When Decree for eviction stayed, Landlord is entitled to mesne Profit for continuing possession: Supreme Court
When Decree for eviction stayed, Landlord is entitled to mesne Profit for continuing possession: Supreme Court
"Thus, after passing the decree of eviction, the tenancy terminates and from the said date the landlord is entitled to mesne profits or compensation depriving him of the use of the premises" said the bench comprising of Justices Indira Banerjee and JK Maheshwari
The Supreme Court in its recent order has reinstated that once a decree is passed, the appellate court must determine the mesne profits payable by the tenant to the landlord for continuing the possession of the premises.
The present special leave petition was filed by a tenant challenging the decision of the Rajasthan High Court putting the condition to pay Rs 2.50 lakhs as monthly rent to the landlord to stay the execution of the eviction decree.
The appellant contended that according to Section 20 of Rajasthan Rent Control Act, 2001, the maximum amount of mesne profit may be payable three times of the standard rent in case the premises are let out for commercial purposes. It was argued that the mesne profit, as determined by the High Court is excessive without looking to the year of construction of premises, the location of the property which is on the inside road of the colony, and also without taking note of the DLC rate, therefore, the order impugned may be set aside and the quantum of mesne profits may be revised to three times of the amount of rent making it Rs.1,35,000/ per month.
The Supreme Court noted that the 2001 Act came into effect from 01.04.2003 and had no applications to the proceedings initiated under the 1950 Act (which was applied in the present case).
Additionally, relying on the case Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd., the Court was of the opinion that: the "Appellate Court does have jurisdiction to put reasonable terms and conditions as would in its opinion reasonable to compensate the decree-holder for loss occasioned by delay in execution of the decree while granting the stay."
Marshall Sons & Co. (I) Ltd. vs. Sahi Oretrans (P) Ltd. and Another: "the Supreme Court held that once a decree for possession has been passed and the execution is delayed depriving the decree-holder to reap the fruits, it is necessary for the Appellate Court to pass appropriate orders fixing reasonable mesne profits which may be equivalent to the market rent required to be paid by a person who is holding over the property."
"The basis of determination of the amount of mesne profit, in our view, depends on the facts and circumstances of each case considering the place where the property is situated i.e. village or city or metropolitan city, location, nature of premises i.e. commercial or residential are and the rate of rent precedent on which premises can be let out is the guiding factor in the facts of the individual case."
The Court concluded by stating that the order fixing the mesne profit and the order passed on the review petition, filed by the Appellants, are just and proper and do not warrant any interference, therefore the said appeals were dismissed.
