Himachal Pradesh High Court
Surinder Kumar vs Rajan Diwan R on 7 January, 2019
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CMP No. 2168/2018 and CMP
.
No. 7352/2018
in
Civil Revision No. 51 of 2018
Date of decision : 7.1.2019
____________________________________________________________
Surinder Kumar .....Petitioner
Versus
Rajan Diwan r ...Respondent
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting? No
For the Petitioner : Mr. B. C. Negi, Senior Advocate
with Mr. Nitin Thakur,
Advocate.
For the Respondent : Mr. Ajay Kumar, Senior
Advocate with Mr. Dheeraj K.
Vashisht Advocate.
Tarlok Singh Chauhan, Judge (oral)
This order shall dispose of CMP No. 2168/2018 filed by the tenant for staying the operation of the judgment passed by learned Appellate Authority dated 17.11.2017, ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 2 whereby it set aside the order passed by learned Rent Controller, on 30.7.2016 and CMP No. 7352/2018 for placing .
on record two rent agreements.
The parties shall be referred to as the landlord and tenant.
2 The landlord filed an eviction petition against the tenant seeking his eviction from shop No.3, in the basement of Hotel Dhauladhar View, Dharamshala, District Kangra, H.P. 3 It is not in dispute that the eviction petition filed by the landlord was though dismissed by the learned Rent Controller, but said order was set aside by the learned Appellate Authority, constraining the tenant to file the instant revision petition.
4 At the outset, it needs to be observed that there can be no dispute that once a decree for eviction has been passed in that event the execution of decree for eviction can be stayed only if the tenant is put to such reasonable terms as would in the opinion of the Court, reasonably compensate the landlord for the loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 3 being dismissed. There can be further no quarrel that with effect from the date of decree of eviction, the tenant is liable .
to pay mesne profits or compensation for use and occupation charges of the premises at the same rate at which the landlord would have been able to let out the premises on being vacated by the tenant.
5 It may also be observed that the courts after passing of an order of eviction can always put the occupant of the premises to terms including payment of mesne profit.
The very purpose of awarding mesne profit or use and occupation charges is to put a check on the diabolical plans of the tenant who has been ordered to be evicted and ensure that he does not squat on the premises by paying a meager rent. At the same time even the landlord is also compensated to receive higher rent than the contractual rent.
6 This question has been considered in detail by this Court in Champeshwar Lall Sood and another vs. Gurpartap Singh and others, 2017 (2) RCR (Rent), 293, wherein the further question as to how the mesne profits and ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 4 use and occupation charges are to be assessed, was also considered and it was observed as under:
.
"21. The fixation of mesne profits and use and occupation charges are to be assessed on the basis of the evidence led by the parties as to the prima facie market value existing at the time of admission of the appeal after the eviction order, which has been exclusively bestowed on the landlord so that he would be able to reasonably compensate for loss caused by delay in execution of the decree by grant of stay order.
The Court while doing so is not to be guided by the factors that the parties at one point of time while creating the tenancy had agreed at a meager amount of rent, it would depend upon the material produced before the Court which under no circumstances can be ignored even though thereafter the rent so fixed may work out to be multiple times to the one which was fixed at the time of creation of the tenancy."
7 In this factual background, it is therefore incumbent upon this Court to first decide the use and occupation charges of the demised premises.
8 I have heard learned counsel for the parties and gone through the pleadings in the application alongwith documents accompanying the same.
::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 59 At the outset, it needs to be noticed that the provisions of the H.P. Urban Rent Control act, 1987 have .
been struck down by a Division Bench of this Court in Chaman Lal Bali vs. State of H.P., 2016(3) Shim.L.C. 1593, wherein the Division Bench was dealing with the question where the landlord had claimed that even after an r to ejectment order having been passed, there was no provision for claiming mesne profits or use and occupation charges and the tenant or sublettee or any other unauthorized occupants could conveniently squat over the premises for years and decades together by paying the contractual rent.
10 Negating the said contention, this Court after placing reliance upon various judgments of the Hon'ble Supreme Court held that from the date of passing of eviction order, the tenant is liable to pay mesne profits or compensation for use and occupation charges of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises.
::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 611 Answering the said question, It was held as under: .
