Leena Mishra vs M/S. Das Build-Con Pvt. Ltd
2023 Latest Caselaw 4039 Ori

                 IN THE HIGH COURT OF ORISSA AT CUTTACK
                                 CMP NO. 1245 OF 2022
                 Leena Mishra                            ....       Petitioner
                                              Mr. Banshidhar Baug, Advocate
                                           -versus-
                 M/s. Das Build-con Pvt. Ltd.,           .... Opp. Parties
                 Bhubaneswar and others
                                         Mr. Samir Kumar Mishra, Advocate
                                                       (For Opp. Party No.2)

                       CORAM:
                       JUSTICE K.R. MOHAPATRA
                                        ORDER

Order No.                              21.04.2023

   6.       1.       This matter is taken up through hybrid mode.

2. Order dated 17th November, 2022 (Annexure-5) passed in Execution Case No.309 of 2021 is under challenge in this CMP, whereby learned Civil Judge (Senior Division), Bhubaneswar directed stay of further proceeding of the execution case till disposal of CMA No. 58 of 2021 filed by Opposite Parties under Order IX Rule 13 C.P.C.

3. Mr. Baug, learned counsel for the Petitioner submits that C.S. No.1720 of 2018 has been filed for eviction, realization of arrear rent along with PI and FI and occupation charges. Ex parte judgment against the Opposite Parties was passed on 13th July, 2021 with the following order:

"The suit be and the same is decreed accordingly, Ex-parte as against the defendants, without cost. The defendants are hereby directed to hand over the vacant suit schedule premises to the plaintiff within 2 months of passing of this judgment clearing the arrear @ 5% enhanced rent as per agreement, since 1.11.2015 with PI & FI @ 10% per annum till actual payment is made, after adjustment

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of the advance so paid to the plaintiff i.e. Rs.3,60,000/- failing which the plaintiff is at liberty to recover possession of the suit land from the defendants through process of the Court. Defendants are further directed to handover the vacated premises without any damage caused to it, by them and if any damage or damages found to have been caused by them, plaintiff is at liberty to realize the amount required to repair the same from the defendants.

Defendants are also held liable to pay the cost of the suit as per GR & CO to the plaintiff."

4. It is his submission that an application under Order IX Rule 13 C.P.C. in CMA No.58 of 2021 was filed by the Opposite Parties to set aside the ex parte judgment and decree, which is sub-judice. Due to non-compliance of the judgment and decree passed in C.S. No.1720 of 2018, Execution Case No.309 of 2021 has been filed. During pendency of the execution petition, the J.Drs-Opposite Parties filed an application to stay further proceedings in the execution case till disposal of CMA No.58 of 2021. Learned Executing Court considering the said application passed the impugned order under Annexure-5.

5. Mr. Baug, learned counsel for the Petitioner further submits that since the decree involved realization of arrear rent, it is a money decree and provision of Order XXI Rule 29 C.P.C. should be followed while entertaining an application for stay of execution proceeding. The Opposite Parties have to furnish the security for enjoying an order of stay of the execution proceeding. It is his submission that as per the agreement, monthly rent in respect of the suit premises was Rs.30,000/- along with clause of enhancement. At present, the arrear rent would be more than Rs.30,00,000/-. Learned Executing Court, while adjudicating the petition for stay, did not take this material

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aspect into consideration. He relied upon the case law in Anderson Wright and Co. -v- Amar Nath Roy and others, reported in (2005) 6 SCC 489, wherein the Hon'ble Supreme Court held at paragraph-5 as under:

"5. As held by this Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. [(2005) 1 SCC 705] , once a decree for eviction has been passed, in the event of execution of decree for eviction being stayed, the appellants can be put on such reasonable terms, as would in the opinion of the appellate court reasonably compensate the decree-holder for loss occasioned by delay in execution of the decree by the grant of stay in the event of the appeal being dismissed. It has also been held that with effect from the date of decree of eviction, 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 on being vacated by the tenant. While determining the quantum of the amount so receivable by the landlord, the landlord is not bound by the contractual rate of rent which was prevalent prior to the date of decree."

