[Cites 5, Cited by 0]
Bombay High Court
Maharashtra Tourism Development ... vs Indian Express Newspapers (Bombay) ... on 5 May, 2026
2026:BHC-AS:21336
Neeta Sawant CRA-283 OF 2022
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO. 283 OF 2022
Maharashtra Tourism Development ...Applicant
Corporation Limited
Versus
Indian Express Newspapers (Bombay) ...Respondent
Pvt. Ltd.
________________
Mr. S.M. Gorwadkar, Senior Advocate with Mr. Varun Thanawla i/b Ms.
Kavita Solunke, for the Applicant.
Mr. Surel Shah, Senior Advocate with Mr. Amol Joshi & Ms. Tejasvi
Ghag i/b Ms. Poorvi Kamani, for the Respondent.
Mr. Sanjay Dhekane, Senior Manager (Legal), MTDC, present.
________________
CORAM: SANDEEP V. MARNE, J.
Reserved On: 20 April 2026.
Pronounced On: 5 May 2026.
Judgment:
1) The Revision Application is filed by Maharashtra Tourism
Development Corporation Limited (MTDC) challenging the judgment
and order dated 8 February 2019 passed by the Appellate Bench of the
Small Causes Court dismissing Misc. Appeal No.62 of 2013 and
confirming Trial Court's decision dated 16 October 2012 in Mesne Profits
Misc. Application No.20 of 2007. The Trial Court has determined mesne
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT Page No.1 of 15
SAWANT Date:
2026.05.05 5 May 2026
20:02:10
+0530
Neeta Sawant CRA-283 OF 2022
profits in respect of the suit premises at Rs.163/- per sq. feet per month
from 31 January 2001 to 31 December 2005 and at Rs.233/- per sq. feet
per month from 1 January 2006 till the date of delivery of possession i.e.
30 December 2010 alongwith interest @ 6%p.a.
2) Office premise admeasuring 5950 sq.ft. (carpet area) on 9 th
floor of the building 'Express Tower', situated at Nariman Point,
Mumbai-400 021 are the 'suit premises'. According to the Applicant, the
land in question was originally leased by the Government of Maharashtra
to the Respondent-Indian Express Newspapers (Bombay) Pvt. Ltd.
(Indian Express) on 2 September 1963 who constructed a building
thereon. By virtue of the Lease Deed dated 8 December 1972, the
Government of Maharashtra leased the land and the building to Indian
Express. It is the case of the Respondent that by draft agreement sent on
4 January 1975, the Government was put in possession as tenant in
respect of the suit premises. MTDC was formed by the Government of
Maharashtra as an extension of tourism department with 100% share
owned by the Government and directors of MTDC being appointed by the
Government.
3) Indian Express filed TE&R. Suit No. 73/79 of 2001 seeking
recovery of possession of the suit premises from MTDC. The suit was
resisted by MTDC by filing written statement contending inter-alia that
the Government of Maharashtra was the tenant in respect of the suit
premises and the tenancy was protected under Section 3(a) of the
Maharashtra Rent Control Act, 1999 (MRC Act). The Trial Court however
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decreed the suit on 16 March 2004 directing MTDC to handover
possession of the suit premises to the Indian Express.
4) MTDC filed Appeal No. 323 of 2004 challenging the eviction
decree dated 16 March 2004. During pendency of the appeal, MTDC paid
to Indian Express interim compensation of Rs.8,30,97,451/-. The Appeal
Court however dismissed the Appeal of MTDC on 6 March 2009. The
Appellate Court's decree was challenged by the Applicant in Civil
Revision Application 634 of 2009 which came to be dismissed by order
dated 18 November 2009. The Apex Court refused to entertain the
Special Leave Petition filed by MTDC. MTDC accordingly handed over
possession of the suit premises to Indian Express on 30 December 2010.
During pendency of the Appeal, Indian Express had taken out Mesne
Profits Misc. Application No. 20 of 2007 for determination of mesne
profits for the period from 30 January 2001 to 30 December 2010. The
application was opposed by MTDC. Based on pleadings, Small Causes
Court framed issues. Parties led evidence in support of their respective
claims. Indian Express examined its Director-Vaidehi Thakar as P.W.1 and
Harshad Maniar- Architect and valuer as P.W.2. MTDC examined Sanjay
Dhekane as D.W.1 and Yatish Kini-Architect and valuer as D.W.2. After
considering the pleadings, documentary and oral evidence, the Small
Causes Court proceeded to allow Mesne Profits Misc. Application No. 20
of 2007 by judgment and order dated 16 October 2012. The Court
determined mesne profits in respect of the suit premises at Rs.163/- per
sq. ft. per month from 31 January 2001 to 31 December 2005 and at
Rs.233/- per sq. ft. per month from 1 January 2006 till the date delivery of
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Neeta Sawant CRA-283 OF 2022
possession i.e. 30 December 2010. The Trial Court granted interest @
6%p.a. in favour of the Indian Express.
