Supreme Court of India was dealing with the petition challengingthe order dated 18.05.2018 as well as the order passed in reviewdated 01.04.2019 questioning the grant of mesne profit.
Brief Facts:
Plaintiffs purchased theproperty through six different registered sale deeds executed on23.12.1985. By virtue of those sale deeds, Plaintiffs became theowner of the tenanted premises. Appellants were tenant to theerstwhile owner and after selling the premises they became tenant
of Respondents by attornment. Earlier a suit underSection 6 of the Old Act was filed by the Respondentsagainst the Appellants for determination ofthe standard rent. During the pendency of the suit an applicationunder Section 7 of the Old Act was filed for fixing the provisionalrent which was decided vide order dated 09.01.2004 fixingprovisional rent @ Rs.1,00,000/permonth. The said order waschallenged, which was confirmed by the High Court. The Appellants had filed a Special Leave Petitionwherein this Court fixed the ad hocprovisional rent @ Rs.60,000/permonth vide order dated12.11.2007 with direction to the Trial Court to decide the issue ofstandard rent expeditiously. The Trial Court decreed the said suit and fixed the standard rent @Rs.45,000/permonth. The appeals filed by both the partiesagainst the said order are pending before the High Court.
Appellant’s Contention:
Learned counsel for the appellant submitted that as per Section 20 ofRajasthan Rent Control Act, 2001,the maximum amount of mesne profit may be payable three timesof the standard rent in case the premises is let out for commercialpurposes. It is said the mesne profit, as determined by the HighCourt, is excessive without looking to the year of construction ofpremises, location of the property which is on inside road of colonyand also without taking note of the DLC rate, therefore, the orderimpugned may be set aside and the quantum of mesne profits maybe revised to three times of the amount of rent making itRs.1,35,000/permonth.
Respondent’s Contention:
Learned Counsel for the respondent submitted that Section 20 of the New Act do not apply to the suit or proceedings initiated under the Old Act and were pending on the date of applicability of the New Act, notified in the official gazette. The argument of the Appellants to fix mesne profits only three time to the standard rent relying the provisions of the New Act is meritless.
It was urged that the order passed by the HighCourt to fix mesne profit is equitable, just and reasonable with adirection to redepositof mesne profits with 9% interest in case ofwithdrawal by Plaintiffs or the Plaintiffs loses in the second appeal.In such circumstances, interference in these appeals is notwarranted.
SC’s Observations:
After hearing both the sides SC observed thatthe Appellants raised a plea that maximum payable mesne profits as per Section 20 of the New Act can be three times of the rent in case the premises let out for commercial purposes. The standard rent was fixed @ Rs.45,000/per month as a result of which three times would come to Rs.1,35,000/, however, the direction of mesne profits @ Rs.2,50,000/per month by the High Court is unjust.
SC observed that the suit or proceedings, if any, pending on thedate of notification issued by the State Government for applicabilityof the New Act such proceedings would continue under the Old Actand New Act has no application.
SC opined that the High Court has rightly rejected the contention while dismissingthe review petition and rightly held that Section 20 of the New Act,by which three times mesne profits to the standard rent was madepermissible for the suit or proceedings started under the New Act,have no application in suit or proceedings initiated under Old Actand pending on the date of commencement of New Act.
SC Held:
After evaluating submissions made by both the parties the SC held that “The basis of determination of the amount of mesne profit, depends on the facts and circumstances of each case considering place where the property is situated i.e., village or city or metropolitan city, location, nature of premises i.e., commercial or residential are and the rate of rent precedent on which premises can be let out are the guiding factor in the facts of individual case.Therefore, the amount of mesne profit hasrightly been decided by the High Court while passing the orderimpugned.”
Case Title: M/S Martin & Harris Private Ltd. &Anr. v. Rajendra Mehta &Ors.
Bench: J. Indira Banerjee and J. J.K. Maheshwari
Citation: CIVIL APPEAL NOS. 464647 OF 2022
Decided on: 6th July, 2022
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