Angoori Devi vs Satya Bhama - 2016 Supreme(P&H) 671

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(P&H) 671

IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mr. Justice Ajay Tewari
C.R. No. 6248 of 2011 (O&M)
Angoori Devi & Ors.
v.
Smt. Satya Bhama
{Decided on 06/04/2016}

Advocates:
For the Non-Applicant-Petitioners:Mr. Vikas Bahl, Sr. Advocate with Mr. Nitish Garg, Advocate.
For the Applicant-Respondent:Mr. O.P. Goyal, Sr. Advocate with Mr. Mukesh Verma, Advocate.

Headnote:Eviction--Mesne profits--To be determined by striking balance between claims of landlord and tenant; Payable from date of eviction order and restricted to 3 years; No interest payable on such amount; Amount so fixed is subject to change; Amount is to be put in FD/RD and payable to landlord after final disposal of appeal.
       (A) East Punjab Urban Rent Restriction Act, 1949, S.13--Eviction--Mesne Profits--Determination of--Balancing the claims between ‘mesne profit’ at the market rates and reasonable compensation for landlord--Held; the Courts have drawn a balance between the two competing claims by fixing mesne profits at a rate between the contractual rent and the market rent--There could be no straight jacket formula while fixing the amount of mesne profits in such cases and the Courts would have to be guided by the facts of each case. (Para 12)
       (B) East Punjab Urban Rent Restriction Act, 1949, S.13--Eviction--Mesne Profits--Payable from date of eviction order and period for which amount would be payable must be restricted to 3 years. (Para 15)
       (C) East Punjab Urban Rent Restriction Act, 1949, S.13--Eviction--Mesne Profits--Interest is not payable on the amount determined as mesne profit. (Para 17)
       The matter cannot be looked at only under the prism of the Rent Act--It has to be kept in mind that damages normally would have to include the component of accrued interest and only after the damages are computed on the date of judgment would future interest be payable. In this context, the use of the word compensation in the above judgments would have to take colour from the context--The entire context is that of mesne profits which can further be explained as another phrase to explain damages for unlawful use and occupation and therefore the argument that under the Rent Act interest is payable on the rent accrued would not hold good to claim that interest is payable on the amount determined as mesne profits.
       (D) East Punjab Urban Rent Restriction Act, 1949, S.13--Eviction--Mesne Profits--In appropriate cases the amount fixed as mesne profits may be subject to change. (Para 18)
       (E) East Punjab Urban Rent Restriction Act, 1949, S.13--Eviction--Mesne Profits--Determination of--Not payable to landlord during appeal--Held; the mesne profits should not be paid to the landlord during the pendency of the appeal/revision unless some special reasons have shown and the deposited amount should be put in a Fixed Deposit/Recurring Deposit which should only be paid after the final disposal to either side depending upon the result of the case. (Para 20)

JUDGMENT

C.M. No.2343-CII-2014

1. This is an application for direction to the non-applicantpetitioner- tenant to deposit mesne profits/damages as per the market rent i.e. @ Rs.14,000/- p.m. for the use and occupation of the tenanted shop/during the pendency of the present petition.

2. It has been averred that after the appeal filed by the applicant/landlord was allowed the tenant is in illegal use and occupation of the shop in question and the relation of landlord and tenant has been terminated and therefore he is not entitled to continue to pay at the contractual rent @ Rs.500/- p.m. It is further pleaded that the shop is situated in the main market at Mahavir Marg Road, Narnaul and the present market rent is not less than Rs.14,000/- p.m. By way of example the lease deed of a similarly situated shop has been placed on record which is dated 06.04.2012 where the rent has been fixed at Rs.14,000/- per month with the stipulation of 15% increase in every three years. Other instances have also been given and it has also been averred that apart from the locational similarities the area of the shops are similar to that owned by the applicant. It is therefore prayed that the mesne profits be fixed @ Rs.14,000/- per month from the date of the eviction i.e. 11.08.2011 along with interest. In reply, it has been disputed that the area of the shop is 167 sq. feet and averred that it is in fact 124 sq. feet while the other shops of which example has been given are of much larger area and are even otherwise locationally better situated. It is further averred that in any case the non-applicant cannot be held entitled to the market rent but only ‘some compensation’, and that too, from the date of application.

3. The dispute ostensibly lies between a narrow compass but has thrown up the following issues:-

i) How are the Courts to balance the competing claims between ‘mesne profits at the market rates’ and ‘reasonable compensation for landlord’?

ii) What is the date from which the mesne profits would be payable?

iii) Whether interest is payable on mesne profits?

iv)Whether mesne profits can be increased in lieu of long pendency of appeal?

v)Whether the amount fixed as mesne profits has to be handed over to the landlord or to be deposited with the Court?

4. Before discussing the same it may be profitable to review this latest judicial innovation. The East Punjab Urban Rent Restriction Act, 1949 (or for that matter other similar Acts) had no specific provision which laid down as to what would be the capacity in which a tenant would retain the tenanted property in the event of an order of eviction and how the landlord was to be compensated in case the tenant was granted a stay by the Superior Court. The matter came up before the Hon’ble Supreme Court in the matter of M/s Atma Ram Properties (P) Ltd. vs. M/s Federal Motors Pvt. Ltd., reported as 2005(1) R.C.R(Rent) 1. In that case, on the petition of landlord an eviction order was passed. The tenant filed an appeal and the Appellate Court while admitting the appeal granted stay of the eviction order subject to the condition that he would deposit in the Court Rs.15,000/- p.m. in addition to the contractual rent which would be paid directly to the landlord. The Hon’ble Supreme Court in para Nos.4, 8, 13, 15, 17 & 18 noticed as follows:-

“4........Landlord-tenant litigation constitutes a large chunk of litigation pending in the Courts and Tribunals. The litigation goes on for unreasonable length of time and the tenants in possession of the premises do not miss any opportunity of filing appeals or revisions so long as they can thereby afford to perpetuate the life of litigation and continue in occupation of the premises. If the plea raised by the learned senior counsel for the respondent was to be accepted, the tenant, in spite of having lost at the end, does not loose anything and rather stands to gain as he has enjoyed the use and occupation of the premises, earned as well a lot from the premises if

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2016 Supreme(P&H) 671

IN THE HIGH COURT OF PUNJAB AND HARYANA Before The Hon’ble Mr. Justice Ajay TewariC.R. No. 6248 of 2011 (O&M)Angoori Devi & Ors. v. Smt. Satya Bhama{Decided on 06/04/2016}

Cases Referred (7)

IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mr. Justice Ajay Tewari
C.R. No. 6248 of 2011 (O&M)
Angoori Devi & Ors.
v.
Smt. Satya Bhama
{Decided on 06/04/2016}