Sandeep Sharma, J. (Oral):— By way of above captioned civil revision petitions filed under S.24(5) of the Himachal Pradesh Urban Rent Control Act, 1987 (hereinafter, ‘Act’), challenge has been laid to order dated 4.7.2018 passed by the learned appellate Authority-II, Shimla, Whether reporters of the Local papers are allowed to see the judgment?. Himachal Pradesh in CMP Nos. 40-S/6 of 2018 under S.24(2)(b) of the Act and 159-S/6 of 2018 under S.151 CPC, whereby the authority below, while staying eviction order dated 15.12.2017 passed by the learned Rent Controller, Shimla has directed the tenant Shri Raman Jain to deposit use and occupation charges at the rate of Rs. 1,64,340/- per month with effect from the date of eviction i.e. 15.12.2017. Authority below has further ordered that, all the arrears, on the basis of use and occupation charges fixed by it should be deposited within a period of sixty days, failing which eviction order shall forthwith become executable.
2. For having a bird's eye view, necessary facts, shorn of unnecessary details are that the landlords namely, Raj Kumar Mehra and Mohit Mehra (petitioners in Civil Revision No. 193 of 2018) (hereinafter, ‘landlords’) filed a Rent Petition No. 11-2 of 2016/12 before the learned Rent Controller, Shimla, Himachal Pradesh under S.14 of the Act, for eviction of the tenant, Shri Raman Jain (petitioner in Civil Revision No. 165 of 2018) (hereafter, ‘tenant’), from the shop in question on the ground of requirement for expanding their existing business. Learned Rent Controller, vide order dated 15.12.2017 ordered eviction of the tenant, which subsequently came to be challenged by the tenant by fling an appeal under S. 24 of the Act, before the learned appellate authority. Alongwith the appeal, tenant filed two applications, one under S.24(2) of the Act for the stay of the operation of order dated 15.12.2017 passed by the learned Rent Controller in Rent Petition No. 11-2 of 2016/2012, titled Raj Kumar Mehra v. Ramesh Jain application under S.151 CPC, with a view to rebut the lease deed filed by the landlords alongwith their reply to the application filed by the tenant under S.24(2) of the Act. Tenant averred in the aforesaid application that, in all probabilities, appeal filed by him is likely to be allowed and, in case, eviction order as passed by the learned Rent Controller, is not stayed during the pendency of present appeal, very purpose of filing appeal would be frustrated. Tenant also averred in the application that, in case impugned order is not stayed, he would suffer irreparable loss and substantial injury, which can not be compensated in terms of money, especially, when premises ordered to be vacated are being used by the tenant for running his business.
3. Aforesaid application came to be hotly contested by the landlords, who claimed that they require the premises in question for expansion of their existing business and in case, operation of impugned order dated 15.12.2017 passed by learned Rent Controller is stayed, it will cause prejudice to them, who have filed the rent petition and they would be deprived of their valuable right, which has accrued in their favour. Landlords also averred that the tenant has adopted a delaying tactic to deprive them from reaping the fruits of eviction order passed by the learned Rent Controller. They further averred in the reply that a vested right has accrued in their favour and as such, they can not be denied of same. Landlords, while contesting the application for stay having been filed by the tenant, further claimed before the authority below, that the demised premises are commercial, situated on The Mall, within the municipal limits of Shimla and, after passing of the eviction order, possession of the tenant over the demised premises is totally unauthorized and tenant is liable to pay use and occupation charges at the rate of Rs. 5.00 Lakh per month. Landlords, further claimed that the tenant has purchased a shop in a Benami transaction on the Mall Road, Shimla, which has been let out to M/s. Raymond Apparels Ltd. on the monthly rent of Rs. 5.00 Lakh, whereas, to the contrary, he is enjoying demised premises on negligible rent of Rs. 6,325/- per month and prayed that the application for stay may be dismissed in the interest of justice. Record reveals that the averments contained in the reply further came to be refuted by the tenant by way of rejoinder.
4. In another application filed under S.151 CPC, being CMP No. 159-S/6 of 2018, tenant averred that the landlords have filed reply to the application under S.24(2) of the Act, claiming use and occupation charges in the event of impugned order being stayed. Tenant, in the application in question, pleaded that the landlords filed a lease deed qua Shop No. 85, The Mall, Shimla, which suggests that one Shri Amrit Lal Chopra executed a lease deed in favour of M/s. SSIPL Retail Ltd, which sale deed was not supplied to the tenant. Tenant, by way of application, claimed that the said lease deed was not supplied to him and by way of application, he wants to rebut the aforesaid lease deed by leading evidence and proving the same to be false. No reply to aforesaid application was filed. However, record reveals that subsequently, tenant was directed to file copy of lease deed, which was executed by his wife in favour of M/s. Raymond Apparels Ltd., but since tenant supplied the copy of lease deed executed between his wife and M/s. Raymond Apparels Ltd., application No. 159-S/6 of 2018 came to be disposed of as having been rendered infructuous.
