Gurunanak Timber Mart, a Partnership Firm v. Anil Kumar Gulatee
2012-05-14
R.C.MISHRA
body2012
DigiLaw.ai
JUDGMENT : Thisorder shall govern the disposal of- ( i ) I.A. No. 4212/10, which is appellant's application,under Order 41 Rule 5 ( 1) of the Civil Procedure Code (for short 'the Code')for staying execution of the impugned judgment and decree. (ii)I.A. No. 9186/11, which is in the form of reply to the aforesaid I.A. andappropriate directions to pay mesne profits @ Rs . 2,67,300/- p.m. 2.The present appeal has been preferred against judgment dated 26-2-2010 passedby Second ADJ, Jabalpur in Civil Suit No. 17-A/05,whereby the suit filed by the respondents for eviction of the appellant, aPartnership Firm, from the suit accommodation, though based on other groundsalso, was decreed on the ground of bonafide requirement, envisaged under Section 12 (1) (f) of the M.P. AccommodationControl Act, 1961 (hereinafter referred to as 'the M.P. Act') and otherconsequential and incidental reliefs , includingdirections to appellant to pay a sum of Rs . 1 lac as compensation and arrears of rent @ Rs . 1,000/- p.m. were also granted. Being aggrieved, therespondents have also preferred a counter objection. 3. Upon LA. No. 4212/10 (above), as an interim measure,vide order dated 29-6-2010 ,execution of the decree was stayed, subject to conditions that the appellantshall deposit within a period of 30 days-- ( i ) entire cost of the litigation. (ii) arrears of rent, if any. (iii) a sum of Rs . 25,000/-towards compensation as awarded by the Trial Court, and also that it shall deposit rent @ Rs .1,000/- p.m. till decision of this appeal. It was further directed that theamount deposited towards the compensation and costs shall not be disbursed tothe respondents and shall be kept deposited with a nationalised bank for a fixed period. 4.As indicated already, while opposing the stay application, so far as it relatesto execution of the eviction part of the decree, the respondents have alsoprayed for modification of the order dated 29-6-2010 in the light of the decision of the SupremeCourt in Atma Ram Properties. Vs. Federal Motors, (2005) 1 SCC 705 , that has been re-affirmed in State of Maharashtra Vs. Super Max International Pvt. Ltd., (2009) 9 SCC 772 .
Vs. Federal Motors, (2005) 1 SCC 705 , that has been re-affirmed in State of Maharashtra Vs. Super Max International Pvt. Ltd., (2009) 9 SCC 772 . According torespondents, with the passing of the eviction decree, the appellant-Firm hasceased to be their tenant, and therefore, an instant right to execute it and torecover, in addition to the contractual rent, mesne profits to be determined after taking into account the prevailing market rentalvalue, has accrued to them contemporaneously. In this context, they haveassessed the minimum rent of the suit accommodation as per- ( i ) Stamp Duty Ready Reckoner 2010-11 to be Rs . 85,427/-; and (ii) prevailing rate of market rent in the surrounding areaas Rs . 2,67,300/-. 5.The prayer for modification of the interim stay order has been vehementlyopposed by the appellant inter alia on the groundthat the decisions in Alma Ram Properties case and Super Max's case (supra),cannot be considered as binding precedents in a case governed by the provisionsof the Act. It has also been urged that in absence of an application, underOrder 41 Rule 27 of the Code, the documents, filled by the respondents insupport of their claim for mesne profits should be keptout of consideration. In support of the reply, written arguments, running in usmany as 14 typed pages, and providing subject matter for philosophicaldissertation and digression, have also been submitted. 6.For the sake of convenience, the-well-settled position of law on the right ofappeal and nature/scope of the Appellate Court's power to grant stay, ashighlighted in the written arguments, may be summed up as under :- ( i ) Right of appeal is a substantive right. For this,reference has been made to Garikapati Veeraya Vs. N. Subbiah Choudhry , AIR 1957 SC 540 , wherein the Supreme Court laiddown the following propositions :- ( i ) That the legal pursuit of a remedy, suit appeal andsecond appeal are really but steps in a series of proceedings all connected byan intrinsic unity and are to be regarded as one legal proceeding. (ii)The right of appeal is not a mere matter of procedure but is a substantiveright. (iii)The institution of the suit carries with it the implication that all rights ofappeal then in force are preserved to the parties thereto till the rest of thecareer of the suit.
