Mujibur Rehman Haji Israr Alam ... vs M/S. K. T. Kubal And Co
2017 Latest Caselaw 4497 Bom

                                                                            WP80.17.doc




         IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                        CIVIL APPELLATE JURISDICTION

                         WRIT PETITION NO.80 OF 2017


Mr Mujibur Rehman Haji Israr Alam Siddiqui      ... Petitioner
     v/s
M/s K.T. Kubal and Co.                     ... Respondent


Mr G.S. Godbole with Mr B.P. Pandey i/b Mr V.B. Pandey for
Petitioner.
Mr Prashant G. Karande for Respondent.


                                 CORAM : B.P. COLABAWALLA, J.

DATE : JULY 14, 2017

ORAL JUDGMENT :

1. Rule. Respondent waives service. Rule made returnable

forthwith and heard finally.

2. This Writ Petition has been filed under Article 227 of the

Constitution of India challenging the order dated 22nd September,

2016 passed by the Appellate Bench of the Small Causes Court,

Mumbai below Exh.7. Exh.7 was a Stay Application filed by the

Respondent herein in Appeal No.303 of 2016 which challenged the

judgment and decree dated 3rd May, 2016 passed in T.E. Suit

VRD 1/18

WP80.17.doc

No.114/142 of 2012. By this decree, the Respondent herein was

evicted from the premises being an open space of land admeasuring

4000 sq.ft. situated in the compound of a building popularly known

as Mujibur Rehman Brothers Building, R.S. Nimkar Marg, Faras

Road, Mumbai 400 008 (hereinafter referred to as the "suit

premises").

3. Few facts that need to be noted for disposal of this Writ

Petition are that the Petitioner herein (Plaintiff in the Trial Court)

filed a Suit for eviction of the Respondent (Defendant before the Trial

Court) being T.E. Suit No.114/142 of 2012 on the grounds more

particularly mentioned in the plaint. This Suit was filed under the

provisions of the Presidency Small Causes Courts Act, 1881 as the

suit premises was an open plot of land and the Defendant did not get

protection under the provisions of the Maharashtra Rent Control

Act, 1999. In view of this, the tenancy of the Defendant was

terminated by the Plaintiff vide its letter dated 9th January 2012. It

is after the expiry period of the termination notice that the Plaintiff

filed the aforesaid suit.

4. This Suit was contested by the Defendant by filing its

written statement. Thereafter, issues were framed by the Trial

VRD 2/18

WP80.17.doc

Court and on the basis of these issues, the parties led their

respective evidence. The Trial Court, thereafter, after hearing the

parties, by it judgment and order dated 3rd May 2016 decreed the

suit and ordered eviction of the Defendant. The Trial Court further

also ordered an inquiry into mesne profits under the provisions of

Order XX Rule 12 of the CPC.

5. Being aggrieved by this judgment and order of the Trial

Court, the Defendant preferred an Appeal before the Appellate Bench

of the Small Causes Court, Mumbai viz. PSCC Appeal No.303 of 2016.

6. I must mention here that as there was some bonafide

error in the judgment and decree dated 3rd May, 2016 regarding the

description of the suit property, the Plaintiff moved the Trial Court

for modification / clarification of the said judgment and decree. The

Trial Court by its order dated 1st July, 2016 accordingly corrected /

modified the description of the suit property as mentioned in its

earlier judgment and decree of 3rd May, 2016.

7. Be that as it may, alongwith the Appeal filed by the

Defendant challenging the decree dated 3rd May 2016, the Defendant

also preferred a Stay Application (Exh.7) seeking a stay of the

VRD 3/18

WP80.17.doc

execution of the decree. The order impugned in this Writ Petition

(dated 22nd September, 2016) has been passed in this Stay

Application (Exh.7). By the impugned order, the execution of the

decree against the Defendant was stayed subject to the Defendant

depositing compensation at the rate of Rs.1,50,000/- per month from

May 2016 to September 2016 within a period of three months from

the date of the order. Further monthly compensation at the same

rate was also to be deposited on or before the 10th day of each month,

pending the hearing and final disposal of the Appeal. Over and above

this, the Defendant was also directed to deposit arrears of rent which

the Petitioner herein was allowed to withdraw.

