w w w . L a w y e r S e r v i c e s . i n



Suhas Janardan Chavan Proprietor of M/s. Suhas Hydro Systems & Others v/s Rajesh Housing Pvt. Ltd. & Others


Company & Directors' Information:- C P SYSTEMS PVT LTD [Active] CIN = U29199DL1999PTC101718

Company & Directors' Information:- T SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U72200DL2004PTC127138

Company & Directors' Information:- A K M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018546

Company & Directors' Information:- W B M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC017764

Company & Directors' Information:- A R G SYSTEMS LIMITED [Active] CIN = U74899DL1994PLC062621

Company & Directors' Information:- S SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111270

Company & Directors' Information:- SYSTEMS INDIA PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059377

Company & Directors' Information:- V S S SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U03000TZ1997PTC007933

Company & Directors' Information:- I L SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U18100GJ1999PTC037104

Company & Directors' Information:- A V SYSTEMS PRIVATE LIMITED [Active] CIN = U31909PN2001PTC015788

Company & Directors' Information:- N D T SYSTEMS PRIVATE LIMITED [Active] CIN = U74210MH1996PTC104744

Company & Directors' Information:- S P P S SYSTEMS PRIVATE LIMITED [Active] CIN = U72200TG2000PTC033732

Company & Directors' Information:- L S I SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U32109DL2000PTC105666

Company & Directors' Information:- H B S SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048198

Company & Directors' Information:- U C SYSTEMS INDIA PVT LTD [Active] CIN = U72200DL1997PTC084267

Company & Directors' Information:- L C SYSTEMS PRIVATE LIMITED [Active] CIN = U55200PB2012PTC036880

Company & Directors' Information:- B & G HYDRO PRIVATE LIMITED [Active] CIN = U40100TN2022PTC149922

Company & Directors' Information:- C I SYSTEMS PVT LTD [Active] CIN = U45200TG1983PTC003915

Company & Directors' Information:- HYDRO INDIA PRIVATE LIMITED [Active] CIN = U29120MH1998PTC121434

Company & Directors' Information:- M J SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72900MH2005PTC150591

Company & Directors' Information:- R R SYSTEMS PRIVATE LIMITED [Active] CIN = U30007DL1999PTC098142

Company & Directors' Information:- C N C SYSTEMS PVT LTD [Active] CIN = U72900DL1999PTC100476

Company & Directors' Information:- HYDRO SYSTEMS PRIVATE LIMITED [Active] CIN = U24117TN1989PTC017133

Company & Directors' Information:- AT HYDRO PRIVATE LIMITED [Not available for efiling] CIN = U40108DL2002PTC114208

Company & Directors' Information:- M B M SYSTEMS PRIVATE LIMITED [Active] CIN = U30006DL1988PTC030404

Company & Directors' Information:- C SYSTEMS PRIVATE LIMITED [Active] CIN = U31103TN2009PTC071155

Company & Directors' Information:- R M I SYSTEMS PRIVATE LIMITED [Active] CIN = U72200KA2011PTC060246

Company & Directors' Information:- W & S SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U74910TN2005PTC055568

Company & Directors' Information:- M. Y. T. SYSTEMS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74990TG2016PTC110104

Company & Directors' Information:- L V SYSTEMS PRIVATE LIMITED [Active] CIN = U31900KA2021PTC150256

Company & Directors' Information:- S E I SYSTEMS LIMITED [Strike Off] CIN = L74899DL1994PLC061731

Company & Directors' Information:- D C S SYSTEMS LIMITED [Strike Off] CIN = U72100MP2000PLC014224

Company & Directors' Information:- I T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL1999PTC098431

Company & Directors' Information:- HYDRO INDIA PRIVATE LIMITED [Strike Off] CIN = U93000DL1998PTC096850

Company & Directors' Information:- I O SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029166

Company & Directors' Information:- S E C O M SYSTEMS PRIVATE LIMITED [Active] CIN = U31909HR2009PTC039084

Company & Directors' Information:- D M SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL1999PTC101817