5. Learned appellate authority below, taking note of the pleadings adduced on record by the respective parties, ordered stay of eviction order dated 15.12.2017 passed by learned Rent Controller, subject to following terms:
“i). The appellant should deposit use and occupation charges @ Rs. 1,64,340/- per month w.e.f. the date of eviction i.e. 15.12.2017 and the same should be deposited by him in the trial court.
ii). Al the arrears make out on the aforesaid basis should be deposited within 60 days, failing which, the eviction order shall forthwith become executable.”
6. In the aforesaid background, tenant has approached this court by filing Civil Revision No. 165 of 2018 with a prayer to set aside the same to the extent of imposition of condition of payment of Rs. 1,64,340/- per month from the date of eviction order, i.e. 15.12.2017, being excessive, on the other hand, landlords have also laid challenge to the aforesaid order by way of Civil Revision No. 193 of 2018 and have prayed that the order dated 4.7.2018 may be suitably modified by enhancing use and occupation charges taking into consideration the factors mentioned in the body of revision petition.
7. Mr. Ashok Sood, learned counsel representing the tenant, while referring to the impugned order passed by the learned authority below vehemently argued that the same is not sustainable in the eye of law, as the same is not based upon proper appreciation of the facts and law, as such, same can not be allowed to sustain. Mr. Sood, contended that bare perusal of S.24(5) of the Act, nowhere provides condition precedent, if any, for depositing use and occupation charges for staying the execution of eviction order, as such, order passed by the appellate authority below, whereby tenant has been ordered to deposit a sum of Rs. 1,64,340/- per month, on account of use and occupation charges, deserves to be set aside. He further stated that otherwise also, amount fixed on account of use and occupation charges, is harsh, wrong, illegal, unreasonable and arbitrary and without any statutory force as such, can not be allowed to sustain. He further contended that the learned authority below, by fixing use and occupation charges at such an exorbitant rate i.e. Rs. 1,64,340/- per month from the date of eviction order, has virtually deprived the tenant from being heard in appeal, because, such a huge amount is beyond the financial capacity, resources, prospects and condition of the business of the tenant, which is being run in small tenanted shop. Mr. Sood, further contended that the learned appellate authority had exercised the jurisdiction, which otherwise is not vested in it under the provisions of the Act, as such, impugned order being illegal, deserves to be set aside. Mr. Sood, strenuously argued that the legislature, in its wisdom, while enacting the Himachal Pradesh Urban Rent Control Act, and while creating right of appeal in favour of the tenant against the eviction, considered it not necessary and appropriate to provide for the payment and deposit of use and occupation charges by the tenant for staying the execution of the eviction order during the pendency of the appeal, taking into consideration many pros and cons of the condition of tenant under eviction. Mr. Sood further argued that, had there been any intention of the legislature to put restriction on the tenant, while preferring appeal, same would have been provided in the Act itself, which stands provided in many other statutes and even under Order 41 Rule 5 CPC. Mr. Sood, while arguing on behalf of the tenant stated that, merely because in some cases Hon'ble Apex Court and this court considered it necessary to order deposit of use and occupation charges at market rate during the pendency of the appeal keeping in view the facts and circumstances of the case before it, it is not necessary that in each and every case, use and occupation charges are to be ordered for staying the execution of the order. Mr. Sood further contended that the case of the tenant, before learned Rent Controller and in the grounds of appeal, is that the tenancy in perpetuity stood created by the landlords, while leasing out the shop in question as provided in the lease document, where it is provided that as long as the tenant continues to pay the agreed rent, he will continue to occupy the shop/premises and therefore, the tenancy of the tenant never came to an end and tenant is liable to pay only use and occupation charges. Mr. Sood further argued that the point of tenancy in perpetuity is still to be adjudicated in appeal as such, condition of depositing use and occupation charges is contrary to law and lease agreement, and can not be allowed to remain in force. Lastly, Mr. Sood, contended that in Himachal Pradesh Urban Rent Control Act, the definition of a tenant is not the same as has been considered by the Hon'ble Apex Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705 and as such, no benefit, if any, can be extended by the court to the landlords, of the judgment referred to herein above, while fixing use and occupation charges. Mr. Sood also contended that as per definition given in the Himachal Pradesh Urban Rent Control Act, tenancy after termination does not come to an end and the appellate authority below has not considered this issue. He further contended that the Shop No. 6, which has an area of 550 square feet and frontage of 8.75 metres, can attend more than 50 customers at a time, whereas, shop in question has the capacity to attend 3-4 customers at a time and as such, same could not be a relevant factor for the settlement of amount between the landlords and the tenant for a particular shop. Mr. Sood contended that the appellate authority has not taken into consideration the business prospects of the locations, where the two shops are situate. Mr. Sood, contended that Shop No. 6 is situated at a prime business location of the Mall Road just on the Scandal Point, whereas shop in question is situated at far end of the Mall Road, having lesser business prospects.