8. In this factual backdrop, Mr Godbole, learned counsel

appearing on behalf of the Petitioner, challenged the impugned order

mainly on two grounds. The first ground on which the impugned

order was challenged was the quantum of compensation fixed by the

Appellate Authority. According to Mr Godbole, the Appellate

Authority had accepted the valuation reports filed by the Plaintiff

and rejected the valuation report that was relied upon by the

Defendant. According to Mr Godbole, the valuation reports relied

upon by the Plaintiff clearly showed that fair market compensation

for the suit premises would be in the range of Rs.1,68,000/- per

VRD 4/18

WP80.17.doc

month to Rs.2,00,000/- per month. This being the case, there was

absolutely no reason for the Appellate Authority to fix compensation

at the rate of Rs.1,50,000/- per month as was done by the impugned

order, was the submission. Mr Godbole submitted that this is more

so in the facts of the present case, because the valuation report

relied upon by the Defendant was rejected by the Appellate

Authority.

9. The second contention raised by Mr Godbole was that in

any event, the interim compensation ought to have been fixed not

from the date of the decree (May 2016) but from the date of the

expiration of the termination notice. He submitted that in the facts

of the present case, it was a clear finding of the Trial Court that the

Defendant was in wrongful occupation of the suit premises on the

expiry period of the termination notice. This finding of the Trial

Court, according to Mr Godbole, was also in consonance with the

provisions of section 106 read with section 111(h) of the Transfer of

Property Act, 1882. Considering that the Defendant did not get

protection under the provisions of the Maharashtra Rent Control

Act, 1999, the Defendant was in wrongful occupation from the

expiry period of the termination notice and not from the date of the

decree as would be the case when a tenant (who was protected under

VRD 5/18

WP80.17.doc

the provisions of the Maharashtra Rent Control Act, 1999) is sought

to be evicted. In support of this proposition, Mr Godbole relied upon

a decision of the Supreme Court in the case of Atma Ram Properties

(P) Ltd. v/s Federal Motors (P) Ltd., reported in (2005) 1 SCC

705. For all the aforesaid reasons, Mr Godbole submitted that the

impugned order clearly suffers from perversity and/or an error

apparent on the face of the record requiring my interference under

Article 227 of the Constitution of India.

10. On the other hand, Mr Karande, learned counsel

appearing on behalf of the Defendant, submitted that there was

absolutely no infirmity in the impugned order requiring interference

in my limited jurisdiction under Article 227 of the Constitution of

India. As far as the quantum fixed by the Appellate Authority is

concerned, Mr Karande submitted that the Appellate Authority had

correctly considered the valuation report submitted by the Plaintiff

and thereafter fixed the compensation at the rate of Rs.1,50,000/-

per month. He submitted that when it comes to fixing interim

compensation under Order 41 Rule 5 of the CPC, certain amount of

guess work has to be undertaken by the Appellate Authority. In the

facts of the present case, the Appellate Authority, in its discretion,

thought it fit to fix the interim compensation at Rs.1,50,000/- per

VRD 6/18

WP80.17.doc

month and it certainly cannot be said that the exercise of this

discretion suffers from perversity and/or an error apparent on the

face of the record requiring my interference under Article 227 of the

Constitution of India.

11. On the second contention raised by Mr Godbole, viz. the

date from which compensation ought to have been fixed, Mr

Karande submitted that the Appellate Authority has stayed the

execution of the decree on the condition that the Defendant deposit

interim compensation of Rs.1,50,000/- per month from the date of

the decree till the disposal of the Appeal. He submitted that the

power exercised by the Appellate Authority under Order 41 Rule 5 of

the CPC is completely distinct and separate from the power

exercised by the Trial Court under Order 20 Rule 12 when it makes

an inquiry into mesne profits. In the facts of the present case, Mr

Karande submitted that an inquiry as contemplated under Order 20

Rule 12 has not yet been completed and therefore, there was nothing

wrong in the impugned order under which interim compensation

was ordered to be deposited from the date of the decree till the

disposal of the Appeal. For all the aforesaid reasons, Mr Karande

submitted that there was no merit in the Writ Petition and the same

ought to be dismissed.

