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Madhya Pradesh High Court · body

2010 DIGILAW 16 (MP)

NATIONAL GARAGE v. RAJVARDHAN SINGHAI

2010-01-06

P.K.JAISWAL

body2010
Judgment P.K.Jaiswal, J. ( 1. ) They are heard on I.A. No.2892/2009, an application for grant of stay and I.A. No. 13292/2009, an application for modification of order dated 18.3.2009 granting ad interim stay against the dispossession of the appellants from the suit premise subject to payment of monthly rent at a rate higher than the contractual rent. . ( 2. ) The suit premises is non-residential commercial premises ad measuring approximately 30,000 sq ft and situated on the main road from Russel Chowk to Fourth Bridge at Jabalpur. The suit premises was let out to the appellants somewhere in December, 1964 vide lease deed dated 9.12.1964 (Ex.D/7). Another lease deed was executed on 10.2.1967 (Ex.D/8). Ex.D/9 is the registered lease deed dated 1.12.1985. The appellants are paying rent by increasing 5% every year as per terms of the registered lease deed dated 1.12.1985. On 20th February, 2004 the respondents instituted a suit for eviction under Section 12(l)(f) and (m) of the M.P. Accommodation Control Act, 1961 and it was contended that the appellants are the tenants of the suit premises @ Rs.24,000/- per month. It was further pleaded that the premises in the occupation of the appellants was needed for expansion of the business of respondents No. 1 to 3 and for that expansion of business, the respondents do not have any other suitable alternative non-residential accommodation of their own in the Corporation area of Jabalpur city. ( 3. ) The Trial Court after appreciating the oral and documentary evidence on record came to the conclusion that the premises in occupation of the appellants was needed by the respondents No. 1 and as such a decree of eviction has been passed against the appellants by impugned judgment and decree dated 12.1.2009 directing them to hand over the possession of the premises within two months from the date of passing of the decree. ( 4. ) The appellants challenged the said judgment and decree by filing the present first appeal before this Court. This Court admitted the first appeal on 18.3.2009 and granted ad interim stay of the execution of impugned judgment and decree, so far as it relates to the eviction of the suit premises and directed that the eviction of the appellants shall remain stayed till further orders. ( 5. This Court admitted the first appeal on 18.3.2009 and granted ad interim stay of the execution of impugned judgment and decree, so far as it relates to the eviction of the suit premises and directed that the eviction of the appellants shall remain stayed till further orders. ( 5. ) The respondents after service of notice from this Court filed an application for modification of stay order (I. A. No. 13292/2009) and prayed that during the pendency of the appeal, the appellants are liable to pay reasonable mesne profit which may be equivalent to the market rent from the date of passing of the decree till the disposal of the first appeal. It is also averred that the appellants did not deposit the entire rent from the date of filing of the suit till the passing of the decree for eviction and, therefore, ad interim stay granted by this Court be vacated. ( 6. ) It is submitted by the learned counsel for the respondents-landlord that the amount of mesne profit fixed by the Trial Court is far less than the current market rent in that area and, therefore, the appellants be directed to pay the market rent @ Rs.7,50,000/- per month from the date of passing of the decree. In support of the said contention, he placed reliance on the decision of the Apex Court in the case of Atma Ram Properties (P) Ltd vs Federal Motors (P) Ltd., reported in (2005) 1 SCC 705 and State of Maharashtra and another vs Super Max International Private Limited and others, reported in (2009) 9 SCC 772 ( 7. ) On the other hand, Shri R. S. Tiwari, learned counsel for the appellants defended the order dated 18-3-09 and submitted that the appellants are paying the rent by increasing 5% every year as per terms of registered lease deed dated 1.12.1985 (Ex.D/9) @ Rs.24,000/- per month. He further submits that the appellants were paying the rent @ Rs.28.140/- per month by increasing rent 5% every year during the pendency of the suit as well as during the pendency of this appeal and presently they are depositing rent @, Rs.35913/- per month after deducting TDS as per provisions of Income Tax Act. 1961. It is also submitted that initially when the premises was taken on rent in the year 1964, the rent was @ Rs.150/- per month and then Rs.801/- per month. 