Bombay High Court
Shri. Manojkumar Jagatrai Virani ... vs M/S. Kanoria Brothers And Ors on 21 April, 2016
Bench: R.D. Dhanuka
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vai
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.345 OF 2014
Urmi Developers Private Limited, )
Through its Director - Mr.Vinod T. Gowani )
Having address at 501, Commerce )
House, 140, N.M. Road, Mumbai - 23. ) ...Petitioner
...Ori.Deft.3
....Versus....
1. M/s.Kanoria Brothers, ig )
A partnership firm carrying on )
business at Ghat Road, Nagpur. )
2. Parasaria Properties Private Limited )
A registered Private Limited Company )
Having its registered office at )
46/A, Pedder Road, Mumbai - 26. )
3. Shri Vishwanath Gopaldas Sharma )
By his duly constituted attorney )
Shri Gopaldas H. Pandit @ )
Shri Gopaldas H. Sharma, residing )
at 46/A, Pedder Road, Hari Kunj, )
1st Floor, Mumbai - 26. )
4. Shri Manojkumar Jagatrai Virani )
Of Mumai Indian Inhabitant, )
residing at J.B. Building, 100, )
Warden Road, Opp. Nathani Petrol )
Pump, Mumbai - 26. )
5. Shri Anantrai P. Virani, )
Since deceased - through His Legal )
Representatives - )
5-A Smt.Indira Anantrao Virani )
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5-B Shri Nilesh Anantrao Virani )
5-C Kum.Bindu Anantrai Virani )
All Adults Indian Inhabitants )
residing at Ground Floor, )
Hari Kunj, 46-A, Pedder Road )
Mumbai - 26. ) ...Respondents
(Respdts.1 to 3
ori.plffs & Respdts 4
& 5 ori. Defts 1 & 2)
WITH
CIVIL REVISION APPLICATION NO.716 OF 2014
Of Mumai Indian Inhabitant,
1. Shri Manojkumar Jagatrai Virani )
)
residing at J.B. Building, 100, )
Warden Road, Opp. Nathani Petrol )
Pump, Mumai - 26. )
2. Shri Anantrai P. Virani, )
Since deceased - through His Legal )
Representatives - )
2-A Smt.Indira Anantrao Virani )
2-B Shri Nilesh Anantrao Virani )
2-C Kum.Bindu Anantrai Virani )
All Adults Indian Inhabitants )
residing at Ground Floor, )
Hari Kunj, 46-A, Pedder Road )
Mumbai - 26. ) ...Petitioners
(Ori. Deft. Nos.1 &
2-A to 2-C)
....Versus....
1. M/s.Kanoria Brothers, )
A partnership firm carrying on )
business at Ghat Road, Nagpur. )
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2. Parasaria Properties Private Limited )
A registered Private Limited Company )
Having its registered office at )
46/A, Pedder Road, Mumbai - 26. )
3. Shri Vishwanath Gopaldas Sharma )
By his duly constituted attorney )
Shri Gopaldas H. Pandit @ )
Shri Gopaldas H. Sharma, residing )
at 46/A, Pedder Road, Hari Kunj, )
1st Floor, Mumbai - 26. )
4. M/s.Urmi Developers Private Limited, )
Through its Director - )
Mr.Vinod T. Gowani )
Having address at 501, Commerce
ig )
House, 140, N.M. Road, Mumbai - 23. ) ...Respondents
Mr.P.S. Dani, Senior Counsel i/b Mr.T.D. Deshmukh for the Petitioner
in Civil Revision Application No.345 of 2014.
Mr.Samrat Shinde for the Petitioners in Civil Revision Application
No.716 of 2014.
Mr.Girish Godbole with Mr.Akash Menon & Mr.Umang Singh i/b
Mr.Ameya Gokhale for the Respondent No.2 (In Both the C.R.As.).
Mr.Anvil Kalekar i/b Mr.Jaydeep Deo for the Respondent No.3 (In
Both the C.R.As.).
Mr.Samrat Shinde for the Respondent Nos.4 and 5 in C.R.A. No.345
of 2014.
CORAM : R.D. DHANUKA, J.
RESERVED ON : 7TH APRIL, 2016
PRONOUNCED ON : 21ST APRIL, 2016
JUDGMENT :-
1. By these two civil revision applications, the petitioners
have impugned a common order and judgment dated 7th January,
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2014 allowing Appeal No.454 of 2004 filed by the respondent nos.1 to
3 herein and dismissing Appeal No.44 of 2011 preferred by the
original defendant nos.1, 2, 2(A), 2(B) and 2(C). The petitioners in the
Civil Revision Application No.345 of 2014 were original defendant
no.3 in the suit. The petitioners in Civil Revision Application No.716 of
2014 were original defendant nos.1 and 2(A) to 2(C). The respondent
nos.1 to 3 in both the civil revision applications were the original
plaintiffs in the suit.
2. Both the matters are placed on board for confirmation of
the ad-interim relief granted by this Court on 20th August, 2015 and
for determination of reasonable compensation.
3. The original defendant nos.1, 2, 2(A) to 2(C) were claiming
to be the tenants of the suit property consisting of the ground floor
with a garage, servant quarter and open court yard at the rear of the
bungalow by name Hari Kunj. The respondent no.3 claimed to be the
sub-tenant in respect of the suit property.
4. Some time in the year 1971, the original plaintiffs filed a
suit against the defendant nos.1 and 2 inter-alia praying for eviction
from the suit properties on various grounds. The defendant nos.2-A to
2-C and defendant no.3 were subsequently impleaded as party
defendants. The trial Court framed various issues. By an order and
judgment dated 12th and 15th March, 2004, the learned trial Judge
decreed the said suit against the original defendant nos.1, 2-A to 2-C
and directed those defendants to hand over vacant and peaceful
possession of the suit premises i.e. the premises on the ground floor
with a garage, servants quarter and open Court yard at the rear of the
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plaintiffs' building known as Hari Kunj, situate at 46-A, Peddar Road,
Mumbai - 400 026. The learned trial Judge however, dismissed the
said suit against the defendant no.3. The learned trial Judge
determined the standard rent of the suit premises at Rs.1000/- per
month and ordered an enquiry insofar as mesne-profit is concerned
under Order 20 Rule 12 of the Code of Civil Procedure.