Company & Directors' Information:- K K K SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100UP1995PTC017784

Company & Directors' Information:- E-SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72200WB2003PTC096700

Company & Directors' Information:- J B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200KL1997PTC011510

Company & Directors' Information:- M AND S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200MH1996PTC103819

Company & Directors' Information:- K AND M SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U32101UP1993PTC015352

Company & Directors' Information:- S S V SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1996PTC037072

Company & Directors' Information:- R G B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1998PTC040485

Company & Directors' Information:- C C SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31100TG1996PTC023469

Company & Directors' Information:- K R T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U52392TN2002PTC048704

Company & Directors' Information:- B & D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100OR1996PTC004611

Company & Directors' Information:- A M P S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900WB2001PTC093281

Company & Directors' Information:- G M E SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U71290DL1987PTC029758

Company & Directors' Information:- R B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31300RJ1990PTC005689

Company & Directors' Information:- E D H SYSTEMS PVT. LTD. [Strike Off] CIN = U99999DL1991PTC045384

Company & Directors' Information:- RAJESH HOUSING PRIVATE LIMITED [Active] CIN = U70102MH2015PTC261258

Company & Directors' Information:- H N G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900RJ2012PTC040713

Company & Directors' Information:- F A SYSTEMS PRIVATE LIMITED [Active] CIN = U72100MH2004PTC148941

Company & Directors' Information:- H AND P SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146918

Company & Directors' Information:- G. K. SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900PN2006PTC129225

Company & Directors' Information:- T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31403TN2006PTC061859

Company & Directors' Information:- I T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72400AS1999PTC005824

Company & Directors' Information:- Y Y SYSTEMS PRIVATE LIMITED [Active] CIN = U72200CH2015PTC035767

Company & Directors' Information:- N P M E SYSTEMS PRIVATE LIMITED [Active] CIN = U29299DL1998PTC094645

Company & Directors' Information:- R D SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL2000PTC103462

Company & Directors' Information:- V C SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111812

Company & Directors' Information:- K B N SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U64204DL1997PTC088904

Company & Directors' Information:- A B SYSTEMS PRIVATE LIMITED [Active] CIN = U93000DL2012PTC234774

Company & Directors' Information:- J S N D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900GJ2011PTC065160

Company & Directors' Information:- J C D SYSTEMS PVT LTD [Strike Off] CIN = U32109PB1988PTC008438

Company & Directors' Information:- Y R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC105093

Company & Directors' Information:- S R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC104743

Company & Directors' Information:- F C S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U73100DL1997PTC090517

Company & Directors' Information:- E R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC061904

Company & Directors' Information:- R & T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL2008PTC179617

Company & Directors' Information:- Q S Q SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U51109KA2000PTC026269

Company & Directors' Information:- JANARDAN AND COMPANY LIMITED [Dissolved] CIN = U99999MH1953PLC009162

    Writ Petition Nos. 9374 of 2018 & 13388 of 2018 with Civil Application Nos.1636 of 2019 & 1694 of 2019

    Decided On, 28 August 2019

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

    For the Applicants: Sharin Nachan i/b. Sumit Phatale, Advocates. For the Respondents: R1 & R2, Rajesh Kachare a/w Anoop Patil, R.M. Bagkar i/b. Bagkar & Co., Advocates.



Judgment Text

1. The Petitioner is a licensee, the 1st respondent the licensor– Company, and the 2nd respondent its Director. In fact, the present licensor’s predecessors entered into a leave and license agreement with the petitioner on 1st October 1998. The licenced property is an industrial shed, admeasuring 4000 sq. ft. The rent then fixed was at Rs.6000/- per month, with Rs. 34,00,000/- as the refundable deposit. The leave and license agreement shall be renewed for 7 terms. Each term coming to five years, the total lease period would be 42 years.

2. But in 2008, the licensor predecessor, that is the original licensor, filed L.E. Suit No.71/84 of 2008 and secured an eviction decree on 15th April 2013. The eviction was on the grounds that the licensee did not come forward to have the license period renewed despite the licensor’s readiness.