5) MTDC filed Appeal No. 62 of 2013 before the Appellate
Bench of the Small Causes Court. The Appeal has been dismissed vide
judgment and order dated 8 February 2019, which is the subject matter
of challenge in the present Revision Application. By order dated 28
August 2023, this Court admitted the Revision Application and granted
stay to the impugned orders subject to deposit of entire decreetal
amount in the Small Causes Court within a period of 12 weeks. It appears
that on account of failure on the part of the Applicant, the stay to the
impugned orders has not remained operational and this is clarified by
the Court vide order dated 30 July 2024.
6) It appears that the Applicant had deposited an amount of
Rs. Rs.8,30,97,451/- which has been withdrawn by the Respondents.
Additionally, Respondent has shown willingness to pay to the
Respondent further amount of Rs. 2,00,00,000/- at the time of closure of
the proceedings for judgment. With the consent of the learned counsel
appearing for the parties, the Revision Application is called out for final
hearing.
7) Mr. Gorwadkar, the learned Senior Advocate appearing for
the Revision Applicant-MTDC submits that the Applicant is not liable to
pay any mesne profits in respect of the suit premises since the decree
itself is a nullity. He submits that the Applicant has raised the said issue
in Writ Petition No. 1595 of 2026. That the land on which building is
constructed belongs to the State Government, who has become the
owner in respect of the building. That occupation of the suit premises is
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Neeta Sawant CRA-283 OF 2022
thus by the State Government in capacity as owner and not as a lessee.
That the State Government and MTDC are not distinct entities for the
purpose of application of provisions of Section 3(1)(a) of the MRC Act.
That the suit itself was not maintainable and the decree passed therein is
a nullity. That the issue of lack of jurisdiction is never res-judicata and
can be examined even in a collateral proceeding.
8) Without prejudice, Mr. Gorwadkar submits that the Small
Causes Court has determined excessive amount towards mesne profits
without properly appreciating the valuation report relied upon by the
Applicant's valuer. That the Small Causes Court has erroneously
considered only the valuation report of Plaintiff's witness. He submits
that the inquiry into mesne profits conducted by the Small Causes Court
is thus perfunctory. That MTDC, being a Government entity, cannot be
saddled with the liability to pay such excessive amount of mesne profits
when the State Government is the owner, not only of the land but also of
the building. He therefore prays for setting side the orders passed by the
Trial and the Appellate Courts.
9) Per contra Mr. Surel Shah, learned Senior Advocate
appearing for the Respondent-Indian Express opposes the Revision
Application submitting that the issue of decree being a nullity is sought
to be agitated for the first time before this Court and that issue was never
the subject matter of dispute before the Trial and the Appellate Courts.
That the Applicant cannot be permitted to argue before this Court
something which was never raised before the Courts below. That in any
case, the decree has attained finality on account of its confirmation by
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the Appellate Court, by this Court and by the Apex Court. That the issue
of applicability of provisions of Section 3(1)(a) of the MRC Act cannot be
raised in a mesne profit enquiry. That Applicant is otherwise a statutory
Corporation having paid up share capital in excess of Rs.1 crore. That
therefore provisions of MRC Act are not applicable to the tenancy of the
Applicant and this position is confirmed by the Trial Court in its
judgment. That the Applicant had not challenged the jurisdiction of the
Small Causes Court under Section 41 of the Presidency Small Causes
Court Act,1882 (PSCC Act) and cannot now be permitted to raise the said
issue in mesne profits inquiry. That filing of the present Revision
Application is gross abuse of process of law.
10) Mr. Shah further submits that the orders passed by the Trial
and Appellate Courts are well supported by the evidence on record. That
both the Courts have relied upon valuation report of Mr. Harshad Maniar,
who has taken into consideration comparable instances of premises in
the same building as against instances taken into consideration by the
Applicant's valuer. Mr. Shah submits that even after adjusting the
amount of Rs.8,30,97,451/- deposited by the Applicant and withdrawn by
the Respondent, an amount of Rs. 17.90 crores is due and payable by the
Applicant towards mesne profits. He prays for dismissal of the Revision
Application.
11) Rival contentions raised on behalf of the parties now fall for
my consideration.