5. Being aggrieved by the said common order and judgment
delivered by the learned trial Judge, the original plaintiffs filed an
appeal (454 of 2004) in the Small Causes Court at Mumbai insofar as
the suit against the defendant no.3 came to be dismissed by the
learned trial Judge is concerned. The original defendant nos.1 and 2-
A to 2-C also filed a separate appeal (44 of 2011) before the Court of
Small Causes at Mumbai inter-alia challenging the decree passed by
the learned trial Judge against them. By a common order and
judgment dated 7th January, 2014 passed by the Appellate Bench of
the Small Causes Court at Mumbai, the appeal filed by the landlords
(454 of 2004) came to be allowed with costs and the judgment and
decree dismissing the suit against the original defendant no.3 is set
aside and the suit came to be decreed against all the defendants. By
the said order and judgment, all the defendants, including defendant
no.3 are directed to deliver possession of the suit premises to the
original plaintiffs on or before 7th May, 2014. Insofar as Appeal No.44
of 2011 preferred by the original defendant nos.1, 2-A to 2-C is
concerned, the same is dismissed. The Appellate Bench of the Small
Causes Court at Mumbai ordered for an enquiry into the mesne-
profit under order 20 Rule 12 of C.P.C. for span from the date of
decree till possession is delivered to the original plaintiffs.
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6. Being aggrieved by the said common order and judgment
dated 7th January, 2014, passed by the Appellate Bench of the Small
Causes Court at Mumbai, the original defendant no.3 filed Civil
Revision Application No.345 of 2014 in this Court. The original
defendant nos.1, 2-A to 2-C filed Civil Revision Application No.716 of
2014 in this Court. By an order dated 20th August, 2015, passed by
this Court, both the above referred civil revision applications are
admitted. This Court granted ad-interim relief in terms of prayer
clause (c ) in both the civil revision applications thereby staying the
effect, implementation and operation of the common order and
judgment dated 7th January, 2014 passed by the Appellate Bench of
the Small Causes Court at Mumbai subject to the petitioners filing
usual undertaking before this Court within a period of two weeks from
the date of the said order and further depositing in this Court Rs.1.00
lac per month from 1st January, 2014 and continuing to deposit the
said amount until further orders. This Court also directed the
petitioners to deposit the arrears on or before 30 th September, 2015.
It was however made clear that the said determination was on ad-hoc
basis upon taking into consideration the area of the suit premises and
its location. This Court granted liberty to both the parties to place
material before this Court to enable this Court to determine
reasonable compensation at the stage of confirmation of ad-interim
relief granted by this Court.
7. Both the civil revision applications are thus placed on
board for confirmation of the ad-interim relief granted by this Court
and for determination of the reasonable compensation. Pursuant to
the liberty granted by this Court, the petitioners in Civil Revision
Application No.345 of 2014 filed an affidavit of a Director of the
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petitioner company enclosing therewith a copy of the valuation report
furnished by M/s.Karamsey & Co. Advisors LLP dated 20 th January,
2016. The respondent no.2 filed an affidavit dated 12th October, 2015
along with affidavit of Mr.Harshad S. Maniar dated 9th October, 2015,
a Chartered Engineer, Surveyor and Registered Estate Valuer. The
said Mr.Harshad S. Maniar enclosed a copy of the valuation report
dated 8th October, 2015 to his affidavit.
8. Mr.Dani, learned senior counsel appearing for the
petitioner in Civil Revision Application No.345 of 2014 invited my
attention to the orders passed by the learned trial Judge as well as by
the Appellate Bench of the Small Causes Court at Mumbai and also
the valuation report submitted by both the parties. It is submitted that
in the valuation report prepared by M/s.Karamsey & Co. Advisors
LLP. which is relied upon by the petitioner, the representative of the
surveyor has after visiting the suit property has properly valued the
market rent at Rs.3,67,000/- per month i.e. at the rate of Rs.80/- per
sq. ft. built up area as on 23rd November, 2015. He submits that the
said valuer has rightly considered the measurement of the suit
property as 4593 carpet area. He submits that the learned valuer has
considered six instances in the said valuation report which were in
respect of the transactions in the same vicinity. He submits that the
learned trial Judge as well as the Appellate Bench of the Small
Causes Court at Mumbai has already ordered a separate enquiry
insofar as mesne-profit is concerned.
9. It is submitted by the learned senior counsel that insofar as
the petitioners in Civil Revision Application No.345 of 2014 are
concerned, the decree of eviction has been passed by the Appellate
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Bench of the Small Causes Court at Mumbai for the first time on 7 th
January, 2014. He submits that compensation which has to be
determined in the present proceedings insofar as the petitioners in
Civil Revision Application No.345 of 2014 are concerned, it has to be
computed only from the date of decree passed against them by the
Appellate Bench of the Small Causes Court at Mumbai and not from
the date when the decree was passed by the learned trial Judge or
from the date of termination of tenancy. He submits that the Appellate
Bench of the Small Causes Court at Mumbai has not passed any
order for enhancement of compensation.
10.
It is submitted that the concept of mesne-profit to be
determined under the provisions of Order 20 Rule 12 of the C.P.C.
and interim compensation to be determined while considering stay of
the decree of eviction stands on a different footing. He submits that
the compensation to be determined while considering stay has to be
a reasonable compensation and cannot be determined on the basis
of the premises being vacant and available with the landlord for
making profit. It is submitted by the learned senior counsel that in the
valuation report relied upon by the petitioner, the learned valuer has
rightly considered all the factors required to be considered while fixing
a market rent and thus the same shall be accepted by this Court.
11. Learned senior counsel appearing for the petitioners
invited my attention to the valuation report submitted by the original
plaintiffs and would submit that the monthly rent recommended by the
said valuer is on higher side and is not based on factual position on
site. He submits that though the open lawn and garden admeasuring
4505 sq. ft. on the East of the suit premises was not in possession of
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the petitioners and was not subject matter of the suit, the learned
valuer in their valuation report has also considered the said open
lawn and garden and has thereby enhanced the area in possession
of the petitioner for computation of rent. It is submitted that the
learned valuer has also followed the average method which is not an
accurate method. He submits that the learned valuer in the said
report has considered only two leave and license agreements which
do not indicate the correct valuation. He submits that this Court thus
shall discard the said valuation report submitted by the original
plaintiffs and shall accept the valuation report submitted by the
petitioners.