3. Aggrieved, the licensee filed an Appeal No.41 of 2013 before the Appellate Bench of the Small Cause Court, Mumbai, under Section 34 of the Presidency Small Cause Courts Act, 1882. The Appellate Bench invoked Order 41 Rule 5 of Civil Procedure Code, 1806 (CPC), and stayed the execution of the decree subject to the licensee’s depositing Rs.10,000/- per month as interim compensation. Then, the licencee challenged the Appellate Bench’s order, dated 31st October 2013, before this Court in Writ Petition No.2826 of 2014. Through its order, dated 13th March 2018, this Court remanded the matter. It directed the Appellate Bench to consider the parameter fixed in the Supreme Court’s Atma Ram Properties (P) Ltd., v. Federal Motors (P) Ltd. (2005) 1 SCC 705), case and decide afresh the interim compensation.

4. In fact, on remand, the Appellate Bench considered the issue and, on 31st July 2018, passed a fresh order of conditional interim stay: in the place of Rs.10,000/- per month, it fixed Rs.1,25,000/- per month as the monthly compensation.

5. Once again, aggrieved, the licensee filed Writ Petition No.9374 of 2018, complaining that the amount fixed is excessive. On the other hand, the licensor filed Writ Petition No.13388 of 2018, complaining that the amount fixed is low. Initially, this Court, through its order dated 5th December 2018, refused to stay the Appellate Bench’s order. Then, the licensee took the matter in SLP before the Supreme Court. Though the Supreme Court refused to interfere with that order, it has, however, given an opportunity to the petitioners “to apply for modification of the impugned order” provided a case to that effect on facts is made out.

6. On the strength of the Supreme Court’s order, dated 5th April 2019, the licensee pro se applied for “modification.” If we skip the later developments, eventually both parties have agreed to argue the matter finally, so this Court could dispose of both the writ petitions. Then, the licensee has engaged Adv. Shri Shariqh Nachan.

Submissions:

Petitioner:

7. In the above factual background, Shri Shariqh Nachan, the learned counsel for the licensee, has submitted that once the matter was remanded, the Appellate Bench has taken a diametrically opposite view. It has straight away raised the interim compensation manifold—from Rs.10,000/- to Rs.1,25,000/- per month. First, he has pointed out that the order suffered from non-application of mind. To support his contention, Shri Nachan has taken me to page 9 of the impugned order and contended that the Appellate Bench erroneously observed that the leased property was an open land and that it was let out for commercial purpose. Neither is correct. According to him, the property, in fact, is an industrial shed, and the purpose of license, too, is industrial. He has also drawn my attention to page 13, where the Appellate Bench has observed that the leave and license agreement contained a clause for annual increase of license fee @20%. Even that one, according to Shri Nachan, is erroneous because the leave and license agreement contained no clause of escalation.

8. Shri Nachan, second, has taken me through a couple of licence deeds, based on which the Appellate Bench seems to have fixed the interim compensation at Rs.1,25,000/-. According to him, in both the instances, the very nature of the property is different; that is, they are RCC structures, whereas the licensee’s property in this case is a mere shed. He has also submitted that it is not the original licensor that entered into those agreements; instead, the licensees inducted their sub-lincesees. And they naturally secured a higher remuneration. Besides, both the documents pertain to 2011.

9. Eventually, Shri Nachan has strenuously contended that in 1998 licensee paid Rs.34,00,000/- as security deposit. By then, the property could be worth about the same amount. In other words, the licencee virtually paid the sale consideration in the name of a security deposit. According to Shri Nachan, the Appellate Bench of the Small Cause Court initially fixed the compensation at Rs.10,000/-, keeping in view the huge deposit, but later, only on remand, it has changed its stand. Nevertheless, the documents it has relied on do not affect the issue because they pertain to a different property and the agreements were entered into recently. He has also submitted that the leave and license agreements the Appellate Bench has relied on contained not only the carpet area but also an equal area in the form of loft. Yet the Appellate Bench has failed to consider that.