VRD                                                                             7/18





                                                                            WP80.17.doc

12. I have heard the learned counsel for the parties at length

and perused the papers and proceedings in the Writ Petition. I have

also given my careful consideration to the impugned order. On the

issue of quantum of compensation fixed (viz. Rs.1,50,000/- p.m.), I

find considerable force in the arguments canvassed by Mr Karande.

In the impugned order, the Appellate Authority has correctly

analyzed the two reports filed by Kishore Karamsey. These reports

were relied upon by the Plaintiff. In the first report, Kishore

Karamsey came to the conclusion that assessment of fair market

rent of open land is Rs.1,68,000/- per month. In the second report,

the same Valuer assessed the fair market rent of the land as if it was

used for an industrial purpose and thereafter came to the conclusion

that the fair market rent would be Rs.2,00,000/- per month. Looking

to the figure that has been mentioned by the Valuer for fixing

compensation, I do not think that the discretion exercised by the

Appellate Authority by fixing a figure of Rs.1,50,000/- can be said to

be so perverse or suffering from any error of law apparent on the

face of the record requiring my interference under Article 227 of the

Constitution of India. I therefore find that at least on this issue, the

order of the Appellate Authority does not suffer from any infirmity

in fixing interim compensation at the rate of Rs.1,50,000/- per

VRD 8/18

WP80.17.doc

month. Mr Karande is correct when he submits that whilst passing

an order of interim compensation under Order 41 Rule 5 of the CPC,

the Appeal Court has to engage in a little bit of guess work and unless

it is shown that the discretion exercised by Appeal Court is

perverse, the Writ Court should loathe to interfere in the exercise of

such discretion.

13. This now leaves me to deal with the second contention

raised by Mr Godbole, namely, from what date this interim

compensation ought to have been fixed by the Appellate Authority.

In this regard, I find considerable force in the arguments canvassed

by Mr Godbole. Admittedly, in the present case, as per the finding of

the Trial Court, the Defendant is not a tenant who gets protection

under the provisions of the Maharashtra Rent Control Act, 1999. He

would therefore be a contractual tenant. Contractual tenancies not

protected by the Maharashtra Rent Control Act, 1999 are governed

by the provisions of the Transfer of Property Act, 1882. For our

purposes, sections 106 and 111 are relevant and read thus :-

106. Duration of certain leases in absence of written contract or local usage.--(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for

VRD 9/18

WP80.17.doc

any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee by fifteen days' notice.

(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice.

(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.

(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

111. Determ ination of lease.-- A lease of immovable property, determines--

(a) by efflux of the time limited thereby;

(b) where such time is limited conditionally on the happening of some event by the happening of such event;

(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event by the happening of such event;

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;

(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them;

(f) by implied surrender;

VRD                                                                                       10/18





                                                                                      WP80.17.doc

(g) by forfeiture, that is to say, (1) in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.

14. Section 106(1) of the Transfer of Property Act, 1882

inter alia stipulates that in the absence of a contract or local law or

usage to the contrary, a lease for immovable property for

agricultural or manufacturing purposes shall be deemed to be a lease

from year to year terminable on the part of either the lessee or the

lessor by six months' notice. A lease of immovable property for any

other purpose shall be deemed to be a lease from month to month

terminable on the part of either the lessor or the lessee by 15 days'

notice. Section 106(4) stipulates that every notice under sub-

section (1) must be in writing, signed by or on behalf of the person

giving it, and either be sent by post to the party who is intended to be

bound by it or be tendered or delivered personally to such party, or

to one of his family or servants, at his residence, or if such tender or

delivery is not practicable, affix it to a conspicuous part of the

VRD 11/18

WP80.17.doc

property.

15. Section 111 deals with determination of a lease and

clause (h) thereof stipulates that a lease of immovable property

determines on the expiration of a notice to determine the lease, or to

quit or of intention to quit the property leased, duly given by one

party to the other. Reading section 106 with section 111(h) of the

Transfer of Property Act, 1882, what is abundantly clear is that

once the lesseee gives a notice to determine the lease, on the

expiration of the period mentioned in the notice, the lessee no longer

has any authority to continue in possession of the leased premises.