1961. It is also submitted that initially when the premises was taken on rent in the year 1964, the rent was @ Rs.150/- per month and then Rs.801/- per month. He also drew my attention to clause (3) of registered lease deed dated 1.12.1985 (Ex.D/9) which provides increase of rent by 5% even year. He submits that there is a condition of increase of rent by 5% which has been accepted by the parties and appellants are paying the rent accordingly which has been accepted by the respondents without any objection and therefore by the aforesaid conduct, they are estopped to claim rent at the market rate. With the aforesaid, appellants prayed for rejection of the application. ( 8. ) The appellants No.2 in para 9 of his deposition has deposed that he is in possession of 30,000 sq ft of land. Recently for widening of the road, the Municipal Corporation, Jabalpur has demolished the boundary wall constructed by the appellants and had taken possession of 800 sq ft out of the said accommodation of 30000 sq ft. The appellants are also paying electricity charges, water charges, corporation tax and property tax etc etc. as per terms and conditions of the Ex.D/9. ( 9. ) It is not in dispute that the suit property is situated on the main road from Russel Chowk to Fourth Bridge. The normal rent of the surrounding area is Rs.22- 30/- per square feet. The respondents have filed a copy of lease agreement of surrounding area vide Ex.R/1 and R/2. Annexure R/1 is lease agreement dated 4.8.2008 effective from 1.6.2006, executed between Smt Suhag Rani Jain with others and M/s Max New York Life Insurance Company Ltd. in which it has been agreed that an amount of Rs.81,120/- would be the rent per month for an area of 3380 sq ft of construction portion and Rs.89232/- would be the enhanced rent from 1st August, 2009. Vide lease agreement Annexure R/2 which is in respect of the same area wherein it has been agreed between the parties that the rent payable for 4330 sq ft of carpet area would be @ Rs.22/- per sq ft i.e. Rs.95,260/- per month. The said rented premises are in respect of Jain Towers Russel Chowk, Jabalpur. The distance of Jain Tower is approximately 50-100 meter from the area in question. ( 10. The said rented premises are in respect of Jain Towers Russel Chowk, Jabalpur. The distance of Jain Tower is approximately 50-100 meter from the area in question. ( 10. ) The Apex court in the case of Atma Ram Properties (P) Ltd vs Federal Motors (P) Ltd. (supra) held that a right of the tenant to file an appeal is statutory but his prayer for grant of stay is appealable in exercise of equitable discretionary jurisdiction of the appellate court. While ordering the 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 it is postponing the execution of the order of eviction. There is every justification for the appellate court to put the appellant tenant 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 which had been paid by the tenant during the trial court proceedings. ( 11. ) In Atma Ram Properties (P) Ltd vs Federal Motors (P) Ltd. (supra), the Apex Court in para 17, 18 and 19 observed as follows: "17. In the Delhi Rent Control Act 1958, the definition of a "tenant" is contained in clause (1) of Section 2. Tenant includes "any person continuing in possession after the termination of his tenancy" [Section 2(1)(ii)] and does not include "any person against whom an order or decree for eviction has been made" [Section 2(1)(A)] This definition is identical with the definition of tenant dealt with by this Court in Chancier Kali Bai case. The respondent-tenant herein having suffered an order for eviction on 19.3.2001, his tenancy would be deemed to have come to an end with effect from that date and he shall become an unauthorized occupant. It would not make any difference if the order of eviction has been put in issue in appeal or revision and is confirmed by the superior forum at a latter date. The date of termination of tenancy would not be postponed by reference to the doctrine of merger. 18. That apart, it is to be noted that the appellate Court while exercising jurisdiction under Order 41 Rule 5 of the Code did have power to put the tenant-appellant on terms. The tenant having suffered an order for eviction must comply and vacate the premises. 18. That apart, it is to be noted that the appellate Court while exercising jurisdiction under Order 41 Rule 5 of the Code did have power to put the tenant-appellant on terms. The tenant having suffered an order for eviction must comply and vacate the premises. His right of appeal is statutory but his prayer for grant of stay is dealt with in exercise of equitable discretionary jurisdiction of the appellate Court. 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 it: 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 Marshall Sons and Co. (I) Ltd. Vs. Sahi Oretrans (P) Ltd. andAnr, (1999) 2 SCC 325 , this Court has 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 is holding over the property. 