He also relied upon the case law in M/s. Jersey Developers (P) Ltd. and others -v- Canara Bank, reported in 2022 (6) SCALE 236, wherein it is held at Paragraph-4.2 as under:

"4.2. Now so far as the amount already deposited by the appellants herein (50% of the amount pursuant to the order passed by the High Court and the balance 50% of the decretal amount pursuant to the order passed by this Court) is concerned, it will be open for the respondent - Bank original plaintiff to withdraw the same and keep it in an interest bearing fixed deposit which shall be dealt with subject to the ultimate outcome of the suit. In case the plaintiff succeeds in the suit and the decree is passed the said amount shall be appropriated towards the decree and if the suit is dismissed the same shall be repaid to the

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defendants subject to the further order to be passed by the Appellate Court. The Bank shall retain the amount as ordered hereinabove without prejudice to the rights and contentions of the respective parties in the suit."

He also relied upon the case law in Sumer Corporation -

v- Vijay Anant Gangan and others, reported in 2022 (16) SCALE 385, wherein at paragraphs-7, 7.2 and 8, it is held as under:

"7. Having heard the learned Senior Advocates appearing on behalf of the respective parties and having gone though the impugned order passed by the High Court determining the monthly compensation @ Rs. 2,50,000/-, we are of the opinion that the approach adopted by the High Court is not a sound principle of law to form the basis for determining the compensation in this case. In the present case, while determining the monthly compensation, the High Court has considered the fair rate of return @ 6.5% annually on the amount for which the appellant purchased the property in the year 2008, i.e., Rs. 5.50 crores. The aforesaid could not have been the basis while determining the monthly compensation. If the approach adopted by the High Court is accepted and/or approved, in a given case, it may happen that the lessor might have purchased the property forty years back and/or long back and if the said approach is considered and thereafter the monthly compensation is determined, the same cannot be said to be a reasonable compensation. The aforesaid would be contrary to the law laid down by this Court in the case of Atma Ram Properties (P) Ltd. (supra) and further reiterated by this Court in the case of Super Max International Private Limited, (supra).

7.2 The decision in the case of Atma Ram Properties (P) Ltd. (supra) has been subsequently followed by this Court in the case of Super Max International Private Limited (supra). In the said decision, it is further observed and held that in fixing the amount subject to payment of which the execution of the order/decree is stayed, the Court would

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exercise restraint and would not fix any excessive, fanciful or punitive amount. Therefore, in a revision/appeal preferred by the tenant, who has suffered an eviction decree, the appellate/revisional court while staying the eviction decree can direct the tenant to pay the compensation for use and occupation of the tenancy premises upon the contractual rate of rent and such compensation for use and occupation of the premises would be 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. In the present case, the High Court has not done that exercise and has determined the compensation considering the market value/value at which original respondent No. 19 acquired the rights of the suit property for a sum of Rs. 5.50 cores and thereafter, considering estimated return @ 6.5% per annum, the High Court has determined/awarded the compensation for use and occupation of the premises by the tenant @ Rs. 2,50,000/- per month. The aforesaid method adopted by the High Court while determining the compensation cannot be accepted. The High Court was required to undertake exercise and to determine the compensation 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.

8. In view of the above and for the reasons stated above, the present appeal succeeds in part. The impugned judgment and order passed by the High Court determining the compensation for the use and occupation of the premises by the tenant @ Rs. 2,50,000/- per month is hereby quashed and set aside. The matter is remitted back to the High Court to determine the compensation for the use and occupation of the premises in question by the tenant/lessee afresh and taking into consideration the observations made hereinabove. For that purpose, the parties may be permitted to lead the evidence on the rate of rent that would have been earned by the landlord/lessor, if the lessor would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The aforesaid exercise be completed within a period of six months from the date

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of the receipt of the present order. Till a fresh decision on remand is taken by the High Court, by way of interim arrangement and subject to further decision that may be taken by the High Court on remand, we direct the respondent No. 1 to deposit the compensation at-least @ Rs. 2,50,000/- per month from the date of passing of the eviction decree, however, as observed hereinabove, the same shall be subject to the final decision/determination of compensation on remand."

