M/S Martin And Harris Private … vs Rajendra Mehta on 6 July, 2022


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Supreme Court of India

M/S Martin And Harris Private … vs Rajendra Mehta on 6 July, 2022

Author: Hon’Ble Ms. Banerjee

Bench: Hon’Ble Ms. Banerjee, J.K. Maheshwari

                                                                  REPORTABLE


                                  IN THE SUPREME COURT OF INDIA
                                   CIVIL APPELLATE JURISDICTION




                                CIVIL APPEAL NOS. 4646­47 OF 2022
                           [ARISING OUT OF SLP(C) NOS.20243­44 OF 2019




          M/s. Martin & Harris Private Limited & Anr.             …Appellants




                                             Versus




          Rajendra Mehta & Ors.                                 ...Respondents



                                          JUDGMENT

J.K. Maheshwari, J.

Signature Not Verified

Digitally signed by
Rachna
Date: 2022.07.06
16:48:33 IST
Leave granted.

Reason:

1

2. Plaintiffs/Respondents being the owners of the suit property

situated at Plot No.1, Block No.D­1, Nagar Nigam No.2844 known

as Khinduka Bhawan, New Colony, Jaipur filed a suit bearing

No.4/2016 (9/2002) for eviction, possession, recovery of rent and

permanent injunction. The said suit was filed in November 2002

invoking the Provisions of Section 13 of the Rajasthan Premises

(Control of Rent and Eviction) Act, 1950 (hereinafter referred as ‘Old

Act’). The suit was decreed vide judgment dated 03.06.2016 passed

by Senior Civil Judge No.7, Jaipur. On filing the appeal bearing

No.11/2016 before Additional District Judge No.10, Jaipur, it was

dismissed on 10.01.2017 confirming the judgment of the Trial

Court. The Second Appeal No.144/2017 was filed challenging both

the judgments before the High Court which was admitted vide order

dated 14.10.2017 granting stay on ejectment. The order of stay was

extended time to time. On filing an application under Order XLI

Rule 5 read with Section 151 of the Code of Civil Procedure (in short

‘CPC’) by the Plaintiffs/Respondents asking mesne profit due to

continuation of stay on eviction decree it was decided vide order

dated 18.05.2018. Whereby the appellants were directed to pay the

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mesne profit @ Rs.2,50,000/­ per month from the date of filing of

the application i.e. 20.12.2017 till disposal of the appeal. The

directions have also been issued to deposit the arrears of mesne

profits upto April 2018 by depositing the same in the bank account

of the Plaintiffs within six months, with further direction to pay

mesne profits from May 2018 consecutively by 15 th date of every

succeeding month. Failing to deposit the amount of mesne profit in

future for four months consecutively, Plaintiffs would have right to

get execute the decree of eviction. The Plaintiffs were granted liberty

to withdraw the amount subject to furnishing surety and

undertaking to re­deposit the mesne profits so withdrawn with 9%

interest in case they lose in the second appeal. The said order was

challenged by filing the Special Leave Petition No.19863/2018

before this Court, which was dismissed as withdrawn with liberty to

the Appellants to file review petition before the High Court. On filing

the review petition bearing No.95/2018, it was dismissed vide order

dated 01.04.2019 which led to file the present appeals challenging

the order dated 18.05.2018 as well as the order passed in review

dated 01.04.2019 questioning the grant of mesne profit.

3

3. The facts unfolded are that the Plaintiffs purchased the

property through six different registered sale deeds executed on

23.12.1985. By virtue of those sale deeds, Plaintiffs became the

owner of the tenanted premises. Appellants were tenant to the

erstwhile owner and after selling the premises they became tenant

of Plaintiffs/Respondents by attornment. Earlier a suit under

Section 6 of the Old Act was filed by the Plaintiffs/Respondents

against the Appellants bearing No.61 of 2002 for determination of

the standard rent. During the pendency of the suit an application

under Section 7 of the Old Act was filed for fixing the provisional

rent which was decided vide order dated 09.01.2004 fixing

provisional rent @ Rs.1,00,000/­ per month. The said order was

challenged, which was confirmed by the High Court vide order

dated 18.04.2007. The Appellants had filed a Special Leave Petition

bearing No.9775 of 2007 wherein this Court fixed the ad hoc

provisional rent @ Rs.60,000/­ per month vide order dated

12.11.2007 with direction to the Trial Court to decide the issue of

standard rent expeditiously. The Trial Court vide judgment dated

12.08.2009 decreed the said suit and fixed the standard rent @

4
Rs.45,000/­ per month. The appeals filed by both the parties

against the said order are pending before the High Court.