His occupation and possession of the premises would clearly be

wrongful. This being the case, I find considerable force in the

argument of Mr Godbole that the interim compensation fixed by the

Appellate Authority ought to have been from the date of the

expiration of the period of the termination notice and not from the

date of the decree. In this regard, I find the reliance placed by Mr

Godbole on the decision of the Supreme Court in the case of Atma

Ram Properties (P) Ltd. (supra) is well founded. Paragraph 11 of

this decision reads thus :-

"11. Under the general law, and in cases where the tenancy is governed only by the provisions of the 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

VRD 12/18

WP80.17.doc

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. In the case of Chander Kali Bai[(1977) 4 SCC 402] the tenancy premises were situated in the State of Madhya Pradesh and the provisions of the M.P. Accommodation Control Act, 1961 applied. The suit for eviction was filed on 8-3-1973 after serving a notice on the tenant terminating the contractual tenancy w.e.f. 31-12-1972. The suit came to be dismissed by the trial court but decreed in first appeal decided on 11-8-1975. One of the submissions made in this Court on behalf of the appellant tenant was that no damages from the date of termination of the contractual tenancy could be awarded; the damages could be awarded only from the date when an eviction decree was passed. This Court took into consideration the definition of tenant as contained in Section 2(i) of the M.P. Act which included "any person continuing in possession after the termination of his tenancy" but did not include "any person against whom any order or decree for eviction has been made". The Court, persuaded by the said definition, held that a person continuing in possession of the accommodation even after the termination of his contractual tenancy is a tenant within the meaning of the M.P. Act and on such termination his possession does not become wrongful until and unless a decree for eviction is passed. However, the Court specifically ruled that the tenant continuing in possession even after the passing of the decree became a wrongful occupant of the accommodation. In conclusion the Court held that the tenant was not liable to pay any damages or mesne profits for the period commencing from 1-1-1973 and ending on 10-8-1975 but he remained liable to pay damages or mesne profits from 11-8-1975 until the delivery of the vacant possession of the accommodation.

During the course of its decision this Court referred to a decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain v. Kamlakar [1974 MPLJ 485] wherein the High Court had held that if a person continues to be in occupation after the termination of the contractual tenancy then on the passing of the decree for eviction he becomes a wrongful occupant of the accommodation since the date of termination. This Court opined that what was held by the Madhya Pradesh High Court seemed to be a theory akin to the theory of "relation back" on the reasoning that on the passing of a decree for eviction, the tenant's possession would become unlawful not from the date of the decree but from the date of the termination of the contractual tenancy itself. It is

VRD 13/18

WP80.17.doc

noteworthy that this Court has not disapproved the decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain case [1974 MPLJ 485] but distinguished it by observing that the law laid down in Kikabhai Abdul Hussain case[1974 MPLJ 485] was not applicable to the case before it in view of the definition of "tenant" as contained in the M.P. Act and the provisions which came up for consideration of the High Court in Kikabhai Abdul Hussain case [1974 MPLJ 485] were different."

(emphasis supplied)

16. As clearly laid down by the Supreme Court in the

aforesaid decision, under the general law and in cases where the

tenancy is governed only by the provisions of the Transfer of

Property Act 1882, once the tenancy comes to an end by

determination of the lease under section 111 of the Transfer of

Property Act, 1882 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 at the rate at which the landlord could have let out the

premises. In other words, after the expiry of the period of the

termination notice, the tenant would be liable to pay fair market

compensation and not from the date of the decree. I must hasten to

add that different considerations apply when an eviction decree is

passed against a tenant who is protected under the provisions of the

Maharashtra Rent Control Act, 1999. In such a situation and as held

by a series of decisions of the Supreme Court including in Atma Ram

VRD 14/18

WP80.17.doc

Properties (P) Ltd. (supra), the occupation of the tenant of the

suit premises in such a case is unlawful after the decree is passed in

an eviction suit. However, that would not be the case where the

tenancy is governed under general law and only by the provisions of

the Transfer of Property Act, 1882. I must also mention here that

this point was specifically raised by the Defendant in their affidavit

in reply to the Stay Application (Exh.7). In paragraph 2 of the reply,

it is specifically contended that the occupation and possession of the

suit premises by the Defendant after the termination notice is

wrongful and as such the Plaintiff is entitled to mesne profits from

one month after the date of the termination notice (9th January

2012). This argument has not even been considered in the

impugned order and there are no findings on this aspect either.