(ii)The right of appeal is not a mere matter of procedure but is a substantiveright. (iii)The institution of the suit carries with it the implication that all rights ofappeal then in force are preserved to the parties thereto till the rest of thecareer of the suit. (iv)The right of appeal is a vested right and such a right to enter the SuperiorCourt accrues to the litigant and exists as on and from the date the Uscommences and Although it may be actually exercised when the adverse judgmentis pronounced such right is to be governed by the law prevailing at the date ofthe institution of the suit or proceeding and not by the law that prevails atthe date of, its decision or at the date of the filing of the appeal. (v)This vested right of appeal can be taken away only by a subsequent enactment,if it so provides expressly or by necessary intendment and not otherwise." (ii)Power to grant stay, being inherent, need not be expressly conferred on theAppellate Court as an express grant of statutory power carries with it bynecessary implication the authority to use all reasonable means to make suchgrant effective (Income Tax Officer, Cannanore Vs.M.K. Mohamad Kunhi , AIR1969 SC 430 referred to). In that case, it was held that when Section 254 ofthe Income Tax Act confers appellate jurisdiction, it impliedly grants thepower of doing all such acts, or employing such means, as are essentiallynecessary to its execution and that the statutory power carries with it theduty in proper cases to make such orders for staying proceeding as will preventthe appeal is successful from being rendered nugatory. The following observationsmade in Polini Vs. Gray, (1879) 12-Ch D 438, werealso quoted with approval :- "Itappears to me on principle that the Court ought to possess that jurisdiction,because the principle which underlies all orders for the preservation ofproperty pending litigation is this, that thesuccessful party is to reap the fruits of that litigation, and not obtainmerely a barren success.
The following observationsmade in Polini Vs. Gray, (1879) 12-Ch D 438, werealso quoted with approval :- "Itappears to me on principle that the Court ought to possess that jurisdiction,because the principle which underlies all orders for the preservation ofproperty pending litigation is this, that thesuccessful party is to reap the fruits of that litigation, and not obtainmerely a barren success. That principle, as it appears to me, applies as muchto the Court of first instance before the first trial, and to the Court ofAppeal before the second trial, as to the Court of last instance before thehearing of the final appeal." 7.Adverting to the main contention, endeavour of theSenior Counsel for the appellant has been to demonstrate, by reference tovarious provisions of the Act and the earlier judgments touching the facets ofthe issue (which, according to him, were not brought to the notice of theCourt), that the decision in Atma Ram Properties case(supra), would not be applicable to a case, like the present one, regulatedexclusively by the provisions of the Act, whereunder ,-- (a) by virtue of Section 13(1) thereof, a tenant, in orderto secure protection against eviction under a decree appealed against by him orstriking out of the defence , is obliged to depositonly the monthly rent as determined by the Trial Court. (b) a tenant against whom a decree for eviction is passedby Trial Court does not lose protection if he files the appeal because, aspointed out by the Supreme Court in Hasmat Rai Vs. Raghunath Prasad, AIR1981 SC 1711, if appeal is allowed the umbrella of statutory protection shieldshim. (c) in view of Section 6 of the Act, a landlord cannotclaim or receive any rent in excess of the standard rent, as referred to in Section7 thereof. (d)Section 17 of the Act creates a bar to re-letting of the accommodation withintwo years from the date on which a landlord recovers possession thereof inpursuance of an order made under clause (f) of sub-section (1) of Section 12. (e)inclusion of 'any person continuing possession after the termination of histenancy' in the definition of tenant given in Section 2 ( i )of the Act does not assume any significance as for seeking eviction underSection 12 of the Act, notice under Section 106 of the Transfer of Property Actis not required in the wake of the pronouncement of the Constitution Bench inV. Dhanapal Chettiar Vs.
