Punjab-Haryana High Court
Vijay Kumar & Anr vs Rahul Malhotra on 2 December, 2014
Author: Rakesh Kumar Jain
Bench: Rakesh Kumar Jain
VINOD KUMAR
2014.12.05 10:31
I attest to the accuracy and
authenticity of this document
Chandigarh
CR No.7861 of 2014 (O&M) [1]
*****
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CR No.7861 of 2014 (O&M)
Date of decision:02.12.2014
Vijay Kumar and another ...Petitioners
Versus
Rahul Malhotra ...Respondent
CORAM: Hon'ble Mr. Justice Rakesh Kumar Jain
Present: Mr. Avnish Mittal, Advocate,
for the petitioners.
*****
Rakesh Kumar Jain, J.
The tenants have challenged the order dated 09.10.2014 passed by the Appellate Authority, Chandigarh, staying the operation of the order of eviction, subject to deposit of all the arrears of rent @ `2,400/- per month after the date of order of ejectment and `1,00,000/- per month as mesne profits from the date of filing of appeal till the date of passing of the order.
The petitioners are basically aggrieved against the order of award of the mesne profits by the Appellate Authority.
In short, the landlord filed the petition under Section 13 of the East Punjab Urban Rent Restriction Act, 1949, as extended to Chandigarh (hereinafter referred to as the "Act") for eviction of the tenants from SCF No.21, Sector-11, Chandigarh on the ground of bona fide necessity. The eviction petition was allowed by the Rent Controller on 13.03.2014 and is VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [2] ***** challenged by the tenants by way of appeal which was admitted on 05.04.2014. On the said date, the landlord appeared through his advocate and filed an application for assessment of mesne profits. Since the tenants had also filed an application for staying the operation of the impugned order stating that they are ready and willing to pay the arrears of rent along with interest and costs, the case was adjourned by the Appellate Authority for enabling the landlord to file reply and in order to consider both the applications for payment of arrears of rent and mesne profits.
After contest, the impugned order has been passed and hence, the present revision petition.
Counsel for the petitioners has argued that the Appellate Authority could not have assessed the mesne profits and the application should have been filed before the Rent Controller who would have allowed opportunity to both the parties to lead evidence and thereafter, the mesne profits could not have been assessed. In this regard, he has referred to an order of the Supreme Court in the case of M/s Bird Travels (P) Ltd. v. Smt. Amarjit Kaur and others, Civil Appeal No.4589 of 2012 arising out of S.L.P. (Civil) No.3299 of 2012, decided on 11.05.2012. He has also submitted that the order of stay passed by the Appellate Authority is under Section 15(2) of the Act which is unlike Order 41 Rule 5 (3) of the Code of Civil Procedure, 1908 (hereinafter referred to as the "CPC") and has also submitted that the judgment of the Supreme Court in the case of M/s Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd., 2005(1) RCR 1 is not applicable as in the said case, stay was granted under Order 41 VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [3] ***** Rule 5 of the CPC in which conditions were there for payment of mesne profits.
I have heard learned counsel for the petitioners and considered his submissions.
Counsel for the petitioners has not argued on merits as to whether the assessment of mesne profits to the tune of `1,00,000/- per month is excessive as the entire argument is focused on the jurisdiction of the Appellate Authority to assess the mesne profits. It is submitted that in case of assessment of mesne profits, the Rent Controller is the only authority to whom the matter has to be remanded by the Appellate Authority for decision.
Before I deal with the submissions made by learned counsel for the petitioner, I would like to refer to certain provisions of the CPC and the Act, which are as under:-
Section 2(12) of the CPC
2. Definitions.-- In this Act, unless there is anything repugnant in the subject or context,--
(1) to (11) xxx xxx xxx (12) "mesne profits" of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [4] ***** wrongful possession."
Order 41 Rule 5 of the CPC
5. Stay by Appellate Court.-- (1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree.
Explanation. -- An order by the Appellate Court for the stay of execution of the decree shall be effective from the date of the communication of such order to the Court of first instance, but an affidavit sworn by the appellant, based on his personal knowledge, stating that an order for the stay of execution of the decree has been made by the Appellate Court shall, pending the receipt from the Appellate Court of the order for the stay of execution or any order to the contrary, be acted upon by the Court of first instance.
(2) Stay by Court which passed the decree.-- Where an application is made for stay of execution of an appealable decree before the expiration of the time allowed for appearing therefrom, the Court which passed the decree may on sufficient cause being shown order the VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [5] ***** execution to be stayed.