17. I am unable to agree with the submissions of Mr Karande

that since the inquiry under Order XX Rule 12 of the CPC is yet to

take place, the Appellate Authority cannot order interim

compensation from the expiry period of the termination notice but

can only do so from the date of the decree. In a case where the

tenancy is governed under general law and only on the basis of the

provisions of the Transfer of Property Act 1882, the occupation and

possession of the tenant / lessee is clearly wrongful on the expiry

VRD 15/18

WP80.17.doc

period of the termination notice. This being the case, it is immaterial

whether an inquiry under Order XX Rule 12 of the the CPC has been

completed or otherwise. This is a condition that is fixed for granting

stay of the execution of the decree and to compensate the Plaintiff

because the fruits of his decree have been delayed by granting a stay.

This compensation is normally deposited in the Appellate Court and

unless exceptional circumstances are made out, the Plaintiff is not

allowed to withdraw this amount. This being the case, I do not find

any merit in the submission of Mr Karande that under Order 41 Rule

5, the Appellate Court can only order interim compensation from the

date of the decree and not otherwise. Even on going through Order

41 Rule 5 I do not find any such fetter on the power of the Court as

was sought to be contended by Mr Karande. This argument of Mr

Karande therefore stands rejected.

18. This now only leaves me to decide that in the facts of the

present case what would be the date from which interim

compensation ought to have been awarded by the Appellate

Authority. As mentioned earlier, section 106 of the Transfer of

Property Act, 1882 clearly stipulates that in the absence of a

contract or local law or usage to the contrary, the lease of immovable

property for agricultural or manufacturing purposes shall be deemed

VRD 16/18

WP80.17.doc

to be a lease from year to year terminable on the part of the lessor or

the lessee by six months' notice. A lease of immovable property for

any other purpose shall be terminable on the part of either the lessor

or the lessee by 15 days' notice. In the facts of the present case, it is

the case of the Plaintiff that an open plot of land was leased to the

Defendant which was not leased out for any agricultural or

manufacturing purposes. This being the case, at least prima facie,

the possession and occupation of the suit premises by the Defendant

would be unlawful on the expiry of 15 days from the date of the

termination notice (viz. 9th January, 2012). In other words, the

possession and occupation of the Defendant would be wrongful from

25th January, 2012. This being the case, I am of the view that the

compensation that ought to have been fixed by the Appellate

Authority of Rs.1,50,000/- per month, should have been from 1st

February, 2012 till the disposal of the Appeal.

19. Looking to my findings given and for the reasons set out

earlier, I pass the following order :-

ORDER

The execution of the decree dated 3rd May, 2016 passed

in T.E. Suit No.114/142 of 2012 is stayed until the final decision in

VRD 17/18

WP80.17.doc

Appeal No.303 of 2016 pending before the Appellate Bench of the

Small Causes Court, Mumbai subject to:-

(a) the Petitioner depositing arrears of interim compensation at the rate of Rs.1,50,000/- per month from 1st February, 2012 to 30th September, 2016 within a period of one year from today. Needless to clarify that credit will be given for the amount of Rs.7,50,000/- already deposited by the Defendant towards arrears as ordered by the Appellate Bench in the impugned order.

(b) From 1st October, 2016 onwards, the Defendant shall continue to deposit interim monthly compensation at the rate of Rs.1,50,000/- per month pending the hearing and final disposal of Appeal No.303 of 2016. This shall be deposited on or before the 10th day of each month.

(c) As far as the other directions in the impugned order are concerned, they shall continue to operate.

20. The impugned order is modified in the aforesaid terms

and rule is made absolute accordingly. However, in the facts and

circumstances of the case, there shall be no order as to costs.

                                              (B.P. COLABAWALLA, J.)



VRD                                                                                   18/18