"23. In Marshall Sons and Co.(I) Ltd. vs. Sahi Oretrans (P) Ltd. and another (1999) 2 SCC 325, the Hon'ble Supreme Court after taking into consideration the invariable delay in Court proceedings held that reasonable mesne profit which may be equivalent to the market rent should be awarded to prevent parties in wrongful possession from taking undue advantage of lengthy delays in the main proceedings and thereafter in execution proceedings. It is apt to reproduce paras 4 and 6 of the judgment which read thus:
"4. From the narration of the facts, though it appears to us, prima facie, that a decree in favour of the appellant is not being executed for some reason or the other, we do not think it proper at this stage to direct the respondent to deliver the possession to the appellant since the suit filed by the respondent is still pending. It is true that proceedings are dragged for a long time on one count or the other and on occasion become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Because of the delay unscrupulous parties to the proceedings take undue advantage and person who is in wrongful possession draws delight in delay ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 7 in disposal of the cases by taking undue advantage of procedural complications. It is also known fact that .
after obtaining a decree for possession of immovable property, its execution takes long time. In such a situation for protecting the interest of judgment creditor, it is necessary to pass appropriate orders so that reasonable mesne profit which may be equivalent to the market rent is paid by a person who is holding over the property. In appropriate cases, Court may appoint Receiver and direct the person who is holding over the property to act as an agent of the Receiver with a direction to deposit the royalty amount fixed by the Receiver or pass such other order which may meet the interest of justice. This may prevent further injury to the plaintiff in whose favour decree is passed and to protect the property including further alienation.
6. Having considered the relevant submissions of the parties including the submissions with regard to market rent and without expressing any opinion on the merits of the contentions of the parties in the pending suit, we think it appropriate to dispose of this matter with the following directions:
(1) That the suit in question be disposed of as expeditiously as possible, preferably within one year from today;
(2) The respondents are directed to pay the mesne profits/compensation at the rate of Rs.10/ per sq. ft.::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 8
from 1984 till today and at the rate of Rs.20/ from today till the disposal of the suit. While making this .
payment, the payments already made shall be adjusted. So far as the arrears are concerned, it be paid in 12 equal monthly instalments.
24. The principle of determining mesne profits after the eviction order has been passed and the right of landlord to receive higher rent than the contractual rent was established by the Hon'ble Supreme Court in Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd. (2005) 1 SCC 705 wherein it was held as under:
"19. To sum up, our conclusions are: (1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decreeholder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable.
(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in clause (l) of Section 2 of the Act, the tenancy does not stand terminated ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 9 merely by its termination under the general law; it terminates with the passing of the decree for eviction.
.
With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.
(3) the doctrine of merger does not have the effect of postponing the date of termination of tenancy merely because the decree of eviction stands merged in the decree passed by the superior forum at a latter date."
25. Notably, even though there is no express provision in the Act for the grant of mesne profit, but then, as held by the Hon'ble Supreme Court in Marshall Sons and Co.(I) Ltd. vs. Sahi Oretrans (P) Ltd. and another (1999) 2 SCC 325 that once a decree for possession has been passed and execution is delayed depriving the judgmentcreditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that reasonable mesne profits which may be equivalent to the market rent is paid by a person who is holding over the property.
26. Similar reiteration of law is found in the judgment of Hon'ble Supreme Court in Anderson ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 10 Wright and Co. vs. Amar Nath Roy and others AIR 2005 SC 2457, wherein it was held as under:
.
"5. As held by this Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. , once a decree for eviction has been passed, in the event of execution of decree for eviction being stayed, the appellants can be put on such reasonable terms, as would in the opinion of the appellate court reasonably compensate the decree holder for loss occasioned by delay in execution of the decree by the grant of stay in the event of the appeal being dismissed. It has also been held that with effect from the date of decree of eviction, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises on being vacated by the tenant. While determining the quantum of the amount so receivable by the landlord, the landlord is not bound by the contractual rate of rent which was prevalent prior to the date of decree."
27. In State of Maharashtra and another vs. M/s Super Max International Pvt. Ltd. and others AIR 2010 SC 722, the Hon'ble Supreme Court held that while admitting the appeal after ejectment order, it is perfectly open to the appellate or the revisional court to direct the tenant to pay rent higher than the contractual rent, but the Court would not fix ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 11 any excessive, fanciful or punitive amount. Since the mesne profits are not assessed by the appellate .
authority on the basis of the evidence led as per the Act, by production of evidence, on fact on issue or relevant facts, but is merely an assessment on the basis of primafacie market rate is existing at the time of admission of the appeal after eviction order, a benefit has been bestowed on the landlord that he would be reasonably compensated for loss occasioned by delay in execution of decree by grant of stay order. The mesne profit or compensation payable to the landlord is generally determined on the basis of the cogent material placed on record by the parties in the shape of the registered lease deeds of the locality indicating the tentative amount of the rent which as the landlord would be entitled to in a case he had rented out the premises at the present market rate existing on the date of ejectment. However, there is no straight jacket formula.