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Neeta Sawant CRA-283 OF 2022
12) The limited remit of inquiry in the present Revision
Application is about the correctness of inquiry conducted by the Small
Causes Court under Order 20 Rule 12(c) of Civil Procedure Code, 1908
(the Code) while determining the mesne profits in respect of the suit
premises. The other related issue is the correctness of the quantum of
mesne profits determined by the Trial Court as upheld by the Appellate
Bench. The Applicant-MTDC has suffered a decree for eviction dated 16
March 2004 in TE & R. Suit No.73/79 of 2001. The suit was filed by Indian
Express under the provisions of Section 41 of the PSCC Act contending
that the MTDC is not a protected tenant and that under Section 3(1)(b)
of the MRC Act, it is not entitled to protection of the said Act. The Trial
Court specifically framed an issue about applicability of provisions of
Section 3(1)(b) of the MRC Act and answered the same against the
Applicant and in favour of Respondent-Indian Express. After holding
that the Applicant is not entitled to protection from eviction and rent
control under the MRC Act, the Trail Court proceeded to decree the suit
by judgment and order dated 16 March 2004 directing the Applicant to
handover possession of the suit premises to Indian Express with further
direction for payment of mesne profits from the date of the suit till
handing over of possession of the suit premises. For that purpose, the
Trial Court directed conduct of inquiry under Order 20 Rule 12(c) of the
Code. The eviction decree passed by the Trial Court has been confirmed
in Appeal vide judgment and order dated 6 March 2009. The Appeal
Court has also considered and decided whether the provisions of Section
3(1)(b) of the MRC Act apply to the premises in question. Applicant-
MTDC preferred Civil Revision Application No.634 of 2009 in this Court,
which was dismissed by order dated 18 November 2009. This Court also
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Neeta Sawant CRA-283 OF 2022
negated the contention of the Petitioner that the tenancy was created in
favour of the State Government since a specific ground to that effect was
raised in para-13 of the Revision Application. The Applicant-MTDC
carried the challenge before the Apex Court and once again urged the
issue of State Government being the real tenant and relied upon letter
dated 4 January 1975. The Apex Court however dismissed Special Leave
Petition (C) No.35024 of 2009 by order dated 5 January 2010.
13) This is how the eviction decree passed in T.E.& R. Suit
No.73/79 of 2001 got confirmed upto the Hon'ble Apex Court. In view of
the above discussion, I am not inclined to go into the issue as to whether
the decree is a nullity or not. The issue of State Government being the
real tenant was specifically raised while challenging the decree and the
same cannot be permitted to the raised in mesne profits inquiry. In any
case, the Applicant has filed separate Writ Petition No.1595 of 2026
challenging an order passed in execution proceedings in which its
objection about decree being nullity was rejected. I am therefore
confining the present Revision Application to the core issue about
correctness of quantum of mesne profits decided by the Trial and the
Appellate Courts.
14) The Small Causes Court has conducted an inquiry into
mesne profits and by order dated 16 October 2012 has determined the
mesne profits in respect of the suit premises @ Rs.163/- per sq.ft. per
month from 31 January 2001 to 31 December 2005 and @ Rs.233/- per
sq.ft. per month from 1 January 2006 till 30 December 2010 when
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possession of the suit premises is handed over to the Respondent-Indian
Express .
15) In support of its claim, Applicant-Indian Express examined
its Director-Mrs. Vaidehi Thakkar and Valuer-Mr.Harshad Maniar. On the
other hand, the Applicant-MTDC examined Mr. Yatish Kini as its valuer.
However, it transpired that Mr. Harshad Maniar took into consideration
comparable instances in respect of the premises located on 4 th , 12th and
13th floor of the same building in respect of the first block period from
2001 to 2005 and in respect of the premises on 1 st and 13th floor for
second block for the period from 2006 to 2010. On the other hand Mr.
Yatish Kini, valuer of Applicant-MTDC, determined valuation on the
basis of comparative method, capitalization method and multiplier
method. However, Mr. Yatish Kini did not use comparative indicators for
depicting market rental for the relevant inquiry period for quantifying
the mesne profits.
16) Therefore, the Small Causes Court has preferred to rely on
valuation report of Mr. Harshad Maniar (P.W.2) as compared to the
valuation report of Mr. Yatish Kini (D.W.2). I do not find any error on the
part of the Small Causes Court in doing so.
17) I have gone through the valuation report of Mr. Harshad
Maniar, as well as his deposition recorded in the mesne profits inquiry.
