When a commercial premises' monthly rent exceeds the statutory limit of the rent control legislation, the civil court retains jurisdiction. Rental enhancement remains valid upon proper notice, and courts may award reasonable interest for commercial transactions under the code of civil procedure.

Headnote:(A) Commercial Courts Act, 2015 - Transfer of Property Act, 1882 - Civil Procedure Code, 1908 - Section 34 - Tenancy dispute - Possession and recovery of occupation charges - Jurisdiction of court determined by rent threshold under special tenancy legislation - Increase in rent lawfully exercised through formal notice - Appellate court interference warranted only upon proof of perversity or illegality in judgment - Pendente lite interest for commercial transactions held justified. (Paras 3, 24, 26, 36, 38)

(B) Appellate Jurisdiction - Scope - Court sitting in appeal does not substitute its view for that of court below unless the decision is found to be afflicted by fundamental errors, perversity, or illegality. (Para 38)

Facts of the case:
The appellant challenged a decree for possession, arrears of rent, and occupation charges concerning commercial premises. The trial court determined that the jurisdiction was not barred by the governing rent control statute because the monthly rent exceeded the prescribed threshold. The appellant disputed the validity of the rent enhancement and the quantum of the occupational charges awarded by the trial court.

Findings of Court:
The court upheld the lower court's decree, finding that the rental increase was compliant with statutory notice provisions. It recognized that the evaluation of occupational charges, while involving a degree of estimation, was supported by the evidence and the prevailing commercial nature of the property. The court further held that interest on the adjudged principal at the awarded rate was legally sound for commercial transactions.

Issues: The main issues were the jurisdiction of the civil court under the rent control framework, the validity of served notices for rent enhancement, the evidentiary basis for occupational charges, and the reasonableness of the interest awarded upon the decree.

Ratio Decidendi: Where premises are used for commercial purposes and the monthly rent exceeds the statutory threshold, the civil court retains jurisdiction. Proper adherence to contractual and statutory notice procedures establishes a valid rent increase, and reasonable interest rates are permissible for commercial liabilities under the governing code of civil procedure.

Result: Appeal dismissed.

Table of Content
1. factual background and summary of the trial court's decree. (Para 1 , 2 , 3 , 4)
2. appellate arguments regarding jurisdiction and valuation of occupation charges. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
3. documentary evidence and evidentiary findings in the trial record. (Para 17 , 18 , 19 , 20)
4. statutory interpretation of rent increase provisions and civil court jurisdiction bars (drc act). (Para 21 , 22 , 23 , 24 , 25 , 26)
5. assessment of reasonableness for mesne profits and occupation charges based on evidence. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
6. application of section 34 of the cpc regarding interest in commercial transactions. (Para 35 , 36 , 37)
7. final appellate decision dismissing the appeal. (Para 38 , 39 , 40 , 41)

JUDGMENT :

NITIN WASUDEO SAMBRE, J.

1. This appeal has been preferred by the original defendant under Section 13(1A) of the Commercial Courts Act, 2015 read with Order XLI of the Code of Civil Procedure, 1908 (“CPC”).

2. The present appeal challenges the judgment and decree dated 29th May, 2025 (hereinafter referred to as the “impugned judgment”) passed by the learned District Judge, Commercial Court, Tis Hazari Courts, Central District, Delhi in Civil Suit (Commercial) No. 3996/2021.

3. By the aforesaid impugned judgment, the suit preferred by the respondent-plaintiff came to be decreed. A declaration was granted that:

a) the defendant is not a statutory tenant under the Delhi Rent Control Act, 1958 (hereinafter referred to as the “DRC Act”), and that the Commercial Court has jurisdiction to entertain the suit as per Section 106 of the Transfer of Property Act, 1882 (hereinafter referred to as the “TP Act”),

b) the suit is not barred by the provision of Section 50 of the DRC Act.

c) the suit cannot be said to be not maintainable in view of non-compliance of Section 12A of the Commercial Court Act, 2015.

d) the learned Commercial Court has further held that the respondent-plaintiff is entitled to possession of the tenanted suit premises and is also entitled to recover pre-suit rent/ occupation charge at the rate of Rs. 40,000/- per month and pendente lite at the rate of Rs. 1,20,000/- per month for a period of 44 months, i.e., from October, 2021 to May, 2025. It has further been held that the respondent-plaintiff shall be entitled to mesne profits at the rate of Rs. 1,20,000/- per month.

e) the statement made by the counsel for the appellant/original defendant that the defendant will not carry out any alteration or create any third-party interest in the suit property in any manner whatsoever was accepted and accordingly, the said issue was also considered and decided in favour of the respondent/plaintiff.

f) interest at the rate of 9% on pendente lite and future period also came to be awarded.

4. The relevant facts which are necessary for deciding the present appeal are as under:

i. The suit property consists of first and second floor on the property number 2E/26, Swami Ram Tirath Nagar, Jhandewalan, New Delhi-110055 (hereinafter shall be referred to as the “Suit Property”).

ii. The case of the respondent-plaintiff before the learned Commercial Court was that one Late Smt. Rajrani Mehta, the mother of plaintiff no.1 and grandmother of plaintiff no.2-5 was owner of the Suit Property.

iii. The plaintiff no. 2 to 5 are the children of Mr. Ashwani Kumar Mehta, the other son of Smt. Rajrani Mehta. The aforesaid property was inherited by the plaintiffs, who claim to be the landlords of the Suit Property by virtue of the Will dated 14th May, 1998 and the Codicil dated 21st July, 2002.

iv. One M/s National Capital Register Limited was inducted as a tenant by late Smt. Rajrani Mehta. Subsequently, there was a change of name and it came to be known as the appellant/defendant company.

v. As there was a failure to pay rent, a notice terminating the tenancy was issued on 14th December, 1995, followed by proceedings for eviction under Section 14(1)(a), (b), and (j) of the DRC Act on 1

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