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2014 Supreme(P&H) 1506

PUNJAB & HARYANA HIGH COURT
Gurmeet Singh Sandhawalia, J.
Vardhman Holdings Ltd. - Appellant
Versus
Ranbir Singh and Ors. - Respondent
C.R. No. 7926 of 2014 (O&M)
Decided On : 17-12-2014

Advocates:
For the Appellant :O.P. Goel, Senior Advocate and Bhawesh Chaudhary, Advocate
For the Respondents:Divanshu Jain, Advocate

The main legal point established in the judgment is that the determination of mesne profits should be based on recent registered lease deeds of the locality, and the landlord is entitled to receive reasonable rent.

Headnote:

Mesne Profits - Rent Fixation - 2011(2) R.C.R. (Civil) 972, 2011(1) R.C.R. (Rent) 394, 2011 (7) SCC 755, 2012(2) R.C.R. (Rent) 203, 2012(4) R.C.R. (Civil) 395, 2012(4) Recent Apex Judgments (R.A.J.) 502, 2009 (2) Mh.LJ 134, 2009 (9) SCC 772 - The judgment discusses the fixation of mesne profits based on registered lease deeds, the relevance of valuation reports, and the principle of landlord receiving reasonable rent.

Fact of the Case:

The case involves a dispute over the fixation of mesne profits for a property in Chandigarh. The landlords sought enhancement of mesne profits, while the tenant challenged the high rate of mesne profits fixed by the Appellate Authority.

Finding of the Court:

The Court upheld the order of the Appellate Authority, reasoning that the mesne profits were awarded based on registered lease deeds of the same building. The Court emphasized the importance of recent registered lease deeds as credible evidence for determining mesne profits.

Issues: The main issue revolved around the reasonableness of the mesne profits fixed by the Appellate Authority, considering the prevailing rates of rent in the locality and the relevance of registered lease deeds in determining mesne profits.

Ratio Decidendi: The Court held that the determination of mesne profits should be based on recent registered lease deeds of the locality, and inadmissible evidence like unregistered lease deeds should not be considered. The principle of the landlord receiving reasonable rent was emphasized.

Final Decision: The Court dismissed the revision petition and the application for recalling the order, affirming the reasoning of the Appellate Authority in fixing the mesne profits.

Gurmeet Singh Sandhawalia, J.

1. The present judgment shall dispose of the abovesaid revision petition alongwith C.M. No. 26865-CII of 2014 which has been filed by the tenant-respondent in C.R. No. 7230 of 2014 for recalling the order dated 30.10.2014, whereby, the revision petition filed by the landlords was dismissed seeking enhancement of the mesne profits which is @ ` 1,50,000/- per month and the order of the Appellate Authority dated 26.09.2014 has been upheld. In the main revision petition i.e. C.R. No. 7296 of 2014, the tenant/petitioner is challenging the fixation of mesne profits vide the same order in the revision petition which has been filed subsequently. Counsel for the petitioner-tenant has vehemently contended that the Appellate Authority was not justified in fixing the mesne profits at such a high rate and submitted that in the same building, tenants are paying @ ` 8 per sq. ft. whereas in adjoining areas in the same sector, the rate of rent varies to a maximum of ` 40 per sq. ft. whereas, in the present case, since the tenant is in occupation of 1860 sq. ft., the rent works out at ` 80 per sq. ft., which is on excessive side. He submits that in the absence of an valuation report and keeping in view that the lease deed provided of an increase clause of 10%, the amount is fanciful and whimsical and accordingly, submitted that the order is liable to be set aside. The application bearing CM. No. 26865-CII of 2014 for recalling in the connected petition i.e. C.R. No. 7230 of 2014 is also being argued on the ground that the landlord, by virtue of the findings recorded by this Court on 30.10.2014, has tried to oust the petitioner by filing revision petition first for enhancement of the mesne profits and, therefore, the order should be recalled and the matter should be remanded to the Appellate Authority. Reliance has been placed on the observations of the Apex Court in Mohammad Ahmad and another v. Atma Ram Chauhan and others, 2011(2) R.C.R. (Civil) 972 : 2011(1) R.C.R. (Rent) 394 : 2011 (7) SCC 755 and R.K. Bansal v. Jag Parvesh Sharma, 2012(2) R.C.R. (Rent) 203 : 2012(4) R.C.R. (Civil) 395 : 2012(4) Recent Apex Judgments (R.A.J.) 502 : 2012 (4) CCC 845 and also the judgment of the Bombay High Court in Super Max International Pvt. Ltd. v. State of Maharashtra, 2009 (2) Mh.LJ 134 which was further upheld by the Apex Court in State of Maharashtra and another v. M/s. Super Max International Pvt. Ltd. and others, 2011(2) R.C.R. (Civil) 972 : 2011(1) R.C.R. (Rent) 394 : 2011(2) R.C.R. (Civil) 972 : 2011(1) R.C.R. (Rent) 394 : 2009 (9) SCC 772.

2. The premises in question, as noticed, measures 1860 sq. ft. and is situated on the first floor of SCO No. 1-3, Sector 17-B, Chandigarh. The rent petition was instituted on 25.10.2007 by the landlords contending that there was a registered lease deed dated 09.04.1996 and renewed from time to time and finally, vide agreement dated 30.11.2004, renewal was for a period of 3 years from 01.09.2004 to 31.08.2007 and the rate of rent was `22,600/- per month. The ground was of sub-letting and arrears from 01.10.2007. Eviction order was passed on 23.08.2014 by the Rent Controller on the ground of sub-letting whereas on the ground of nonpayment, the petition was rendered infructuous in view of the fact that the rent assessed by the Court had been paid.

3. In appeal, the application for mesne profits was filed by the landlords wherein, specific averment was made that the building in question comprised of 6 floors including the basement and there were many tenants in the building in question. The tenants on the second and third floor namely Crayons Advertising Ltd. and Mega Cabs. Ltd. were occupying 811 sq. ft. and paying monthly rent of ` 68,935/- which translated to ` 85 per sq. ft. which they had occupied in the year 2010 @ ` 1,40,000/-. Another tenant, the IDBI Bank Ltd. was occupying 1860 sq. ft. The rent had thereafter been increased to ` 1,61,000/- w.e.f. August, 2014 but the execution o









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