12. Learned senior counsel in support of the aforesaid
submission placed reliance on the judgment of the Supreme Court in
case of Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd.
(2005) 1 SCC 705.
13. In support of his submission that the compensation has to
be determined from the date of decree of eviction passed by the
Appellate Bench of the Small Causes Court on 7 th January 2014
and not from the date of termination of tenancy in so far as the
petitioner in Civil Revision Application No.345 of 2014 is concerned,
he placed reliance on paragraphs 15, 16 and 19 of the judgment of
the Supreme Court in the case of Atma Ram Properties (P) Ltd.
(supra). He submits that though the order of the trial Court is
merged with the order passed by the Appellate Bench, the doctrine
of merger did not have effect of postponing the date of termination
of tenancy. He submits that in so far as Civil Revision Application
No.345 of 2014 is concerned, the decree of eviction came to be
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passed for the first time by the Appellate Bench of the Small Causes
Court on 7th January 2014.
14. In support of his submission that the compensation to be
determined by this Court while considering the application for stay
of the impugned decree of eviction shall not be punitive and harsh,
but has to be a reasonable amount, learned counsel for the
petitioner placed reliance on paragraph 13 of the judgment of the
Supreme Court in the case of Atma Ram Properties (P) Ltd.
(supra).
15. In so far as
ig Civil Revision Application No.716 of 2014
filed by the original defendant nos.1 and 2-A to 2-C is concerned,
it is submitted that since the petitioners in that civil revision
application are admittedly not in possession of the suit property
since the date of handing over possession thereof to the original
defendant no.3 (petitioner in Civil Revision Application No.345 of
2014), this Court cannot pass any order for payment of any
compensation against the petitioners.
16. Mr.Godbole, learned counsel for the respondent no.2
(one of the original plaintiff), on the other hand, placed reliance on
the valuation report dated 8th October 2015 prepared by
Mr.Harshad S. Maniar, Chartered Engineer, Surveyor and
Registered Estate Valuer. He submits that the petitioner in Civil
Revision Application No.345 of 2014 who was claiming to be a sub-
tenant has no higher rights than the alleged rights claimed by the
original tenant in the suit property. He submits that the sub-tenant
even otherwise was not entitled to seek any protection either
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under the provisions of the Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947 or under the provisions of the
Maharashtra Rent Control Act, 1999.
17. It is submitted that the valuer appointed by the
respondent no.2 has rightly considered the measurement of the
suit property and has rightly considered the additional area of 4505
sq.ft. on the east side of the suit property, the area of open lawn
and garden which was being enjoyed by the petitioners. He
submits that the learned valuer appointed by the respondent no.2
has given two instances ig in the said report under the leave and
license transactions which had taken place on 20 th April 2013 and
26th April 2013 respectively. He submits that the measurements of
the suit property in both the instances considered by the valuer
were almost identical to the area of the suit property occupied by
the petitioners. He submits that the learned valuer has rightly
considered the average monthly rent agreed under those two
instances and has rightly come to the conclusion that the market
rental / mesne profits for the ground floor premises admeasuring
4593.49 sq.ft. was at the rate of Rs.172/- per sq.ft. p.m. He submits
that the valuation of the monthly rent of the suit premises derived
by the learned valuer @ Rs.790080.28 p.m. is correct and shall be
accepted by this Court.
18. Learned counsel for the respondent no.2 invited my
attention to the valuation report submitted by the petitioners and
would submit that in the said report, the learned valuer has not
considered the area of open lawn and garden admeasuring 4505
sq.ft which was also being enjoyed by the petitioners. He submits
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that though the said open lawn and garden may not be a part of the
tenancy, the same however being enjoyed by the petitioners has to
be considered while computing the compensation which will have
bearing on the valuation of the suit property. Learned counsel for
the respondent no.2 also placed reliance on paragraphs 4, 8, 9, 11,
13 to 18 of the judgment of the Supreme Court in the case of Atma
Ram Properties (P) Ltd. (supra) and would submit that if the
premises would have been vacated by the petitioners and the
original tenant, the respondent no.2 being landlord would have
given the suit premises on license or tenancy to other person and
would have earned income on the basis of prevailing market rent.
He submits that the plaintiffs having succeeded in the proceedings
filed before the trial Court against the petitioners, the petitioners shall
be directed to pay market rent as determined by the learned valuer
in the valuation report submitted by the respondent no.2.
19. Mr.Godbole, learned counsel for the respondent no.2
placed reliance on the judgment of the Supreme Court in the case
of State of Maharashtra and Anr. vs. Super Max International
Private Limited and Ors.,(2009) 9 SCC 772 and in particular
paragraphs 72 to 80 thereof and would submit that the Supreme
Court after adverting to its earlier judgment in the case of Atma
Ram Properties (P) Ltd. (supra) has upheld the order passed by
this Court fixing an amount with reference to stamp duty as per
ready reckoner. He submits that if the rates according to the ready
reckoner is considered, the rates would be even higher than the
amount of compensation recommended by the learned valuer in the
valuation report submitted by the respondent no.2.
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20. Learned counsel placed reliance on the said judgment
of the Supreme Court also in support of his submission that if the
amount as directed by this Court to be deposited by the petitioners
in this Court, the respondent no.2 be permitted to withdraw the said
amount by furnishing bank guarantees for the amount allowed to be
withdrawn.
21. Learned counsel for the respondent no.2 also placed
reliance on the order and judgment of this Court dated 14 th March
2016 in the case of Vidyaben Mafatlal Parikh and Anr. vs. Smt.
Nirat Krishnadeo Gupta & Ors. in Writ Petition No.10679 of
2015 and in particular paragraph 14 thereof and would submit that
while determining the compensation, the Court has to consider not
only the location/area of the premises, the age/nature of construction
of the building/premises, but also the facilities inside and outside
the premises, advantages and disadvantages etc. He submits that
the learned valuer in the valuation report relied upon by the
respondent no.2 has rightly considered the area of open lawn and
garden in the said report which was enjoyed by the petitioners.
