Thursday, 30 July 2015

Whether landlord is entitled to get interim monthly compensation in application for staying execution of eviction decree?

There is nothing in law, which would preclude the landlord in doing so. In other words, the fact that no argument for imposing condition, now prayed by the landlord, was canvassed on 22nd February, 2006, will come in the way of the landlord to call upon the Court to impose appropriate condition in terms of the legal position stated by the Apex Court in Atma Ram Properties case(supra). Indeed, the question whether the landlord would be entitled for arrears of interim monthly compensation with retrospective effect is a may matter within the discretion of the Court.
confine the relief to the landlord from the date The Court of the filing of the present Application. That would meet the ends of justice and address the concern of the tenants as well to that extent.
I shall now deal with the argument that the amount claimed by the landlord at the rate of Rs.70,500/- per month towards interim monthly compensation is excessive or otherwise. Even if the amount of fair market price of the property at the rate of Rs.1,88,400/- per sq. mtr. as assumed by the landlord is to be ignored and the contention of the tenant is accepted, even then the fair market value of the suit property as per the Ready Reckoner would be around Rs.53.50 Lakhs, as the price indicated for office premises in the Ready Reckoner at Rs.1,37,300/- per sq. mtr. It was argued that the present market condition being precarious one, it is not possible to fetch amount of Rs.53,50,000/- for the suit premises. The argument will have to be stated to be rejected as the tenants have not produced any comparable instance to substantiate that contention. Instead, the Court will have to proceed on the basis of the price indicated in the Ready Reckoner, which is an official document. As aforesaid, accepted, even the igif the tenants' value of the property should contention not is be less than Rs.53.50 Lakhs. Applying the commercial practice of fair returns of 10% P.A. against the value of the property, the tenants would be liable to pay atleast amount of Rs.5,35,000/- per annum towards the interim compensation or fair market rent to avail of the protection given by the Court in terms of the Order dated 22nd February, 2006. The tenants however, would be liable to pay such interim compensation with effect from 2nd July, 2008 i.e. the date of filing of the present application and not for the anterior period. The monthly interim compensation would work out to around Rs.44,583/-.
Bombay High Court
Super Max International Pvt.Ltd. ... vs Choksey(Since Deceased) Through ... on 3 March, 2009
Bench: A.M. Khanwilkar
Citation; 2009 (3) ALLMR 528
1. Heard Counsel for the parties.
2. This Application by the landlord is founded on the exposition of the Apex Court in the case of Atma Ram Properties Vs.Federal Motors[2005(3) Bom.C.R.274], praying that during the pendency of the Writ Petition the tenant be directed to pay interim monthly compensation/mesne profit atleast at the rate of Rs.70,500/- per month with effect from 1st July, 2003.
3. To buttress the claim that the monthly compensation in respect of the suit premises is around Rs.70,500/-, the landlord has relied on the value of the property indicated in the Ready Reckoner of 2008. According to the landlord, the fair market price indicated in respect of the suit premises, which is given for office purpose and used for commercial activities should be at the rate of Rs.1,88,400/- per sq.mtr. The premises admeasures about 419 sq.ft. That fact is not in dispute.
According to landlord, if the value in the Ready Reckoner is to be applied, the fair market value the premises would be around Rs.80 Lakhs and the fair of market return on the suit property at the conservative rate of 10% would be much more than Rs.70,500/- per month.
4. On the other hand, tenants submit that the question of determining interim compensation does not arise in the fact situation of the present case.
That is so because while admitting the Writ Petition on 22nd February, 2006, both sides were heard and interim relief was granted, which was unconditional one. At this distance of time, it is not open to the landlord to claim interim monthly compensation, as that request was not pressed when the Writ Petition was heard for admission. Besides, it is contended that the amount claimed by the landlords towards monthly interim compensation at the rate of Rs.70,500/- is excessive.
5. The tenants on the other hand, rely on the Ready Reckoner to contend that the fair market value of the premises for office user is mentioned as Rs.1,37,300/- per sq.mtr. Applying that rate the value of the suit property would come to about Rs.53,46,000/- and not Rs.80 Lakhs, as claimed by the landlord. Besides, according to the tenants keeping in mind the present market trend movement, the question of offering return of 10% will of downward be unrealistic. According to the tenants, return should not exceed 5% of the fair market value of the property. On the above argument, it is submitted that the claim of the landlord for interim monthly compensation at the rate of Rs.70,500/- is far excessive. Lastly it is contended on behalf of the tenants that they would not be able to pay such high amount towards monthly compensation and resultantly it will amount to putting unreasonable restriction on them as condition for enjoying interim protection, which will be unjust and inequitable.
6. Having considered the rival arguments and perusing the relevant documents on record, I would in the first place answer the preliminary point raised on behalf of the tenants that it is not open to the landlord to ask for modification of the interim order for continuation of protection to the tenants during the pendency of the Writ Petition which has already been admitted after hearing both sides and unconditional interim relief granted.