8. Mr. Bhupender Gupta, learned Senior Advocate duly assisted by Mr. Janesh Gupta, Advocate, appearing for the landlords, while refuting the submissions having been made by Mr. Ashok Sood, learned counsel representing the tenant, contended that there is no illegality or infirmity in the order passed by the learned appellate authority below, as far as imposition of use and occupation charges upon the tenant is concerned. He further contended that the appellate authority below has fallen in error while fixing use and occupation charges at the rate of Rs. 1,64,340/- per month. He contended that keeping in view the location of the shop in question vis-à-vis shop rented by the wife of the tenant to M/s. Raymond Apparels, rent fixed by the appellate authority can not be said to be justified and same needs to be enhanced. While responding to the submissions made by Mr. Ashook Sood, learned counsel representing the tenant that there is no condition under S.24(5) of the Act, that the amount is required to be deposited at the time of filing of the appeal, Mr. Gupta, learned Senior Advocate contended that the court, in its discretion, can always put a condition to protect the interests of the other party, especially in rent petitions, where parties litigate usually for years together and in this process, landlords suffer. He further contended that the argument advanced by Mr. Ashok Sood, learned Senior Advocate that the definition of ‘tenant’ in the Himachal Pradesh Urban Rent Control Act, is not exactly the same, as has been considered by Hon'ble Apex Court in Atma Ram Properties (supra), has been duly answered by the Hon'ble Apex Court in the aforesaid judgment itself. While referring to the aforesaid judgment, Mr. Gupta, learned Senior Advocate forcefully contended that it has been specifically held that a tenant having suffered a decree or order of eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. While placing reliance upon the aforesaid judgment, Mr. Gupta, learned Senior Advocate contended that Hon'ble Apex Court has held that, while passing order of stay under Rule 5 Order 41 CPC, appellate court has the jurisdiction to put the appellant to such requirement or terms, as would, in its opinion, compensate the landlord for the loss suffered by him on account of grant of stay order.
9. I have heard the learned counsel for the parties and gone through the record carefully.
10. Question, which requires consideration in both the revision petitions is, whether the appellate authority below had the jurisdiction to direct the tenant to pay use and occupation charges qua the demised premises i.e. shop, during the pendency of the appeal filed by him against the ejectment order passed by the learned Rent Controller and, whether the amount fixed by the appellate authority as ‘use and occupation charges' qua the demised premises is reasonable or needs to be enhanced, as prayed for by the landlords. Another ancillary question, which requires consideration is, in case, landlords are entitled for use and occupation charges, then what would be the ground for determining the same.
11. Before exploring answer to the aforesaid questions, it would be apt to take note of judgment rendered by Hon'ble Apex Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705, wherein, Hon'ble Apex Court having taken note of the fact that the landlord-tenant litigation goes on for unreasonable length of time, and tenants, in possession of premises, do not miss the opportunity to file appeal/revision to perpetuate the life of litigation and continue in occupation of the premises, held that the tenants, after termination of tenancy, are liable to pay damages for use and occupation at the same rate at which he would have paid even otherwise by way of rent and a little amount of costs which is generally insignificant. Following para of the aforesaid judgment can be usefully extracted here:
“4. Ordinarily this Court does not interfere with discretionary orders, more so when they are of interim nature, passed by the High Court or subordinate Courts/Tribunals. However, this appeal raises an issue of frequent recurrence and, therefore, we have heard the learned counsel for the parties at length. Landlord-tenant litigation constitutes a large chunk of litigation pending in the Courts and Tribunals. The litigation goes on for 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. If the plea raised by the learned senior counsel for the respondent was to be accepted, the tenant, in spite of having lost at the end, does not loose anything and rather stands to gain as he has enjoyed the use and occupation of the premises, earned as well a lot from the premises if they are non-residential in nature and all that he is held liable to pay is damages for use and occupation at the same rate at which he would have paid even otherwise by way of rent and a little amount of costs which is generally insignificant.”