4. In the present appeals the order of the High Court directing to

pay the mesne profits @ Rs.2,50,000/­ per month with other

ancillary directions have been questioned. It is contended by

learned counsel for the Appellants that as per Section 20 of

Rajasthan Rent Control Act, 2001 (hereinafter referred as ‘New Act’),

the maximum amount of mesne profit may be payable three times

of the standard rent in case the premises is let out for commercial

purposes. It is said the mesne profit, as determined by the High

Court, is excessive without looking to the year of construction of

premises, location of the property which is on inside road of colony

and also without taking note of the DLC rate, therefore, the order

impugned may be set aside and the quantum of mesne profits may

be revised to three times of the amount of rent making it

Rs.1,35,000/­ per month.

5. Per contra, learned counsel representing the Plaintiffs has

strenuously urged that Section 20 of the New Act do not apply to

5
the suit or proceedings initiated under the Old Act and were

pending on the date of applicability of the New Act i.e. 01.04.2003,

notified in the official gazette. The argument of the Appellants to fix

mesne profits only three time to the standard rent relying the

provisions of the New Act is meritless. The High Court said that the

suit property is located on the main road of New Colony, Jaipur

situated in the heart of the City being commercial area rightly fixed

mesne profit. It is also urged that the order passed by the High

Court to fix mesne profit is equitable, just and reasonable with a

direction to re­deposit of mesne profits with 9% interest in case of

withdrawal by Plaintiffs or the Plaintiffs loses in the second appeal.

In such circumstances, interference in these appeals is not

warranted.

6. After having heard learned counsel appearing on behalf of

both the parties, it is not in dispute that in the previous

proceedings bearing No.61 of 2002 filed under Sections 6 and 7 was

under the Old Act, wherein the standard rent was fixed Rs.45,000/­

per month to the suit property. During those proceedings, the

present suit seeking decree of eviction was filed by Plaintiffs under

6
the provisions of Old Act in November 2002 prior to commencement

of the New Act. Thus, on the date of commencement of the New Act,

the present suit was pending and vide judgment dated 03.06.2016

Trial Court decreed the suit, which was confirmed in appeal by

Lower Appellate Court on 10.01.2017. Challenging the judgment

and decree concurrently passed by the two Courts, Second Appeal

No.144/2017 has been filed by the Appellants, which has been

admitted on 14.10.2017 and stay of ejectment passed by the High

Court which was extended quite a few times. Thereafter, on filing an

application under Order XLI Rule 5 read with Section 151 of CPC

asking mesne profits by Plaintiffs, it was allowed vide order dated

18.05.2018. Against which the Special Leave Petition bearing

No.19863/2018 filed by Appellants was dismissed as withdrawn

with liberty to file a review petition after noting the submissions

made before this Court. The said order dated 06.08.2018 is

relevant, therefore, for ready reference reproduced as under:

“Mr. Mukul Rohatgi, learned Senior Counsel
appearing on behalf of the petitioners, submits that
under Section 20 of the Rajasthan Rent Control
Act, 2001, the maximum that is payable by way of
mesne profits is three times the rent in the case of

7
premises let out for commercial purposes. He
submits that the standard rent for the premises
has been fixed at Rs.45,000/­ as a result of which,
three times would amount to a figure of
Rs.1,35,000/­. What has been awarded, however,
by the High Court is Rs. 2,50,000/­ per month.
We note this submission and permit the learned
Senior Counsel to withdraw this petition and
approach the High Court in review.

