Sobti Furniture Mart Pvt. Ltd. vs Ravinder Kumar Suri

Mukta Gupta, J.

CM 7618/2015 (by respondent)

An eviction petition was filed by the respondent Ravinder Kumar Suri against the petitioner M/s. Sobti Furniture Mart Pvt. Ltd. (in short the Sobti Furniture) under Section 14(1) (e) read with Section 25B DRC Act. The leave to defend application filed by Sobti Furniture was dismissed vide order dated 27th August, 2014 and an eviction order was passed by the learned ARC. The order dated 27th August, 2014 passing the eviction order was challenged by Sobti Furniture in the present revision petition.

On 9th March, 2015 when the matter came up for hearing ex-parte, this Court issued notice. On a subsequent application of the petitioner on the next date when the respondent entered appearance, this Court vide order dated 16th April, 2015 stayed the execution of the impugned order dated 27th August, 2014.

By the present application the respondent Ravinder Kumar Suri seeks directions to the petitioner/non-applicant for payment of user charges @ market rate of rent. The applicant/respondent along with the application has placed on record lease deed of the adjoining property with similar dimensions which has been let out on 4th March, 2011 at a rent of Rs. 1,11,000/-. It is thus prayed that Ravinder Kumar Suri is entitled to user charges at the market rate of rent, if not higher than the same rate, in terms of the decision of the Supreme Court in Atma Ram Properties (P) Ltd. Vs. Federal Motors Pvt. Ltd., (2005) 1 CTC 53 : (2004) 10 JT 410 : (2005) 141 PLR 643 : (2004) 10 SCALE 345 : (2005) 1 SCC 705 .

Learned counsel for Sobti Furniture relying upon the decision in Sunita Rani and Others Vs. Sri Chand and Others, (2009) 15 JT 344 : (2009) 12 SCALE 470 : (2009) 10 SCC 628 : (2009) 15 SCR 295 submits that the law as laid down in Atma Ram Properties is no more good law and in view of this subsequent decision the Court cannot fix rent more than the statutory rent taking out the premises from the purview of the provisions of Delhi Rent Control Act.

Heard learned counsel for the parties. In Sunita Rani (supra) the Court was dealing with a case where the landlord had sought eviction of three premises i.e. a godown, a shop and a Kothari. All the three eviction petitions were dismissed by the Rent Controller. However, the appellate authority allowed the appeal of the landlord in respect of the go-down and ordered eviction vide judgment dated 30th May, 1989 and by the same judgment rejected the landlord''s appeal in respect of shop and Kothari. Thus, the landlord filed two writ petitions in respect of shop and Kothari and the tenant filed in respect of the go-down before the High Court. High Court heard all the three writ petitions together and by a common judgment dismissed all the three writ petitions. However, the High Court noted that the rent of the shop and Kothari were low and thus increased the same. It is this order of the High Court increase of rent of the shop and Kothari which was not directed to be evicted that was challenged before the Supreme Court.

The Supreme Court in Sunita Rani (supra) relying upon its earlier decision in The State of Maharashtra and Another Vs. Super Max International Pvt. Ltd. and Others, AIR 2010 SC 722 : (2009) 11 JT 344 : (2009) 11 SCALE 794 : (2009) 9 SCC 772 : (2009) 14 SCR 801 and Niyaz Ahmad Khan Vs. Mahmood Rahmat Ullah Khan and Another, (2008) 3 CLT 495 : (2008) 7 JT 104 : (2008) 8 SCALE 635 : (2008) 7 SCC 539 held that in writ petitions by landlords against rejection of eviction petition there is no scope of issue of any interim direction to the tenant to pay higher rent, but in writ petitions by tenants against grant of eviction, the High Court may as a condition of stay direct the tenant to pay higher rent during the pendency of the writ petition. This again was subjected to two limitations i.e. condition should be reasonable and that there should be no bar in the respective State Rent Control legislation in regard to such increases in the rent.

In Atma Ram Properties (supra) the Supreme Court noted the rational of imposing terms on the tenant for grant of stay of decree of eviction and held that there was a need to deter tenants from perpetuating the life of litigation thereby robbing the landlord of the fruits of litigation even if successful. The Court held that dispossession during pendency of an appeal of a party in possession, is generally considered to be a ''substantial loss'' and since the power to grant stay is equitable in nature, an applicant seeking stay must do equity for seeking equity. The Supreme Court further held that after termination of the tenancy possession of a tenant is akin to that of a trespasser and with effect from the date of termination of the tenancy i.e. from the date of decree of eviction, the tenant was 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 and the landlord is not bound by the contractual rate of rent which was prevalent prior to the date of decree. It was stated that the right of the tenant to continue in possession on passing of an eviction order is not protected by the Rent Control Legislation and thereafter is governed by the general law i.e. by the provisions of Transfer of Property Act. It was held:

"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 insofar 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 (l) 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."

As noted above, the decision in Sunita Rani does not over-rule the earlier decision of the Supreme Court in Atma Properties but was a case which related to facts where the landlord despite having lost in the eviction petitions the rent was increased by the High Court and not where the eviction orders were passed against the tenants. In fact, the decision in Sunita Rani reiterated that the High Court as a condition of stay can direct the tenant to pay higher rent during the pendency of the writ petition subject to the same being reasonable and there being no bar in the respective State Rent Control legislation. The DRC Act does not bar payment of mesne profit and occupation charges after an eviction order is passed and as noted by the Supreme Court in Atma Ram Properties after an eviction order is passed the status of the occupant terminates as a tenant and is thereafter of an unauthorized occupant which is not governed by the provisions of the DRC Act.

The respondent/applicant has placed on record a lease deed in respect of an adjoining property admeasuring 1550 sq.ft. on the ground floor at plot No. 794, Joshi Road, Karol Bagh which has been let out at a rent of Rs. 1,11,000/- from 4th March, 2011. The area of the property in the present petition is 1500 sq.ft. on the ground floor of property bearing No. 816-818 Joshi Road, Karol Bagh thus similar in size. Thus, it would be reasonable to direct that the petitioner/non-applicant would pay user charges @ Rs. 50,000/- per month to the respondent/applicant besides statutory charges from the date of order of eviction i.e. 27th August, 2014 till the present petition is decided. The arrears of user charges @ Rs. 50,000/- per month from 27th August, 2014 till date will be paid within 8 weeks and further charges will be paid on month-to-month basis on or before 7th of each month.

Application is disposed of.