12. Careful perusal of the judgment rendered by the Hon'ble Apex Court in Atma Ram Properties (supra) would reveal that following questions arose for its consideration:
“(i) in respect of premises enjoying the protection of rent control legislation, when does the tenancy terminate; and
(ii) upto what point of time the tenant is liable to pay rent at the contractual rate and when does he become liable to pay to the landlord compensation for use and occupation of the tenancy premises unbound by the contractual rate of rent?”
13. In the aforesaid judgment, Hon'ble Apex Court specifically referred to provisions of Order 41 Rule 5 CPC, and held that the appellate court does have the jurisdiction to put the applicant on such reasonable terms, as would, in its opinion, reasonably compensate the decree-holder for the loss occasioned on account of 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. The conclusions were summed up by the Hon'ble Apex Court in the following terms:
“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 (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 latter date.
14. In case the judgment rendered by the Hon'ble Apex Court in Atma Ram Properties (supra) is read in its entirety, it is clearly elicited that the rationale, for directing the tenant to pay use and occupation charges, is that there was a need to deter the tenant from perpetuating the life of litigation and thereby depriving the landlord of the fruits of litigation, even if successful.
15. The main argument of Mr. Ashok Sood, learned counsel representing the tenant, is that the aforesaid observations came to be made by Hon'ble Apex Court in Atma Ram (supra) in view of specific definition of ‘tenant’ contained in Delhi Urban Rent Control Act, as such, much emphasis can not be laid on the same, while deciding the case at hand, which is governed by the Himachal Pradesh Urban Rent Control Act. Mr. Sood, further contended that, in case of the Delhi Act, ‘tenant’ does not include a person against whom, an order/decree of eviction has been passed as provided under S.2(1)(ii) thereof, whereas, under Section 2(j) of Himachal Pradesh Urban Rent Control Act, ‘tenant’ means a person, by whom or on whose account, rent is payable for a building or rented land and includes a tenant in continued possession after termination of tenancy in his favour. Mr. Sood further contended that the aforesaid definition of ‘tenant’ clearly suggests that the tenancy of a tenant does not terminate after termination of tenancy. ‘Tenant” in the Himachal Pradesh Urban Rent Control Act is defined as under:
“Section 2. Definitions
(j) “tenant” means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after termination of the tenancy and in the event of the death of such person such of his heirs as are mentioned in Schedule-I to this Act and who were ordinarily residing with him at the time of his death, subject to the order of succession and conditions specified, respectively in Explanation-I and Explanation-II to this clause, but does not include a person placed in occupation of a building of rented land by its tenant, except with the written consent of the landlord, or a person to whom the collection of rent or fees in a public market, cart-stand or slaughter house or of rents for shops has been farmed out or leased by a municipal corporation or a municipal committee or a notified area committee or a cantonment board’;”
16. Hence, this court is not persuaded to agree with the aforesaid contention of Mr. Sood, because careful perusal of definition of ‘tenant’, as given in Himachal Pradesh Urban Rent Control Act, suggests that it does not include a person, continuing in possession after order of ejectment is passed against him/her. Otherwise also, very object of payment of damages/compensation, as has been stipulated by the Hon'ble Apex Court in Atma Ram Properties (supra), is to deter a tenant from perpetuating the life of litigation, as such, once this is the object, argument having been advanced by Mr. Sood that since observations/findings came to be made by Hon'ble Apex Court in Atma Ram Properties (supra) in terms of S.38(3) of Delhi Urban Rent Control Act, ratio of the same can not be applied in the case at hand, cannot be accepted because in the aforesaid judgment, Hon'ble Apex Court has clearly held that the rationale for providing compensation for use and occupation charges in favour of the landlords, is to deter the tenant from perpetuating life of litigation.
17. Otherwise also, in the aforesaid judgment, Hon'ble Apex Court has candidly held that the tenant having suffered decree/order of eviction, may continue his fight before the superior forum but, on the termination of proceedings and the decree or order of eviction first passed having been terminated, tenancy stands terminated from the date of decree passed by lower forum.
18. Hon'ble Apex Court in R.K. Bansal v. Jag Pravesh Sharma, 2012 (2) RCR (Rent) 203 has held that the main reason for proliferation of landlord tenant matter is primarily because landlord do not get rent which is close to the market rent. In landlord tenant matter it is the bounden duty and obligation of the Court to ensure that the landlord gets rent which is akin to market rent. Hon'ble Apex Court has held as under:
“11. The main reason for proliferation of landlord tenant matter is primarily because landlord do not get rent which is close to the market rent. In landlord tenant matter it is the bounden duty and obligation of the Court to ensure that the landlord gets rent which is akin to market rent. The High Court was quite justified in increasing the rent from Rs. 175/- to Rs. 25,000/- in view of the facts of this case.
