Having Decree of Eviction, the tenancy terminates and Landlord is entitled to mense profits depriving him from the use of premises, pending Revision- Delhi High Court

IN THE HIGH COURT OF DELHI AT NEW DELHI

RC.REV. 22/2020

SONIA MEHRA ..... Petitioner

Through: Mr. G.P. Thareja and Mr. Amit, Advocates

  versus

HARI CHAND VERMA ..... Respondent

Through: Ms. Anju Lal and Ms. Shalu Lal, Advocates

Reserved on: 05.01.2023

Date of Decision: 17.01.2023

CORAM: HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA

JUDGMENT

MANMEET PRITAM SINGH ARORA, J:

CM APPL. 41155/2022 (Fixation of use and occupation charges)

1.The The present application has been filed by the Respondent, Landlord, seeking a direction to the Petitioner, Tenant, to pay a sum of Rs.1,25,000/-per month as use and occupation charges from the date of eviction order i.e., 17.07.2019 passed by the Rent Controller, till the date of actual handing over of the possession of the tenanted premises to the Respondent.

2.Learned counsel for the Respondent relies upon rental amount, specified in the certified copies of two registered lease deeds, for similar sized shops located in the vicinity of the tenanted premises. She states that the use and occupation charges of the tenanted premises may be fixed at Rs.1,25,000/-per month being commensurate with the market rent.

3.She states that the Tenant is presently paying a meagre sum of Rs.974/-per month towards monthly rent, excluding all the taxes and charges. She states that the execution of the eviction order dated 17.07.2019 has been stayed by this Court vide interim order dated 15.01.2020. She states that with the passing of the eviction order, the tenancy stands terminated and the Tenant is liable to pay market user charges during the pendency of this petition. She relies upon the judgment of this Court in R.K Naith Through Rakesh Kainth, Guardian v. Swadesh Kumar Bhagi & Ors., 275 (2020) DLT 176.

4.In reply, learned counsel for the Petitioner states that the shop premises, which are subject matter of the registered lease deeds filed by the Landlord are situated on a 60 feet wide main road and therefore, have greater commercial viability. In contrast, he states that the tenanted premises is situated on a 16 feet wide lane and therefore, the user charges for the said premises cannot be fixed at Rs.1,00,000/­or Rs.1,25,000/-as stated in the application.

5.He states that however, without prejudice to her rights and contentions, the Tenant is willing to pay damages of Rs.10,000/-per month. He states the market rent cannot be awarded as contended by the Landlord and a reasonable amount should by fixed by the Court considering that the Tenant has filed the present revision petition in exercise of her statutory right under Section 25(B) of the Delhi Rent Control Act, 1958. He relies upon the judgment of the Supreme Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705, to contend that the user charges determined by this Court should be a reasonable amount in context of the rate of rent paid prior to passing of the eviction order.

6.He also relies upon the judgment of Hon’ble Supreme Court in State of Maharashtra and Another v. Super Max International Private Limited and Others : (2009) 9 SCC 772 to contend that the Tenant should be permitted to deposit the user charges with the Registry of this Court and there should be no direction to make payment to the Landlord.

7.In rejoinder, learned counsel for the Respondent states that both the submissions of the Tenant are contrary to the directions contained at paragraph 19 of Atma Ram Properties (P) Ltd. (supra). She further, states that the shop premises which are subject matter of the two registered lease deeds are located at a distance of 200 sq. yards from the tenanted premises and therefore the rent reserved therein is duly applicable.

8.This Court has heard the learned counsel for the parties and perused the pleadings in the application.

9.The shop premises which are subject matter of the said two lease deeds are located at Hauz Qazi, Chawri Bazar, Delhi – 110006.

9.1. The first lease deed annexed with the application is with respect to a shop admeasuring 24.86 sq. metre (267.5 sq. feet) and it is for the period of 36 months from 10.07.2018 till 09.07.2021. The rental reserved under the said lease deed is Rs.1,50,000/-per month for first 12 months, with an enhancement clause of 5% per annum after the expiry of one year.

9.2. The second lease deed is with respect to a shop admeasuring 31 sq. yards (279 sq. feet) and it is for the period of 24 months from 01.04.2019 to 31.03.2021. The rental reserved under the said lease deed is Rs.1,00,000/-per month for the first 12 months, with an enhancement clause of 10% per annum after the expiry of one year.

9.3. The tenanted premises are located in Ward no.VI, Chawri Bazar, Delhi – 110006, admeasuring 250 sq. ft.

9.4. Thus, except for stating that the tenanted premises are located at a 16 feet wide lane, there is no dispute raised by the learned counsel for the Petitioner, Tenant, with respect to the contents of the registered lease deeds filed on record.

