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Madhya Pradesh High Court · body

2014 DIGILAW 128 (MP)

Bhupendra Kant Bhardwaj v. Rameshchandra Goyal

2014-01-27

G.D.SAXENA

body2014
Judgment: G.D. Saxena, J. 1. Arguments were heard on I.A. No. 5149/2011 which is filed under Order 41, Rule 5 of the Code of Civil Procedure, 1908 by the appellants/tenants seeking stay of the operation of the impugned judgment and decree dated 3rd November, 2011 in a civil suit instituted by the plaintiff/respondent against appellants for eviction and arrears of rent with mesne profit. Learned counsel for the appellants contended that under the garb of the impugned decree, the plaintiff/respondent is bent upon to dispossess the appellants from the suit premises wherein they are running business and also residing in first floor of the building. It is submitted that if the operation of the impugned judgment and decree is not stayed, the appellants shall suffer irreparable loss which cannot be compensated in any manner and the purpose of filing the appeal would be frustrated. Hence, by the aforesaid application, the operation of the impugned judgment and decree is sought to be stayed till pendency of the appeal. 2. In response to the application, the respondent/plaintiff contented that the appellants are enjoying the constructed area about 3000 square feet for their business in busy commercial market in the town of Gwalior City. They are further utilising 3000 square feet area for their residence on the first floor of the building and 3000 square feet area of the roof of the building but in turn they are paying meagre amount of Rs. 350/- as monthly rent to the landlord/respondent. On the other hand, the landlord/respondent is paying Rs. 7999/- as property tax to the Municipal Corporation. It is submitted that as per market price of the area in question, at present rent of Rs. 25,000/- cannot be denied. Giving an example of one Shri Shyam Agrawal and Smt. Rekha Agrawal who are landlords of the adjoining building it is stated that they are getting Rs. 39,600/- as monthly rent from tenant Dena Bank. Therefore, it is prayed that the application under consideration in such circumstances is liable to be dismissed or in alternative the appellants may be directed to deposit Rs. 25,000/- as monthly mesne profits of the building till their possession over the rented premises. In support of his arguments, learned counsel placed reliance on the following judgments of Hon'ble Apex Court as well as this Court. 25,000/- as monthly mesne profits of the building till their possession over the rented premises. In support of his arguments, learned counsel placed reliance on the following judgments of Hon'ble Apex Court as well as this Court. They are:-- (i) Atma Ram Properties (P.) Ltd. vs. Federal Motors (P.) Ltd., (2005) 1 SCC 705 , (ii) State of Maharashtra vs. M/s. Super Max International Pvt. Ltd. and ors., 2009 AIR SCW 7265, (iii) Shabbir Hussain and ors. vs. Ram Dayal and others, decided on 2011 (1) MPLJ 366 . 3. Before going further into a discussion of the questions that arise, the relevant provisions of law may be summarised which are as follows:-- Order 41. Rule 5 Stay by Appellate Court 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 appealing therefrom, the Court which passed the decree may on sufficient cause being shown order the execution to be stayed. -- Where an application is made for stay of execution of an appealable decree before the expiration of the time allowed for appealing therefrom, the Court which passed the decree may on sufficient cause being shown order the 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.] 4. Since the appellants/tenants have preferred an appeal against the judgment and decree of eviction from the rented premises, in that case the provisions of section 13 of M.P. Accommodation Control Act, 1961 which are as follows shall also apply to the case in strict sense: Section 13. When tenant can get benefit of protection against eviction. Since the appellants/tenants have preferred an appeal against the judgment and decree of eviction from the rented premises, in that case the provisions of section 13 of M.P. Accommodation Control Act, 1961 which are as follows shall also apply to the case in strict sense: Section 13. When tenant can get benefit of protection against eviction. -- (1) On a suit or any other proceeding being instituted by a landlord on any of the grounds referred to in section 12 or in any appeal or other proceeding by a tenant against any decree or order for his eviction, the tenant shall within one month of the service or writ of summons or notice of appeal or of any other proceeding or within one month of institution of appeal or any other proceeding by the Court may on application made to it allow in this behalf, deposit in the Court or pay to landlord, an amount calculated at the rate of rent at which it was paid, for the period for which the tenant may have been made default including the period subsequent thereto up to the end of the month previous to that