12. For the reasons aforesaid, we direct that in case the non-applicant-tenant wants to stay in the premises for the aforesaid period then he would be obliged to pay rent at the rate of Rs. 25,000/- with effect from 18 May, 2010 per month as fixed by the High Court of Delhi, otherwise the tenant is directed to vacate the premises within one month from today subject to filing usual undertaking within four weeks from today and give peaceful possession to the applicant-landlord along with arrears of rent with effect from 18 May, 2010. If the premises is not vacated within the time stipulated above, then the applicant-landlord would be at liberty to take police help and get the possession of the premises from the non-applicant-tenant. This application is, accordingly, disposed of.”
19. Even a Division Bench of this court in Chaman Lal Bali v. State of Himachal Pradesh, 2016 (3) Shim. LC 1593, taking into consideration various judgments passed by Hon'ble Apex Court, held that reasonable mesne profit, which may be equivalent to market rent, should be awarded to prevent the party in wrongful possession from taking undue advantage of lengthy delays in main proceedings. Following paras of the aforesaid judgment may be extracted herein below:
“22. The learned Senior Counsel for the petitioner would then contend that even if the tenant or sublettee or any other unauthorized occupant is permitted to squat over the premises, then there should atleast be a provision for claiming mesne profits which according to him is not at all available under the impugned Act.
23. In Marshall Sons and Co.(I) Ltd. v. Sahi Oretrans (P) Ltd., (1999) 2 SCC 325, the Hon'ble Supreme Court after taking into consideration the invariable delay in Court proceedings held that reasonable mesne profit which may be equivalent to the market rent should be awarded to prevent parties in wrongful possession from taking undue advantage of lengthy delays in the main proceedings and thereafter in execution proceedings. It is apt to reproduce paras 4 and 6 of the judgment which read thus:
“4. From the narration of the facts, though it appears to us, prima facie, that a decree in favour of the appellant is not being executed for some reason or the other, we do not think it proper at this stage to direct the respondent to deliver the possession to the appellant since the suit filed by the respondent is still pending. It is true that proceedings are dragged for a long time on one count or the other and on occasion become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Because of the delay unscrupulous parties to the proceedings take undue advantage and person who is in wrongful possession draws delight in delay in disposal of the cases by taking undue advantage of procedural complications. It is also known fact that after obtaining a decree for possession of immovable property, its execution takes long time. In such a situation for protecting the interest of judgment creditor, it is necessary to pass appropriate orders so that reasonable mesne profit which may be equivalent to the market rent is paid by a person who is holding over the property. In appropriate cases, Court may appoint Receiver and direct the person who is holding over the property to act as an agent of the Receiver with a direction to deposit the royalty amount fixed by the Receiver or pass such other order which may meet the interest of justice. This may prevent further injury to the plaintiff in whose favour decree is passed and to protect the property including further alienation.
6. Having considered the relevant submissions of the parties including the submissions with regard to market rent and without expressing any opinion on the merits of the contentions of the parties in the pending suit, we think it appropriate to dispose of this matter with the following directions:
(1) That the suit in question be disposed of as expeditiously as possible, preferably within one year from today;
(2) The respondents are directed to pay the mesne profits/compensation at the rate of Rs. 10/- per sq. ft. from 1984 till today and at the rate of Rs. 20/- from today till the disposal of the suit. While making this payment, the payments already made shall be adjusted. So far as the arrears are concerned, it be paid in 12 equal monthly instalments.
24. The principle of determining mesne profits after the eviction order has been passed and the right of landlord to receive higher rent than the contractual rent was established by the Hon'ble Supreme Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705 wherein it was held as under:
“19. 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 (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 latter date.”
25. Notably, even though there is no express provision in the Act for the grant of mesne profit, but then, as held by the Hon'ble Supreme Court in Marshall Sons and Co.(I) Ltd. v. Sahi Oretrans (P) Ltd., (1999) 2 SCC 325 that once a decree for possession has been passed and execution is delayed depriving the judgment-creditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that reasonable mesne profits which may be equivalent to the market rent is paid by a person who is holding over the property.
26. Similar reiteration of law is found in the judgment of Hon'ble Supreme Court in Anderson Wright and Co. v. Amar Nath Roy, (2005) 6 SCC 489 : AIR 2005 SC 2457, wherein it was held as under:
“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.”
