Sunday, 12 August 2018

Whether landlord is entitled to get mesne profits at contractual rent till passing of eviction decree?

That such is the correct position in law is quite evident from the recent decision of the Supreme Court in the case of Smt. Chander Kali Bail v. Jagdish Singh Thakur MANU/SC/0366/1977: A I R 1977 S C 2262. The decision turns upon the provisions of M.P. Accommodation Control Act, 1961. Though the provisions of the said statute are not identical with the Act we are concerned, still so far as the material aspect is concerned, there is no substantial alteration in the language of the wordings or the effect thereof. The Supreme Court in this case has held that a tenant after the termination of his contractual tenancy does not become an unauthorised occupant of the premises but remains a tenant. After referring to an earlier decision of the Supreme Court in Damadilal v. Parasram MANU/SC/0476/1976 : A I R 1976 S C 2229, it is pointed out that a person continuing in possession of the accommodation even after the termination of his contractual tenancy is a tenant within the meaning of the Act and on such termination his possession does not become wrongful until and unless a decree for eviction is made. If he continues to be in possession even after the passing of the decree, he does so as a wrongful occupant of the accommodation. Thus, it is clear that till the date of the passing of the decree the possession of the tenant even if the contractual tenancy is terminated is not wrongful and it becomes wrongful, for the first time, once a decree of eviction is passed by a competent Court.

15. Thus, the appeal is partly allowed. It is declared that for the period from the date of the suit till February 28, 1966, being the date of the passing of the decree by the trial Court, the landlords will be entitled to payment at the rate of Rs. 34 per month, being the amount of contractual rent; that from and after the date of the decree, i. e. from March 1, 1966, till August 15, 1969, being the date of handing over of possession, the landlords would be entitled to mesne profits at the rate of Rs. 125 per month. 

IN THE HIGH COURT OF BOMBAY

Appeal No. 789 of 1972

Decided On: 27.04.1978

Nathumal Chandanmal and Co. Vs.  Damodar Prabhat Sharma and Ors.

Hon'ble Judges/Coram:
R.M. Kantawala, C.J.

Citation: 1980(1) RCJ 591 Bom


1. The erstwhile tenants have filed this appeal against an order passed by the learned Assistant Judge, Dhulia, awarding mesne-profits to the landlords, after a decree of eviction against the tenants was executed.

2. The plaintiffs filed a suit on August 17, 1964, against the defendants for eviction on various grounds. In that suit, a decree for eviction against the defendants tenants was passed on February 28, 1966. The matter went further and came ultimately to the High Court. The High Court by its decree dated July 18, 1969, confirmed the decree for eviction that was passed by the trial Court. On August 15, 1969, possession of the suit premises was handed over to the landlords. On December 21, 1969, the landlords filed an application for fixation of mesne-profits claiming Rs. 200 per month from the date of institution of the suit till the date of handing over of possession on August 15, 1969. The trial Court accepted the contention of the landlords in toto and awarded mesne-profits at the rate of Rs. 200 per month, as demanded.

3. In an appeal preferred by the tenants, the learned Assistant Judge, Dhulia, modified the order passed by the trial Court and directed mesne-profits to be given at the rate of Rs. 125 per month to be calculated from the date of the suit till the date of handing over of possession. It is against this order passed by the learned Assistant Judge that the present appeal is filed by the tenants and cross-objections are filed by the landlords.

4. Mr. Abhyankar, on behalf of the tenants, submitted that since in the suit instituted by the landlords, mesne-profits were claimed at the rate of Rs. 34 per month, neither of the two Courts ought to have awarded by way of mesne-profits any amount in excess of Rs. 34 per month. In the alternative, he submitted that in case this Court is not inclined to accept the contention that the landlords are not entitled to mesne-profits in excess of Rs. 34 per month till the passing of the present decree by the trial Court, i. e. fill February 28, 1966, and thereafter, in that event he has not controverted the right of the landlords to recover mesne- profits from March 1, 1966, till the date of handing over of possession at the rate of Rs. 125 per month, as awarded by the appellate Court.

5. Mr. Sali, on the other hand, on behalf of the landlords submitted that they were entitled to mesne-profits for the entire period, from the date of the institution of the suit till the date of handing over of possession at the rate of Rs. 200 per month, as given by the trial Court. He urged that neither the amount of mesne-profits per month ought to be reduced nor the period for which such mesne-profits had to be awarded ought to be reduced. He has thus supported the cross-objections that have been filed on behalf of the landlords.