Learned counsel for the respondent no.2 placed reliance on an
unreported judgment of this Court delivered on 7th January 2009 in
the case of Chandrakant Dhanu & Anr. vs. Sharmila Kapur &
Ors. and in particular paragraph 21 thereof and would submit that
while determining the compensation, the Court also needs to consider
the principles of Order XX Rule 12 of the Code of Civil Procedure,
1908.
22. Learned counsel for the respondent no.2 also placed
reliance on an unreported judgment of this Court delivered on 3 rd
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March 2009 in the case of Super Max International Pvt. Ltd. vs.
M/s.R.M. Choksey & Co. in Civil Application No.37 of 2009 in
Writ Petition No.8702 of 2005 in support of the aforesaid
submissions.
23. Learned counsel for the respondent no.2 invited my
attention to the valuation report submitted by the petitioner and would
submit that in the said valuation report, the learned valuer has not
considered the area of open lawn and garden being enjoyed by the
petitioners. He submits that the learned valuer has considered the
alleged instances which are in respect of the smaller flats which
cannot be considered while considering the area of the suit property
which is more than 4000 sq.ft. It is submitted by the learned counsel
that Jaslok Hospital, Villa Theresa School, New Era High School
and Hill-Granage Junior College are all situated within a 300 to
500 meter radius of the suit premises. He submits that the buses
and taxis are available just outside the compound of the suit
property which fact is not considered by the learned valuer in the
valuation report submitted by the petitioner. He submits that the
learned valuer has considered the rent paid in respect of the flats
and not the bungalows which would fetch higher rent than the flats
forming part of a multi-storied building.
24. It is submitted by the learned counsel for the respondent
no.2 that though the area of the subject property is 4593 sq.ft. of
carpet area, the learned valuer has considered the rent paid on
built-up area which is ex-facie erroneous. He submits that the area
occupied by the petitioners was not measured as a built-up area but
carpet area and thus the rent could not be fixed on the basis of built-
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up area.
25. Learned counsel invited my attention to the averments
made in the affidavit dated 10th February 2016 filed by the
respondent no.2 and would submit that if the valuer would have
considered the rent in respect of carpet area, he would have
determined the rent per month in respect of carpet area at least @
Rs.96/- per sq.ft. and not @ Rs.80/- per sq.ft. as erroneously
determined by the said valuer. It is submitted by the learned counsel
that even according to the ready reckoner for the city of Greater
Mumbai, for any property which has appurtenant to it a garden/open
space, terrace, a premium of 25% is to be added to the gross
market value of the suit property which is not considered by the
learned valuer in the valuation report relied upon by the petitioner.
It is submitted that the premium of 25% must be added to the
stated market value to take into account the abutting garden/open
space/terrace. The average monthly rent would, therefore, be
increased to Rs.120/- per sq.ft. and consequently, the total value of
market rent in respect of the suit property ought to be at least
Rs.5,51,160/-.
26. Learned counsel for the respondent no.2 disputed the
statement in the valuation report relied upon by the petitioner
stating that the suit building was 100% occupied by the tenants.
He submits that the first floor and second floor portion above the
subject property are occupied by the owners of the suit property
and not by the tenants. He submits that the learned valuer in the
valuation report relied upon by the petitioner has not considered
the registered Leave and License Agreements or taken search of
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documents relating to similarly placed properties as available with
the office of the Sub-Registrar and thus credibility and veracity of
the valuation report relied upon by the petitioner itself raised a
serious concern and thus such valuation report being not a reliable
report cannot be considered by this Court for determination of
compensation payable by the petitioners.
27. In so far as the submission of the learned counsel for the
petitioner that this Court cannot fix compensation from the date of
decree of eviction dated 7th January 2014 passed by the Appellate
Bench of the Small Causes Court is concerned, it is submitted that
since the valuation report relied upon by the respondent no.2 does
not pertain to the period prior to 7th January 2014, this Court can
pass a separate order thereby granting liberty to the respondent
nos.1 to 3 to make a separate application in respect of
compensation for a period prior to 7th January 2014 by placing
material on record. He submits that similar order can also be
passed by this Court in Civil Revision Application No.716 of 2014.
He submits that though the original defendant nos.1 and 2A to 2C
were not in physical possession in view of those defendants
handing over possession of the suit property to the defendant no.3
(petitioner in Civil Revision Application No.345 of 2014), but since
the decree of eviction is passed against those defendants by both
the Courts, they are also liable to pay compensation to the landlord
in view of the stay granted by this Court in their favour from the date
of decree of their eviction from the suit premises.
28. Mr.Dani, learned senior counsel appearing for the
petitioner in rejoinder submits that compensation as may be
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determined by this Court cannot be punitive and has to be
reasonable. He submits that it was the case of the petitioners that the
sub-letting in favour of the petitioners was with the permission of
the landlord and thus with effect from 1 st February 1973 even
unlawful sub-letting was legalised. He submits that the trial Court
has thus rightly refused to grant decree of eviction against the
petitioner in Civil Revision Application No.345 of 2014. He submits
that the Supreme Court in the case of Atma Ram Properties (P)
Ltd. (supra) and in particular paragraph 15 thereof has held that the
compensation is determined only from the date of decree of eviction
and not prior thereto. He also placed reliance on paragraph 19(3) of
the said judgment of the Supreme Court in the case of Atma Ram
Properties (P) Ltd. (supra) and would submit that the date of trial
Court decree does not merge with the decree of the Appellate
Bench.
29. In so far as the submission of the learned counsel for the
respondent no.2 that his client shall be allowed to withdraw the
amount of deposit already made and to be deposited pursuant to
the order which may be passed by this Court upon furnishing bank
guarantees is concerned, it is submitted by the learned senior
counsel that in view of the principles laid down by the Supreme
Court in the case of State of Maharashtra and Anr. Vs. Super Max
International Private Limited and Ors. (supra), ordinarily such
amount of compensation deposited by the tenants cannot be
allowed to be withdrawn and has to be retained in Court till the
proceedings are finally disposed of. He submits that the respondent
no.2 has not demonstrated any extra ordinary circumstances for
permitting it to withdraw the amount already deposited by the
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petitioners and/or to be deposited pursuant to the order that may be
passed by this Court.