27. In State of Maharashtra v. Super Max International Pvt. Ltd., (2009) 9 SCC 772 : AIR 2010 SC 722, the Hon'ble Supreme Court held that while admitting the appeal after ejectment order, it is perfectly open to the appellate or the revisional court to direct the tenant to pay rent higher than the contractual rent, but the Court would not fix any excessive, fanciful or punitive amount. Since the mesne profits are not assessed by the appellate authority on the basis of the evidence led as per the Act, by production of evidence, on fact on issue or relevant facts, but is merely an assessment on the basis of prima-facie market rate is existing at the time of admission of the appeal after eviction order, a benefit has been bestowed on the landlord that he would be reasonably compensated for loss occasioned by delay in execution of decree by grant of stay order. The mesne profit or compensation payable to the landlord is generally determined on the basis of the cogent material placed on record by the parties in the shape of the registered lease deeds of the locality indicating the tentative amount of the rent which as the landlord would be entitled to in a case he had rented out the premises at the present market rate existing on the date of ejectment. However, there is no straight jacket formula.
28. It would be noticed that the entire subject matter of mesne profits in the event of a decree of eviction and appeal there against being filed, is a judge-made law chiseled out by the Hon'ble Supreme Court in its various pronouncements (some of which have been cited above), the entire premise of the aforesaid judgments is that once a decree of eviction is passed, the tenant becomes unlawful occupant (subject to his right in appeal/revision), therefore, any contract between the parties also comes to an end. It is for this reason that the Courts have carved out this new principle for ensuring that the tenant in unlawful possession does not further prejudice the landlord, who is otherwise entitled to get possession of his property and for this purpose, have laid down that the tenant must pay a reasonable amount subject to the outcome of the appeal/revision.
29. Even otherwise, the awarding of mesne profits does put a check on the diabolical plans of the tenant who has been ordered to be evicted to further delay the matter and squat on the premises by paying a nominal or meager rent. In light of the aforesaid discussion, it is evidently clear that the plea of the petitioner that there is no provision for claiming mesne profits after the order of eviction has been passed is clearly based on the misconception of the position of law.”
20. A coordinate Bench of this court in Sh. Champeshwar Lall Sood v. Sh. Gurpartap Singh, Latest HLJ 2017 (HP) 589, has held as under:
“13. It would be evidently clear from the aforesaid exposition of law that the courts after passing of an order of eviction can always put the occupant of the premises to terms including payment of mesne profit. The very purpose of awarding mesne profit or use and occupation charges is to put a check on the diabolical plans of the tenant who has been ordered to be evicted and ensure that he does not squat on the premises by paying a meager rent. At the same time even the landlord is also compensated to receive higher rent than the contractual rent.
14. In Atma Ram Properties Pvt. Ltd. (supra), it has been clearly laid down that the tenant with the passing of the decree of eviction is liable to pay mesne profits or compensation for use and occupation charges of the premises at the same rate on which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises.
15. Likewise, in Marshals Sons and Co.(I) Ltd. v. Sahi Oretrans (P) Ltd. (supra), it was categorically held that once a decree for possession has been passed and execution is delayed depriving the judgment-creditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that ‘reasonable’ mesne profits which may be equivalent to the market rent is paid by a person who is holding over the property.
16. At the same time, it was also held that while 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.
17. What is ‘reasonable’ is difficult to define and this expression being a relative term is required to be considered vis- à-vis, the fact situation obtaining in a particular case. A three Hon'ble Judge Bench of Hon'ble Supreme Court in Rena Drego (Mrs) v. Lalchand Soni, (1998) 3 SCC 341, considered the expression ‘reasonable’ in the following terms:- [9] It is difficult to give an exact definition of the word ‘reasonable’. It is often said that “an attempt to give a specific meaning to the word ‘reasonable’ is trying to count what is not number and measure what is not space.” The author of ‘Words and Phrases” (Permanent Edition) has quoted from In re Nice and Schreiber, 123 F, 987, 999 to give a plausible meaning for the said word. He says “the expression ‘reasonable’ is a relative term, and the facts of the particular controversy must be considered before the question as to what constitutes reasonable can be determined.” It is not meant to be expedient or convenient but certainly something more than that. While interpreting the word ‘reasonable’ in Section 13 of the Act, the Bombay High Court has suggested in Krishchand Moorjimal v. Bai Kalavati, AIR 1973 BOMBAY 46, “that the word ‘reasonable’ cannot mean convenient or luxurious, though it may not necessarily exclude the idea of convenience and comfort.” However, the expression reasonable can be taken as providing an angle which is conformable or agreeable to reasons, having regard to the facts of the particular controversy. [10] In Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar, (1987) 4 SCC 497 : (AIR 1987 SC 2316), this Court has stated that “the word ‘reasonable’ has in law prima facie meaning of reasonable in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know.” This has been reiterated by Sabyasachi Mukherjee, J. (as his Lordship then was) in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) P. Ltd., (1989) 1 SCC 532 : (AIR 1989 SC 973).
