Sunday, 5 January 2020

Whether appellate court should determine mesne profits for determining interim compensation while staying eviction decree?

 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 experiences” rather
than depend on the rival facts presented by warring litigants.”
(g) Pragmatic Pursuit:
32. 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 dictum
put on hold in the name of stay, the appellant needs to submit himself
to certain terms. The terms of, for example, paying monetary
compensation. A stay is not for mere asking. Nor can the appellant
paint himself 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.
33. 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.
34. Here, in the revision, the appellant cannot insist on
reappreciation of his case on merits. This Court can only examine the
jurisdictional errors, if any, committed by the Appellate Bench.
Therefore, the tenant seeking to stall the execution of a decree from a
final court of fact has more burden to bear.
(h) The Result:
35. So, I reckon this Court’s interim arrangement needs no
interference, for this adjudication under Order 41, Rule 5 of CPC has no trappings of a judicial determination of mesne profits under Order
20, Rule 12 of CPC. The tenant will continue to pay Rs.25,000/- per
month to have the decree stayed, and the eviction stalled. Between the
two extremes of Rs.71,500/- per month and Rs.12,846/-, as projected
by the landlords and tenant respectively, my altering the figure
Rs.25,000/- can be nothing more than a cosmetic consideration. This
interim arraignment does not prevent the landlords from invoking
Order 20, Rule 12 of CPC. In that event, both the rival contenders can
invite a reasoned order from the trial Court.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION (ST.) NO.33250 OF 2018

Previn Govind Sharma Vs  Dinyar Jal Jamshedji

CORAM : DAMA SESHADRI NAIDU, J.
DATE : 21st JUNE 2019.


Rule. Rule made returnable forthwith. Heard finally by consent
of the parties.
Facts:
2. The tenant has filed this CRA and has had the Appellate
Court's decree of eviction stayed. In that process, this Court tentatively
fixed Rs.25,000/- as a monthly compensation to be paid to the
landlords. As a condition precedent, this Court has also observed that

once the rival parties place on record the necessary material, it will fix
the interim compensation to be paid pending the Civil Revision
Application.
3. In the context of fixing the interim compensation, I may set
out the facts briefly. Initially, before the City Civil Court, Mumbai, the
landlords filed Suit No.162 of 1996 against the applicant–tenant for
eviction. But the plaint was returned under Order VII Rule 10 to be
presented before the proper court. The landlords, instead, instituted
RAE Suit No.141/260 of 2008; the trial Court dismissed it on 16th
September 2013. But the landlords succeed in Appeal No. 124 of 2013;
the Appellate Bench of the Small Cause Court, Mumbai, allowed it on
6th October 2018. Aggrieved, the tenant filed this Civil Revision
Application. And on 12th December 2018, she secured an interim stay.
4. The interim order, as I have noted, directs the tenant to pay
Rs.25000/- per month as compensation until the Court fixes a
reasonable amount as interim compensation. Based on the material
either party placed on record, including the mesne profits reports
prepared by the Government approved valuers, both the counsel have
advanced their arguments.
Submissions:
Applicant’s:
5. Shri Amrut Joshi, the learned counsel for the tenant–
applicant, contends that the building was constructed in 1915 and is
dilapidated. According to him, the area does not exceed 600 sq. ft. In
this context, he submits that the landlords have admitted in their
pleadings that the property is about 600 sq. ft., but it has later gone

back on its own admission. That is, the landlords now assert that the
property measures over 1,000 sq. ft.
6. To support his contentions, Shri Joshi has also drawn my
attention to the landlords’ pleadings in the plaint to the effect that the
leased property is 600 sq. ft, and that the initial rent was Rs.562/-. As
per the pleadings, the rent was later raised to Rs.662/-. So it now stands
at Rs.1200/- per month.
7. Shri Joshi argues that the landlords constituted a Charitable
Trust, and that Trust is expected to lease out the property to the needy.
It should not be swayed by profit motive. Besides, Shri Joshi elaborates
on, what he calls, the well-established principles that weigh with the
Court in its fixing the interim compensation. On that count, he has
relied on these decisions: (i) Niaz Ahmad Khan v. Mahmood Rahmat
Ullah Khan and anr.[1], (ii) Atma Ram Properties (P) Ltd. v. Federal
Motors (P) Ltd.[2], (iii) Chanddrakant Dhanu v. Sharmila Kapur[3].
8. Further, Shri Joshi has drawn my attention to the mesne
profits reports on record. According to him, the landlords’ valuer
prepared the report without inspecting the property. So the valuer has
fixed the fair market rent for the suit property at Rs.71,500/- per
month. And that amount, according to Shri Joshi, is exorbitant. On the
other hand, he stresses that the fair market rent fixed by the tenant's
valuer is about Rs.12,000/-. This amount must be the just interim
compensation.
Respondents’:
1 [1] (2008) 7 SCC 539
2 [2] (2005) 1 SCC 705
3 [3] 2009 (2) Mh.L.J. 243