30. Supreme Court in case of Atma Ram Properties (P) Ltd.
(supra) has held that while granting an order of stay under Order 41
Rule 5 of the Code of Civil Procedure, 1908 the appellate court does
have jurisdiction to put the party seeking stay order on such terms as
would reasonably compensate the party successful at the end of the
appeal in so far as those proceedings are concerned. It is held that
under the general law, and in cases where the tenancy is governed
only by the provisions of Transfer of Property Act, 1882, once the
tenancy comes to an end by determination of lease under section 111
of the Transfer of Property Act, the right of the tenant to continue in
possession of the premises comes to an end and for any period
thereafter, for which he continues to occupy the premises, he
becomes liable to pay damages for use and occupation at the rate at
which the landlord could have let out the premises on being vacated
by the tenant.
31. It is held that after determination of the tenancy, the
position of the tenant is akin to that of a trespasser and he cannot
claim that the, measure of damages awardable to the landlord should
be kept tagged to the rate of rent payable under the provisions of the
rent control order. If the real value of the property is higher than the
rent earned then the amount of compensation for continued use and
occupation of the property by the tenant can be assessed at the
higher value. It is held that in the case of premises governed by rent
control legislation, the decree of eviction on being affirmed, would be
determinative of the date of termination of tenancy and the decree of
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affirmation passed by the superior forum at any subsequent stage or
date, would not, by reference to the doctrine of merger have the effect
of postponing the date of termination of tenancy. It is held that there
is every justification for the appellate Court to put the tenant-appellant
on terms and direct the appellant to compensate the landlord by
payment of a reasonable amount which is not necessarily the same
as the contractual rate of rent.
32. The Supreme Court adverted to its earlier judgment in
case of Marshall Sons & Co. (I) Ltd. vs. Sahi Oretrans (P) Ltd.
(1999) 2 SCC 325 in which it was 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. It is held that 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.
33. Supreme Court in case of State of Maharashtra and
another vs. Super Max International Private Limited and Others
(supra) after adverting to the judgment of Supreme Court in case of
Atma Ram Properties (P) Ltd. (supra) has held that in an appeal or
revision preferred by a 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. However in fixing the amount subject to payment
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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.
34. The Supreme Court has held that the High Court in that
matter had fixed the amount of Rs.5,40,000/- per month with
reference to the Stamp Duty Ready Reckoner and its reasonableness
could not be doubted. The Supreme Court held that the amount fixed
by the court payable by the tenant in excess of the contractual rent,
ordinarily should not be directed to be paid to the landlord during the
pendency of the appeal/revision and such deposited amount, along
with the accrued interest, should only be paid after the final disposal
to either side depending upon the result of the case. Supreme Court
however has clarified that in case for some reason the Court finds it
just and expedient that the amount fixed by it should go to the
landlord even while the matter is pending, it must be careful to direct
payment to the landlord on terms so that in case the final decision
goes in favour of the tenant the payment should be made to him
without any undue delay or complications.
35. This court in an unreported judgment dated 7th January,
2009 in case of Chandrakant Dhanu & Anr. (supra) has led down
the guidelines for fixing the compensation while grating stay of a
decree of eviction. It is held that the basic burden lies upon the
landlord to prove and support his case of reasonable
compensation/mesne profits by placing on record material documents
alongwith the affidavit to support his case of enhanced compensation.
The court needs to consider the said material by giving full
opportunity to the tenant / licensee / occupant / tresspasser /
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obstructionists. The court also has to consider the effect of valuation
or architecture's report/opinion and its validity being expert's opinion,
which can be subjected to challenge from other side, if case is made
out. The valuation report/opinion may be atleast one of the
government recognized valuer, apart from private valuer report, if
any. Both the parties are free to submit their material on record to
support their case through their respective affidavits. The court also
needs to consider the principle of Order 20 Rule 12 of the Code of
Civil Procedure while determining the ad-interim compensation /
mesne profits.
36.
This court adverted to the judgment of Supreme Court in
case of Atma Ram Properties (P) Ltd. (supra) and has held that the
court needs to consider and take note of (i) the Rent Control
Legislation, governing the particular premises/residential or non-
residential. (ii) the location/area of the premises (iii) the age/nature of
construction of the building/premises (iv) the facilities in the premises
and outside the premises, advantages and disadvantages (v) the
market value and the rental value of the premises based on
architecture/expert valuation reports/opinion (vi) other instances of
the rent/license fees of similarly situated premises (vii) the date of
termination of the tenancy/license.
37. This court also held that the compensation which is
awarded as condition precedent should not be oppressive and
unreasonable. This court held that there is no question of any detail
trial while fixing a compensation/occupation charges, based upon
authenticated material produced on the record, pending the appeal
but it is an essential condition precedent to grant stay of the eviction
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decree/order on the footing of Order 41, Rule 5 of Code of Civil
Procedure, 1908. The final decision of the appeal should be
uninfluenced by such tentative figure/order which shall be a condition
precedent but is always adjustable and is tentative figure. Such
interim order/payment is always subject to the final result of the
appeal.
38. This court in an unreported judgment of this court in case
of Vidyaben Mafatlal Parikh & Another (supra) after adverting to
the judgment of Supreme Court in case of Atma Ram Properties (P)
Ltd. (supra) and an unreported judgment of this court in case of
Super Max International Pvt. Ltd. & Ors. vs. M/s.R.M. Choksey &
Ors. dated 3rd March, 2009 in Civil Application No.37 of 2009 in Writ
Petition No.8702 of 2005 and an unreported judgment of this court in
case of Chandrakant Dhanu & Anr. (supra) has determined the
monthly compensation by applying the principles of Order 41 Rule 5
of the Code of Civil Procedure.
