Delhi High Court

Capt. Praveen Davar Retd. & Anr. vs Harvansh Kumari & Ors. on 17 July, 2008

Author: Manmohan

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    CM No. 4710/2008 in RFA No. 72/2005


                                               Reserved on : 3rd July, 2008

                                        Date of Decision : July 17th , 2008


CAPT. PRAVEEN DAVAR RETD. & ANR.    ..... Appellants
                  Through: Mr. A.K. Singh, Sr. Advocate
                             with
                             Mr. Pankaj Gupta, Advocate.

                                      Versus


HARVANSH KUMARI & ORS.                             ..... Respondents
                 Through:                Mr. Ravi Nath, Advocate with
                                         Mr. P.K. Jain, Advocate.


CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE MANMOHAN


1. Whether Reporters of local papers may be allowed to see the judgment? Yes
2. To be referred to the Reporter or not?                                  Yes
3. Whether the judgment should be reported in the digest?                  No


                     JUDGMENT

MANMOHAN, J :

1. The Respondent/Plaintiffs have filed the present application

being CM No. 4710/2008 under Section 151 of Code of Civil

Procedure praying for a direction to the Appellant/Defendants to

deposit a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) per

month as compensation for use and occupation of the suit

premises from December 1994 till final decision in the present

appeal.

2. Briefly sated the material facts for this application are that

the Appellant/Defendants in the year 1995 had filed a suit for

recovery of possession and damages in respect of first floor of

the premises bearing No. B-32, Connaught Place, New Delhi - 110

001, hereinafter referred to as the 'suit premises'. The said suit

premises admittedly comprises of three bed rooms, kitchen,

bathroom, verandah facing the Central Park, Connaught Place.

3. On the basis of the pleadings of the parties, the trial court

framed the following issues :-

"(i) Whether the plaintiff are owners and landlords? OPP

(ii) Whether the suit is barred by Section 50 of the DRC Act? OPD.

(iii) Whether the plaintiff is estopped from bringing the present suit in view of the averments in para no. 3 of the Written Statement of defendant no. 1 to 4? OPD.

(iv) Whether the tenancy of the defendant is terminated by a valid and legal notice? If not, its effect. OPP.

           (v)     Whether     the   defendants    are    still
                   continuing as tenants? OPD.

           (vi)    Whether the premises were taken for

residential-cum-commercial purpose? OPD.

(vii) Whether the plaintiff is entitled for the possession of the premises as claimed? OPP.

(viii) Whether suit is barred by res judicata?

OPD.

(ix) Whether the plaintiff is entitled for the damages as claimed? If so, as what rate? OPP.

(x) Relief.

4. On 11th January, 2005 the trial court passed a preliminary

decree of possession of the suit premises in favour of the

Respondent/Plaintiffs, but directed a further enquiry to be held

under Order 20 Rule 12 of Code of Civil Procedure in respect of

mesne profits/damages to be paid by the Appellant/Defendants

herein for unauthorized occupation of the suit premises.

5. However, on the present appeal being filed, this Court on 7 th

February, 2005 admitted the matter and in the interregnum the

learned counsel for the Respondent/Plaintiffs undertook not to

obtain warrants of possession of the suit premises. While the

present appeal was pending final disposal, the

Respondent/Plaintiffs have filed the present application seeking

payment of the interim compensation as detailed hereinabove.

6. In the present application, the Respondent/Plaintiffs have

stated that the owners are all senior citizens who, after several

years of court battle, have obtained a decree for possession. But,

they have not received any rent/occupation charges for the suit

premises since 1989. The Respondent/Plaintiffs have further

alleged that the Appellant/Defendants are two of the five children

of the original tenant who had died about 30 years ago and

further the tenant's wife who was a statutory tenant had also

died about 15 years ago. In this application it has further been

stated that the present appeal has been pending adjudication in

this court for last about three years and the market rent of the

suit premises is approximately Rs. 2,00,000/- per month.

7. Though the Appellant/Defendants admit that they are in

occupation of the suit premises, they claim that rents of first floor

properties in Connaught Place are abysmally low as said

properties can be used only for residential purposes. The

Appellant/Defendants further allege that during the last 5 to 7

years there has been no letting out of first floor properties in

Connaught Place as no person is willing to take premises in that

area for residential purpose and further letting out of such

premises for commercial use is legally not permissible. The

Appellant/Defendants further claim that the finding of the trial

court with regard to issue No. 4 is untenable in law since it has

been passed without even considering the mandatory provision

of Section 10 of the Punjab Urban Rent Restriction Act, 1941.

8. In our view, Order 41 Rule 5 of Code of Civil Procedure gives

power and jurisdiction to the appellate court to put the appellant

on such reasonable terms as would in the courts opinion

reasonably compensate the decree holder for loss occasioned by

delay in execution of the decree by the grant of a stay order. The

relevant Sub-Rules (1) and (3) of Rule 5 of Order 41 of Code of

Civil Procedure are reproduced hereinbelow :-

"5. Stay by Appellate Court

(1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree......

(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied--

(a) that substantial loss may result to the party applying for stay of execution unless the order is made;

(b) that the application has been made without unreasonable delay; and

(c) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him."