10. The Supreme Court in Atma Ram Properties (P) Ltd. (supra) has categorically held that after the passing of the eviction order by the Rent Controller in favour of the landlord, during the pendency of the revision petition, the tenant is liable to pay to the landlord the use and occupation charges of the tenanted 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 relevant paragraph of this judgment reads as follows:

“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 (l) 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.”

(Emphasis Supplied)

10.1. Recently, the aforesaid law has been re-affirmed by the Hon’ble

Apex Court in Martin and Harris Private Limited and Another v.

Rajendra Mehta and Others, (2022) 8 SCC 527 at paragraphs 18, 19

and 20, which reads as follows:­

“18. Thus, after passing the decree of eviction the tenancy terminates and from the said date the landlord is entitled for mesne profits or compensation depriving him from the use of the premises. The view taken in Atma Ram [Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705] has been reaffirmed in State of Maharashtra v. Super Max International (P) Ltd. [State of Maharashtra v. Super Max International (P) Ltd., (2009) 9 SCC 772 : (2009) 3 SCC (Civ) 857] by three-Judge Bench of this Court. Therefore, looking to the fact that the decree of eviction passed by the trial court on 3-3-2016 has been confirmed in appeal; against which second appeal is pending,

however, after stay on being asked the direction to pay mesne profits or compensation issued by the High Court is in consonance to the law laid down by this Court, which is just, equitable and reasonable.

19.The basis of determination of the amount of mesne profits, 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 area and the rate of rent precedent on which premises can be let out are the guiding factor in the facts of individual case.

20.In the case at hand, the High Court in the impugned order [Martin & Harris (P) Ltd. v. Rajendra Mehta, 2018 SCC OnLine Raj 3524] observed that the tenanted property is located on the main road of New Colony near Panch Batti which is a commercial area in the heart of Jaipur City. The said finding has been arrived at considering the voluminous documentary record dispelling the plea taken by the appellants. However, the Court in the facts and circumstances found it reasonable to determine Rs 2,50,000 per month as mesne profits. As per the discussion made hereinabove so far as the area of the tenanted premises and the location of the property is concerned, the findings of fact have been recorded by the High Court, in our considered opinion, those findings are based on the material brought on record which are neither perverse nor illegal. The amount of mesne profits as fixed @ Rs 2,50,000 is also just and proper looking at the span of time i.e. 10 years from the date of fixing of the standard rent and six years from the date of passing of the decree of eviction. Therefore, the amount of mesne profits has rightly been decided by the High Court while passing the order impugned.”

(Emphasis supplied)

11. In the facts of the present case, the tenanted premises are

located in an established commercial market and the same is being

used by the Tenant for commercial purpose.

11.1. The Tenant has not disputed that the shop premises which are

subject matter of the registered lease deeds and the tenanted premises

are all located in the same commercial market area of Chawri Bazar.

11.2. The only distinguishing fact pleaded by learned counsel for the

Tenant is that the tenanted premises are not located on main road

unlike the other two shop premises.

11.3. This Court has considered this dissimilarity and is of the

opinion that even if the location of the tenanted premises is on a 16 feet wide lane, the variation in the rent cannot be more than 25%, for similar sized shops, in the same commercial market area of Chawri Bazar.

11.4.Upon review of the rate of rent reserved under the registered lease deeds and the facts of this case, the use and occupation charges are fixed at a rate of Rs. 50,000/-per month for calendar year 2019, with a 10% enhancement each year, which is tabulated as follows:­

12.The contention of the Tenant that as per the judgment in Super Max International Private Limited (supra), she should be permitted to deposit the use and occupation charges with the Registry of this Court is not tenable and contrary to settled law. In Martin and Harris Private Limited (supra) the Supreme Court after duly noting Super Max International Private Limited (supra) upheld the direction of High Court of Rajasthan directing the tenant therein to make payment of user charges to the landlord therein. In the facts of this case, there is no dispute that the Respondent is the owner and the landlord of the tenanted premises and therefore this Court finds no merit in the submission of the Tenant.

13.The Tenant is accordingly, directed to pay the use and occupation charges as per the rate as stated at paragraph 11.4 of this order. The arrears shall be paid in four equal instalments i.e., on 28.02.2023, 15.04.2023, 30.05.2023 and 15.07.2023. The use and occupation charges for the month of February, 2023 shall be paid on or before 7th day of February 2023 and continue to pay for following months in the same manner.

14.In case the Tenant defaults in making the payment of arrears and/or current use and occupation charges as directed by this Court, the interim order granted on 15.01.2020 shall stand vacated.

15.With the aforesaid direction the present application is allowed.

July, 2019 to December, 2020 Rs.50,000/-per month

January, 2021 to December, 2021 Rs.55,000/-per month

January, 2022 to December, 2022  Rs.60,500/-per month

January, 2023 onwards Rs.66,550/-per month

RC.REV. 22/2020

16. List on 28.02.2023.

MANMEET PRITAM SINGH ARORA, J JANUARY 17, 2023/pkv/kv