28. It would be noticed that the entire subject matter of mesne profits in the event of a decree of eviction and appeal there against being filed, is a judgemade law chiseled out by the Hon'ble Supreme Court in its various pronouncements (some of which have been cited above), the entire premise of the aforesaid judgments is that once a decree of eviction is passed, the tenant becomes unlawful occupant (subject to his right in appeal/revision), therefore, any contract ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 12 between the parties also comes to an end. It is for this reason that the Courts have carved out this new .
principle for ensuring that the tenant in unlawful possession does not further prejudice the landlord, who is otherwise entitled to get possession of his property and for this purpose, have laid down that the tenant must pay a reasonable amount subject to the outcome of the appeal/revision.
29.Even otherwise, the awarding of mesne profits does put a check on the diabolical plans of the tenant who has been ordered to be evicted to further delay the matter and squat on the premises by paying a nominal or meager rent.
12 It would be evidently clear from the aforesaid exposition of law that the courts after passing of an order of eviction can always put the occupant of the premises to terms including payment of mesne profit. The very purpose of awarding mesne profit or use and occupation charges is to put a check on the diabolical plans of the tenant who has been ordered to be evicted and ensure that he does not squat on the premises by paying a meager rent. At the same time even the landlord is also compensated to receive higher rent than the contractual rent.
::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 1313 In Atma Ram Properties Pvt. Ltd. (supra), it has been clearly laid down that the tenant with the passing of the .
decree of eviction is liable to pay mesne profits or compensation for use and occupation charges of the premises at the same rate on which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises.
14 Likewise, in Marshals Sons and Co.(I) Ltd. vs. Sahi Oretrans (P) Ltd. (supra), it was categorically held that once a decree for possession has been passed and execution is delayed depriving the judgmentcreditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that 'reasonable' mesne profits which may be equivalent to the market rent is paid by a person who is holding over the property.
15 At the same time, it was also held that while fixing the amount, subject to payment of which the execution of the order/decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.
::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 1416 What is 'reasonable' is difficult to define and this expression being a relative term is required to be considered .
visàvis, the fact situation obtaining in a particular case. A three Hon'ble Judge Bench of Hon'ble Supreme Court in Rena Drego (Mrs) vs. Lalchand Soni and others (1998) 3 SCC 341, considered the expression 'reasonable' in the following terms: r to [9] It is difficult to give an exact definition of the word 'reasonable'. It is often said that "an attempt to give a specific meaning to the word 'reasonable' is trying to count what is not number and measure what is not space." The author of 'Words and Phrases" (Permanent Edition) has quoted from In re Nice and Schreiber, 123 F, 987, 999 to give a plausible meaning for the said word. He says "the expression 'reasonable' is a relative term, and the facts of the particular controversy must be considered before the question as to what constitutes reasonable can be determined." It is not meant to be expedient or convenient but certainly something more than that. While interpreting the word 'reasonable' in Section 13 of the Act, the Bombay High Court has suggested in Krishchand Moorjimal v. Bai Kalavati, AIR 1973 Bombay 46, "that the word 'reasonable' cannot mean convenient or luxurious, though it may not necessarily exclude the idea of ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 15 convenience and comfort." However, the expression reasonable can be taken as providing an angle which .
is conformable or agreeable to reasons, having regard to the facts of the particular controversy. [10] In Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar, (1987) 4 SCC 497 : (AIR 1987 SC 2316), this Court has stated that "the word 'reasonable' has in law prima facie meaning of reasonable in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know." This has been reiterated by Sabyasachi Mukherjee, J. (as his Lordship then was) in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) P. Ltd., (1989) 1 SCC 532 : (AIR 1989 SC 973).
17 The expression 'reasonable' again came up for consideration before the Hon'ble Supreme Court in Union of India vs. Shiv Shankar Kesari, (2007) 7 SCC 798. It was held as under: "[8] The word "reasonable" has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. It is difficult to give an exact definition of the word 'reasonable'. Stroud's Judicial Dictionary, Fourth Edition, page 2258 states that it would be unreasonable to expect an exact definition of the word "reasonable'. Reason varies in its ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 16 conclusions according to the idiosyncrasy of the individual, and the times and circumstances in which .
he thinks. The reasoning which built up the old scholastic logic sounds now like the jingling of a child's toy. (See: Municipal Corporation of Delhi v. M/s Jagan Nath Ashok Kumar and another (1987) 4 SCC 497. and Gujarat Water Supplies and Sewerage Board v. Unique Erectors (Gujarat) Pvt. Ltd. and another [(1989) 1 SCC 532].
[9] It is often said "an attempt to give a specific meaning to the word 'reasonable' is trying to count what is not number and measure what is not space".