10. In the end, Shri Nachan has relied on State of Maharashtra and anr. v. Super Max International Private Limited (2009) 9 SCC 772), Niyas Ahmad Khan v. Mahmood Rahmat Ullah Khan (2008) 7 SCC 539) and Chandrakant Dhanu v. Sharmila Kapur (2009 (1) Bom CR 698). Shri Nachan wants this Court to set aside the impugned order, dated 31st July 2018, and fix a reasonable amount as interim compensation, pending the disposal of the appeal before the Appellate Bench of Small Cause Court.

11. On the other hand, Shri Rajesh Kachare, the learned counsel for the respondent licensor, has with equal vehemence defended the impugned order.

12. According to Shri Kachare, the properties the Appellate Bench has taken as a measure to determine the interim compensation are similar to the licensee’s property All are sheds rather than the RCC structures. He has further submitted that the Appellate Bench has considered all facets, including the market value of the property and the probable rent that property could fetch. It has also reckoned the commercial potential of the area and the property location.

13. In this context, Shri Kachare has pointed out that the valuation report submitted by the licensee does show that the market value of the property in the locality is Rs.48,100/- per sq. ft. With the area of the licenced property being about 4,000 sq. ft., the Appellate Bench has taken the monthly rental value of the property at Rs.2,00,000/-. Then, it took into account the security deposit. Only then has the Appellate Bench fixed Rs.1,25,000/- as the interim compensation.

14. Shri Kachare has pointed out that initially this Court refused to grant any interim stay against the Appellate Bench’s order. The licensee took the matter to the Supreme Court but could not succeed. Then, in that context, the licensee filed an additional affidavit before this Court expressing his willingness to deposit a substantial amount from the accumulated arrears. Shri Kachare has taken me through Paragraphs 7 to 9 of the licensee’s additional affidavit in Civil Application (st.) No.20237 of 2017; he stressed that the licensee has admitted that he paid Rs.9,48,000/- and is willing to pay Rs.20,00,000/- towards the partial satisfaction of the arrears. Those arrears, according to the licensee, come to Rs.63,48,000/-. Shri Kachare, nevertheless, maintains that the amount due is more than that.

15. To elaborate, Shri Kachare has submitted that initially the Appellate Bench instructed the licensee to pay Rs.10,000/- from the date of suit, but the licensee paid the amounts only from the date of the decree. Of course, the licensee contradicts that assertion. Even as per the licencee’s additional affidavit, from the date of decree, he paid only Rs.9,48,000/-.

16. At this juncture, I need to provide the backdrop for Shri Kachare’s further arguments. On earlier occasion, I advised the counsel on either side to use their good offices and bring about, if possible, an amicable settlement about the reasonable compensation pending the appeal before Appellate Bench of Small Cause Court, Mumbai. When they reported that the parties could not agree on a common figure as compensation, I took up the matter for further hearing. In the above background, Shri Kachare has submitted that the licensor has offered to the licensee a huge amount if he is prepared to vacate and hand over vacant possession. But the licencee demanded an astronomical sum.

17. About what transpired during the compromise talks, I reckon it is out of bounds for the Court; it cannot take cognizance of it. It is a well-established practice that when the parties engage in compromise talks, they participate freely, only when they have the comfort and assurance of not being quoted in the judicial proceedings. If the talks succeeded, they will result in consented terms; if they fail the matter remains intact. And it ought to be determined on merits. Therefore, I could not take on record Shri Kachare plea about what has happened during the compromise talk. At any rate, Shri Kachare has submitted that the interim compensation the Appellate Bench has fixed is reasonable and, in fact, far lower than the actual market rate now prevailing. Therefore, he urges this Court, not to interfere with the order impugned.

18. Heard Shri.Sharin Nachan i/b. Shri.Sumit Phatale for the petitioner in Writ Petition No.9374 of 2018, and Shri.Rajesh Kachare for the respondents.