Dhanapal Chettiar Vs. Yesodai Ammal , AIR 1979 SC 1745 . 8.lie is further of the view that the decisions in Atma Ram Properties case and Super Max case (supra), are not applicable to a caseunder the Act as, firstly they respectively relate to provisions of Delhi RentControl Act, 1958 and Bombay Rent Act, 1947 and secondly, the source ofstatutory power to grant stay, under Order 41 Rule 5 of the Code, subject topayment of me sue profits at a rate higher than the contractual rate of rentwas not considered in both the cases, despite the fact that the rule is merelya rule of procedure and regulatory in nature. 9.Per contra, learned Senior Counsel appearing for the respondents has submittedthat Atma Ram Properties case (supra), provides anaffirmative answer to the core question as to whether the Appellate Court,while staying execution of a decree for eviction, has jurisdiction to put theappellant on such reasonable terms as would, in its opinion, reasonablycompensate for loss occasioned by delaying in execution of the decree or by thegrant of stay order in the event of the appeal being dismissed. According tohim, the aforesaid ratio of law has already been followed by a Co-ordinateBench of this Court in M/s National Garage Vs. Rajvardhan Singhai , 2010(2) M.P.H.T. 462 , as well as by aDivision Bench in Shabbar Hussain Vs. Ram Dayal , 2011 (1) MPWN 58 , and there is nocompelling reason to take a different view. Reference has also been made to thedecision, rendered by the then Chief Justice of Nagpur High Court, in Bhagwandas Lakhamsi Vs. Kesheoram , AIR 1953 Nagpur 186, holding that- " the Rent Control Order governs, for the limited purpose ofthat Order, relationship of landlord and tenant. It has absolutely no relevanceto the question of what should be the measure of damages, which a successfulplaintiff should get for being kept out of his or her property.
Kesheoram , AIR 1953 Nagpur 186, holding that- " the Rent Control Order governs, for the limited purpose ofthat Order, relationship of landlord and tenant. It has absolutely no relevanceto the question of what should be the measure of damages, which a successfulplaintiff should get for being kept out of his or her property. After thetermination of the tenancy the position of the tenant is that a trespasser, and a trespasser cannot invoke in aid theprovisions of that order." 10.At the outset, it may be observed that the contention that Order 41 Rule 5 ofthe Code does not correspond to any substantive right is self contradictoryinasmuch as the proposition that the power to hear appeal (which, in theinstant case, has been conferred by Section 96 of the Code) docs include thepower to stay execution of the order in question was propounded in M.K. Mohamad Kunhi's case (supra),cited on behalf of the appellant only. 11.The judgment in Hasmt Rai Vs. Raghunath Prasad, AIR 1981 SC 1711 , does notcontain reference to an earlier decision rendered in Chander Kali Rai Vs. Jagdish Singh Thakur , AIR 1977 SC 2262 and re-affirmed in Shyam Charans Vs. Sheoji Bhai , AIR 1977 SC 2270 ,explaining that- "Atenant even after the termination of his contractual tenancy does not become an unauthorised occupant of the accommodation butremains a tenant. Such a tenant is conveniently called a statutory tenant.Whether the expression. aforesaid borrowed from the English Law is quite appositeor not but, what is certain is that a person continuing in possession of theaccommodation even after the termination of his contractual tenancy is a tenantwithin the meaning of the Act and on such termination his possession does notbecome wrongful, until and unless a decree for eviction is made. If hecontinues to be in possession even after the passing of the decree, he does soas a wrongful occupant of the accommodation". Inabsence of a decree of eviction the person in occupation of the accommodationcontinues to be a tenant and is not liable to pay any damages as his occupationis not unauthorised or wrongful even after thetermination of the contractual tenancy." 12.In other words, liability of the tenant to pay mesne profits arises only upon the passing of the decree for eviction against him.The view taken in Chancier Kali's case (supra ), was followed in Atma RamProperties case (supra).