The author of 'Words and Phrases' (Permanent Edition) has quoted from in re Nice & Schreiber 123 F. 987, 988 to give a plausible meaning for the said word. He says, "the expression 'reasonable' is a relative term, and the facts of the particular controversy must be considered before the question as to what constitutes reasonable can be determined". It is not meant to be expedient or convenient but certainly something more than that. [10] The word 'reasonable' signifies "in accordance with reason". In the ultimate analysis it is a question of fact, whether a particular act is reasonable or not depends on the circumstances in a given situation. (See: Municipal Corporation of Greater Mumbai and another v. Kamla Mills Ltd. (2003) 6 SCC 315)."
18 Even otherwise the expression 'reasonable' would only mean "rational according to the dictates of reason and ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 17 not excessive or immoderate". An act is said to be reasonable when it is conformable or agreeable to reason, having regard .
to the facts of the particular controversy. In other words 'reasonable' would mean what is just, fair and equitable in contradiction to anything whimsical, capricious etc. The word 'reasonable' has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the word 'reasonable'. The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks, as has been held by Hon'ble Supreme Court in Veerayee Ammal vs. Seeni Ammal (2002) 1 SCC 134.
19 Therefore, the term 'reasonable', as has been used by the Hon'ble Supreme Court and this Court is required to be interpreted in a manner so as to ensure that the landlord is reasonably compensated for the loss occurred by the delay in execution of the decree by grant of stay order. The rent has to be determined on case to case basis depending upon the ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 18 cogent material placed on record by the parties and would therefore, normally be dependent upon the occupation, trade .
or business etc. of the tenant and would further not be dependent solely on the capacity to pay or actual earning of the tenant, who has suffered an order of eviction.
20 The fixation of mesne profits and use and occupation charges are to be assessed on the basis of the evidence led by the parties as to the prima facie market value existing at the time of admission of the appeal after the eviction order, which has been exclusively bestowed on the landlord so that he would be able to reasonably compensate for loss caused by delay in execution of the decree by grant of stay order.
21 Reverting back to the facts of the instant case, it would be noticed that the tenant by medium of CMP No. 7352/2018, has placed on record certain documents, however, those cannot be said to be representing true rental value because the rent agreements placed on record by the tenant as Annexures A1 and A2 relate to the premises, which are situated on Gurudwara Road, Dharamshala, ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 19 whereas the demised premises are situated in prime and prestigious Kotwali Bazaar, Dharamshala.
.
22 Adverting to the lease deed dated 6.3.2013 annexed by the landlord with his reply to CMP No. 7352/2018 annexed as Annexure RA, it would be noticed that the same pertains to a shop measuring 0800 sq. feet that has been rented out to the State Bank of India at monthly rental of Rs.12,000/ for the purpose of ATM. As regards the other lease deed dated 28.7.2014, Annexure RB, the same pertains to premises measuring 137.5 sq. feet having been let out by the landlord for the purpose of ATM at the monthly rental of Rs.20,000/. In addition thereto, the landlord has also relied upon certain lease deeds, but those pertain to premises that were auctioned and cannot therefore form the basis for determining the use and occupation charges of properties that have been leased out with consent of the parties in view of the ratio of the judgment of the Hon'ble Supreme Court in Executive Engineer, Karnataka, Housing Board vs. Land Acquisition Officer, Gadag and ors., (2011) 2 SCC 246.
::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 2023 However, as observed above, the premises in question are located in the prestigious Kotwali Bazaar, .
Dharamshala where the reasonable rent could any way be above Rs.50 per sq. feet. per month.
24 Accordingly, the operation and execution of the impugned judgment passed by the learned Appellate Authority shall remain stayed subject to the following terms:
The tenant shall deposit use and occupation charges @ Rs. 50/ per sq. ft. per month with effect from the date of eviction order i.e. 17.11.2017 and the same shall be deposited by him before the learned Rent Controller within three months.
Thereafter the tenant shall continue to deposit the monthly rental, as aforesaid before 10 th of every month before the learned Rent Controller in terms of para 79 of the judgment in Super Max International Pvt. Ltd.' case supra, failing which the eviction order shall forthwith become executable.
25 It goes without saying that any observation touching the merits of the case is purely for the purpose of ::: Downloaded on - 10/01/2019 23:01:55 :::HCHP 21 deciding the question(s) involved in these applications and shall not be construed as an expression of final opinion in the main .
matter or in any other proceedings.
26 Before parting, it is made clear that the determination of the use and occupation charges of the demised premises is solely for the purpose of this revision petition and the parties shall always, after final decision of the main petition, be at liberty to approach the competent authority for fixing the use and occupation charges on the basis of evidence so led by them before the authority and this order shall not in any manner come in their way for the aforesaid purpose. Likewise, if the petition filed by the tenant is allowed, the amount deposited towards use and occupation charges shall be adjusted in future rent payable by the tenant.
Applications stand disposed of.
C.R. No. 51/2018List on 8.4.2019.
7.1.2019 (Tarlok Singh Chauhan)
(pankaj) Judge
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