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 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, ] 958, 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 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." ( 12. ) In Atma Ram Properties (P) Ltd vs Federal Motors (P) Ltd. (supra), th Apex Court framed two issues arising for consideration as follows :- "10...... This submission raises the following two issues: (i) in respect of premises enjoying the protection of rent control legislation, when does the tenancy terminate; and (ii) up to what point of time is the tenant liable to pay rent at the contractual rate and when does he become liable to pay compensation for use and occupation of the tenancy premises unbound by the contractual rate of rent to the landlord ?" ( 13. ) The Apex Court answered the first issue as follows : "16. We are, therefore, of the opinion that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed, would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy. ( 14. ( 14. ) The second issue was answered as follows : "(2)......With effect from that date [the passing of the 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 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." (words in parenthesis added) (emphasis supplied) ( 15. ) Recently in the case of State of Maharashtra and another vs Super Max International Private Limited and others (supra), the Constitutional Bench of the Apex Court considered the case of Satyawati Sharma Vs. Union of India (2008) 5 SCC 287 and Atma Ram Properties (P) Ltd vs Federal Motors (P) Ltd. (supra), and respectfully agreed with the view taken in Atma Ram Properties (P) Ltd. (supra) and held that in an appeal or revision preferred by a tenant against an order or decree of an eviction passed under the Rent Act it is open to the appellate or the Revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. ( 16. ) In the case of State of Maharashtra and another vs Super Max International Private Limited and others (supra), it has been held that the amount of Rs.5,40,000 per month fixed by the Bombay High Court is reasonable and held that if the eviction decree is set aside than the status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent. Here in the present case, the tenanted premises is around 28000-30000 sq ft and is situated at the prime location of commercial activity of Jabalpur city and rent of the adjoining area, within the vicinity of 50 sq meter is around Rs. 22-30 per sq ft. The appellants are in possession of the premises since 1964. Now the tenant has been paying the rent @ Rs.28,140/- per month and adjoining premises have been recently let out on rent between year 2006 to 2008 @ Rs.22-30 per sq ft per month. ( 17. 22-30 per sq ft. The appellants are in possession of the premises since 1964. Now the tenant has been paying the rent @ Rs.28,140/- per month and adjoining premises have been recently let out on rent between year 2006 to 2008 @ Rs.22-30 per sq ft per month. ( 17. ) As per affidavit of appellants No.2 dated 4.3.2009 and the chart appended along with the affidavit, the appellants deposited the mesne profit up to the period of December, 2009. No counter affidavit has been filed by the respondents to disbelieve the statement and facts mentioned in the affidavit and, therefore the contention of respondents that no arrears of rent as per agreement dated 1.12.1985 (Ex.D/9) was deposited by the appellants nor they are paying it regularly during the pendency of the appeal, cannot be accepted at this stage. ( 18. ) Looking to these facts, it is directed that the appellant would deposit in the court Rs. 7/- per sq. ft i.e, Rs. 2,03,000/- ( 29000 x 7= 03,000/-) in addition to the contractual rent which could be paid directly to the respondents. The stay granted by this court on 18-3-09 shall continue during the pendency of the appeal, however, subject to the condition that the appellants shall deposit a sum of Rs.2,03,000/- commencing from the date of decree passed by the Trial Court. Amount so fixed over and above the contractual monthly rent shall be deposited before the Trial Court unti the appeal is decided so that the amount in deposit could be disbursed by this Court at the end of the appeal and the said deposit amount along with the accrued interest, should only be paid after the final disposal to civil suit depending upon the result of this appeal. The appellants are directed to deposit the said amount within a period of three months from today failing which the stay granted by this court on 18.3.2009 shall stand vacated automatically without further reference to the bench. ( 19. ) With the aforesaid I.A. No.13292/2009 and 2892/2009 are partly allowed and disposed of. Order accordingly.