@JUDGMENTTAG-ORDER
G.S. Sandhawalia, J.@mdashThe present revision petition is directed against the order dated 08.02.2012 passed by the Appellate Authority, Chandigarh whereby mesne profits have been fixed at a sum of Rs. 3 lacs per month during the pendency of the appeal before the Appellate Authority. The landlord-respondent filed a petition u/s 13 of the East Punjab Urban Rent Restriction Act, 1949 (for brevity, the ''Act'') as extended to Chandigarh for ejectment of the tenant-petitioner from basement and ground floor area, approximately measuring 3700 square feet numbering SCO No. 483-484, Sector 35-C, Chandigarh. In the rent petition, it was averred that the period of lease was for 5 years from 01.07.2002 to 30.06.2007 at a monthly rent of Rs. 1,20,000/- and the rent was to be increased by 8% compounded after every year and from 01.07.2006, it was to be @ Rs. 2,04,074/- per month. There was a dispute regarding the payment of rent on the ground that the building in question has been resumed and the basement could not be put to the use and even criminal proceedings had been initiated between the parties. The ejectment order was passed by the Rent Controller, Chandigarh on 28.09.2011 on the ground of non-payment of rent. Initially, provisional rent was assessed at a sum of Rs. 80,000/- per month by the Rent Controller during the pendency of the ejectment petition vide order dated 16.12.2010 and thereafter, it was held that the tenant was liable to pay the rent as per the terms of the agreement @ Rs. 2,04,074/- per month with effect from 01.07.2007. During the pendency of the appeal, an application was filed on behalf of the respondent-landlord for assessing the mesne profits and it was pleaded that the duly registered lease deed in respect of a hotel bearing SCO No. 499-500, Sector 35-C, Chandigarh whose covered area on the ground floor and basement was 3700 square feet out of which, 3300 square feet was let out for Rs. 4,50,000/-, and therefore, the prevalent rent was Rs. 136/- per square feet and the tenant was liable to pay a sum of Rs. 5,03,200/- per month. Detailed reply was filed to the application that the premises in question were under resumption and the landlord was guilty of concealment and had played a fraud and the lease deed was not applicable to the premises as that was a hotel site and used as a hotel.
2. The Appellate Authority, Chandigarh, after taking into consideration the judgment of the Hon''ble Apex Court in
3. Resultantly, the said order has been challenged by arguing that the amount fixed is very substantial and there is a quantitative jump in the rate of rent. Accordingly, counsel for the petitioner has argued that the premises have been resumed in the year 1996 and the rent note was executed on 01.07.2002 and the fact of resumption was concealed and that the premises were sealed by the Estate Officer and therefore, there has been an fraud and the tenant is not in a position to use the resumed portion since it was let out as a kitchen but cannot be used due to the restriction put on running a kitchen by the Estate Office. Mr. A.K. Jaiswal, Advocate, who has put in appearance for the respondents has, on the other hand, argued that the violation was made by the tenant himself and as per the order dated 24.07.2007 passed in CWP No. 8220 of 2005, the resumption order has been set aside and the compounding charge has been directed to be adjusted from the forfeited amount of Rs. 5,10,000/-. Accordingly, it was contended that the violation is made by the tenant and it was beyond the control of the landlord.
4. The said submission of the petitioner cannot be accepted since it is now settled by the Hon''ble Supreme Court that after the order of ejectment, the contractual rate of rent comes to an end and the landlord is not bound by the contractual rate. The conclusions summed up by the Hon''ble Supreme Court in
18. To sum up, our conclusions are:-
(1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate 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 (1) 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 latter date.
This view was followed in
5. As held by this Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., once a decree for eviction has been passed, in the event of execution of decree for eviction being stayed, the appellants can be put on such reasonable terms, as would in the opinion of the appellate court reasonably compensate the decree holder for loss occasioned by delay in execution of the decree by the grant of stay in the event of the appeal being dismissed. It has also been held that with effect from the date of decree of eviction, 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 on being vacated by the tenant. While determining the quantum of the amount so receivable by the landlord, the landlord is not bound by the contractual rate of rent which was prevalent prior to the date of decree.