39. This court has to keep the aforesaid principles laid down
by the Supreme Court and this court in the above referred judgments
while fixing the compensation required to be paid by the petitioner as
a condition precedent for grant of the stay during the pendency of the
civil revision application. Both the parties have produced separate
valuation report of the registered valuers. Even according to the
valuation report relied upon by the petitioner, the classification of the
locality where the suit properties is situated is "upper class". The suit
property is within the proximity of 1 to 2 km to civic amenities like
school, hospitals, offices, market, cinemas etc. Taxis and bus routes
are available within 1 to 2 km. The area of the suit property
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considered in the said report is 4275.13 sq.ft. carpet area and after
considering the 30% area of W.C's sheds and washing place and
20% of the rear side open space area suit property is measured as
4593 sq.ft. However in paragraph 24 of the said report, it is stated
that 100% of the building is occupied by the tenants. The year of
commencement of construction and year of completion is 1950 or
thereabout. The class of fittings is superior. Wooden flush doors,
wooden panelled doors, sintex doors and aluminium framed sliding
glazed windows with M.S.grills are provided. Mosaic tiles flooring is
provided. Electrical wiring is concealed and of superior type. The
type of construction is good and specification of building materials
used are of standard type.
40. In the said report, it is stated that the said valuer has relied
upon 6 instances of leave and licence by making enquiries in the
vicinity and local broker. It is stated that all such transactions were
within a radius of 1 km from subject property on Peddar Road. The
learned valuer has opined that the average rental ranges between
Rs.50/- per sq.ft. to Rs.97/- per sq.ft. of built up area in the year 2015.
It is stated that considering the location, type of construction,
specification of building, materials used and making enquiries in the
vicinity a rental rate of Rs.80/- per sq.ft. of built up area per month is
considered to be reasonable as on 23rd November, 2015. The
learned valuer has accordingly derived a fair market rent value of the
suit property by applying the rate of Rs.80/- per sq.ft. to the built up
area of 4593 sq.ft. carpet area and arrived at the figure of
Rs.3,67,000/- as fair market rent value as on 23rd November, 2015.
41. Insofar as valuation report relied upon by the respondent
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no.2 is concerned, it appears from the affidavit of Mr.Harshad
S.Maniar, Chartered Engineer, Surveyor and registered estate valuer
that the suit property is comprising of ground floor premises, servant
quarters open to sky land on rear side of the bungalow known as 'Hari
Kunj'. The said bungalow consists of ground, part first floor and part
second floor. In front of the subject property there is a lawn and
garden. The suit property is having front passage of 10 ft. 8 inches
wide and the height of the ground floor is 14 ft. It is stated that the
estimated rent valuation has been arrived at by taking into account
the rental rates of premises on adjoining property, and of other
properties in the immediate locality.
ig It is stated that the subject
property abuts Dr.Gopalrao Deshmukh Marg (Peddar Road), a
prestigious and aristocratic locality of Mumbai and forming part and
parcel of revenue village of Malabar and Cumballa Hill Division. To
the suit property all civil amenities are available within approachable
distance, buses and taxis are available. The carpet area of the
premises is 4275.13 sq.ft. Area of A.C. Shed (2 nos.) is 363.98 sq.ft.
The area of two no. of W.C's is 25.02 sq.ft. Area of washing place is
84.95 sq.ft. Area of open space on rear side exclusive of sheds,
W.C's, suction tank and washing place is 880.92 sq.ft.
42. A perusal of the said report indicates that the learned
valuer has considered two instances i.e. (1) in respect of the
agreement dated 20th April, 2013 in respect of the flat admeasuring
1665 sq.ft. on the second floor in the building known as 'Asha Mahal'
on land bearing C.S.No. 699 of Malbar and Cumballa Hill Division
situate at Peddar Road, Mumbai - 400 026. The valuer has held that
the rent in respect of the said flat at Rs.113.21 per sq.ft. per month of
carpet area.
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43. The second instance considered by the learned valuer is in
respect of leave and licence agreement 26th April, 2013 in respect of
the residential flat admeasuring 4000 sq.ft. on the first floor along with
one garage and car parking space in the building known as
'Lyndewode House' on land bearing C.S.No.680 of Malbar and
Cumballa Hill Division situate at 9-Bomanji Petiti Road, Mumbai - 400
026. The monthly rent in respect of the said flat is at Rs.160.27 per
sq.ft. per month. The learned valuer has taken average of the
monthly rent derived in respect of two instances and has derived the
monthly rent per month per sq.ft. at Rs.137.59 per sq.ft. per month.
The learned valuer has thereafter added 25% on the said amount of
Rs.137.59 per sq.ft. per month on account of better situation, location,
lawn and garden in front of the premises and having 14 ft. height of
the ground floor at Rs.34.39 per sq.ft. per month and has therefore
derived the gross market rental/mesne profits at Rs.171.98 per
sq.ft.per month and in round figure of Rs.172/- per sq.ft. per month.
The learned valuer has multiplied the said rent of Rs.172/- per sq.ft.
per month to the premises admeasuring 4593.49 sq.ft. (C.A.) and has
derived the sum of Rs.7,90,080.28 per month as and by way of
compensation/mense profits.
44. The comparison of the two reports filed by the parties
respectively would indicate that there is no dispute insofar as area of
the suit property as 4593 sq.ft. carpet area is concerned. The valuer
appointed by the respondent no.2 however considered the two
instances of leave and licence in respect of the premises on the
adjoining property and of the other properties in the immediate
locality. The said valuer has attached the certified copies of the
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documents collected by him through search clerk whereas the
learned valuer appointed by the petitioner appears to have
considered the unregistered leave and licence agreement and that
also in the flat having area admeasuring between 308 sq.ft. to 1687
sq.ft. The area considered in the instances referred by the valuer
appointed by the respondent no.2 however shows the area of the flat
under leave and licence agreement as 1665 sq.ft. in the first instance
and the area of 4000 sq.ft. in the second instance of the leave and
licence.
45. In my view the flat/bungalow having larger area will fetch
higher rent or compensation in comparison to a smaller flat. In my
view the valuation report thus submitted by the petitioner based on
the smaller area of the flat cannot be considered as reliable valuation
report while fixing compensation of the suit property.