6. The first question that has to be considered in this appeal is simply because the landlords in the plaint have claimed mesne-profits at the rate of Rs. 34 per month, are they precluded, when direction is given for determination of mesne-profits, from claiming a larger amount. So far as the claim for mesne-profits is concerned, it is for a period subsequent from the date of institution of the suit in the present case. Any party, however much foresight it may use, may not be able to foresee the duration of the litigation and the compensation that may be received from the premises in future after the institution of the suit in case a prudent owner is to give his property for occupation on leave and licence. Thus, merely because in the plaint the amount is restricted to the sum of Rs. 34 per month/a decree holder cannot be prevented from claiming appropriate compensation by way of mesne-profits. For claims in future it is a mere surmise on the part of the landlords, who mentioned the amount that, according to him, would be reasonable. But such mentioning of a specific amount does not deter him from claiming an appropriate amount by way of compensation towards mesne-profits, if he is in law able to establish the same.

7. The second question that is required to be considered in this appeal is that between the date of the institution of the suit, and the date of the eviction decree passed by the trial Court, viz., February 28, 1966, at what rate the landlords are entitled to mesne-profits. The contention on behalf of the erstwhile tenants is that until the eviction decree is passed by a competent Court, the possession of an erstwhile tenant whose contractual tenancy has been duly terminated is lawful; it becomes unlawful only when an eviction decree is passed which has not been later on, in further proceedings, reversed by any superior Court. On the other hand, it has been urged by the landlords that once a landlord has manifested his intention to evict his tenant by instituting a suit for ejectment and ultimately succeeds in such proceedings of getting a decree of eviction, such decree will relate back to the date of the institution of the suit and the landlord will be entitled to mesne profits at an appropriate rate, not from the date of passing of the decree but right from the date of the institution of the suit. Thus, in short, the submission is that once a landlord succeeds in getting the eviction decree against a tenant, he will be entitled to claim proper or appropriate mesne- profits right from the date of the institution of the suit and such claim for mesne-profits ought not to be postponed to the date of the decree.

8. The material part of the definition of the word "tenant" in section 5(11) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as "the Act"), means "any person by whom or on whose account rent is payable for any premises." The rest of the portion of the definition, as it was existing at the material time, is not of much relevance or importance for our present purpose.

9. Section 12 of the Act contains several provisions which are to a certain extent independent, but are combined together in one section. Subsection (1) thereof provides that.

"A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act."
This sub-section is declaratory in character and is worded in a negative form.

Sub-section (2) thereof imposes a ban or fetter upon the right of a landlord to institute a suit for recovery of possession against a tenant. That sub-section provides that -

"No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non-payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882."
Thus, this sub-section merely makes the service of a requisite notice as a condition precedent when the landlord wants to avail of his right to evict the tenant on the ground of non-payment of rent.

10. Sub-section (3) of the Act relates to circumstances under which a Court shall pass a decree for eviction in any suit for recovery of possession. While clause (b) of sub-section (3) provides the effect of a tenant depositing the standard rent and permitted increases in Court and continuing to pay or tendering the same regularly. Thus, as indicated earlier, section 12 combines independent provisions within its scope. The grounds on which a landlord may be able to evict a tenant are laid down in section 13 and it starts with a non-obstante clause. We are not concerned with the nature of the grounds which are available to a landlord so as to successfully initiate proceedings for recovery of possession from a tenant.

11. It is an elementary principle of the Act that protection is given to a tenant against eviction, even in cases where his contractual tenancy has been duly terminated in the manner contemplated by the Transfer of Property Act. It is not even urged by Mr. Sali that simply because a tenant's contractual tenancy is terminated, he ceases to have the right to occupy the premises let out to him by the landlord. He has also not controverted the position that a landlord will not be entitled to claim any amount in excess of the standard rent for the period between the date of termination of the contractual tenancy and the date of the institution of proceedings in eviction. The primary question to be considered in this case is whether between the date of the filing of the suit for eviction and the date of the passing of a decree for eviction by a Court for the first time, is a tenant liable to pay as mesne-profits the sum equivalent to the standard rent. There is no provision in the Act which says or lays down that when an eviction decree is passed in a suit instituted by a landlord, the decree of eviction will relate back to the date of the institution of the suit. The decree becomes effective only when it is passed and unless it is reversed in a subsequent proceeding, there is nothing in the Act to indicate that the occupation of a tenant prior to the date of the passing of the decree was unlawful. If that is so, then the tenant's possession becomes unlawful for the first time when an eviction decree is passed by a competent Court against a tenant. Till such eviction decree is passed, a fortiori the liability of the tenant will be to pay the standard rent. Thus, in my opinion, between the date of the institution of the suit and the date of the passing of the decree of eviction by the Court of first instance, viz. February 28, 1966, the tenant will be liable to pay merely the standard rent and nothing in excess thereof.

