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2025 Supreme(SC) 692
SUPREME COURT OF INDIA
B.R. GAVAI, AUGUSTINE GEORGE MASIH, JJ.
M/s. A.J. Shetty and Co. Pvt. Ltd. – Appellant
Versus
St. Antony’s Charity Institutes And Others – Respondents
Civil Appeal No. 5468 of 2025 (Arising out of SLP (C) NO. 26214 of 2024 With Civil Appeal No. of 2025 (Arising out of SLP (C) NO. 26316 of 2024
Decided on : 23-04-2025
For the Petitioner(s): Mr. P. Vishwanatha Shetty, Sr. Adv. Mr. Mahesh Thakur, AOR Ms. Anuparna Bordoloi, Adv. Mr. Vibhav Chaturvedi, Adv. Mr. Ranvijay Singh Chandel, Adv. Ms. Geetanjali Bedi, Adv. Mrs. Geetanjali Bedi, Adv. Ms. Anusha R, Adv. Mr. Akshay Kumar, Adv.
For the Respondent(s): Mr. Sharan Dev Singh Thakur,Sr.Adv. Ms. Sakshi Kakkar, AOR Mr. Harish Pandey, AOR
The court upheld the settlement agreement allowing the appellant to vacate the property while ensuring the continuity of educational operations for students during the transition period.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXIX Rules 1 and 2 - Appeals against dismissal of suits for specific performance and mesne profits - The High Court confirmed the Trial Court's decree directing the Appellant to vacate the suit property and pay mesne profits. The Appellant's request for lease renewal was rejected, leading to litigation. (Paras 2, 3.7, 3.13)
(B) Settlement Agreement - The parties reached a settlement allowing the Appellant to vacate the property by 30th April 2025, with modified mesne profits of Rs. 23,000 per day. The settlement was accepted by the Court, ensuring the Appellant's compliance with AICTE requirements for the Institute's relocation. (Paras 6, 18)
Facts of the case:
The Appellant operated a hotel management institute on leased property, which was subject to a lease dispute with Respondent No. 1. The Appellant sought to renew the lease but was denied, leading to legal action.
Findings of Court:
The Court upheld the Trial Court's decision and facilitated a settlement between the parties, allowing the Appellant to relocate the Institute temporarily.
Issues: The main issues included the validity of the lease renewal request and the determination of mesne profits.
Ratio Decidendi: The Court emphasized the importance of amicable settlement and the need to protect the educational interests of students during the transition period.
Result: Appeals disposed of in terms of the settlement agreement.
JUDGMENT :
B.R. GAVAI, J.
1. Leave granted.
2. The present appeals challenge the common judgment and final order dated 11th September 2024 passed by a Division Bench of the High Court of Karnataka at Bengaluru1[Hereinafter “High Court”] in RFA No. 525 of 2018 (RES) connected with RFA No. 2328 of 2019 (SP) and RFA Cross Objection No. 1 of 2019. The High Court dismissed with costs the appeals2[RFA No. 525 of 2018 (RES) and RFA No. 2328 of 2019 (SP)] filed by the Appellant and confirmed the judgment and decree dated 15th February 2018 passed by the Court of III Additional Senior Civil Judge, Mangaluru, D.K. 3[Hereinafter “Trial Court”] in O.S. No. 144 of 2011 and O.S. No. 162 of 2014.
3. The facts, in brief, giving rise to the present appeals are as given below.
3.1. On 20th August 1912, the Milagres Church granted a permanent lease in favour of Respondent No. 1 in connection with the suit property. The suit property consists of two items – an area of 1 Acre 18.50 cents in Sy. No. 173-A2 and another area of 0.52 cents in Sy. No. 174 at Attavara Village, Mangaluru Taluk.
3.2. On 23rd September 1961, a lease deed for the suit property was executed by Respondent No. 1 in favour of Respondent No. 3 for a period of 50 years. Respondent No. 3, thereafter, constructed a multi-storied building and started a business under the name of “Hotel Motimahal” on the suit property.
3.3. On 3rd February 1984, Respondent No. 3 by a sale deed conveyed the lease hold rights, all improvements, business of Hotel Motimahal along with the right to use the name to the Appellant.
3.4. On 12th October 2009, in view of the impending expiry of the lease deed, the Appellant wrote to Respondent No. 1 for renewal. The same was rejected.
3.5. On 10th October 2011, Respondent No. 1 filed a suit bearing O.S. No. 144 of 2011 in the Trial Court against the Appellant and Respondent No. 3 inter-alia praying for a direction to them to surrender vacant possession of the suit property, to pay mesne profits from 23rd September 2011 to 1st October 2011 at the rate of Rs. 1,00,000/- per day, to pay future mesne profits, etc.
3.6. On 1st March 2012, the Appellant also filed a suit bearing O.S. No. 165 of 2012 (later re-numbered as O.S. No. 162 of 2014) in the Trial Court against Respondent No. 1, inter-alia, praying for specific performance of a clause in the lease deed dated 23rd September 1961 for renewal of the term of lease, for a direction to Respondent No. 1 to renew the lease of suit property for another term of 50 years on monthly rental to be fixed by the Court, etc.
3.7. On 15th February 2018, upon consolidation of the suits and recording of common evidence, the Trial Court by a common judgment decreed the suit filed by Respondent No. 1 and dismissed with costs the suit filed by the Appellant. The Appellant was directed to surrender the vacant possession of the suit property to Respondent No. 1; the Appellant and Respondent No. 3 were directed to jointly pay mesne profits from 3rd September 2011 to 1st October 2011 at the rate of Rs. 50,000/- per day and to jointly pay mesne profits from the date of suit till the date of delivery at the same rate. Respondent No. 1 was also entitled to recover the amount with interest at the rate of 15% per annum from the date of suit till realization. 3.8. Aggrieved by the dismissal of the suit filed by him, the Appellant filed an appeal bearing RA No. 11 of 2018 before the District Judge, Mangalore D.K. Simultaneously, the Appellant also filed a Regular First Appeal (RFA No. 525 of 2018) before the High Court challenging judgment and decree in favour of Respondent No. 1.
3.9. On 14th March 2018, the Principal District Judge, Mangalore D.K. admitted the appeal and allowed an application filed by the Appellant under Order XXXIX Rules 1 and 2 and Section 151 of the Code of Civil Procedure, 19084[Hereinafter “CPC”]. The Principal District Judge directed that the parties maintain status quo with regard to possession of the suit property on the cond