Relevant observations may be reproduced as under : - "17.In the Delhi Rent Control Act, 1958, the definition of a "tenant" iscontained in clause (1) of Section 2. Tenant includes "any personcontinuing in possession after the termination of his tenancy" (Section 2(I) (ii)] and does not include "any person against whom an order or decreefor eviction has been made" [Section 2(1) (A)]. This definition isidentical with the definition of tenant dealt with by this Court in Chancier Kali's case. The respondent tenant herein having sufferedan order for eviction on 19-3-2001 ,his tenancy would be deemed to have come to an end with effect from that dateand he shall become an unauthorised occupant. Itwould not make any difference if the order of eviction has been put in issue inappeal or revision and is confirmed by the superior forum at a latter date. Thedate of termination of tenancy would not be postponed by reference to thedoctrine of merger. 18.That apart, it is to be noted that the Appellate Court while exercisingjurisdiction under Order 41 Rule 5 of the Code did have power to put theappellant tenant on terms. The tenant having suffered an order for evictionmust comply and vacate the premises. His right of appeal is 'statutory but hisprayer for grant of stay is dealt with in exercise of equitable discretionaryjurisdiction of the Appellate Court. While ordering stay the Appellate Courthas to be alive to the fact that it is depriving the successful landlord of thefruits of the decree and is postponing the execution of the order for eviction.There is every justification for the Appellate Court to put the appellanttenant on terms and direct the appellant to compensate the landlord by paymentof a reasonable amount, which is not necessarily the same as the contractualrate of rent. In Marshal Sons & Co. (I) Ltd. Vs.
In Marshal Sons & Co. (I) Ltd. Vs. Sahi Oretrans (P) Ltd., this Court has held that once adecree for possession has been passed and executed is delayed depriving thejudgment creditor of the fruits' of decree, it is necessary for the Court topass appropriate orders so that reasonable mesne profits which may be equivalent to the market rent is paid by a person who isholding over the property." 13.Moreover, as explained in Super Max's case (supra), the definition of 'tenant'in Section 2 ( i ) of the M.P. Act and Section 2 (1) ofthe Delhi Act contains a similarly worded exclusionary clause to the effectthat a tenant does not include any person against whom an order or decree foreviction has been made under the Act. Although, the definition of 'tenant' asgiven in Section 5(11) of the Bombay Act does not have such an exclusionaryclause yet, in that case, a three Judge, speaking through Aftab Alam , J., proceeded to dismiss the contention raisedagainst the applicability of the dictum of Atma RamProperties case (supra), to a proceeding under the Bombay Act, while holdingthat- " in an appeal or revision preferred by a tenant against anorder or decree of an eviction passed under the Rent Act, it is open to theappellate or the Revisional Court to stay the execution of the order or the decreeon terms, including a direction to pay monthly rent at a rate higher than thecontractual rent." 14.There is yet another aspect of the matter. Article 141 of the Constitution ofIndia unequivocally indicates that the law declared by the Supreme Court shallbe binding on all Courts within the territory of India . The aforesaid Articleempowers the Supreme Court to declare the law. It is, therefore, an essentialfunction of the Court to interpret a Legislation . Thestatements of the Court on matters other than law like facts may have nobinding force as the facts of two cases may not be similar. But, what is binding is the ratio of the decision and not any findingof facts. It is the principle found out upon a reading of a judgment as awhole, in the light of the questions before the Court that forms the ratio andnot any particular word or sentence.