12. That such is the correct position in law is quite evident from the recent decision of the Supreme Court in the case of Smt. Chander Kali Bail v. Jagdish Singh Thakur MANU/SC/0366/1977: A I R 1977 S C 2262. The decision turns upon the provisions of M.P. Accommodation Control Act, 1961. Though the provisions of the said statute are not identical with the Act we are concerned, still so far as the material aspect is concerned, there is no substantial alteration in the language of the wordings or the effect thereof. The Supreme Court in this case has held that a tenant after the termination of his contractual tenancy does not become an unauthorised occupant of the premises but remains a tenant. After referring to an earlier decision of the Supreme Court in Damadilal v. Parasram MANU/SC/0476/1976 : A I R 1976 S C 2229, it is pointed out that a person continuing in possession of the accommodation even after the termination of his contractual tenancy is a tenant within the meaning of the Act and on such termination his possession does not become wrongful until and unless a decree for eviction is made. If he continues to be in possession even after the passing of the decree, he does so as a wrongful occupant of the accommodation. Thus, it is clear that till the date of the passing of the decree the possession of the tenant even if the contractual tenancy is terminated is not wrongful and it becomes wrongful, for the first time, once a decree of eviction is passed by a competent Court.

13 Reliance was sought to be placed by Mr. Sali upon the decision of the Supreme Court in Sita Ram Lakshmanji v. Dipnarain Mandal MANU/SC/0030/1977 : A I R 1977 S C 1870. In my opinion, this decision is of no assistance to Mr. Sali for determining the matters in controversy in the present appeal. It does not deal with a case under the Rent Act but deals with a claim for possession and mesne profits governed by the Bihar Land Reforms Act, 1950. Such a decision is of no assistance to the Court in adjudicating the rights of the parties.

14. A question then arises, at what rat Thus, the appeal is partly allowed. It is declared that for the period from the date of the suit till February 28, 1966, being the date of the passing of the decree by the trial Court, the landlords will be entitled to payment at the rate of Rs. 34 per month, being the amount of contractual rent; that from and after the date of the decree, i. e. from March 1, 1966, till August 15, 1969, being the date of handing over of possession, the landlords would be entitled to mesne profits at the rate of Rs. 125 per month. e mesne profits ought to be directed to be paid for the period after February 28, 1966, when the decree of the trial Court was passed which has been confirmed in appeal. In the subsequent proceedings the appellate Court while determining the question of mesne profits had come to the conclusion that Rs. 125 per month is an adequate amount of mesne profits to be paid by the erstwhile tenants to the landlords. A determination as to the question of quantum ordinarily cannot be disturbed in second appeal unless any principle of law is overlooked or misapplied. I am not oblivious of the fact that the contractual rent of the premises was Rs. 34 per month, while the appellate Court has awarded Rs. 125 per month as mesne profits. Neither side is able to point out any error of law or principle for adjudication of this quantum and under such circumstances it will not be possible for me to interfere with the figure arrived at by the first appellate Court.

15. Thus, the appeal is partly allowed. It is declared that for the period from the date of the suit till February 28, 1966, being the date of the passing of the decree by the trial Court, the landlords will be entitled to payment at the rate of Rs. 34 per month, being the amount of contractual rent; that from and after the date of the decree, i. e. from March 1, 1966, till August 15, 1969, being the date of handing over of possession, the landlords would be entitled to mesne profits at the rate of Rs. 125 per month. Parties are agreed that if the figures are calculated on this footing, instead of the amount directed to be paid under the orders of the first appellate Court, the tenants will be liable to pay to the landlords a sum of Rs. 3,772.50 p. (Rupees three thousand seven hundred seventy-two and Paise fifty only). This figure is, therefore, substituted for the amount directed to be paid by the first appellate Court. So far as the costs of the appeal are concerned, as either party has partly succeeded in this appeal, each party will bear its own costs of the appeal.

16. So far as the cross-objections are concerned, the same are dismissed and each party will bear its own costs of the cross-objections.


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