Landlord Entitled To Mesne Profits If Decree For Eviction Is Stayed - Supreme Court
|Landlord Entitled To Mesne Profits If Decree For Eviction Is Stayed - Supreme Court
A Supreme Court Bench comprising of Justice Indira Banerjee and Justice JK Maheshwari has held that "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."
A Special Leave Petition was filed by a tenant challenging an order of the Rajasthan High Court, which had put a condition to pay Rs 2,50,000 as monthly rent to the landlord, to stay the execution of the eviction decree.
The Supreme Court relied on a catena of judgments including Marshall Sons & Co. Ltd. vs Sahi Oretrans Ltd. and Another, to opine that once a decree for possession has been passed and the execution is delayed, depriving the decree-holder to reap the fruits, it is necessary for the Appellate Court to pass appropriate orders fixing reasonable mesne profits which may be equivalent to the market rent required to be paid by a person who is holding over the property.
Further, the Court relied on the case of Atma Ram Properties Ltd. vs Federal Motors Ltd. to opine that the Appellate Court does not have jurisdiction to put reasonable terms and conditions as would in its opinion reasonable to compensate the decree-holder for loss occasioned by delay in execution of the decree while granting a stay.
The Supreme Court also noted that since the 2001 Act came into effect in 2003, it could not be applied to these proceedings which were initiated under the Act of 1950.
Further, the Court opined that "The basis of determination of the amount of mesne profit, in our view, depends on the facts and circumstances of each case considering place where the property is situated i.e., village or city or metropolitan city, location, nature of premises i.e., commercial or residential are and the rate of rent precedent on which premises can be let out are the guiding factor in the facts of individual case." To that end, it held that the amount of mesne profit as fixed at Rs 2,50,000 was just and proper, especially considering 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 Supreme Court did not find any error with the order passed by the High Court and dismissed the Petitions.