But, what is binding is the ratio of the decision and not any findingof facts. It is the principle found out upon a reading of a judgment as awhole, in the light of the questions before the Court that forms the ratio andnot any particular word or sentence. To determine whether a decision has'declared law' it cannot be said to be a law when a point is disposed of onconcession and what is binding is the principle underlying a decision. Ajudgment of the Court has to be read in the context of questions, which arosefor consideration in the case in which the judgment was delivered. An 'obiterdictum' as distinguished from a ratio decidendi is anobservation by Court on a legal question suggested in a case before it but notarising in such manner as to require a decision. Such an obiter may not have abinding precedent as the observation was unnecessary for the decisionpronounced, but even though an obiter may not have a binding effect as aprecedent, but it cannot be denied that it is of considerable weight. The lawwhich will be binding under Article 141 would, therefore, extend to allobservations of points raised and decided by the Court in a given case.....Thedecision in a judgment of the Supreme Court cannot be assailed on the groundthat certain aspects were not considered or the relevant provisions were notbrought to the notice of the Court. When Supreme Court decides a principle itwould be the duty of the High Court or a Subordinate Court to follow the decision of the Supreme Court.A judgment of the High Court which refuses to follow the decision anddirections of the Supreme Court or seeks to revive a decision of the HighCourt, which had been set aside by the Supreme Court is a nullity [See : Narinder Singh Vs. Surjit Singh, (1984) 2 SCC 402 ]. [Quoted from Director of Settlements, A.P. Vs. M.R. Apparao , AIR 2002 Supreme Court 1598]. 15.Thus, viewed from any angle, the decision in Atma RamProperties case (supra), applies with full force to a case under the Act and,accordingly, the appellant is liable to pay mesne profits from the date of the eviction decree appealed against. 16.Coming to the quantum of mesne profits, it may beobserved that the accommodation, having an area 13506 Square Feet( 1254.56 sq.
16.Coming to the quantum of mesne profits, it may beobserved that the accommodation, having an area 13506 Square Feet( 1254.56 sq. meters), is situated in the City of Jabalpur on the Main Road from Madan Mahal Chowk to Amanpur Gangasagar Garha Road and therespondents have claimed mesne profits at a monthlyrate varying between minimum of Rs . 85,247/- andmaximum of Rs . 2,67,320/- per month. However, fact ofthe matter is that, admittedly, in their application, under Section 10 of theAct [registered as Case No. 4-A-90 (1)72006], before the Rent ControllingAuthority, Jabalpur , they have prayed for fixation ofstandard rent in relation to the suit accommodation @ Rs .20,000/- per month only and the prayer has remained un-amended as yet. 17.Question of stay of execution of decree by an Appellate Court is a matter ofdiscretion to be exercised after taking into consideration the facts andcircumstances of each individual case. The stay of execution is granted with aview to prompting the disruption of rights vested in the appellant subject tosuitable compensation to the respondents who have succeeded in the LowerCourts. For this, attention has been invited to the following observations madeby. the Privy Council in the case of Roger Vs. Comptoir D.S. Escompte De Paris,3 LR P.C. Page 475 :- "Oneof the first and highest duty of all the Courts is to take care that the act ofCourt does no injury to anyone of the suitors and when the act of Court is usedit does not mean merely the act of primary Court or any intermediate Court ofappeal but the act of Court as a whole from first Court, which entertains thejurisdiction over the matter up to the highest Court, which finally disposes ofthe cases." 18.The decision in Super Max's case (supra), also lays down guideline in thefollowing terms : - "Needlessto say that in fixing the amount subject to payment of which the execution ofthe order/decree is stayed, the Court would exercise restraint and would notfix any excessive, fanciful or punitive amount." 19.Taking into consideration all these legal as well as factual aspects of thematter, I am of the view that the respondents are entitled to get additionalsum as me sue profits, equivalent to the amount claimed as the standard rent ofthe accommodation. 20. In the result, LA.
20. In the result, LA. No. 9186/11 stands allowed in Part.The interim stay order dated 29-6-2010, passed upon I.A. No. 4212/10, is herebymodified and it is directed that execution of the impugned decree shall remainstayed till decision of the appeal subject to an additional condition that theappellant shall also deposit a monthly sum of Rs .20,000/- as mesne profits in addition to thecontractual rent w.e.f . the date of decree. Fordepositing the arrears of mesne profits payable underthis order, two month's time is granted to the appellant.