their own use and occupation – Appeal against the decree was dismissed by Division Bench of Small Causes Court – Writ petition – High Court declined to entertain it on the ground that the appellant had a remedy available to it under the Act itself-Appellant then moved the High Court in Civil Revision Application challenging the orders of its ejectment – High Court admitted the Civil Revision and issued rule on interim relief regarding stay of execution of the decree – Later on, after hearing the parties the Court stayed the execution of the decree subject, however, to the condition that the appellant would deposit a sum of Rs. 5,40,000/– every month commencing from date of the decree passed by the trial court – Case of appellant that condition on which stay was granted was highly onerous – Held in an appeal or revision preferred by a tenant against a order or decree of an eviction passed under the Rent Act it is open to the appellate or the revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent – Needless to say that in fixing the amount subject to payment of which the execution of order/ decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount – In the case in hand, the High Court had fixed the amount of Rs.5,40,000/– per month with reference to the Stamp Duty Ready Reckoner and hence, its reasonableness could not be doubted – In the event tenant’s appeal/revision was allowed and the eviction decree was set aside status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent – That being the position, the amount fixed by the court over and above the contractual monthly rent, ordinarily, should not be directed to be paid to the landlord during the pendency of the appeal/revision – The deposited amount, along with the accrued interest, should only be paid after the final disposal to either side depending upon the result of the case- In case for some reason the Court finds it just and expedient that the amount fixed by it should go to the landlord even while the matter is pending, it must be careful to direct payment to the landlord on terms so that in case the final decision goes in favour of the tenant the payment should be made to him without any undue delay or complications – Impugned order of High Court held just and proper, calling for no interference by Court – Appeal having no merit dismissed. (Paras 46 to 49)
       Facts of the Case :
        Appellant Government of Maharashtra, was in occupation of an area of 9000 sq. ft. comprising the sixth floor of a building on a monthly rental of Rs. 5236.58/-, besides water charges at the rate of Rs. 515.35/- per month since 1966 .Respondents 1 to 3 purchased suit premises under a deed of assignment and stepped into the shoes of Landlord.Appellant suffered a decree of ejectment passed by the Court of Small Causes on grounds of default in payment of taxes and water charges and reasonable and bona fide need of landlords, respondents 1 to 3 for their own use and occupation. Appeal against the decree was dismissed by Division Bench of Small Causes Court . High Court declined to entertain writ petition on the ground that the appellant had a remedy available to it under the Act itself. Appellant then moved the High Court in Civil Revision Application challenging the orders of its ejectment .High Court admitted the Civil Revision and issued rule on interim relief regarding stay of execution of the decree. Later on, after hearing the parties the Court stayed the execution of the decree subject, however, to the condition that the appellant would deposit a sum of Rs. 5,40,000/- every month commencing from date of the decree passed by the trial court. Case of appellant that condition on which stay was granted was highly onerous. Respondents on the other hand maintained that the Court had been very liberal with the appellant and amount of monthly deposit fixed by the court was far less than the current market rent in that area.
       Findings of the Court :
        Held in an appeal or revision preferred by a tenant against a order or decree of an eviction passed under the Rent Act it is open to the appellate or the revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent . Needless to say that in fixing the amount subject to payment of which the execution of order/ decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount. In the case in hand, the High Court had fixed the amount of Rs.5,40,000/- per month with reference to the Stamp Duty Ready Reckoner and hence, its reasonableness could not be doubted. In the event tenant’s appeal/revision was allowed and the eviction decree was set aside status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent. That being the position, the amount fixed by the court over and above the contractual monthly rent, ordinarily, should not be directed to be paid to the landlord during the pendency of the appeal/revision. The deposited amount, along with the accrued interest, should only be paid after the final disposal to either side depending upon the result of the case. In case for some reason the Court finds it just and expedient that the amount fixed by it should go to the landlord even while the matter is pending, it must be careful to direct payment to the landlord on terms so that in case the final decision goes in favour of the tenant the payment should be made to him without any undue delay or complications. Impugned order of High Court was held just and proper, calling for no interference by Court. Appeal having no merit was dismissed.