In view of the above, the Special Leave Petition is
dismissed as withdrawn.

In the event the review petition is dismissed, liberty
is granted to challenge the original order as well.”

On perusal of the order, it is clear that the Appellants raised a plea

that maximum payable mesne profits as per Section 20 of the New

Act can be three times of the rent in case the premises let out for

commercial purposes. It was said that the standard rent was fixed

@ Rs.45,000/­ per month as a result of which three times would

come to Rs.1,35,000/­, however, the direction of mesne profits @

Rs.2,50,000/­ per month by the High Court is unjust. This Court

without expressing any opinion with respect to fixing the quantum

of mesne profits directed to approach the High Court by filing the

review.

8

7. On filing the review petition bearing No.95/2018, the

appellants have taken the said plea and also stated that the Court

in the order under review wrongly mentioned the let­out area as

407 sq. yard including 1200 sq. ft. court yard passage, in fact, the

said area was a common passage for all. Therefore, the mesne profit

of the said area cannot be determined against Appellants. The High

Court noted that the case in hand shall be governed by the

provisions of the Old Act. In the light of the said undisputed factual

position, it was observed that the argument regarding applicability

of Section 20 of the New Act is misconceived. The Court also

observed that in a review petition the Court cannot sit as an

Appellate Court over the order under review until an error apparent

on the face of the record has been pointed out. With the said

observation, the High Court dismissed the review petition.

8. In the above said facts, the argument advanced by the

Appellants in the matter of grant of mesne profit to the extent of

three times to the standard rent in terms of Section 20 of the New

Act is required to be addressed first. Section 20 of the New Act deals

with the execution of the orders of the Rent Tribunal in the manner

9
so prescribed. Sub­section (3) makes it clear that if the tenant does

not vacate premises within three months of the date of issue of

certificate for recovery of the possession, in that event he is liable to

pay mesne profits at the rate of 2 times the rent in case premises let

out for residential purposes; at the rate of three times the rent in

case of premises let out for commercial purposes as applicable in

the facts of the present case. On the said pretext, it is contended

that the direction of mesne profits more than three times is contrary

to the said provisions. The other side contends that the New Act has

come into force on 01.04.2003 by way of notification published in

the Official Gazette. As per Section 32 of the New Act, the repeal

and savings of the Old Act has been specified. For the said purpose

Section 32 is relevant, therefore, it is reproduced as thus:

“32. Repeal and savings. ­ (1) The Rajasthan Premises
(Control of Rent and Eviction) Act, 1950 (Act No. 17 of
1950) shall stand repealed with effect from the date
notified under Sub­sec. (3) of Sec. 1 of this Act.

(2) The repeal under Sub­section (1) shall not affect,­

(a) anything dub done or suffered under the
enactment so repealed; or

(b) any right, title, privilege, obligation or liability
acquired or incurred under the enactment so
repealed; or

10

(c) any fine, penalty or punishment incurred or
suffered under the provisions of the enactment so
repealed.

(3) Notwithstanding the repeal under Sub­section (1).

(a) all applications, suits or other proceedings under
the repealed Act pending on the date of
commencement of this Act before any Court shall be
continued and disposed of, in accordance with the
provisions of the repealed Act, as if the repealed Act
had continued in force and this Act had not been
enacted. However, the plaintiff within a period of
one hundred and eighty days of coming into force of
this Act shall he entitled to withdraw any suit or
appeal or any other proceeding pending under the
repealed Act with liberty to file fresh petition in
respect of the subject matter of such suit or appeal
or any other proceeding under and in accordance
with the provisions of this Act and for the purposes
of limitation such petition shall, if it is filed within a
period of two hundred and seventy days from the
commencement of this Act, be deemed to have been
filed on the date of filing of the suit which was so
withdrawn and in case of withdrawal of appeal or
other proceeding, on the date on which the Suit, out
of which such appeal or proceeding originated, was
filed;

(b) the provision for appeal under the repealed Act
shall continue in force in respect of applications,
suits and proceedings disposed of thereunder;

(c) all prosecutions instituted under the provisions
of the repealed Act shall be effective and disposed of
in accordance with such repealed law;

(d) any rule or notification made or issued under the
repealed Act and in force on the date of
commencement of this Act shall continue to govern
the pending cases.”