46. Insofar as valuation report submitted by the petitioner is
concerned, a perusal of the said report also indicates that the said
valuer has not considered any part of the area of open lawn and
garden admeasuring 4505 sq.ft. which was also being enjoyed by the
petitioner. This court in case of Chandrakant Dhanu & Anr. (supra)
has held that the court has to consider the facilities in the premises
and outside the premises, advantages and disadvantages,
location/area of the premises also while determining the
compensation. The petitioner does not dispute that there is open
lawn and garden admeasuring about 4505 sq.ft. being enjoyed by the
petitioner. In my view fact of enjoyment of such open lawn and
garden by the petitioner alongwith the suit property will also have to
be considered while determining the compensation which will have
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bearing on the quantum of compensation to be determined by this
court. Judgment of this court in case of Chandrakant Dhanu & Anr.
(supra) would squarely apply to the facts of this case. I am
respectfully bound by the said judgment.
47. A perusal of the valuation report submitted by the
petitioner also indicates that though the learned valuer has
considered the area of the suit property as 4593 sq.ft. carpet area,
the learned valuer has multiplied the said area considering the rental
rate of Rs.80/- per sq.ft. of built up area. In my view the application of
rental rate of Rs.80/- per sq.ft. of built up area in respect of the carpet
area is ex-facie erroneous and thus the said report cannot be relied
upon on this ground also as reliable valuation report. In my view the
learned counsel for the respondent no.2 is right in his submission that
if the rate of Rs.80/- per sq.ft. considered as the rate of built up area
is converted into a rate of carpet area, the said rate of Rs.80/- per
sq.ft. would be increased to Rs.96/- per sq.ft. for computation of the
compensation in respect of the carpet area of 4593 sq.ft.
48. A perusal of the said report submitted by the petitioner also
indicates that the learned valuer in the said report has not considered
the premium of Rs.25% to be added in the gross market value in the
suit property in view of the said suit property being appurtenant to the
garden/open space/terrace in accordance with ready reckoner of the
city of Greater Mumbai. In my view there is thus substance in the
submission of the learned counsel for the respondent no.2 that if
these two factors are corrected in the valuation report relied upon by
the petitioner, the market rent of the suit property would be minimum
647613 per month.
cra345-14c
49. A perusal of both the valuation reports clearly indicates
that the suit property is situated in posh locality known as Peddar
Road with all civic amenities area available within the approachable
distance which is covered by buses and taxis insofar as surface
transportation is concerned. The suit property is situated in a
prestigious and aristocratic locality of Mumbai. The landmarks of the
locality are Telephone Exchange, Jaslok Hospital, Villa Theresa
School and New Era High School, Hill Granage Junior College,
Mahalaxmi Temple, Haji Ali Dargah, Breach Candy Hospital and
Breach Candy Garden. The doors and windows in the suit property
are of standard fittings and fixtures. All these facilities described in
the valuation report would clearly indicate that the rent in respect of
the suit property would be much more than the rate indicated in the
valuation report relied upon by the petitioner. The said report relied
upon by the petitioner thus cannot be considered as the basis for
deciding of the compensation by this court.
50. This Court in case of Chandrakant Dhanu & Anr. (supra)
has held that the amount as may be determined by this court as and
by way of compensation cannot be determined by conducting any
detail trial at this stage and the amount determined has to be tentative
subject to the final result of the appeal/civil revision application and
can be adjusted at the stage of final order as may be passed by this
Court. The observations made by this court determining the
compensation at this stage also is prima facie and will be subject to
the final order as may be passed by this court in the civil revision
application. Though the compensation as may be fixed by this court
shall not be punitive or unreasonable, at the same time, the court has
to apply the principles of Order 20 Rule 12 of Code of Civil
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Procedure, i.e. while determining the mense-profit. If the vacant
premises would have made available with the landlord upon decree of
eviction, the landlord would have fetch the present market rent by
letting out the suit property to the third parties. The landlord is thus
entitled to be compensated in view of the tenant having been allowed
to occupy the suit premises though there was a decree of eviction
against him. The principles of law laid down in case of Atma Ram
Properties (P) Ltd. (supra), in case of State of Maharashtra and
another vs. Super Max International Private Limited and Others
(supra) and other judgments of this court referred to aforesaid would
squarely apply to the facts of this case. I am respectfully bound by
these judgments.
51. Insofar as issue as to whether the petitioner in Civil
Revision Application No.345 of 2015 should be directed to pay the
compensation from the date of decree of trial court or of the decree
passed by the Appellate Bench is concerned, Mr.Godbole, learned
counsel for the respondent no.2 fairly stated that the valuation report
produced by the respondent no.2 which recommends the
compensation of Rs.7,90,080.28 per month is for the period from 1 st
January, 2014 onwards and the same compensation cannot be
applied with retrospective effect.
52. A perusal of the order passed by the learned trial judge as
well as by the appellate bench of the Small Causes Court, Mumbai
indicates that both the courts below have ordered separate enquiry
for determination of mense profit under Order 20 Rule 12 of the Code
of Civil Procedure, 1908. This court in case of Chandrakant Dhanu
& Anr. (supra) has held that the basic burden lies upon the landlord
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to prove and support his case of reasonable compensation/ mesne
profits by relying upon valuation report/opinion and other material on
record to support their case. I am thus not inclined to go into the
issue as to whether the petitioner should be directed to pay the
compensation from the date of decree of Lower Court or from the
date of decree passed by the Appellate Court of the Small Causes
Court at this stage. Both the civil revision applications filed by the
petitioners are already admitted by this court and would be heard
finally. This court can pass an appropriate order while deciding these
civil revision applications as to for what period the petitioner should
be made liable to pay compensation i.e. period prior to 1 st January,
2014. If this court comes to the conclusion that the petitioner in both
the civil revision applications shall be directed to pay the
compensation for the period prior to 1st January, 2014 also, the
respondent no.2 in that event would be at liberty to prove the amount
of compensation required to be paid by the petitioner by conducting
enquiry before the appropriate court.
53. In my view at this stage, the court cannot determine the
exact amount of compensation only on the basis of the valuation
report submitted by both the parties. The court however can consider
whether all the principles/factors required to be considered while
considering the compensation being tentative whether are considered
or not in the valuation report and other material produced by the
parties. In my prima facie view the valuation report submitted by the
respondent no.2 can be considered as authentic and can be relied
upon by determining the compensation. However I do not propose to
determine the compensation fully as recommended by the learned
valuer in the said valuation report relied upon by the respondent no.2.