9. Per contra, Shri Foroze Bharuka, the learned counsel for the
landlords, has initially touched on the merits. He contends that though
the applicant–tenant now claims the status of a tenant, she has actually
trespassed on the suit property. To elaborate, Shri Bharuka submits that
the applicant claims to be the adopted daughter of the original tenant,
who died both intestate and issueless. At any rate, he submits that he
will not take that issue further.
10. Then, Shri Bharuka has drawn my attention to the relative
merits of the rival mesne profits reports. According to him, the tenant’s
valuer has treated the property as if it were vacant land and, then, went
on to calculate the probable monthly rent. Shri Bharuka, again, stresses
that the property is over 1000 sq. ft. Faced with the landlords’
admission about the extent—that it is 600 sq. ft.,—Shri Bharuka
submits that it is a verifiable fact. Even at the landlords’ cost, this Court
may have the area measured before it could fix the interim
compensation. In that context, he submits that even an admission can
be explained.
11. Shri Bharuka submits that the landlords’ mesne profits report
has considered all aspects and opined that Rs.71.500/- is the just

compensation. About the landlords’ valuer not visiting the property, he
submits that the applicant did not allow him to enter the property.
Reply:
12. In reply, Shri Joshi, the learned counsel for the tenant,
submits that it is the landlords’ suit that has occasioned this CRA. The
landlords’ having sued the applicant showing her as a tenant, it does
not lie in their mouth to call the applicant a trespasser.
13. Heard Srhir Amrut Joshi i/b. Shri Sanket Mungale for the
applicant and Shri Foroze Bharuka for the respondents 1 to 8.
Discussion:
(a) The Decree:
14. In September 2013 the trial Court dismissed the landlords’
RAE & R Suit No. 141/260 of 2008. But in Appeal No.124 of 2013,
the Appellate Bench of the Small Cause Court decreed the suit—that is,
it reversed the trial Court’s verdict. While allowing the appeal, it
ordered:
“1. Appeal is allowed.
2. The judgment and decree passed in RAE & R Suit
No.141/260 of 2008 on 16.09.2013 is set aside and
the suit is decreed.
3. The defendants are hereby ordered to vacate the
suit premises and deliver quiet and peaceful
possession of it to the plaintiffs within three months
from the date of this order.

4. A separate inquiry as to mesne profits be held as
per the provisions of Order 20 Rule 12 of the Code of
Civil Procedure and the plaintiffs are entitled to get
mesne profits at the rate determined in such inquiry
from the defendant no.3 from date of the suit till the
date they get possession of the suit premises.
5. The defendant no.3 to pay the cost throughout to
the plaintiffs.
6. A decree be drawn accordingly.”
(italics supplied)
15. Aggrieved, the tenant filed the Civil Revision Application.
This Court, through its order on 12th December 2018, granted to the
tenant ad-interim protection against eviction. It was on a few
conditions. One of them is that the tenant should deposit in the Court
“compensation assessed on an ad-hoc basis at Rs.25,000/- per month
from 1st November 2018, on or before 5th day of each succeeding
month.”
16. Besides that, the Court permitted both parties to place
material before the Court to assist it in its determining the
compensation amount as per the Supreme Court’s ruling in Atma Ram
Properties.
(b) Mesne Profits:
17. Lexically speaking, mesne (pronounced “meen”) denotes the
idea of occupying a middle position; it has two important senses in the
law. We may consider the second sense. Mesne may signify “occurring
or performed at a time intermediate between two dates” (as defined by
the Oxford English Dictionary). Thus, mesne profits are the profits of