Thereafter, again, in
77. In the light of the discussions made above we hold that in an appeal or revision preferred by an tenant against an order or decree of an eviction passed under the Rent Act it is open to the appellate or the Revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. Needless to say that in fixing the amount subject to payment of which the execution of the order/decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount." Keeping this view in mind, this Court in
9. The other question that requires consideration is the mode of determination of the mesne profits or compensation payable. In this respect, it is appropriate to note that the same is to be done on the basis of materials placed on record by the parties. The parties would be at liberty to place cogent evidence by way of recent registered lease deeds of the locality to show their amount of rent which is payable. It is on the basis of such convincing material that a provisional assessment of the compensation/damages which the tenant is liable to pay the landlord pending his appeal or revision against an order of ejectment, can be determined. This provisional assessment that has been made would be subject to adjudication at the time of final disposal of the appeal or revision as the case may be. If the final adjudication by the appellate or revisional Court in respect of the damages or compensation payable by the tenant is at variance with the provisional order, the landlord would be liable to reimburse or refund the excess amount deposited by the tenant and in case of deficient deposit, the tenant shall be liable to make good the deficient amount. In fact in Atma Ram Properties case (supra), the Hon''ble Supreme Court held that reversal of interim orders passed at the interim stage due to final decision going against the party securing the interim order in its favour would entitle the successful party to demand (a) restitution of benefit earned by the opposite party under the interim orders or (b) compensation for what it has lost.
5. In the present case, there is a registered lease deed between the parties dated 01.07.2002 which itself provides that after 01.07.2007, the rate of rent would be Rs. 2,04,074/- per month. The premises are being used as a restaurant in the central portion of the town in a market which is dominated by restaurants. The Appellate Authority has taken into consideration that in the adjoining locality, the rate of rent for hotel site comes to Rs. 4,50,000/- per month. The premises in question herein are measuring 3700 square feet and the rate of rent for the hotel site works out to more than Rs. 160/- per square feet whereas the assessment made by the Appellate Authority would come to Rs. 81/- per square feet. The contractual rate of rent having come to an end after the ejectment order on 28.09.2011 and the rate of rent being Rs. 2,04,074/- per month with effect from 01.07.2007 and in view of the fact that a period of almost 4 years having been passed thereafter, the mesne profits which has been fixed at Rs. 3 lacs cannot be held to be excessive as there has been a quantitative jump in the market rate during the last 5 years.
6. This Court in
7. The Appellate Authority has ensured that the rent shall be deposited in a fixed deposit receipt during the pendency of the appeal, and therefore, neither the landlord is in a position to withdraw mesne profits and the tenant will also not be prejudiced in any manner. The order of this Court inter se between the parties in the resumption proceedings goes on to show that a Division Bench of this Court has noticed that the basement was being used as a party hall and the furniture has been removed and that it was not being used as a party hall when the order was passed and the Division Bench has noticed that though the landlord wanted to remove the furniture and it would not be fair to hold him accountable. The said dispute regarding the allegations of misuse between the landlord and tenant cannot be gone into at this stage of proceedings and it is for the parties to seek appropriate remedy in the pending appeal as to who was at fault and whether the violation has been made earlier or subsequently and had been continued by the present tenant. Admittedly, both the basement and the ground-floor is with the tenant, and therefore, he is liable to pay the mesne profits and the assessment of mesne profits by the Appellate Authority cannot be held to be excessive in any manner. Accordingly, the present revision petition is dismissed. The conditional order of the Appellate Authority, Chandigarh to deposit the mesne profits within 30 days is, however, extended till 15.05.2012. However, in the facts and circumstances of the case, the Appellate Authority, Chandigarh is directed to decide the rent appeal titled Alamjit Singh Mann v. Amarjeet Singh & others and at an early date of hearing preferably before 15.08.2012.