in which the deposit or payment is made; and shall thereafter continue to deposit or pay, month by month by the 15th of each succeeding month a sum equivalent to the rent at that rate till the decision of the suit, appeal or proceeding, as the case may be. (2) xx xx xx xx (3) xx xx xx xx (4) xx xx xx xx (5) xx xx xx xx (6) If a tenant fails to deposit or pay any amount as required by this section, the Court may order the defence against eviction to be struck out and shall proceed with the hearing of the suit, appeal or proceeding as the case may be. 5. Thus, from provisions of aforesaid Order 41, Rule 5 of the Civil Procedure Code, it is amply clear that the Appellate Court is not bound to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. The petitioner who comes to the Court for seeking a stay order must do equity for seeking equity. The petitioner who comes to the Court for seeking a stay order must do equity for seeking equity. While granting an order of stay under Order 41, Rule 5 of the Civil Procedure Code the Appellate Court does have the jurisdiction to put the parties seeking the stay order on such terms, as would in its opinion reasonably compensate the decree holder, for the loss occasioned by the delay in the execution of the decree by the grant of stay order. 6. As regards claim made by the plaintiff for receiving higher rent on the basis of present market rate, same has been answered in the case of Shabbir Hussain (supra), as under:-- 10. The Scope of Order 41, Rule 5, Civil Procedure Code has been taken into consideration in the decision of Supreme Court Atma Ram Properties (P.) Ltd. (supra) in which an earlier decision of Supreme Court Marshall Sons and Co. (I) Ltd. (supra) has been relied upon in which the Apex Court has directed to deposit mesne profits at quite higher rate looking to the facts and circumstances that tenant was inducted long back and if during those days quite lesser rate of rent was prevailing, it cannot be equated with present rate of rent. These decisions are fully applicable in present case also. 7. Further on the point of stay whether it is to be granted or not while exercising discretion by the Appellate Court and what would be guiding factors, in Atma Ram Properties (P.) Ltd. vs. Federal Motors (P.) Ltd., (2005) 1 SCC 705 , at page 712: the Hon'ble Apex Court held as follows:-- 8. It is well settled that mere preferring of an appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the Court below. A prayer for the grant of stay of proceedings or on the execution of decree or order appealed against has to be specifically made to the Appellate Court and the Appellate Court has discretion to grant an order of stay or to refuse the same. The only guiding factor, indicated in Rule5 aforesaid, is the existence of sufficient cause in favour of the appellant on the availability of which the Appellate Court Would be inclined to pass an order of stay. The only guiding factor, indicated in Rule5 aforesaid, is the existence of sufficient cause in favour of the appellant on the availability of which the Appellate Court Would be inclined to pass an order of stay. Experience shows that the principal consideration which prevails with the Appellate Court is that in spite of the appeal having been entertained for hearing by the Appellate Court, the appellant may not be deprived of the fruits of his success in the event of the appeal being allowed. This consideration is pitted and weighed against the other paramount consideration: why should a party having succeeded from the Court below be deprived of the fruits of the decree or order in his hands merely because the defeated party has chosen to invoke the jurisdiction of a superior forum. Still the question which the Court dealing with a prayer for the grant of stay asks itself is: why the status quo prevailing on the date of the decree and/or the date of making of the application for stay be not allowed to continue by granting stay, and not the question why the stay should be granted. 9. Dispossession, during the pendency of an appeal of a party in possession, is generally considered to be "substantial loss" to the party applying for stay of execution within the meaning of clause (a) of sub-rule (3) of Rule 5 of Order 41 of the Code. Clause (c) of the same provision mandates security for the due performance of the decree or order as may ultimately be passed being furnished by the applicant for stay as a condition precedent to the grant of order of stay. However, this is not the only condition which the Appellate Court can impose. The power to grant stay is discretionary and flows from the jurisdiction conferred on an Appellate Court which is equitable in nature. To secure an order of stay merely by preferring an appeal is not a statutory right conferred on the appellant. So also, an Appellate Court is not ordained to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. Therefore, an applicant for order of stay must do equity for seeking equity. So also, an Appellate Court is not ordained to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. Therefore, an applicant for order of stay must do equity for seeking equity. Depending on the facts and circumstances of a given case, an Appellate Court, while passing an order of stay, may put the parties on such terms the enforcement whereof would satisfy the demand for justice of the party found successful at the end of the appeal...... 