IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
GURBIR SINGH, J.
M/s. Kanhiya Lal Madho Ram and Others – Petitioners
Versus
Arun Kumar and Another – Respondents
CR-5845 of 2023
Decided On : 22-12-2023
Mesne Profits - Assessment of Mesne Profits - C.R. No. 6248-2011 - The court assessed the mesne profits at a lower rate than the Appellate Authority, considering the nature of the property, the extent of exclusive and common areas in possession of the tenant, and the meager rent of the tenancy.
Fact of the Case:
The landlord filed a rent petition for eviction of the tenants from the demised premises. The petitioners/tenants sought stay of the ejectment order and the landlord moved an application for assessment of mesne profits, which was allowed by the Appellate Authority. The tenants challenged the assessment of mesne profits.
Finding of the Court:
The court found that the Appellate Authority had assessed the mesne profits at a very high rate and set aside the order, ordering the assessment of mesne profits at a lower rate. The tenants were directed to pay the arrears and future mesne profits at the new rate by the 10th of every month till the disposal of the appeal.
Issues: The main issue was the assessment of mesne profits, with the tenants arguing that it was assessed on the higher side and the landlord claiming that it was rightly assessed. The dispute also involved the nature of the demised premises and the rental value of the property.
Ratio Decidendi: The court balanced the competing claims between mesne profits at market rate and reasonable compensation for the landlord, considering the nature of the property, the extent of exclusive and common areas in possession of the tenant, and the meager rent of the tenancy.
Final Decision: The revision petition was allowed, and the order of assessment of mesne profits at a higher rate was set aside. Mesne profits were ordered to be assessed at a lower rate, and the tenants were directed to pay the arrears and future mesne profits at the new rate by the 10th of every month till the disposal of the appeal.
JUDGMENT :
GURBIR SINGH, J.
1. Challenge in this revision petition is for setting aside the impugned order dated 06.09.2023 passed by Appellate Authority whereby application moved by respondent No. 1 for assessment of mesne profits w.e.f. 31.03.2022 has been allowed.
2. The brief facts as culled out from the petition are that the respondent/landlord filed a rent petition for eviction of the petitioners/tenants from the demised premises i.e. one half of front verandah with the open space/thara in front of SCF No. 88 including one front room and one big room on the backside of SCF and passage to go and come from the front room to back room adjoining SCF No. 87 on the ground floor including the common courtyard and two rooms on the front side on the first floor including kitchen and open courtyard of SCF No. 88, Grain Market, Sector-26, Chandigarh. The said petition was allowed on 31.03.2022 and the petitioners/tenants have been directed to vacate the demised premises within a period of two months. They have filed the appeal in which petitioners/tenants have also sought stay of the ejectment order. The respondent/landlord moved an application for assessment of mesne profits which was allowed vide impugned order dated 06.09.2023.
3. The Appellate Court assessed the mesne profits @ Rs.90,000/- per month from the date of ejectment order and operation of the ejectment order has been stayed subject to the payment of arrears of mesne profits and future mesne profits at the same rate by 10th of every month.
4. The relationship of tenant-landlord is not in dispute. The tenancy was created long time back. The landlord has claimed the rent @ Rs.550/- per month and has claimed arrears at the said rate w.e.f. 01.04.1999.
5. Learned counsel for the petitioners/tenants has argued that mesne profits have been assessed on the higher side. The learned Appellate Authority failed to take into account that mesne profits is not intended to be a bonanza for the landlord. The mesne profits are to be assessed in such a manner that these are reasonable and are not assessed in an arbitrarily manner. The purpose of assessment of mesne profits is that reasonable compensation is granted to the landlord during the pendency of the appeal. The petitioners/tenants pleaded throughout that partnership firm-M/s. Kanhiya Lal Kanshi Ram is the actual landlord and not the respondent No. 1. The one half of front verandah with the open space/thara in front of the demised property and the passage to go and come from the front room to back room adjoining SCF No. 87 on the ground floor including the common courtyard in no way can be rented out to the petitioners/tenants as the landlord has no title, right and interest in the same and landlord is not entitled to receive any rent for the same. As per the revised site plan, petitioner are in possession of only two rooms of the demised premises that are not joined with each other and are actually in isolation of each other. It is further argued that the learned Appellate Authority relied on the three lease deeds but failed to take into account that the covered area mentioned in the aforesaid lease deed was much higher than the area of the demised premises. Even adjoining property does not fetch the same rent since various factors are relevant for determining the rental value of the property i.e. facilities provided by the lessor, infrastructure, type of business and condition of the premises etc. The petitioners/tenants relying upon the lease deeds dated 27.08.2021 executed in respect of SCF No. 174, Grain Market , Sector-26, Chandigarh (Annexure P-14) whereby commercial area as a single shop comprising of 450 sq. ft. with a better location has been assessed as Rs.54,022/- per month whereas the demised premises is segregated into two different rooms out of which only one can be commercially used whereas other part of the SCF No. 85, Sector-26, Grain market, Chandigarh, 350 sq.ft on the ground floor has been leased out as Rs.50,000/-
The assessment of mesne profits should be reasonable, considering the nature of the property, the extent of exclusive and common areas in possession of the tenant, and the meager rent of the tenancy.
Mesne profits must reflect current market value and potential of the property, considering comparable lease agreements and inflationary trends.
The main legal point established in the judgment is that the assessment of mesne profits should consider the location, condition of the premises, nature and age of the construction, maintenance, and ....
The main legal point established in the judgment is the application of mesne profits under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 and the consideration of previous legal princ....
Assessment of mesne profits must rely on cogent evidence and judicial notice of market conditions, balancing landlord and tenant interests.
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