Discussion:

19. Indeed, what falls for consideration before this Court is the interim compensation, as a condition for stay, under Order 41 Rule 5 of CPC. And that provision reads:

“(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 . . .

(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.

(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 far 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.”

(italics supplied)

20. Both the counsel have agreed that the adjudication of the lis is under the Maharashtra Rent Control Act, and the appeal was filed under Section 34 of that Act. But there is no provision in the Act to deal with interim protection pending the appeal. Therefore, what applies is Order 41 Rule 5 of the CPC.

21. In the suit, as seen from the record, the licensor sued the licensee for eviction and for the mesne profits. In the decretal order, dated 15th April 2013, the trial Court has permitted mesne profits. In fact, that part of the order, reads: “[E]nquiry into mesne profit be deducted under Order 20 Rule 12 of the CPC for the period from the date of suit till the recovery of possession”.

22. First, the licensee filed Appeal No.41 of 2013 before the Appellate Bench of the Small Cause Court, Mumbai. Through its order dated 31st October 2013, the Appellant Bench stayed the execution of decree on the condition of the licensee’s paying Rs.10,000/- per month from the date of the suit. That is from 26th February 2008 until the disposal of the appeal. Then, the licensor challenged that order under Writ Petition No.2826 of 2014. This Court remanded the matter to the Appellate Bench for a fresh consideration, keeping in view the proposition of M/s. Atma Ram Properties (P) Ltd. Then, the Court wanted the Appellate Bench to consider all relevant aspects such as area of the suit premises, its user, its location, among other things, to determine the compensation. And that has resulted in the impugned order.

23. True, as the licensee’s counsel pointed out, in the impugned order there are a couple of factual errors: that the property is vacant, though it is an industrial shed; that it was licenced for a commercial purpose, though it is industrial purpose; and that there is an escalation clause, though there is none. But I reckon those observations have not affected the ultimate adjudication. Before I consider the issue in detail, I will first examine the presidential base of the issue: Atma Ram Properties and other cases.

(a) Atma Ram Properties:

24. In Atma Ram Properties, the respondent, first, suffered a decree of eviction. Then, he approached the Rent Control Tribunal, which stayed the eviction subject to his depositing in the court Rs.15,000/- per month as compensation, besides the contractual rent, which may be paid directly to the appellant. The compensation was ordered to be retained with the court; neither party could withdraw the amount until the appeal was finally decided. The respondent-tenant challenged it before the High Court. He contended that the Tribunal ought not to have required him to deposit more than the contractual rent. The High Court accepted that contention; it modified the stay order. So the appellant-landlord went to the Supreme Court.

25. In Atma Ram Properties, the Supreme Court observed that “the litigation goes on for an unreasonable length of time and the tenants in possession of the premises do not miss any opportunity of filing appeals or revisions so long as they can thereby afford to perpetuate the life of litigation and continue in occupation of the premises.” It has quoted with approval the aphoristic observations of Chief Justice Chandrachud, who spoke for the Constitution Bench in Olga Tellis v. Bombay Municipal Corporation (1985) 3 SCC 545):

"[C]ommonsense which is a cluster of life's experiences is often more dependable than the rival facts presented by warring litigants".

26. Atma Ram Properties has observed that once the lease or tenancy stands determined, say, through a decree from a competent court, the tenant’s right to continue to possess the leased property ends. And for his continued use and occupation of the property for any period thereafter, he must pay damages at the rate the landlord could have let out the premises if there had been no tenant or the tenant had vacated with the lease termination. Thus, Atma Ram Properties has summed up the principles of interim compensation: (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, 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 later date.

(italics supplied)

(b) Niays Ahmad Khan:

27. In Niyas Ahmad Khan, the landlord sued the tenant for eviction. He set up the bona fide requirement as the ground of eviction. But both the primary authority and the appellate authority disbelieved the landlord’s version and rejected the application. The landlord, then, approached the High Court, challenging the concurrent rejection. In the writ petition, he wanted the High Court to quash the impugned orders of the authorities under the rent control regime and to grant an order of eviction.

