M/s. Gurunanak Timber Mart vs Anil Kumar Gulatee and Others

R.C. Mishra, J.—This order shall govern the disposal of-

(i) I.A. No. 4212/10, which is appellant''s application, under Order 41 Rule 5(1) of the CPC (for short ''the Code'') for staying execution of the impugned judgment and decree.

(ii) I.A. No. 9186/11, which is in the form of reply to the aforesaid LA. and appropriate directions to pay mesne profits @ Rs. 2,67,300/- p.m.

The present appeal has been preferred against judgment dated 26-2-2010 passed by Second ADJ, Jabalpur in Civil Suit No. 17-A/05, whereby the suit filed by the respondents for eviction of the appellant, a Partnership Firm, from the suit accommodation, though based on other grounds also, was decreed on the ground of bonafide requirement, envisaged u/s 12(1)(f) of the M.P. Accommodation Control Act, 1961 (hereinafter referred to as ''the M.P. Act'') and other consequential and incidental reliefs, including directions to appellant to pay a sum of Rs. 1 lac as compensation and arrears of rent @ Rs. 1,000/- p.m. were also granted. Being aggrieved, the respondents have also preferred a counter objection.

Upon LA. No. 4212/10 (above), as an interim measure, vide order dated 29-6-2010, execution of the decree was stayed, subject to conditions that the appellant shall deposit within a period of 30 days-

(i) entire cost of the litigation.

(ii) arrears of rent, if any.

(iii) a sum of Rs. 25,000/- towards compensation as awarded by the Trial Court,

and also that it shall deposit rent @ Rs. 1,000/- p.m. till decision of this appeal. It was further directed that the amount deposited towards the compensation and costs shall not be disbursed to the respondents and shall be kept deposited with a nationalised bank for a fixed period.

As indicated already, while opposing the stay application, so far as it relates to execution of the eviction part of the decree, the respondents have also prayed for modification of the order dated 29-6-2010 in the light of the decision of the Supreme Court in Atma Ram Properties (P) Ltd. Vs. Federal Motors Pvt. Ltd., that has been re-affirmed in The State of Maharashtra and Another Vs. Super Max International Pvt. Ltd. and Others, According to respondents, with the passing of the eviction decree, the appellant-Firm has ceased to be their tenant, and therefore, an instant right to execute it and to recover, in addition to the contractual rent, mesne profits to be determined after taking into account the prevailing market rental value, has accrued to them contemporaneously. In this context, they have assessed the minimum rent of the suit accommodation as per-

(i) Stamp Duty Ready Reckoner 2010-11 to be Rs. 85,427/-; and

(ii) prevailing rate of market rent in the surrounding area as Rs. 2.67,300/-.

The prayer for modification of the interim stay order has been vehemently opposed by the appellant inter alia on the ground that the decisions in Alma Ram Properties case and Super Max''s case (supra), cannot be considered as binding precedents in a case governed by the provisions of the Act. It has also been urged that in absence of an application, under Order 41 Rule 27 of the Code, the documents filed by the respondents in support of their claim for mesne profits should be kept out of consideration. In support of the reply, written arguments, running in as many as 14 typed pages, and providing subject matter for philosophical dissertation and digression, have also been submitted.

For the sake of convenience, the well-settled position of law on the right of appeal and nature/scope of the Appellate Court''s power to grant stay, as highlighted in the written arguments, may be summed up as under:-

(i) Right of appeal is a substantive right. For this, reference has been made to Garikapatti Veeraya Vs. N. Subbiah Choudhury, wherein the Supreme Court laid down the following propositions:-

(i) That the legal pursuit of a remedy, suit appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right.

(iii) The institution of the suit carries with it the implication that all rights of appeal then in force arc preserved to the parties thereto till the rest of the career of the suit.

(iv) The right of appeal is a vested right and such a right to enter the Superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of, its decision or at the date of the filing of the appeal.

(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.

(ii) Power to grant stay, being inherent, need not be expressly conferred on the Appellate Court as an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective ( Income Tax Officer Vs. M.K. Mohammed Kunhi, In that case, it was held that when Section 254 of the Income Tax Act confers appellate jurisdiction. It impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal is successful from being rendered nugatory. The following observations made in Polini Vs. Gray, (1879) 12 Ch D 438, were also quoted with approval:-

It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of Appeal before the second trial, as to the Court of last instance before the hearing of the final appeal.

Adverting to the main contention, endeavour of the Senior Counsel for the appellant has been to demonstrate, by reference to various provisions of the Act and the earlier judgments touching the facets of the issue (which, according to him, were not brought to the notice of the Court), that the decision in Atma Ram Properties case (supra), would not be applicable to a case, like the present one, regulated exclusively by the provisions of the Act, whereunder,

(a) by virtue of Section 13(1) thereof, a tenant, in order to secure protection against eviction under a decree appealed against by him or striking out of the defence, is obliged to deposit only the monthly rent as determined by the Trial Court.