9. The Apex Court in the case of Atma Ram Properties (P)

Ltd. vs. Federal Motors (P) Ltd reported in (2005) 1

Supreme Court Case 705 has also held as under :-

"8. It is well settled that mere preferring of an appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the court below. A prayer for the grant of stay of proceedings or on the execution of decree or order appealed against has to be specifically made to the appellate Court and the appellate Court has discretion to grant an order of stay or to refuse the same. The only guiding factor, indicated in the Rule 5 aforesaid, is the existence of sufficient cause in favour of the appellant on the availability of which the appellate Court would be inclined to pass an order of stay. Experience shows that the principal consideration which prevails with the appellate Court is that in spite of the appeal having been entertained for hearing by the appellate Court, the appellant may not be deprived of the fruits of his success in the event of the appeal being allowed. This consideration is pitted and weighed against the other paramount consideration: why should a party having succeeded from the Court below be deprived of the fruits of the decree or order in his hands merely because the defeated party has chosen to invoke the jurisdiction of a superior forum. Still the question which the Court dealing with a prayer for the grant of stay asks to itself is: Why the status quo prevailing on the date of the decree and/or the date of making of the application for stay be not allowed to continue by granting stay, and not the question why the stay should be granted.

9. Dispossession, during the pendency of an appeal of a party in possession, is generally considered to be 'substantial loss' to the party applying for stay of execution within the meaning of Clause (a) of Sub-rule (3) of Rule 5 of Order 41 of the Code. Clause (c) of the same provision mandates security for the due performance of the decree or order as may ultimately be passed being furnished by the applicant for stay as a condition precedent to the grant of order of stay. However, this is not the only condition which the appellate Court can impose. The power to grant stay is discretionary and flows from the jurisdiction conferred on an appellate Court which is equitable in nature. To secure an order of stay merely by preferring an appeal is not the statutory right conferred on the appellant. So also, an appellate Court is not ordained to grant an order of stay merely because an appeal has been

preferred and an application for an order of stay has been made. Therefore, an applicant for order of stay must do equity for seeking equity: Depending on the facts and circumstances of a given case an appellate Court, while passing an order of stay, may put the parties on such terms the enforcement whereof would satisfy the demand for justice of the party found successful at the end of the appeal. In South Eastern Coalfields Ltd. v. State of M.P. and Ors., this Court while dealing with interim orders granted in favour of any party to litigation for the purpose of extending protection to it, effective during the pendency of the proceedings, has held that such interim orders, passed at an interim stage, stand reversed in the event of the final decision going against the party successful in securing interim orders in its favour; and the successful party at the end would be justified in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand (a) the delivery to it of benefit earned by the opposite party under the interim order of the High Court, or (b) compensation for what it has lost, and to grant such relief is the inherent jurisdiction of the Court. In our opinion, while granting an order of stay under Order 41 Rule 5 of the CPC, 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. Thus, for example, though a decree for payment of money is not ordinarily stayed by the appellate Court, yet, if it exercises its jurisdiction to grant stay in an exceptional case it may direct the appellant to make payment of the decretal amount with interest as a condition precedent to the grant of stay, though the decree under appeal does not make provision for payment of interest by the judgment-debtor to the decree-holder. Robust commonsense, common knowledge of human affairs and events gained by judicial experience and judicially noticeable facts, over and above the material available on record - all these provide useful inputs as relevant facts for exercise of discretion while passing an order and formulating the terms to put the parties on. After all, in the words of Chief Justice Chandrachud, speaking for the Constitution Bench in

Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors. - "commonsense which is a cluster of life's experiences, is often more dependable than the rival facts presented by warring litigants"......................

19. To sum up, our conclusions are:-

(1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decree-holder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable;

(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in Clause (I) of Section 2 of the Act, the tenancy does not stand terminated merely by its termination under the general law; it terminates with the passing of the decree for eviction. With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree;

(3) 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." (emphasis supplied)

10. Following the aforesaid judgment, one of us Hon'ble Mr.

Justice Mukul Mudgal vide judgment and order dated 7th April,

2008 in M/s. C.E. Construction Ltd. Vs. Mr. Ajay Relan and

Others in CM No. 1773/2008 in EFA (OS) No. 05/2008 held

as under :-

".........it is amply clear that the Appellate court is not bound to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. An applicant who comes to the court for seeking a stay order must do equity for seeking equity. While granting an order of stay under Order 41 Rule 5 of the CPC the appellate court does have the jurisdiction to put the parties seeking the stay order on such terms, as would in its opinion reasonably compensate the decree holder, for the loss occasioned by the delay in the execution of the decree by the grant of stay order...."

11. Since the trial court has categorically held that the

Appellant/Defendants are not entitled to the continued

possession of the suit premises and the trial court has not

calculated the use/occupation charges, we deem it necessary

ourselves to compute the occupation charges payable by the

Appellant/ Defendants for continued possession of the suit

property during the pendency of the present appeal, taking

judicial notice of the rents prevalent in this area as well as the

exponential increase in the rents every year. It is pertinent to

mention that it was the Appellant/Defendants' case before the

trial court that the suit premises had been initially let out to them

both for commercial as well as residential use.