Summary
Landlords of commercial premises in New Colony, Jaipur obtained an eviction decree in a 2002 suit under the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, affirmed in first appeal. In the tenants' second appeal the Rajasthan High Court stayed ejectment and, on the landlords' application under Order XLI Rule 5 CPC, directed the tenants to pay mesne profits of Rs 2,50,000 per month during the appeal, with liberty to the landlords to withdraw on furnishing security. The tenants contended that Section 20 of the Rajasthan Rent Control Act, 2001 caps mesne profits for commercial premises at three times the standard rent of Rs 45,000. The Supreme Court dismissed the appeals. Under Section 32(3) of the 2001 Act, suits pending under the repealed Act on 01.04.2003 continue under the old Act, so Section 20 has no application, and the mesne profits fixed were just.
Issues
- Whether Section 20 of the Rajasthan Rent Control Act, 2001, limiting mesne profits to three times the rent for commercial premises, governs a suit filed under the repealed 1950 Act and pending when the new Act commenced.
- Whether an appellate court staying execution of an eviction decree may require the tenant to pay mesne profits at the market rate, and whether Rs 2,50,000 per month was justified.
Provisions considered
- Section 32(3) (repeal and savings) and Section 20(3), Rajasthan Rent Control Act, 2001Section 32(3) provides, with overriding effect, that suits and proceedings under the repealed 1950 Act pending on the commencement of the 2001 Act continue and are disposed of as if the old Act were in force; Section 20's three-times cap therefore does not apply to the eviction suit filed in November 2002. (¶ 8)
- Order XLI Rule 5 read with Section 151, Code of Civil Procedure, 1908While staying an eviction decree the appellate court may impose reasonable terms compensating the decree-holder for the delay, including mesne profits at the rate the landlord could have let the premises (Marshall Sons, Atma Ram Properties, Super Max International). (¶¶ 10, 11)
Held
- Suits or proceedings pending on the date the 2001 Act was notified continue under the 1950 Act, and the new Act has no application; the High Court rightly rejected in review the plea based on Section 20 of the new Act. (¶ 8)
- The tenants, having admitted on affidavit in earlier standard-rent proceedings before this Court that the tenanted premises comprised 2,100 sq ft covered and 1,200 sq ft open area (407 sq yards), are estopped from disputing the area; the High Court's finding warrants no interference. (¶ 9)
- On passing of an eviction decree the tenancy terminates and the landlord is entitled to mesne profits or compensation for use and occupation at the market rate; the quantum depends on the place, location and nature of the premises and prevailing rents. Rs 2,50,000 per month for commercial premises on the main road in the heart of Jaipur, ten years after the standard rent was fixed and six years after the decree, was just and proper. (¶¶ 11, 12, 13)
Result
Appeals dismissed; the Rajasthan High Court's order of 18.05.2018 fixing mesne profits at Rs 2,50,000 per month and the order of 01.04.2019 dismissing the review petition upheld.