Mr. Maniar divided the inquiry period into two groups (i) 2001 to 2005
and (ii) 2006 till 2010. In respect of Group-1 period from 2001 to 2005, he
has taken into consideration four comparable instances of offices located
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in the same building on 4th, 12th and 13th floor which depicted following
position:
Name of M/s. Pathak & Lasalle Partners The Bank of Delta Air-lines
licensee Associates (I) Pvt. Ltd New York INC
Date of 16-5-2000 8-01-2001 29-6-2000 1-2-2001
Agreement
Area 8061 s.ft. 2272 s.ft. B.U.A. 2900 s.ft. B.U.A. 3200 s.ft. B.U.A.
Premises Office premises 13th floor 12th floor 4th floor
on 12th floor
License period 36 months form 36 months form 36 months form 36 months form
1-6-2000 15-2-2001 22-6-2000 1-2-2001
Compensation Rs. 110/- p.s.ft. Rs. 80/- p.s.ft. Rs. 100/- p.s.ft. Rs. 155/- p.s.ft.
(A) Including taxes Including air-
conditioning
Centrally Air Rs. 20/- p.s.ft. Rs. 20/- p.s.ft. Rs. 20/- p.s.ft. ------
Conditioning
charges (B)
Other building Rs. 20/- p.s.ft. Rs. 50/- p.s.ft. Rs. 32.50/- Rs. 11/- p.s.ft.
servise charges B.U.A. B.U.A. p.s.ft.
(C)
Option of After 36 After 36 After 36 After 36
Renewal monthd at 15% monthd at 15% monthd at 15% monthd at 15%
increase in increase in increase in increase in
licensee fee licensee fee licensee fee licensee fee
Additional From 1-6-2000 From 15-2- To be borne by To be borne by
Municipal taxes to be borne by 2001 to be licensee licensor
if any from licensee borne by
licensee
Interest free Rs. 72,54,9000/- Rs. 20,44,800/- Rs. 26,53,500/- Rs. 39,68,000/-
security deposit
Doc. No. BBE -4455 R-3 BBB- 997 R-3 BBB- 5893 R-3 BBB- 996
2000 2001 2001 2001
18) The Valuer-Mr. Harshad Maniar took into consideration
factors of monthly compensation, charges for centralized air
conditioning, building services and interest on security deposit and held
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that for Group-1 period of 2001 to 2005, the license fees was paid as
under:
(i) M/s. Pathak & Associates-12th floor- Rs.157.31/- per sq. ft per month.
(ii)Lasalle Partners (I) Pvt. Ltd -13 floor Rs.157.31/- per sq. ft per month.
(iii)The Bank of New York-12 floor- Rs.159.93/- per sq. ft per month.
(iv) Delta Air-lines INC-4 floor - Rs.176.07/- per sq. ft per month.
19) By considering the variable trend of four comparable
instances for Group-1 period, the Valuer opined that the rate would be
Rs.163/- per sq.ft. per month. Accordingly, the Trial Court has awarded
mesne profits in respect of Group-1 period from 2001 to 2005 at Rs.163/-
per sq.ft. per month. However, it is seen that in respect of three
comparable instances of M/s. Pathak & Associates, Lasalle Partners (I)
Pvt. Ltd and The Bank of New York, mesne profits were only in the range
of Rs.157/- to Rs.159/- per sq.ft. per month. In my view, therefore
fixation of mesne profits @ Rs.163/- per sq.ft. per month for Group-1
period appears to be on a slightly higher side. Also, the above rates are
considered by adding interest component of Rs.9.75% on the security
deposit. Otherwise, the base rents were only in the range of Rs.150/- per
sq.ft. per month in all the three comparative instances. In my view,
therefore considering the peculiar facts and circumstances of the present
case, where the Petitioner is an undertaking of Government of
Maharashtra, it would be appropriate to direct slight reduction in respect
of the rate of mesne profits from Rs.163/- to Rs.150/- per sq ft per month
in respect of Group-1 period from 2001 to 2005.
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20) Coming to the Group-2 period from 2006 to 2010, the
valuer, Mr. Harshad Maniar took into consideration two comparable
instances in respect of the licensees of Indian Express viz Bank of
America and Jones Lang Lasalle Property Consultant (I) Pvt. Ltd. which
depicted following position:
Name of licensor Indian Express Newspapers Indian Express Newspapers
(Mumbai) Pvt. Ltd. (Mumbai) Pvt. Ltd.
Name of licensee Bank of America Jones Lang Lasalle
Property Consultant (I) Pvt.
Ltd.
Date of Agreement 21-8-2006 15-3-2007
Area 5100 s.ft. B.U.A. 2272 s.ft. B.U.A.