18. The expression reasonable again came up for consideration before the Hon'ble Supreme Court in Union of India v. Shiv Shankar Kesari, (2007) 7 SCC 798. It was held as under:—
“[8] The word “reasonable” has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. It is difficult to give an exact definition of the word ‘reasonable’. Stroud's Judicial Dictionary, Fourth Edition, page 2258 states that it would be unreasonable to expect an exact definition of the word “reasonable’. Reason varies in its conclusions according to the idiosyncrasy of the individual, and the times and circumstances in which he thinks. The reasoning which built up the old scholastic logic sounds now like the jingling of a child's toy. (See: Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar, (1987) 4 SCC 497. and Gujarat Water Supplies and Sewerage Board v. Unique Erectors (Gujarat) Pvt. Ltd. [(1989) 1 SCC 532]. [9] It is often said “an attempt to give a specific meaning to the word ‘reasonable’ is trying to count what is not number and measure what is not space”. The author of ‘Words and Phrases’ (Permanent Edition) has quoted from in re Nice & Schreiber 123 F. 987, 988 to give a plausible meaning for the said word. He says, “the expression ‘reasonable’ is a relative term, and the facts of the particular controversy must be considered before the question as to what constitutes reasonable can be determined”. It is not meant to be expedient or convenient but certainly something more than that. [10] The word ‘reasonable’ signifies “in accordance with reason”. In the ultimate analysis it is a question of fact, whether a particular act is reasonable or not depends on the circumstances in a given situation. (See: Municipal Corporation of Greater Mumbai v. Kamla Mills Ltd., (2003) 6 SCC 315).”
19. Even otherwise the expression ‘reasonable’ would only mean “rational according to the dictates of reason and not excessive or immoderate”. An act is said to be reasonable when it is conformable or agreeable to reason, having regard to the facts of the particular controversy. In other words ‘reasonable’ would mean what is just, fair and equitable in contradiction to anything whimsical, capricious etc. The word ‘reasonable’ has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the word ‘reasonable’. The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks, as has been held by Hon'ble Supreme Court in Veerayee Ammal v. Seeni Ammal., (2002) 1 SCC 134.
20. Therefore, the term ‘reasonable’, as has been used by the Hon'ble Supreme Court and this Court is required to be interpreted in a manner so as to ensure that the landlord is reasonably compensated for the loss occurred by the delay in execution of the decree by grant of stay order. The rent has to be determined on case to case basis depending upon the cogent material placed on record by the parties and would therefore, normally be dependent upon the occupation, trade or business etc. of the tenant and would further not be dependent solely on the capacity to pay or actual earning of the tenant, who has suffered an order of eviction.
21. The fixation of mesne profits and use and occupation charges are to be assessed on the basis of the evidence led by the parties as to the prima facie market value existing at the time of admission of the appeal after the eviction order, which has been exclusively bestowed on the landlord so that he would be able to reasonably compensate for loss caused by delay in execution of the decree by grant of stay order. The Court while doing so is not to be guided by the factors that the parties at one point of time while creating the tenancy had agreed at a meager amount of rent, it would depend upon the material produced before the Court which under no circumstances can be ignored even though thereafter the rent so fixed may work out to be multiple times to the one which was fixed at the time of creation of the tenancy.
22. Noticeably, even the tenant had not disputed the agreement entered between one of the landlord with Bata India Ltd., before the appellate authority wherein the rent fixed works out to Rs. 295.56 paise per sq. feet and with the increase contemplated in the agreement, the same on the date of admission of the appeal was @ Rs. 325/- per sq. feet.
23. The agreement reveals that the rentals therein have been fixed for two premises i.e. 42, the Mall, Shimla and 14/1, Middle Bazaar, Shimla. From the photographs appended alongwith the petition filed by the landlord being Civil Revision Petition No. 212 of 2016, which have not even being disputed by the tenant, the premise No. 42 is admittedly located on the prime location i.e. Mall Road, Shimla, whereas the premise No. 14/1 is sandwiched between the premises let out to the tenant and premise No. 42 is approachable only through the narrow lane of about three feet. Therefore, obviously, the rental of these properties would be presumed to be worked out after taking into consideration the comparative advantage and disadvantages of both the premises.
24. So far as the premises which are in possession of the tenant are concerned, the same admittedly are situated on the main Middle Bazaar, at the heart of Shimla town which over the years have now been come to be reckoned as ‘Middle Mall’ and is one of the important hub of business activity and has great commercial potential though less than that of the premises located on the Mall Road.