(b) a tenant against whom a decree for eviction is passed by Trial Court does not lose protection if he files the appeal because, as pointed out by the Supreme Court in Hasmat Rai and Another Vs. Raghunath Prasad, , if appeal is allowed the umbrella of statutory protection shields him.

(c) in view of Section 6 of the Act, a landlord cannot claim or receive any rent in excess of the standard rent, as referred to in Section 7 thereof.

(d) Section 17 of the Act creates a bar to re-letting of the accommodation within two years from the dale on which a landlord recovers possession thereof in pursuance of an order made under clause (f) of sub-section (1) of Section 12.

(e) inclusion of ''any person continuing possession after the termination of his tenancy'' in the definition of tenant given in Section 2(i) of the Act does not assume any significance as for seeking eviction u/s 12 of the Act, notice u/s 106 of the Transfer of Properly Act is not required in the wake of the pronouncement of the Constitution Bench in V. Dhanapal Chettiar Vs. Yesodai Ammal, .

He is further of the view that the decisions in Atma Ram Properties case and Super Max case (supra), are not applicable to a case under the Act as, firstly they respectively relate to provisions of Delhi Rent Control Act, 1958 and Bombay Rent Act, 1947 and secondly, the source of statutory power to grant stay, under Order 41 Rule 5 of the Code, subject to payment of mesne profits at a rate higher than the contractual rate of rent was not considered in both the cases, despite the fact that the rule is merely a rule of procedure and regulatory in nature.

Per contra, learned Senior Counsel appearing for the respondents has submitted that Atma Ram Properties case (supra), provides an affirmative answer to the core question as to whether the Appellate Court, while staying execution of a decree for eviction, has jurisdiction to put the appellant on such reasonable terms as would, in its opinion, reasonably compensate for loss occasioned by delaying in execution of the decree or by the grant of stay order in the event of the appeal being dismissed. According to him, the aforesaid ratio of law has already been followed by a Co-ordinate Bench of this Court in Netlal Vs. Thagi Bai (dead) through L.R. Marotirao, as well as by a Division Bench in Shabbar Hussain Vs. Ram Dayal. 2011 (1) MPWN 58 , and there is no compelling reason to take a different view. Reference has also been made to the decision, rendered by the then Chief Justice of Nagpur High Court, in AIR 1953 186 (Nagpur) holding that-

the Rent Control Order governs, for the limited purpose of that Order, relationship of landlord and tenant. It has absolutely no relevance to the question of what should be the measure of damages, which a successful plaintiff should get for being kept out of his or her property. After the termination of the tenancy the position of the tenant is that a trespasser, and a trespasser cannot invoke in aid the provisions of that order.

At the outset, it may be observed that the contention that Order 41 Rule 5 of the Code does not correspond to any substantive right is self contradictory inasmuch as the proposition that the power to hear appeal (which, in the instant case, has been conferred by Section 96 of the Code) does include the power to slay execution of the order in question was propounded in M.K. Mohamad Kunhi''s case (supra), cited on behalf of the appellant only.

The judgment in Hasmat Rai and Another Vs. Raghunath Prasad, , does not contain reference to an earlier decision rendered in Smt. Chander Kali Bai and Others Vs. Shri Jagdish Singh Thakur and Another, and re-affirmed in Shyam Charan Vs. Sheoji Bhai and Another, explaining that -

A tenant even after the termination of his contractual tenancy does not become an unauthorised occupant of the accommodation but remains a tenant. Such a tenant is conveniently called a statutory tenant. Whether the expression aforesaid borrowed from the English Law is quite apposite or not but, what is certain is 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 Act and on such termination his possession does not become wrongful, until and unless a decree for eviction is made. If he continues to be in possession even after the passing of the decree, he does so as a wrongful occupant of the accommodation.

In absence of a decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy.''

In other words, liability of the tenant to pay mesne profits arises only upon the passing of the decree for eviction against him. The view taken in Chander Kali''s case (supra), was followed in Atma Ram Properties case (supra). Relevant observations may be reproduced as under:-

In the Delhi Rent Control Act, 1958, the definition of a "tenant" is contained in clause (1) of Section 2. Tenant includes "any person continuing in possession after the termination of his tenancy" [Section 2 (1) (ii)] and does not include "any person against whom an order or decree for eviction has been made" [Section 2(1) (A)]. This definition is identical with the definition of tenant dealt with by this Court in Chander Kali''s case. The respondent tenant herein having suffered an order for eviction on 19-3-2001, his tenancy would be deemed to have come to an end with effect from that date and he shall become an unauthorised occupant. It would not make any difference if the order of eviction has been put in issue in appeal or revision and is confirmed by the superior forum at a latter date. The date of termination of tenancy would not be postponed by reference to the doctrine of merger.