28. There was, indeed, no prayer for a direction that the tenant should pay the rent at an increased rate. Plainly put, the grievance in the writ petition was only about the authorities’ refusal to grant an order of eviction.

29. In the above factual backdrop, Niyas Ahmad Khan has reckoned that the High Court has exceeded its jurisdiction. For it fixed an arbitrary figure as the conditional interim compensation to be paid by a successful tenant to an unsuccessful landlord. And the landlord never sought that relief, though. It has felt there is no justification for directing payment of a higher rent either pending consideration of the writ petition or otherwise. It has also observed that when the statute specifically provides for fixation of rent and increase in rent, it is impermissible for the High Court to ignore those provisions and direct the tenant to pay an arbitrarily assessed rent. I am afraid Niyas Ahmad Khan does not affect this case. Here, the tenant suffered a decree of eviction; now he rendered himself an unauthorised occupant, if not an illegal one. His continuation as a tenant in the face of a decree is impermissible unless an appellate or revisional forum stays that decree. And that stay comes at a premium called interim compensation or damages as recognized by Order 41, Rule 5 of CPC. Yet it has nothing to do with mesne profits under Order 20, Rule 12 of CPC, for they stand on a different footing.

(c) Super Max International:

30. In this case, a three-Judge Bench of the Supreme Court had a reference before it. The reference was because of what was felt to be a conflict between two of its Division Bench decisions: Atma Ram Properties and Niyas Ahmad Khan.

31. Then, Super Max International has held that there was no conflict between Atma Ram Properties and Niyas Ahmad Khan. In Atma Ram Properties the landlord challenged the restriction that he should not withdraw the amounts the tenant deposited pending the appeal. The High Court allowed his application under Article 227 of the Constitution of India. The Supreme Court restored the Tribunal’s order: the landlord should not withdraw the amounts. In Niays Ahmad Khan, as already noted, the High Court awarded enhanced interim compensation unasked for. In that factual backdrop, the Supreme Court has disproved the High Court’s approach.

32. In the end, after exhaustively analysing the issue of interim compensation, Super Max International has 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.” That said, it has cautioned that in fixing the amount, “the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.”

33. Then, Super Max International has also held that the amount fixed by the court over and above the contractual monthly rent, ordinarily, should not be directed to be paid to the landlord during the pendency of the appeal/revision. The deposited amount, along with the accrued interest, should only be paid after the case disposal to either side depending upon the result. If the Court finds it just and expedient that the amount fixed by it should go to the landlord even while the matter is pending, it must be careful to direct payment to the landlord on terms so that if the final decision goes in the tenants’ favour, he can recover the amounts with no undue delay or complication.

(b) Chandrakant Dhanu:

34. In Chandrakant Dhanu, the petitioners-tenant suffered a decree of eviction. In the appeal, the Appellate Bench of the Court of Small Causes, fixing Rs.50,000/- as the monthly compensation for the tenant to pay as a precondition to have the decree stayed. Aggrieved, he filed a writ petition before this Court.

35. Chandrakant Dhanu, per a learned Single Judge, holds that “there is no question of fixing any compensation without any basis. The burden is on the landlord to prove his claim of fair and reasonable compensation by putting the material on record, including expert opinion report and other such instances etc.” It permits the tenant, too, to show the contra material, if any. What is determined now?

36. This Court in Previn Govind Sharma v. Dinyar Jal Jamshedji6 has considered the issue in detail. After examining the above decisions besides others, it has held that this Court under Order 41, Rule 5 CPC does not fix mesne profits per se. If this Court indulges in a threadbare analysis and judicially determines the relative merits of the rival mesne profits reports at an interlocutory stage—more so under Order 41, Rule 5 of CPC—that preempts the trial Court’s legitimate adjudicatory powers under Order 20, Rule 12 of CPC. Here, what this Court intends, or requires, to do is to use the “commonsense which is a cluster of life's 6 Decided on 21st June 2019 experiences” rather than depend on the rival facts presented by warring litigants.”