                                       
    7.           Learned    Counsel for the tenants submits that

    it     would

    February, 2006.
                         
                    amount to review of the Order              dated

It is then contended that keeping in 22nd mind the parameters for exercising review jurisdiction, it is not open to this Court to impose any further condition other than the one provided in the interim order dated 22nd February, 2006. To buttress this contention, reliance is placed on the decision of the Apex Court in the case of Haridas Das v/s. Usha Rani Banik(Smt) and ors. reported in (2006) 4 SCC page 78. The argument clearly overlooks that it is not a case of review of the order. It would have been a case of review, if the Court was called upon to recall the entire interim order. The landlord by this application is merely asking for imposing additional condition to allow the tenants to enjoy the suit property in lieu of interim protection during the pendency of the Writ Petition. Granting of this relief at best would result in modification of the interim order and not review thereof. Thus understood, the principle stated by the Apex Court in Haridas Das(Supra) is of no avail to the tenants.
Moreover, the fact that the earlier unconditional interim order was granted after hearing both sides cannot preclude the landlord from applying for modification of the order so as to impose some legitimate condition to meet the ends of justice.
    Keeping

    to     reach      for
                            
in mind that the Writ Petition is not likely hearing for quite some time, the landlord who has succeeded in getting decree of eviction is entitled to claim suitable interim arrangement to meet the ends of justice.
8. It was then argued that the legal position stated by the Apex Court in the Atma Ram Properties(supra) case could have been invoked by the landlord, when the matter was argued on 22nd February, 2006. The fact that such argument was not canvassed on behalf of the landlord on 22nd February, 2006 in my opinion, in no way preclude the landlord to lateron apply for imposing additional condition to enable the tenants to avail of the interim protection in terms of the Order dated 22nd February, 2006.
There is nothing in law, which would preclude the landlord in doing so. In other words, the fact that no argument for imposing condition, now prayed by the landlord, was canvassed on 22nd February, 2006, will come in the way of the landlord to call upon the Court to impose appropriate condition in terms of the legal position stated by the Apex Court in Atma Ram Properties case(supra). Indeed, the question whether the landlord would be entitled for arrears of interim monthly compensation with retrospective effect is a may matter within the discretion of the Court.
confine the relief to the landlord from the date The Court of the filing of the present Application. That would meet the ends of justice and address the concern of the tenants as well to that extent.
9. I shall now deal with the argument that the amount claimed by the landlord at the rate of Rs.70,500/- per month towards interim monthly compensation is excessive or otherwise. Even if the amount of fair market price of the property at the rate of Rs.1,88,400/- per sq. mtr. as assumed by the landlord is to be ignored and the contention of the tenant is accepted, even then the fair market value of the suit property as per the Ready Reckoner would be around Rs.53.50 Lakhs, as the price indicated for office premises in the Ready Reckoner at Rs.1,37,300/- per sq. mtr. It was argued that the present market condition being precarious one, it is not possible to fetch amount of Rs.53,50,000/- for the suit premises. The argument will have to be stated to be rejected as the tenants have not produced any comparable instance to substantiate that contention. Instead, the Court will have to proceed on the basis of the price indicated in the Ready Reckoner, which is an official document. As aforesaid, accepted, even the igif the tenants' value of the property should contention not is be less than Rs.53.50 Lakhs. Applying the commercial practice of fair returns of 10% P.A. against the value of the property, the tenants would be liable to pay atleast amount of Rs.5,35,000/- per annum towards the interim compensation or fair market rent to avail of the protection given by the Court in terms of the Order dated 22nd February, 2006. The tenants however, would be liable to pay such interim compensation with effect from 2nd July, 2008 i.e. the date of filing of the present application and not for the anterior period. The monthly interim compensation would work out to around Rs.44,583/-.
10. To get over this position Counsel for the tenants would argue that fair returns at the rate of 10% is very excessive. According to him, keeping in mind the present market condition, the amount of return should not be more than 5%. Once again, no instance or document has been produced by the tenants to substantiate this position. Assuming that there is slack in demand of rental properties and the return have fallen to some extent, giving that benefit I would assume that instead of 10% the tenants should be made to pay atleast at the rate of 8% on the fair market value determined on the basis of would come to the amount indicated in the Ready Reckoner.
                           around     Rs.4,28,000/-P.A.             On
                                                                           That

                                                                           this
                       
    finding,      the    tenant would be liable to             pay      yearly

    interim    compensation        of    around    Rs.4,28,000/-.               I

    would    round      off that figure to Rs.4,00,000/-                 p.a.,
      


    which    comes to monthly compensation of                Rs.33,333/-.
   