an estate received by a tenant in wrongful possession between two dates
—that is, between the commencement of a lawsuit and its termination.
18. As Section 2(12) of the Code of Civil Procedure defines,
mesne profits are those profits which a person in wrongful possession of
the property actually received or might with ordinary diligence have
received by using that property. Those profits carry interest but do not
include profits made by a person in wrongful possession. Plainly put,
the mesne profits are a penal compensation. Thus, the object of
awarding a decree for mesne profits is to compensate the person kept
out of possession and deprived of enjoying his property despite his
entitlement to possession.[4]
19. A decree for mesne profits can be passed against a trespasser
or against a person who has suffered a decree of restoring possession to
the true owner. Order 20, Rule 12 governs this process. Here , that
process has not begun. Instead, the parties want the interim
compensation fixed under Order 41, Rule 5, as a precondition so the
landlords’ decree could be stayed. For that, they want the Court to
follow the ratio of Atma Ram Properties. Let us examine that case.
(c) Atma Ram Properties:
20. 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
4 [4] C. K. Thakker’s Code of Civil Procedure, Vol. 1, P.247 (E-book Reader)

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.
21. 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[5]: "[C]ommonsense
which is a cluster of life's experiences is often more dependable than
the rival facts presented by warring litigants".
22. 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
5 [5] (1985) 3 SCC 545

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)
23. After setting out those principles, Atma Ram Properties has
taken stock of the prevailing market condition in Delhi. It has judicially
acknowledged that the value of the real estate and the rents have
skyrocketed. It estimated the probable rent the leased property would
fetch if let out to a third person—Rs.3,50,000/-per month—and then
restored the Tribunal’s conditional stay. That is, the respondent was

asked to pay Rs.15,000/- per month for his continued presence in the
leased property pending the appeal.
24. I may note that Rs.3,50,000/- as the estimated rent and
Rs.15,000/- as the conditional interim compensation may have no
parity or congruity. But, to me, the Supreme Court has refused to
interfere with the Tribunal’s discretion and impose its view in an
interlocutory matter.
(d) Niays Ahmad Khan:
25. 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.
26. 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.
27. 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 the 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 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.
(e) Chandrakant Dhanu:
28. 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.
29. 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.
(f) What is determined now?
30. I may put the issue in perspective. What this revisional
Court now considering or determining are not mesne profits. It is only
laying down the condition or conditions under Order 41, Rule 5 (3) (c)
& (5) of CPC. Nothing more. Here, the contractual rate is Rs.1,200/-.
The landlords’ mesne profits report recommends Rs.71,500/- per
month; the tenant’s report, as expected, recommends Rs.12,846/-—a
lower figure.
31. 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 experiences” rather
than depend on the rival facts presented by warring litigants.”
(g) Pragmatic Pursuit:
32. 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 dictum
put on hold in the name of stay, the appellant needs to submit himself
to certain terms. The terms of, for example, paying monetary
compensation. A stay is not for mere asking. Nor can the appellant
paint himself 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.
33. 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.
34. Here, in the revision, the appellant cannot insist on
reappreciation of his case on merits. This Court can only examine the
jurisdictional errors, if any, committed by the Appellate Bench.
Therefore, the tenant seeking to stall the execution of a decree from a
final court of fact has more burden to bear.
(h) The Result:
35. So, I reckon this Court’s interim arrangement needs no
interference, for this adjudication under Order 41, Rule 5 of CPC has no trappings of a judicial determination of mesne profits under Order
20, Rule 12 of CPC. The tenant will continue to pay Rs.25,000/- per
month to have the decree stayed, and the eviction stalled. Between the
two extremes of Rs.71,500/- per month and Rs.12,846/-, as projected
by the landlords and tenant respectively, my altering the figure
Rs.25,000/- can be nothing more than a cosmetic consideration. This
interim arraignment does not prevent the landlords from invoking
Order 20, Rule 12 of CPC. In that event, both the rival contenders can
invite a reasoned order from the trial Court.
So I dispose of this Civil Revision Application confirming this
Court’s earlier Order, dt.12th December 2018.
[DAMA SESHADRI NAIDU, J.]
15/15
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