Pragmatic Pursuit:

37. Then, Previn Govind Sharma has recorded what could be a pragmatic approach. Indeed, any adjudication, if it were, under Order 41, Rule 5 of CPC involves an element of ad hocism, a permissible level of guess work, and a dose of discretion. That provision is a step-in-aid in appeal proceedings; it tries to keep both the rivals in the litigation on an even keel. One has the reality of a decree; the other a possibility of its reversal. The decree, say in an eviction suit, alters the characters of parties. The tenant is no longer a tenant; he is, at best, an occupant. And that occupation stands branded as unauthorised. The suspension of the decree does not obliterate the judicial findings; it only keeps its effect—its execution—at bay. So to have the legitimate judicial direction put on hold in the name of stay, the appellant needs to submit himself to certain terms. The terms may include paying monetary compensation. A stay is not for mere asking. Nor can the appellant portray himself as a victim under Order 41, Rule 5 of CPC. That said, I must also acknowledge that the appellate courts will not lose sight of the distinction between what is ideal and what is practical; what is discretionary and what is arbitrary; what is a fair guess and what is a wild whim.

38. With judicial overload, docket explosion, and clogging adjudicatory avenues at every echelon, we cannot expect a mini-trial even under Order 41, Rule 5 of CPC, for fixing, say, an interim compensation. It is ideal. But with the litigious multitude knocking at the court’s doors clamouring for speedy justice, it is an unaffordable legal luxury.

39. Here, in this writ petition, we are dealing with an interlocutory order the Appellant Bench rendered while staying the decree of eviction. This Court can only examine whether the Appellate Bench has properly or judicially exercised its discretion. Nothing more.

40. Here, the area of the licenced property is not in dispute, nor is the monthly license fee and the security amount. True, in the first instance, the Appellate Bench has fixed Rs.10,000/- as interim compensation, and that was from the date of the suit. There is a factual dispute between the parties now about from which date the licensee complied with the earlier interim direction. The fact remains he did pay certain amount out of the total outstanding amount, which anyway is not disputed.

41. This Court, in WP No.2826 of 2014, found that the order dated 13th March 2018 had not considered the parameters fixed by Atma Ram Properties (P) Ltd. So it remanded the matter. Then, based on the material placed by either party, The Appellate Bench has rendered the impugned order. In paragraph 15 of the impugned order, the Appellate Bench has reckoned that the property should be fetching more than Rs.2,00,000/- as monthly rent. But it has considered the security deposit of Rs.34,00,000/- and, then, felt that Rs.1,25,000/- should be the monthly interim compensation.

42. It is the licensee’s contention there is a huge variation between Rs.10,000/-, the amount initially fixed, and Rs.1,25,000/- the amount fixed after remand.

43. That said, I must note that the order fixing Rs.10,000/- as compensation has, now, no legal existence; it was set aside by this Court. And that order attained finality. Therefore, what amount initially fixed is of no consequence. Now, the only question is whether the amount fixed by the Appellate Bench finally is justifiable and justiciable.

44. Indisputably, the property has immense potential, but the rent it was fetching before the licensor could secure the decree was Rs.6000/-. The leave and license agreement contained no escalation clause. Besides that, the initial lease was for 61 months and it “shall be renewed license for such additional terms not exceeding 7 terms”.

45. The trial Court has found that the licensee failed to have the license agreement renewed, that finding is under challenge before the Appellate Bench. It is inappropriate for this Court to consider the merits of the judgment under appeal. Suffice to say, the licencee suffered a decree for eviction.

46. Invariably, as Order 41 Rule 5 mandates, mere filing of the appeal does not arrest the operation of the decree. But pending the appeal, if the decree was executed, that would render the appellant’s possible success in the appeal nugatory—an empty formality or ritual. So the Code, under Order 41, Rule 5, contemplates or provides for maintaining status quo ante until the suit proceedings reach their logical conclusion. For the appeal is in continuation of the original proceedings. But that prohibition of the status quo ante comes with conditions attached, including compensation, as stated in Order 41 Rule 5(3)(c) of CPC.

