Compensation for mesne profits post-eviction must reflect prevailing market rates rather than prior contractual agreements, mandating substantiated reasoning in the assessment process.

JUDGMENT

C.Hari Shankar, J. (Oral)

1. It is gratifying to note that without entering into intricacies of facts and figures, this Court is in a position to dispose of the present petition, by consent between learned Counsel.

2. Given the nature of the order that I am passing today, it is not necessary to enter into the history of the litigation between the parties. Suffice it to state that, by an order dated 1st June, 2019, passed in E.P. M 29527/16, the learned Additional Rent Controller ("the learned ARC") directed eviction of the petitioner from the property of the respondent, under the Proviso to Section 14(2) read with Clauses 14(1)(a) and (j) of the Delhi Rent Control Act, 1958. The petitioner appealed, against the said order, before the learned Rent Control Tribunal ("the learned RCT") vide RCT 44/2019 (Ashok Kumar Jain & Anr. v. Prem Chand Gupta & Anr.). The impugned order dated 28th May, 2022 directs the petitioner to pay, to the respondent, user and occupation charges in respect of the suit property @ Rs. 41,500/- per month for the period June to December, 2019, Rs. 44,000/- per month for the period January to December, 2020, Rs. 47,000/- per month for the period January to December, 2021 and Rs. 50,000/- per month for the period January to December, 2022. It may be noted, here, that the rent which was agreed between the petitioner and the respondent and which the petitioner had been paying, was Rs. 1,000/- per month, as per the rate fixed in 1983.

3. The direction for payment of user and occupation charges (essentially mesne profits) was passed by way of implementation of Conclusion (2) in para 19 of the report in the judgment of the Supreme Court in Atma Ram Properties (P) Ltd. v. Federal Motors Pvt. Ltd., (2015) 1 SCC 705. The Supreme Court, in the said case, held that where an order of eviction stood passed against a tenant and the tenant was liable to pay, to the landlord, mesne profits for continued user and occupation of the said premises beyond the date of eviction. The quantum of mesne profits which would be required to be paid would be "at the same rate at which the landlord would have been able to let out the premises and earned rent if the tenant would have vacated the premises". The Supreme Court also clarified that the landlord was not bound by the contractual rate of rent fixed between the tenant and himself. Para 19 of the report in Atma Ram Properties on which the learned RCT has placed reliance, may be reproduced thus:

"19. To sum up, our conclusions are:

(1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decree-holder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable;

(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in clause (I) of Section 2 of the Act, the tenancy does not stand terminated merely by its termination under the general law; it terminates with the passing of the decree for eviction. With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which