Premises Office premises on 1st floor Office premises on 13th
in Express Tower Building floor in Express Tower
Building
License period 21-8-2006 to 20-9-2009 for 15-02-2007 to 14-11-2009
37 months for 37 months
Compensation (A) Rs. 125/- p.s.ft. Rs. 125/- p.s.ft.
Amenity charges (B) Rs. 100/- p.s.ft. Rs. 100/- p.s.ft.
Option of renewal No option No option
Municipal taxes To be borne by licensor Existing taxes to be borne
by licensor and increase in
taxes, if any will be borne
by licensee
Interest free security Rs. 68,25,000/- Rs. 30,67,200/-
deposit
Doc. No. BBE -1 8794 --------
21) After adding factors of amenity charges and interest on
security deposit, the valuer Mr. Harshad Maniar considered the rentals in
respect of two comparable instances on the 1st and 13th floors as under:
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Neeta Sawant CRA-283 OF 2022
(i) Bank of America -1 floor- Rs.232.80/- per sq. ft per month.
(ii) Jones Lang Lasalle Property Consultant (I) Pvt. Ltd -13 floor- Rs.232.87/-
per sq. ft per month.
22) Considering the two comparative instances, the Valuer
recommended average rent of Rs.233/- per sq.ft per month for Group-B
period from 2006 to 2010. The Trial Court has accepted the same and has
directed payment of mesne profits @ Rs.233/- per sq. ft per month from
1 January 2006 to 30 December 2010.
23) In respect of Group-2 period also, slight reduction in the
rate of mesne profits is warranted. The base monthly compensation in
respect of both the instances of Bank of America and Jones Lang Lasalle
Property Consultant (I) Pvt. Ltd. was Rs.125/- to which amenity charges
of Rs.100/- per sq.ft. per month were added. Furthermore, the valuer
considered 7% interest on security deposits and thereafter recommended
rental value of Rs.233/- per sq.ft. per month. In that view of the matter, it
would be appropriate to fix mesne profits in respect of Group-2 period @
Rs.200/- per sq.ft. per month.
24) Grant of some reduction in the rates of mesne profits in
favour of the Applicant is thus fully justified based on the comparable
instances cited by the valuer of Indian Express. Additionally, this Court
also took into consideration the fact that the Applicant is a State
Government undertaking and is not in a position to bear the financial
burden of paying mesne profits at commercial rates in respect of a fairly
large property admeasuring 5950 sq.ft. in Nariman Point in Mumbai.
Reduction in rate of mesne profits would provide some solace to the
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Applicant, who has expressed inability to deposit the decreetal amount
despite order passed by this Court on 28 August 2023. In fact, this is a
reason why, in his usual fairness, Mr. Shah has not very strenuously
opposed the suggestion made by this Court during the course of hearing
for slight reduction in the amount of mesne profits.
25) The Applicant was a protected tenant in respect of the suit
premises during the regime of Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947. On account of introduction of provisions of
Section 3(1)(b) of the MRC Act which came into effect on 31 March 2000,
the Applicant lost protection from eviction and rent escalation. The
provision of Section 3(1)(b) was newly introduced and it took some time
for excepted entities to understand its true effect. The provision got
interpreted by Courts and finally the situation got settled that the
entities like MTDC do not enjoy protection from rent control and
eviction, like several other entities, who have lost rent control
protection, the Applicant also tried its luck for protecting its possessory
right in respect of the suit premises upto the Apex Court and in the
process, has incurred liability to pay mesne profits in respect of the suit
premises. In my view therefore this slight reduction in the rate of mesne
profits would therefore provide some solace to the Applicant which is a
Government of Maharashtra undertaking and a public body.
26) Considering the above position, the Civil Revision
Application succeeds partly, and I proceed to pass the following order:
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(i) Orders passed by the Small Causes Court on 16 October
2012 in Mesne Profits Misc. Application No.20 of 2007 and
by the Appellate Bench on 8 February 2019 in Misc. Appeal
No.62 of 2013 are modified to the quantum of mesne profits.
(ii) It is directed that the Applicant-MTDC is liable to pay to
the Respondent-Indian Express mesne profits in respect of
the suit premises admeasuring 5950 sq.ft carpet area @
Rs.150/- per sq.ft. per month from 31 January 2001 to 31
December 2005 and @ Rs.200/- per sq.ft. per month in
respect of the period from 1 January 2006 till 30 December
2010 alongwith interest @ 6% p.a.
27) Civil Revision Application is allowed to the above extent.
There shall be no order as to costs.
(SANDEEP V. MARNE, J.)
5 May 2026