47. The precedents I have already referred to have consistently held that the interim compensation to be fixed cannot be arbitrary. In the same breath, I must observe that the Appellate Court’s power under Order 41, Rule 5 is discretionary. And so long as that exercise is not arbitrary or perverse, the Revisional Court, either under Section 115 of CPC or under Article 227 of the Constitution of India, does not interfere.

48. Here, the Appellate Bench has compared the present market potential of the property with two leave and license agreements some other parties entered into over the property in the same vicinity. The licensee has contended that they are not the agreements between the licensors and licensees, but between the licensees and their sub-licensees. According to him, the sub-licence is usually driven by a profit-motive. It does not reflect the true market rate of the rent or licence fee. So he insists those documents do not conform to the standards set out in Atma Ram Properties (P) Ltd. They are recent, too.

49. The interim compensation, I may note, is to ensure that neither party gets an unfair advantage over the other. Either too high an amount or too low an amount prejudices one or the other party. The whole endeavour under Order 41, Rule 5 of CPC is to keep the rival parties on an even keel. It is a balancing act between the competing interests of a party who secured a decree and a party who entertains the hope of emerging successful in the appeal proceedings.

50. In this context, the licen

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see’s counsel submits that given the adverse market conditions, the licensee is willing to provide ‘the property security’, instead of depositing cash monthly in compliance with the order under Order 41 Rule 4 of CPC, as this Court may modify. 51. All along, I have tried to see whether the parties on either side could find a middle ground. On my queries, the licencee, of course without prejudice, has submitted that he is willing to pay Rs.40,000/- to 50,000/- per month. On the other hand, the licensor has asserted that the amount should not be less than Rs.1,25,000/-, for the Appellate Bench has already brought it down from Rs.2,00,000/-. 52. Before I could determine what may be the reasonable amount, I must examine whether the order impugned is arbitrary or perverse. If it is neither, I must not impose my view over that of the Appellate Bench. Merely because an alternative view is possible, the Revisional Courts will not upset otherwise well-founded orders of discretion. Judicial interference requires much more than a plausible or a probable alternative view. 53. At the same time, I cannot lose sight of this being an arrangement pending the appeal, and it does not affect the licensor’s right to press Order 20 Rule 12 of CPC and seek mesne profits, as the trial Court has already held in the decree. Therefore, I consider the following aspects: (a) that the licencor holds a valid decree; (b) that the licencee’s statutory appeal not be rendered purposeless; (c) the original licence fee was Rs.6,000/- in 1998; (d) the security deposit then made is Rs.34,00,000/-; (e) now the property can fetch a rent of about Rs.2,00,000/-, as held by the Appellate Bench; and (f) the interim compensation will not preclude the licensor to apply for mesne profits before the trial Court. 54. Under these circumstances, first, I hold that the licensor may apply under Order 20 Rule 12 for mesne profits. And the enquiry before the trial Court may go on uninterruptedly. Besides that, after considering the contractual rent, the security deposit made, and the present market potential of the property, I hold that the interim compensation should be Rs.90,000/- per month, instead of 1,25,000/-. The rest of the terms the Appellate Bench of the Small Causes Court remain unaltered. 55. The licensee will pay the interim compensation of Rs.90,000/- from 1st October 2019, payable every month by 5th of the succeeding month. As to the arrears, after deducting the amount the licensee has already paid, he should pay them in six equal monthly installments. Should there be any dispute about the quantum of the arrears, either party may apply to the Appellate Bench for its determination on that count. 56. Given the layers of litigation a mere interlocutory order engendered, the Appellate Bench may endevour to dispose of the appeal expeditiously. 57. With the above observations and modifications to the impugned Order, dated 31st July 2018, I dispose of WP No.9374 of 2018. 58. As a corollary, the licensor’s WP No.13388 of 2018, too, stands disposed of through this common Order. Civil Applications, if any, stand closed.
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