11............In the case of Chander Kali Bai the tenancy premises were situated in the State of Madhya Pradesh and the provisions of the M.P. Accommodation Control Act, 1961 applied. The suit for eviction was filed on 8-3-1973 after serving a notice on the tenant terminating the contractual tenancy w.e.f. 31-12-1972. The suit came to be dismissed by the trial Court but decreed in first appeal decided on 11-8-1975. One of the submissions made in this Court on behalf of the appellant tenant was that no damages from the date of termination of the contractual tenancy could be awarded; the damages could be awarded only from the date when an eviction decree was passed. This Court took into consideration the definition of tenant as contained in section 2(i) of the M.P. Act which included "any person continuing in possession after the termination of his tenancy" but did not include "any person against whom any order or decree for eviction has been made". The Court, persuaded by the said definition, held that a person continuing in possession of the accommodation even after the termination of his contractual tenancy is a tenant within the meaning of the M.P. Act and on such termination his possession does not become wrongful until and unless a decree for eviction is passed. However, the Court specifically ruled that the tenant continuing in possession even after the passing of the decree became a wrongful occupant of the accommodation. In conclusion the Court held that the tenant was not liable to pay any damages or mesne profits for the period commencing from 1-1-1973 and ending on 10-8-1975 but he remained liable to pay damages or mesne profits from 11-8-1975 until the delivery of the vacant possession of the accommodation. In conclusion the Court held that the tenant was not liable to pay any damages or mesne profits for the period commencing from 1-1-1973 and ending on 10-8-1975 but he remained liable to pay damages or mesne profits from 11-8-1975 until the delivery of the vacant possession of the accommodation. During the course of its decision this Court referred to a decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain vs. Kamlakar wherein the High Court had held that if a person continues to be in occupation after the termination of the contractual tenancy then on the passing of the decree for eviction he becomes a wrongful occupant of the accommodation since the date of termination. This Court opined that what was held by the Madhya Pradesh High Court seemed to be a theory akin to the theory of "relation back" on the reasoning that on the passing of a decree for eviction, the tenant's possession would become unlawful not from the date of the decree but from the date of the termination of the contractual tenancy itself. It is noteworthy that this Court has not disapproved the decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain case but distinguished it by observing that the law laid down in Kikabhai Abdul Hussain case was not applicable to the case before it in view of the definition of "tenant" as contained in the M.P. Act and the provisions which came up for consideration of the High Court in Kikabhai Abdul Hussain case were different. 13. In Shyam Charan vs. Sheoji Bhai this Court has upheld the principle that the tenant continuing in occupation of the tenancy premises after the termination of tenancy is an unauthorised and wrongful occupant and a decree for damages or mesne profits can be passed for the period of such occupation, till the date he delivers the vacant possession to the landlord. With advantage and approval, we may refer to a decision of the Nagpur High Court. In Bhagwandas Lakhamsi vs. Kokabai the learned Chief Justice of the Nagpur High Court held that the Rent Control Order, governing the relationship of landlord and tenant, has no relevance for determining the question of what should be the measure of damages which a successful landlord should get from the tenant for being kept out of the possession and enjoyment of the property. After determination of the tenancy, the position of the tenant is akin to that of a trespasser and he cannot claim that the measure of damages awardable to the landlord should be kept tagged to the rate of rent payable under the provisions of the Rent Control Order. If the real value of the property is higher than the rent earned then the amount of compensation for continued use and occupation of the property by the tenant can be assessed at the higher value. We find ourselves in agreement with the view taken by the Nagpur High Court. 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. 