Judgement Key Points

The key point of this judgement is that in proceedings involving eviction under rent control legislation, the court has the authority to stay the execution of an eviction order on certain terms, including directing the tenant to pay a higher monthly amount than the contractual rent. The court emphasizes that such conditions should be reasonable and not punitive, and that the amount fixed for stay should be proportionate to market rent or other relevant considerations (!) (!) . Additionally, the judgement clarifies that the tenancy is considered terminated upon the passing and affirmation of the eviction decree, and the tenant's liability for rent shifts to the market rate from that point onward (!) (!) . It also highlights that if the appeal or revision is ultimately successful, the tenant is entitled to recover any excess payments made during the pendency of the proceedings (!) . Overall, the decision underscores the court's discretion to impose fair and balanced conditions while safeguarding the rights of both landlords and tenants during litigation.

JUDGMENT

Aftab Alam, J. —

1. Leave granted.

2. The Government of Maharashtra, the appellant before us, is in occupation of an area of 9000 sq. ft. (11,050 sq. ft. as per the affidavit-in- reply filed by the appellant) comprising the sixth floor of a building on a monthly rental of Rs. 5236.58/-, besides water charges at the rate of Rs. 515.35/- per month. The suit premises, used for housing the office of the Registrar Co-operative Societies is situate at Fort, opposite GPO, (near C.S.T. Railway Station) in the heart of the city of Mumbai. The appellant is in occupation of the suit premises since 1966. At that time the building belonged to the Maharaja of Travancore. Respondents 1 to 3 purchased it under a deed of assignment dated May 5, 1982 and stepped into the shoes of the landlord.

3. The appellant suffered a decree of ejectment passed by the Court of Small Causes on June 30, 2003 in RAE & R Suit No. 1233/3730 of 1986 on grounds of (i) default in payment of taxes and water charges as stipulated under section 13(3)(a) and (ii) reasonable and bona fide need of the landlords, respondents 1 to 3 for their own use and occupation in terms of section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (‘the Bombay Rent Act’ or ‘the Act’ hereinafter). Its appeal (No.752/2003) against the decree was dismissed by the Division Bench of the Small Causes Court by judgment and order dated April 28, 2005.

4. The appellant initially filed a writ petition [W.P. (C) No.7361 of 2005] seeking to challenge the orders of ejectment. The Bombay High Court declined to entertain it on the ground that the appellant had a remedy available to it under the Act itself. It, accordingly, disposed of the writ petition by order dated March 15, 2007 leaving it open to the appellant to file a civil revision application as provided under section 35F(2) of the Act. The appellant then moved the High Court in Civil Revision Application No.78 of 2007 challenging the orders of its ejectment. The High Court admitted the Civil Revision on December 10, 2007 and issued rule on interim relief regarding stay of execution of the decree. Later on, after hearing the parties the Court stayed the execution of the decree by order dated October 14, 2008 subject, however, to the condition that the appellant would deposit a sum of Rs. 5,40,000/- every month commencing from the date of the decree passed by the trial court. The Court directed that the amount in arrears should be deposited by January 10, 2009 and from that date the future deposits for every month should be made by the tenth of the next succeeding month. The Court, however, did not allow the landlords to take away the money but further directed that the deposits would be ad-hoc and subject to further order in the revision or in any other appropriate proceeding. It also directed the office to invest the amount(s), in case deposited by the appellant, in a nationalized bank, initially for a period of one year and then for further periods of one year each. The appellant finds the condition on which stay is granted highly onerous. But the respondents maintain that the Court has been very liberal with the appellant and the amount of monthly deposit fixed by the court is far less than the current market rent in that area.

5. Of late, orders are coming to this Court where, in cases arising from ejectment proceedings, the High Courts, with a view to strike a balance between the competing interests of the landlord and the tenant, pass interim orders asking the tenant to pay to the landlord or deposit in court, as monthly rent, certain sum fixed by it (that, according to the High Court, should be the reasonable market rent for the tenanted premises), far in excess of the existing monthly rent. In this case, while it was at the threshold, it was stated before this Court that two of its Division Bench decisions, one in Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd, 1 (2005) 1 SCC 705 and the ot

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2009 Supreme(SC) 1497

Cases Referred (13)