11
From the aforesaid for the present case only sub­section (3) is

relevant, which has been given overriding effect to other provisions

by which the applications or suit or other proceedings filed under

the Old Act (Repealed Act) pending on the date of commencement of

the New Act before any Court shall be continued and disposed of in

accordance with the provisions of the Old Act (Repealed Act) as the

Old Act had continued in force and this Act had not been enacted.

Thus, it is clear that the suit or proceedings, if any, pending on the

date of notification issued by the State Government for applicability

of the New Act such proceedings would continue under the Old Act

and New Act has no application. Therefore, in our considered view,

the High Court has rightly rejected the contention while dismissing

the review petition and rightly held that Section 20 of the New Act,

by which three times mesne profits to the standard rent was made

permissible for the suit or proceedings started under the New Act,

have no application in suit or proceedings initiated under Old Act

and pending on the date of commencement of New Act. In our

considered opinion the reasoning given in the order dated

12
01.04.2019, while rejecting the review petition by the High Court, is

perfectly in consonance to the spirit of Section 32 of the New Act.

9. Before the High Court, while passing the original order dated

18.05.2018, it was contended by the Appellants that they are not in

possession of 469.92 sq. meter (5058 sq. ft.). The said issue has

been dealt with on the admitted fact in the earlier proceeding

between the same parties regarding fixation of standard rent in

which the parties came before this Court. In the order Court

referring the affidavit of the Appellants filed before this Court

admitted that the total covered area is 2100 sq. ft. and an open area

of 1200 sq. ft. having total area of 407 sq. yards is a tenanted

premises. In our view also the affidavit filed before this Court in

previous proceedings if considered by the High Court, now the

Appellants are estopped to take different plea disputing the area of

tenancy. Thus, the finding of fact recorded by the High Court do not

warrant any interference.

10. Now, reverting on the issue of determination of the amount of

mesne profits @ Rs.2,50,000/­ per month is concerned, the

13
guidance may be taken from the judgment of Marshall Sons & Co.

(I) Ltd. vs. Sahi Oretrans (P) Ltd. and Another – (1999) 2 SCC

325, in which this Court held 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. In the case of Atma Ram

Properties (P) Ltd. vs. Federal Motors (P) Ltd. – (2005) 1 SCC

705, this Court held that Appellate Court does 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 the stay. The Court

relying upon the provisions of the Delhi Rent Control Act, observed

that on passing the decree for eviction by a competent Court, the

tenant is liable to pay mesne profit or compensation for use and

occupation of the premises at the same rate at which the landlord

would have able to let out the premises in present and earn the

profit if the tenant would have vacated the premises. The Court has

14
explained that because of pendency of the appeal, which may be in

continuation of suit, the doctrine of merger does not have 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.

11. 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 the case of Atma Ram (supra) has been

reaffirmed in the case of State of Maharashtra vs. Super Max

International Pvt. Ltd. and others ­ (2009) 9 SCC 772 by three

Judges Bench of this Court. Therefore, looking to the fact that the

decree of eviction passed by Trial Court on 03.03.2016 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.

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12. 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.

In the case at hand, the High Court in the impugned order 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 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 profit. 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 profit as fixed @ Rs.2,50,000/­ is also just

16
and proper looking at the span of time i.e. 10 years from the date of

fixing of the standard rent and six year from the date of passing of

the decree of eviction. Therefore, the amount of mesne profit has

rightly been decided by the High Court while passing the order

impugned.

13. In view of the foregoing discussion, in our considered opinion,

the order fixing the mesne profit and the order passed on the review

petition, filed by the Appellants, are just and proper which do not

warrant any interference. Therefore, both the appeals are

dismissed.

….………..…………………J.

(INDIRA BANERJEE)

….….………………………J.

(J.K. MAHESHWARI)
New Delhi;

July 06, 2022

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