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In my view, after considering the valuation report relied upon by the
respondent no.2 and after considering the submission made by both
the parties, the compensation in respect of the suit premises can be
fixed at Rs. 5 lacs per month. Pursuant to the ad-interim order
passed by this court on 20th August, 2015, the petitioner has already
paid the arrears on the basis of Rs.1 lacs per month to be paid from
1st January,2014. The petitioner in Civil Revision Application No.345
of 2014 will have to pay the differential amount of Rs.4 lacs per month
w.e.f. 1st January, 2014 till the civil revision application is disposed of
and at such rate as may be finally ordered by this court.
54.
Insofar as submission of the learned senior counsel for the
petitioner that the respondent no.2 shall not be allowed to withdraw
any amount deposited by the petitioner so far or the amount that
would be deposited if any, pursuant to the order passed by this court
is concerned, learned senior counsel for the petitioner and the
learned counsel for the respondent no.2 invited my attention to
paragraphs 79 and 80 of the judgment of Supreme Court in case of
State of Maharashtra and another vs. Super Max International
Private Limited and others (supra) in support of their rival
submissions. Supreme Court in the said judgment has held that the
amount fixed by the court over and above the contractual monthly
rent, ordinarily, should not be directed to be paid to the landlord
during the pendency of the appeal/revision and should be paid only
after the final disposal to either side depending upon the result of the
case. It is further held that in case for some reason the Court finds it
just and expedient that the amount fixed by it should go to the
landlord even while the matter is pending, it must be careful to direct
payment to the landlord on terms so that in case the final decision
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goes in favour of the tenant the payment should be made to him
without any undue delay or complications.
55. It is not in dispute that the suit filed by the landlord was
filed in the year 1971 for eviction of the tenants and thereafter sub-
tenants were impleaded therein. The landlords have succeeded
before the learned trial judge against the original tenants. The
landlords have succeeded against the alleged sub-tenants before the
appellate bench of the Small Causes Court when the decree of
eviction was passed against them. The respondent no.2 has been
paying municipal taxes in respect of the suit property and also other
maintenance charges which are not borne by the petitioner. In my
view the landlords having succeeded against the petitioner and since
the civil revision application filed by the petitioner is admitted by this
court and ad-interim stay is granted on the condition of the petitioner
depositing the compensation amount as may be determined by this
court, it would be in the interest of justice, just and expedient if the
amount already deposited by the petitioner and the amount i.e.
directed to be deposited pursuant to this order is allowed to be
withdrawn by the respondent no.2 however on the condition that the
respondent no.2 shall furnish bank guarantee of a nationalized bank
in favour of the Registrar of this court in respect of the amount
allowed to be withdrawn plus 10% thereon.
56. In my view if the petitioner succeeds ultimately in the civil
revision application and if the said impugned decree of eviction is set
aside by this court, the petitioner would be entitled to encash the bank
guarantee that would be furnished by the respondent no.2 without
any undue delay or compensation. I am thus inclined to accept the
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request of the respondent no.2 for permission to withdraw the amount
that is already deposited by the petitioner and the amount that is
directed to be deposited by this order to withdraw the said amount
however on condition of furnishing the bank guarantee of a
nationalized bank. No prejudice thus would be caused to the
petitioner if such amount is allowed to be withdrawn on condition of
furnishing a bank guarantee.
57. I, therefore, pass the following order :-
Ad-interim order dated 20th August, 2015 in terms
of prayer clause (c) is confirmed subject to the
following order :
(a) The petitioner in Civil Revision
Application NO.345 of 2014 is directed to deposit
a sum of Rs.5 lacs per month towards
compensation in respect of the suit premises in
this court on or before 10th of each month till
disposal of Civil Revision Application No.345 of
2014.
(b) The petitioner in Civil Revision
Application No.345 of 2014 is directed to deposit
in this Court the differential amount of Rs.4 lacs
per month w.e.f. 1st January, 2014 till 30th April,
2016 on or before 31st May, 2016.
(c) If, there is any default of any
installment committed by the petitioner, interim
protection granted by this court on 20th August,
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2015 to stand vacated without further reference to
court.
(d) The respondent no.2 shall be at liberty
to withdraw the amount already deposited by the
petitioner pursuant to the ad-interim order dated
20th August, 2015 and amount to be deposited
pursuant to this order upon furnishing bank
guarantee of a nationalized bank within two
weeks from the date of making such application
for withdrawal in favour of the Registrar of this
Court which bank guarantee shall be initially for a
period of two years and shall be extended till
disposal of the Civil Revision Application No.345
of 2014. It is made clear that the bank guarantee
shall be in respect of the amount sought to be
withdrawn plus 10% thereon. If the respondent
no.2 fails to execute any such bank guarantee
before withdrawal of any such amount, the
learned Registrar shall invest the said amount in a
fixed deposit of a nationalized bank initially for a
period of two years and for like period after
obtaining further orders from this court.
(e) It is made clear that the amount of
compensation determined by this order shall be
subject to the final outcome of the Civil Revision
Application No.345 of 2014. It is made clear that
all the observations made by this court in this
order are prima facie and are made only for the
purpose of deciding compensation.
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(f) Insofar as compensation against the
petitioners in Civil Revision Application No.716 of
2014 is concerned, in my view since the petitioner
in the said civil revision application has already
handed over possession of the suit premises to
the petitioner in Civil Revision Application No.345
of 2014 also in view of the fact that the learned
trial judge as well as the appellate bench of the
Small Causes Court has already ordered,
separate enquiry for determination of the mesne-
profit under Order 20 Rule 12 of the Code of Civil
Procedure, 1908, no separate order of
compensation against the petitioners in the said
application is warranted at this stage. The final
orders for compensation can be passed by this
court at the time of disposal of the Civil Revision
Application No.716 of 2014 filed by the original
tenants.
(g) The parties as well as the learned
Registrar to act on the authenticated copy of this
order.
(R.D. DHANUKA, J.)