(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied--
(a) that substantial loss may result to the party applying for stay of execution unless the order is made;
(b) that the application has been made without unreasonable delay; and
(c) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him.
(4) Subject to the provisions of sub-rule (3), the Court may make an ex parte order for stay of execution pending the hearing of the application.
(5) Notwithstanding anything contained in the foregoing sub-rules, where the appellant fails to make the deposit or furnish the security specified in sub-rule (3) of rule 1, the Court shall not make an order staying the execution of the decree.
Section 15 of the Act
15. Vesting of appellate authority on officers by State Government.--
(1)(a) The State Government may, by a general or VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [6] ***** special order, by notification confer on such officers and authorities as they think fit, the powers of appellate authorities for the purposes of this Act, in such area in such classes of cases as may be specified in the order.
(b) Any person aggrieved by an order passed by the Controller may, within fifteen days from the date of such order or such longer period as the appellate authority may allow for reasons to be recorded in writing, prefer an appeal in writing to the appellate authority having jurisdiction. In computing the period of fifteen days the time taken to obtain a certified copy of the order appealed against shall be excluded.
(2) On such appeal being preferred, the appellate authority may order stay of further proceedings in the matter pending decision on the appeal.
(3) The appellate authority shall decide the appeal after sending for the records of the case from the Controller and after giving the parties an opportunity of being heard and, if necessary, after making such further inquiry as it thinks fit either personally or through the Controller.
(4) The decision of the appellate authority and subject VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [7] ***** only to such decision, an order of the Controller shall be final and shall not be liable to be called in question in any Court of Law except as provided in sub-section (5) of this section.
(5) The High Court may, at any time on the application of any aggrieved party or on its own motion, call for and examine the records relating to any order passed or proceedings taken under this Act for the purpose of satisfying itself as to the legality or propriety of such order or proceedings and may pass such order in relation thereto as it may deem fit."
In M/s. Atma Ram Properties (P) Ltd.'s case (supra), the Apex Court has observed that "while ordering stay, the appellate Court has to be alive to the fact that it is depriving the successful landlord of the fruits of the decree and is postponing the execution of the order for eviction. There is every justification for the appellate Court to put the tenant- appellant on terms and direct the appellant to compensate the landlord by payment of a reasonable amount which is not necessarily the same as the contractual rate of rent". In the case of Marshall Sons & Co. (I) Ltd. v. Sahi Oretarans (P) Ltd. & Anr., (1999) 2 SCC 325, the Supreme Court had held that once a decree for possession has been passed and execution is delayed depriving the judgment-creditor 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 VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [8] ***** is holding over the property.
The conclusions which were summed up by the Supreme Court in M/s. Atma Ram Properties (P) Ltd.'s case (supra) are as under:-
"(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 decree-holder 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 (1) of Section 2 of the Act, the tenancy does not stand terminated 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 VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [9] ***** earn 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."
The argument raised by counsel for the petitioners that in M/s Bird Travels (P) Ltd.'s case (supra), the Supreme Court has remanded the case back to the Rent Controller to decide and as such all cases are to be decided by the Rent Controller for the purpose of deciding the question of mesne profits is not acceptable because in that case, the Supreme Court was of the view that the fixation of mesne profits requires evidence from both the sides and thus the matter was remanded back to the Rent Controller to decide the question of mesne profits after holding proper inquiry by allowing the parties to lead their respective evidence. However, in the present case, the Appellate Authority, while dealing with the application for payment of mesne profits by the landlord, allowed the parties to lead their respective evidence in which the landlord led evidence by way of lease deed of SCO No.6, Sector 11-D, Chandigarh, which has been let out @ `1.5 lacs VINOD KUMAR 2014.12.05 10:31 I attest to the accuracy and authenticity of this document Chandigarh CR No.7861 of 2014 (O&M) [ 10 ] ***** per month, whereas the demised premises in the present case is SCF No.21 in the same Sector 11 of Chandigarh for which the mesne profits has been fixed by the Appellate Authority to the tune of `1 lac only. Since no evidence was led by the petitioners-tenants, therefore, they cannot have a grievance and ask for determination of mesne profits by the Rent Controller in terms of the order passed by the Apex Court in M/s Bird Travels (P) Ltd.'s case (supra).
Thus, in view of the aforesaid discussion, I do not find any merit in the present revision petition and hence, the same is hereby dismissed.
December 02, 2014 ( Rakesh Kumar Jain ) vinod* Judge