25. Therefore, the fixation of the monthly rental of Rs. 12,000/- per month by the learned first appellate Court, even after concluding that the premises in question are in heart of the city is obviously erroneous because such rental is based upon the alleged earning of the tenant instead of the same being based upon the prima facie market rent that the landlord would have been able to let out on vacation by the tenant at the time of the admission of the appeal after eviction order. Moreover, once the Court has before it a lease deed of the premises which pertains to a part of the same building then it will not normally be wise, safe or prudent to rely upon any other document like rent deed of the so called adjoining premises in the vicinity to work out the prima facie market rent.”
21. Thus, from the above discussion, it is evident that while passing the impugned order, appellate authority below had the jurisdiction to put the tenant to the condition of payment of Rs. 1,64,340/- per month to compensate the landlords due to delay in execution of decree by grant of stay order. Otherwise also the use and occupation charges fixed by appellate authority below are commensurate with the amount, which the landlords would have fetched, had the tenant vacated the demised premises, as such, the learned authority below has rightly fixed the use and occupation charges and this court finds no occasion to interfere with the same.
22. Hon'ble Apex Court, in Marshall Sons and Co.(I) Ltd. v. Sahi Oretrans (P) Ltd., (1999) 2 SCC 325 has categorically held that that once a decree for possession has been passed and execution is delayed depriving the judgment-creditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that reasonable mesne profits which may be equivalent to the market rent are paid by a person, who is holding over the property. In the aforesaid judgment, Hon'ble Apex Court has further held that, while fixing rent, court would exercise restraint and would not fix any excessive, fanciful or punitive amount. Hon'ble Apex Court, in Rena Drego (Mrs.) v. Lalchand Soni, (1998) 3 SCC 341, while interpreting the expression, ‘reasonable’ observed that it is difficult to give an exact definition of the word ‘reasonable’, however, expression, ‘reasonable’ can be taken as providing an angle which is conformable or agreeable to reasons, having regard to the facts of the particular controversy. Subsequently, Hon'ble Apex Court in Union of India v. Shiv Shankar Kesari, (2007) 7 SCC 798, while interpreting the expression, ‘reasonable’ ruled that the word ‘reasonable’ has, in law, prima facie, meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. Hon'ble Apex Court further held that it may be unreasonable to give an exact definition of the word ‘reasonable’ and expression ‘reasonable’ is a relative term, and the facts of the particular controversy must be considered before the question as to what constitutes reasonable can be determined. Word/expression, ‘reasonable’ signifies “in accordance with reason”, therefore, coordinate Bench of this court, while taking note of the various judgments passed by Hon'ble Apex Court, while pronouncing judgment in Champeshwar Lall Sood (supra) rightly held that the term, ‘reasonable’ as has been used by Hon'ble Apex Court and this court is required to be interpreted in the manner, so as to ensure that the landlord is reasonably compensated for the loss occurred by delay in execution of decree on account of stay order. Rent is to be determined on ‘case to case’ basis, depending upon cogent material placed on record by the parties.
23. Market rate and use and occupation charges are to be fixed on the basis of evidence led by parties as per market value existing at the time of admission of the appeal after eviction order. In the case at hand, it is not in dispute that the landlord successfully proved on record, during proceedings of appeal, that the wife of the tenant let out one shop to M/s. Raymond Apparels on the rent of more than Rs. 5.00 Lakh per month, whereas, tenant had been paying meager rent of Rs. 6,325/- per month to the landlords, that too, for the shop, which is situate in the heart of the Mall Road, Shimla. It is also not in dispute that the shop let out to M/s. Raymond Apparels by the wife of the tenant is on extreme end of the Mall Road, as such, tenant can not be allowed to state that the use and occupation charges fixed at the rate of Rs. 1,64,340/- per month by the learned Court below are on higher side, rather, impugned order clearly reveals that the authority below has fixed rent on the basis of rent being charged by wife of the tenant for the shop let out by her to M/s. Raymond Apparels, that too qua the shop, which is situate at the extreme end of the Mall Road, Shimla.
24. Similarly, this court finds that since the use and occupation charges fixed by appellate authority are based upon prevailing market rate, which is appropriate for a property, which is not only newly built but spacious also, as has been alleged by the tenant, landlord, can not be allowed to state that use and occupation charges fixed by the appellate authority below are on higher side, rather, same appear to be reasonable as per prevailing market rate/rent.
25. Consequently, in view of above, both the petitions are dismissed being devoid of any merits. Order dated 4.7.2018 passed by the learned appellate Authority-II, Shimla, Himachal Pradesh in CMP Nos. 40-S/6 of 2018 under S.24(2)(b) of the Act and 159-S/6 of 2018 under S.151 CPC, is upheld. Pending applications in both the petitions, if any, are disposed of. Interim directions, if any, are vacated. Record, if received, be sent back forthwith.
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