6. It is thus submitted that while granting an order of stay of the execution proceeding, it is the duty of the Court to see that the Decree Holder is not prejudiced. The D.Hr. should be adequately compensated for the loss he continues to suffer for grant of order of stay. Hence, suitable arrangement should be made by the Court while granting order of stay in execution case, more particularly when a money decree is put to execution. He, therefore, submits that the Petitioner should be directed to pay up-to-date rent in respect of the suit property as a condition precedent for staying further proceeding of the execution case.

7. Mr. Mishra, learned counsel submits that the Opposite Parties are not in a position to pay arrear rent at present. It is his submission that when a proceeding under Order IX Rule 13 C.P.C. is pending, learned Executing Court should wait till disposal of the said proceeding, failing which the petition under Order IX Rule 13 C.P.C. would be held infructuous. Considering the same, the impugned order under Annexure-5 has been passed.

8. In support of his case, he relied upon the case law in Nilamani Nayak -v- Ramkrushna Swain Mohapatra, reported in 1979 (1) C.W.R. 45, wherein this Court stayed the execution proceeding during pendency of an application under Order XLI Rule 19 C.P.C. It is his submission that parties are involved in

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several litigations and payment of arrear rent as per the decree will seriously prejudice the Opposite Parties, as it would be very difficult to recover the same, if the J.Drs-Opposite Parties succeed in the suit after the ex parte decree is set aside. As such, learned Executing Court has committed no error in passing the impugned order. Hence, he prays for dismissal of the CMP.

9. Considering the submissions made by learned counsel for the parties and keeping in mind that the decree put to execution is for eviction and for realization of the arrear rent, this Court is of the considered opinion that the provision under Order XXI Rule 29 C.P.C. is squarely applicable to the case at hand. It provides that the Court may, on such terms, as to security or otherwise, as would think fit, stay execution of the decree until the pending suit has been decided. In the instant case, realization of arrear rent has been directed. Thus, learned Executing Court while granting stay of further proceeding in the execution case ought to have resorted to Rule 29 of Order XXI C.P.C. while passing the impugned order under Annexure-5. Neither the J.Drs-Opposite Parties are asked to furnish security nor has any reason for not asking the J.Drs to furnish security been recorded by the learned Executing Court. Since a proceeding under Order IX Rule 13 C.P.C. is pending for adjudication, the Court may stay execution proceeding till disposal of the said petition, but it shall be subject to furnishing security to the satisfaction of the Court.

10. Taking into consideration the facts and circumstances of the case, this Court directs that further proceeding of Execution Case No. 309 of 2021 shall remain stayed subject to the J.Drs.- Opposite Parties depositing a sum of Rs.10,00,000/- (Rupees ten

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lakh) before learned Executing Court by 12th May, 2023. It is further directed that the J.Drs-Opposite Parties shall go on depositing the current rent @ Rs.35,000/- (Rupees thirty-five thousand) per month by 10th of every month before the Executing Court during continuance of order of stay of execution proceeding. Deposits, if made within the stipulated time as aforesaid, shall be invested in fixed deposit(s) in any nationalized bank, which shall be renewed from time to time subject to further orders to be passed in the execution case. The amount so deposited shall be disbursed as per direction in the execution proceeding. Failure on the part of the Opposite Parties to deposit the aforesaid amount within the stipulated period shall entail the Executing Court to proceed with the execution case.

11. With the aforesaid observation and direction, the CMP is disposed of.

Urgent certified copy of this order be granted on proper application.

                                           (K.R. Mohapatra)
bks                                              Judge