Tenant’s liability to pay mesne profits kicks in only after eviction decree, rules Supreme Court
In a recent ruling that streamlines the computation of mesne profits in tenancy disputes governed by the Maharashtra Rent Control Act, 1999, the Supreme Court has held that the juridical relationship of landlord and tenant does not extinguish with mere filing of a suit but subsists until the passing of the eviction decree.
A bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan delivered this clarification while allowing an appeal against a trial court’s direction that had ordered an inquiry into mesne profits from the date of institution of the suit, rather than from the date of the eviction decree.
The Court observed: “As the decree of eviction was passed under the Maharashtra Rent Control Act, 1999, the settled position of law is that only on the decree of eviction being passed, the relationship of the landlord and the tenant comes to an end.”
The bench stressed that tenancy is deemed to be terminated only upon judicial adjudication of eviction, and thus, any computation of mesne profits, a compensatory measure for unlawful possession, must necessarily commence post-decree.
Explaining the legal rationale, Justice Oka stated during the hearing: “The suit is under Rent Act; the termination of tenancy takes place on the date on which decree is passed. And therefore, mesne profit has to be calculated from the date of the decree. You will get mesne profit from the date on which his possession becomes unlawful. His possession becomes unlawful when termination of tenancy takes place.”
The case pertained to a dispute between a landlord and tenant, wherein the former had secured a possession decree which subsequently attained finality. The trial court, however, directed mesne profits to be calculated from the date the suit was filed, a position the apex court found legally unsustainable under the Rent Act.
Referring to Section 2(12) of the Civil Procedure Code (CPC), which defines "mesne profits" as gains derived or reasonably expected to be derived from property during the period of wrongful possession, the Court emphasized that such a period commences only after lawful possession ceases, which in rent control matters is marked by the decree date.
Accordingly, modifying clause (4) of the trial court's decree, the Supreme Court directed: “Inquiry into future mesne profit under Order XX Rule 12(1)(c) of Code of Civil Procedure, 1908, be made from 29th March, 2014 till the delivery of the vacant possession of the suit property by the defendant to the plaintiff.”
The appeal was thus allowed with this modification, and the Court’s intervention now sets a binding precedent on the point of commencement of mesne profit liability in similar eviction suits under rent control statutes.
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