That apart, it is to be noted that the Appellate Court while exercising jurisdiction under Order 41 Rule 5 of the Code did have power to put the appellant tenant on terms. The tenant having suffered an order for eviction must comply and vacate the premises. His right of appeal is statutory but his prayer for grant of stay is dealt with in exercise of equitable discretionary jurisdiction of the Appellate Court. While ordering stay the Appellate Court has to be alive to the fact that it is depriving the successful landlord of the fruits of the decree and is postponing the execution of the order for eviction. There is every justification for the Appellate Court to put the appellant tenant on terms and direct the appellant to compensate the landlord by payment of a reasonable amount, which is not necessarily the same as the contractual rate of rent. In Marshal Sons & Co. (I) Ltd. Vs. Sahi Oretrans (P) Ltd., this Court has held that once a decree for possession has been passed and executed is delayed depriving the judgment creditor of the fruits of decree, it is necessary for the Court to pass appropriate orders so that reasonable mesne profits which may be equivalent to the market rent is paid by a person who is holding over the property.

Moreover, as explained in Super Max''s case (supra), the definition of ''tenant'' in Section 2 (i) of the M.P. Act and Section 2(I) of the Delhi Act contains a similarly worded exclusionary clause to the effect that a tenant does not include any person against whom an order or decree for eviction has been made under the Act. Although, the definition of ''tenant'' as given in Section 5(11) of the Bombay Act does not have such an exclusionary clause yet, in that case, a three Judge, speaking through Aftab Alam, J., proceeded to dismiss the contention raised against the applicability of the dictum of Atma Ram Properties case (supra), to a proceeding under the Bombay Act, while holding that-

in an appeal or revision preferred by a tenant against an order or decree of an eviction passed under the Rent Act, it is open to the appellate or the Revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent.

There is yet another aspect of the matter. Article 141 of the Constitution of India unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a Legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But, what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ''declared law'' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions, which arose for consideration in the case in which the judgment was delivered. An ''obiter dictum'' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a binding effect as a precedent, but it cannot be denied that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case......... The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court. When Supreme Court decides a principle it would be the duty of the High Court or a Subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court, which had been set aside by the Supreme Court is a nullity [See: Narinder Singh Vs. Surjit Singh,

[Quoted from Director of Settlements, Andhra Pradesh and Others Vs. M.R. Apparao and Another,

Thus, viewed from any angle, the decision in Atma Ram Properties case (supra), applies with full force to a case under the Act and, accordingly, the appellant is liable to pay mesne profits from the date of the eviction decree appealed against.

Coming to the quantum of mesne profits, it may be observed that the accommodation, having an area 13506 Square Feet (1254.56 sq. meters), is situated in the City of Jabalpur on the Main Road from Madan Mahal Chowk to Amanpur Gangasagar Garha Road and the respondents have claimed mesne profits at a monthly rate varying between minimum of Rs. 85,247/- and maximum of Rs. 2,67,320/- per month. However, fact of the matter is that, admittedly, in their application, u/s 10 of the Act [registered as Case No. 4-A-90 (1)/2006], before the Rent Controlling Authority, Jabalpur, they have prayed for fixation of standard rent in relation to the suit accommodation @ Rs. 20,000/- per month only and the prayer has remained un-amended as yet.

Question of stay of execution of decree by an Appellate Court is a matter of discretion to be exercised after taking into consideration the facts and circumstances of each individual case. The stay of execution is granted with a view to prompting the disruption of rights vested in the appellant subject to suitable compensation to the respondents who have succeeded in the Lower Courts. For this, attention has been invited to the following observations made by the Privy Council in the case of Roger Vs. Comptoir D.S. Escompte De Paris, 3 LR P.C. 475:-

One of the first and highest duty of all the Courts is to take care that the act of Court does no injury to anyone of the suitors and when the act of Court is used it does not mean merely the act of primary Court or any intermediate Court of appeal but the act of Court as a whole from first Court, which entertains the jurisdiction over the matter up to the highest Court, which finally disposes of the cases.

The decision in Super Max''s case (supra), also lays down guideline in the following terms:-

Needless to say that in fixing the amount subject to payment of which the execution of the order/decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.

Taking into consideration all these legal as well as factual aspects of the matter, I am of the view that the respondents are entitled to get additional sum as mesne profits, equivalent to the amount claimed as the standard rent of the accommodation. In the result, I.A. No. 9186/11 stands allowed in Part. The interim stay order dated 29-6-2010, passed upon I.A. No. 4212/10, is hereby modified and it is directed that execution of the impugned decree shall remain stayed till decision of the appeal subject to an additional condition that the appellant shall also deposit a monthly sum of Rs. 20,000/- as mesne profits in addition to the contractual rent w.e.f. the date of decree. For depositing the arrears of mesne profits payable under this order, two month''s time is granted to the appellant.