    This    arrangement would meet the ends of justice                       and

    also    address      the argument of the tenants              that       the

    amount    of    compensation claimed by the              landlord          is





    excessive.



    11.       It    was then argued on behalf of the                  tenants





    that     they    will    not    be      able   to      pay        monthly

    compensation        claimed by the landlord.           This argument

    would    have been relevant if this Court were to grant

    interim    compensation at the rate of Rs.70,500/-,                        as








    claimed      by the landlord as it is.                However, applying

    the    above      logic,      I    am satisfied         that       amount        of

Rs.33,333/- per month would meet the ends of justice.
The question is: whether the tenants will be unable to pay even this amount. From the documents on record it is not possible to infer that position.
For, the latest yearly return filed on record of Respondent Nos.1(a) would indicate that the exempted income of Respondent No.1(a) is Rs.9,44,004/- towards interest income, Rs.8,50,118/- towards dividend income and Rs.17,19,210/- towards long term capital gains.
is Rs.29,13,332/-.
The aggregate annual income as per the return Even if the amount of income towards long term capital gains is to be set apart, nevertheless the income of the Respondent No.1(a) towards interest income and dividend income in aggregate is around Rs.18 Lakhs. According to the learned Counsel for the tenants, gross income of Respondent No.1(b) is Rs.1,99,454/-. However, schedule E1 of the return does not support that position. Insofar as Respondent No.1(b) is concerned, once again return under column Schedule E1 indicates that the interest income is Rs.4,90,943/-, dividend income is Rs.6,81,000/- and long term capital gains is Rs.642792/- and other income Rs.1,66,286/-. The aggregate income under all these head is shown as Rs.19,81,021/-. Once again even in the case of Respondent No.1(b), if the long term capital gains is to be set apart, the other income from interest and dividend exceeds over Rs.10 Lakhs.
Counsel for the tenants however, submits that income of the Respondent No.1(b) is Rs.5,54,462/-, which position is not supported by the return, in particular, column schedule E1.
12. Accordingly, I have no hesitation in taking the view that it is not a case as if by imposing monthly interim compensation at the rate of or Rs.33,333/-, the tenants will not be able to pay that amount it would be a harsh arrangement. On the other hand, the premises in question are admittedly situated in prime locality at Fort in front of GPO, Mumbai.
13. Taking overall view of the matter, therefore, it is ordered that the tenant shall pay interim monthly compensation in respect of the suit premises at the rate of Rs.33,333/- to avail of interim protection granted by this Court on 22nd February, 2006. Liability to pay the said amount would accrue from the month of July, 2008 as the present application has been filed on 2nd July, 2008. The tenants shall pay arrears within eight weeks from today and regularly pay future interim monthly compensation in terms of this order on or before 5th of every English calender month. Failure to comply with any of the above condition or in case of any one default, the interim protection granted by this Court shall stand vacated forthwith without further reference to the Court, in which case the landlord will be free to proceed with the execution of the decree. Indeed, the above arrangement would be subject to the outcome of this Writ Petition. In the event the interim relief stands vacated on account of default committed by the tenants and the landlord proceeds executing to take possession of the suit premises the decree, then the landlord will have to by ensure that the premises are kept in such condition and utilised in such a way that the possession of the suit premises will have to be restored to the tenants, if the Court so directs. The landlord through his Counsel assures to abide by this condition.
14. Needless to observe that in the event the landlord eventually succeeds in the present proceeding, the landlord would be free to ask for mesne profits in respect of the suit premises which claim will have to be considered on its own merit in accordance with the law, uninfluenced by this decision. Indeed, the tenant would be entitled to claim for adjustment of the amount paid by them by way of interim monthly compensation against the claim of mesne profits.
15. The Application preferred by the landlord would succeed on condition that the landlord would file undertaking in this Court that in the event the tenants succeed in the present Petition, the entire amount recovered by them in excess of the monthly rent of the suit premises, in terms of this order shall be reimbursed to the tenants with interest, not be fixed by less than 12% per annum, or such other amount, as may the Court at the relevant time. All questions in that behalf are left open.
16. Application is disposed of on the above terms.

(A.M.KHANWILKAR,J)
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