PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
VIRINDER AGGARWAL, J.
M/S. Sheikhupura Transport Company Private Limited Through Its Director And Another – Appellant
Versus
Jagjit Singh Others – Respondent
CR No. 5766 of 2025 and CR No. 5799 of 2025
Decided on : 03-09-2025
JUDGMENT :
Virinder Aggarwal, J.
1. Petitioner filed this revision petition under Article 227 of the Constitution of India read with Section 15(5) of East Punjab Urban Registration Act, 1949 assailing the order dated 12.08.2025 passed by learned Appellate Authority, Ludhiana vide which the application filed by the petitioner for staying the operation of the impugned eviction order dated 23.10.2024 as well as application dated 28.01.2025 filed by respondent No. 1 for fixing mesne profit on account of use and occupation charges of the property has been disposed of subject to payment of Rs.75,000/- per month from the date of order of eviction. The order has been assailed on the ground that the Appellate Authority has passed the order without considering reply of the petitioners and the order is contrary to the settled principles of law. The assessment of mesne profit to the tune of Rs.75,000/- is far more than the contractual rent of Rs.600/- which was provisionally assessed by the learned Rent Controller and that the assessment of mesne profit at the rate of Rs.75,000/- per month has literally rendered the appeal to be infrucutous. The learned Appellate Authority has not taken into consideration any lease deeds of the adjacent buildings to prove the prevailing market rent. Photographs annexed by respondent No. 1 with the application were of other areas and valuation report has been prepared without any formulae and without inspecting the demised premises in question. The Appellate Authority has failed to look into the photographs placed on record by the petitioners which showed the actual and factual position of the property in question which is sufficient to conclude that building is in dilapidated condition and that construction is very old and the building would not fetch rent of more than Rs.4,000-5,000/- per month. The learned Appellate Authority has wrongly directed the petitioner to pay the mesne profits and arrears to the land lord whereas during the pendency of the appeal the same is required to be kept in a fixed deposit/recurring deposit, hence the petition.
2. When the petition was taken up for admission hearing, respondent landlord has also filed another revision petition bearing CR-5799 of 2025 for modification of the impugned order by enhancing the mesne profit to the tune of minimum by Rs.1,46,210/- on the basis of report of the Building expert. Both the revision petitions came up for hearing together.
3. Learned counsel for the petitioners in CR-5766 of 2025 argued that the impugned order is not sustainable as the learned Rent Controller has not taken into consideration the judgment of 'Angoori Devi and others versus Smt. Satya Bhama' 2016(5) RCR (Civil) 1043. The relevant portion of the judgment has been extracted in the grounds of revision as under :-
"8. Pursuant to the above decisions disputes regarding fixation of mesne profits have proliferated exponentially. However, the exact contours have not yet been worked out. Both sides have placed reliance on a multitude of orders passed by different Courts fixing mesne profits. However, in no case have the issues which are delineated above been considered. As regards issue No.1, on the one side is the landlord who claims that on eviction order being passed he would have to be compensated for any future use and occupation on the same rate at which he would have been able to let it out in the open market. For instance, in a subsequently instituted suit for mesne profits he would be able to claim the exact amount which he could have got in the open market. On the other hand, the tenant would claim that such amount cannot be fixed which the tenant can never afford to pay and be forced to vacate the premises without his claim being adjudicated, thus rendering his appeal infructuous, and this would hold true even if the increased amount is not paid to the landlord and is kept in an escrow account, to be handed over to the party who may be found entitled to the same at the co
Assessment of mesne profits must rely on cogent evidence and judicial notice of market conditions, balancing landlord and tenant interests.
Court may reassess mesne profits based on market evidence and principles to avoid punitive outcomes.
The court reaffirmed that tenants must pay mesne profits equivalent to market rent post-eviction, regardless of ongoing appeals.
The court determined that mesne profits should reflect the market rate while balancing the landlord's interests against the tenant's ability to pay, setting the amount at Rs. 13,000/- per month.
Mesne profits must reflect current market value and potential of the property, considering comparable lease agreements and inflationary trends.
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