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 insofar 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. (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 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. 8. In State of Maharashtra vs. Super Max International (P.) Ltd., (2009) 9 SCC 772 , at page 796: The Hon'ble Apex Court observed as follows:-- 77. In the light of the discussions made above we hold 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. Needless to say that in 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. 9. Now, on examining the case in the light of the aforesaid decisions, it comes to the notice that the learned trial Court for want of sufficient proof disallowed the prayer of the landlord for the prospective rent @ Rs. 25,000/- monthly claimed on the basis of present market rate of rent of the building let out to the appellants. However, it was not disputed by the appellants that landlord/respondent is receiving Rs. 350/- towards monthly rent and he is paying Rs. 7999/- as property tax against the rented building to the Municipal Corporation Gwalior. 25,000/- monthly claimed on the basis of present market rate of rent of the building let out to the appellants. However, it was not disputed by the appellants that landlord/respondent is receiving Rs. 350/- towards monthly rent and he is paying Rs. 7999/- as property tax against the rented building to the Municipal Corporation Gwalior. Therefore, it was put forth by the landlord that the aforesaid sum is separately recoverable in addition to the amount of contractual rent from the tenant. Hence, according to his learned counsel, the plaintiff/landlord is entitled to receive amount of contractual rent vis-à-vis property tax both from the defendants. 10. In the case of Mohd. Ahmad vs. Atma Ram Chauhan, (2011) 7 SCC 755 , facing the same situation, the Hon'ble Apex Court observed, relevant para is as under:-- 21. xxxx xxxxx xxxxx xxxxx (ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only. 11. Considering the above, at present, direction for payment of mesne profits/damages against the appellants under Order 41, Rule 5 of Civil Procedure Code on the basis of present market rate of rent of the building, cannot be issued when the appeal is pending. However, the appellants/tenants can be put on such reasonable terms for due performance of such decree or order as may ultimately be binding upon them as prescribed under Order 41, Rule5(3) of Civil Procedure Code as well as section 13(1) of the M.P. Accommodation Control Act, 1961. Consequently, stay with respect to possession of rented property is granted to the appellants/defendants subject to compliance of the following conditions for due performance of such decree or order as may ultimately be passed by this Court:-- (i) that, money part of the decree (Cost of the suit) payable to the plaintiff/respondent be deposited by the appellants within a period of two months from the order of this Court before the trial/Executing Court. (ii) that, the appellants shall furnish an undertaking with a solvent security worth Rs. 5,00,000/- (Rs. (ii) that, the appellants shall furnish an undertaking with a solvent security worth Rs. 5,00,000/- (Rs. Five Lakh only), to the satisfaction of the Trial/Executing Court for handing over the possession of the rented property and mesne profits/damages for wrongful possession as determined by the Appellate Court within the time period as fixed by the Appellate Court. Aforesaid undertaking of the appellants with the above solvent security shall be furnished within a period of two months from today before the trial/Executing Court. (iii) That, the appellants/defendants to deposit from the date of filing of appeal, i.e., 12-12-2011, the amount of rent as determined by the trial Court per month. Thereafter every month the appellants/defendants shall without fail deposit the rent on or before every 15th day of Gregorian calendar month till the finality of the appeal. (iv) That, the appellants/tenants shall also deposit the property tax amount which was paid by the owner of the suit house to the Municipal Corporation on furnishing necessary bill of the property tax and the deposit of the receipt thereof by the plaintiff/owner before the Executing Court and deposit of such payment of bills shall be made by the appellants/tenants within two months from the date of furnishing the above bills and receipts. The property tax as directed shall be leviable from the date of filing of the suit for eviction before the trial Court. (v) That, the amount of rent and the amount paid towards property tax by the landlord on being deposited by the appellants/tenants shall be disbursed to the respondent/landlord. (vi) In case there is failure to make compliance of the aforesaid directions within the stipulated period mentioned above, the interim arrangement that the respondent/plaintiff would not obtain warrants of possession shall stand automatically vacated without reference to the bench. 12. In view of aforesaid, the application (I.A. No. 5149/2011) stands disposed of. List the appeal on priority basis under category of senior citizen.