Tenancy - Interim Compensation/ Mesne Profit - Present application by landlord, praying that during pendency of Writ Petition tenant/respondent be directed to pay interim monthly compensation/mesne profit at least at rate of 70,500/ per month with effect from filing of writ petition - Held, fact that earlier unconditional interim order was granted after hearing both sides cannot preclude landlord from applying for modification of order so as to impose some legitimate condition to meet ends of justice - Keeping in mind that Writ Petition is not likely to reach for hearing for quite some time, landlord who has succeeded in getting decree of eviction is entitled to claim suitable interim arrangement to meet ends of justice - There is nothing in law, which would preclude landlord in doing so - If tenants' contention is accepted, value of property should not be less than Rs. 53.50 Lakhs - Applying commercial practice of fair returns of 10% p.a. against value of property, tenants would be liable to pay at least amount of Rs. 5,35,000/- p.a. towards interim compensation or fair market rent to avail of protection given by Court in terms of earlier order - According to tenant, keeping in mind present market condition, amount of return should not be more than 5% - Once again, no instance or document has been produced by tenants to substantiate this position - Assuming that there is slack in demand of rental properties and return have fallen to some extent, giving that benefit would assume that instead of 10% tenants should be made to pay at least at rate of 8% on fair market value determined on basis of amount indicated in Ready Reckoner - That would come to around Rs. 4,28,000/ p.a. - On this finding, tenant would be liable to pay yearly interim compensation of around Rs. 4,28,000/ which would round off that figure to Rs. 4,00,000/- p.a., which comes to monthly compensation of Rs. 33,333/ - Therefore, it is ordered that tenant shall pay interim monthly compensation in respect of suit premises at rate of Rs. 33,333/- to avail of interim protection granted by this Court earlier - Above arrangement would be subject to outcome of this Writ Petition - Application preferred by landlord would succeed on condition that landlord would file undertaking in this Court that in event tenants succeed in present Petition, entire amount recovered by them in excess of monthly rent of suit premises, in terms of this order shall be reimbursed to tenants with interest, not less than 12% per annum, or such other amount, as may be fixed by Court at relevant time - Application is disposed of on above terms
Citation: 2009(3)BomCR99
IN THE HIGH COURT OF JUDICATURE OF BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL APPLICATION NO.37 OF 2009
IN
WRIT PETITION NO.8702 OF 2005
Super Max International Pvt.Ltd. & Ors. ..Applicants.
V/s.
..Respondents.
M/s.R.M.Choksey & Co.
CORAM: A.M.KHANWILKAR,J
P.C. :
Heard Counsel for the parties.
2. This
1.
on
the
Atma
Application by the landlord is
founded
exposition of the Apex Court in the case
Ram
Properties
Vs.Federal
of
Motors[2005(3)
Bom.C.R.274], praying that during the pendency of the
Writ
Petition the tenant be directed to pay
interim
monthly compensation/mesne profit atleast at the rate
of
Rs.70,500/- per month with effect from 1st
July,
2003.
3.
To
buttress
compensation
claim the
of the suit premises
respect
that
Rs.70,500/-,
monthly
the landlord has relied on
is
the
around
in
the
value of the property indicated in the Ready Reckoner
According to the landlord, the fair market
price indicated in
which is for
given
commercial
about
respect of the
419
per
to
That
be
at
and
premises,
the
used
rate
The premises
fact is
landlord,
for
of
not
admeasures
in
dispute.
if the value in
the
Ready
ig
According
should
sq.mtr.
sq.ft.
suit
office purpose
activities
Rs.1,88,400/-
2008.
of
Reckoner
is to be applied, the fair market value
of
market
the premises would be around Rs.80 Lakhs and the fair
return
conservative
on
rate
the
of
suit
property
the
more than
10% would be much
at
Rs.70,500/- per month.
4.
On
the
other hand, tenants submit that
the
question of determining interim compensation does not
arise
That
in
22nd
interim
one.
present
February, 2006, both sides were
relief was granted, which was
case.
that
heard
and
unconditional
At this distance of time, it is not open to the
landlord
was
fact situation of the
is so because while admitting the Writ Petition
on
the
to
claim interim monthly compensation,
request was not pressed when the Writ
heard
for admission.
Besides, it is
as
Petition
contended
that
the
amount
monthly
interim
claimed by the
compensation
landlords
at
the
towards
rate
of
The
Ready
of
tenants
on the other hand, rely on
the
5.
Rs.70,500/- is excessive.
Reckoner to contend that the fair market value
the
premises
Rs.1,37,300/-
value
of
for office user
per
the
sq.mtr.
suit
is
mentioned
Applying that
property would
rate
come
as
to
the
about
Rs.53,46,000/- and not Rs.80 Lakhs, as claimed by the
in
Besides, according to the tenants keeping
mind
ig
landlord.
the
present
market
trend
of
downward
be
movement, the question of offering return of 10% will
unrealistic.
should
tenants,
return
not exceed 5% of the fair market value of the
On
the above argument, it
property.
that
the
submitted
at
the
rate
of
Rs.70,500/-
monthly
is far
Lastly it is contended on behalf of
excessive.
tenants
is
claim of the landlord for interim
compensation
According to the
the
amount
that they would not be able to pay such high
towards monthly compensation and
resultantly
it will amount to putting unreasonable restriction on
them
as
condition for enjoying interim
protection,
which will be unjust and inequitable.
6.
Having
considered
the rival
arguments
and
perusing the relevant documents on record, I would in
on
first place answer the preliminary point
raised
the
behalf of the tenants that it is not open to
the
landlord to ask for modification of the interim order
for continuation of protection to the tenants during
the pendency of the Writ Petition which has
been
admitted
after
hearing
both
already
sides
and
it
Learned
would
Counsel for the tenants submits that
ig
7.
unconditional interim relief granted.
amount to review of the Order
mind
the
parameters
jurisdiction,
the
for
exercising
review
it is not open to this Court to impose
further condition other than the one provided in
any
22nd
It is then contended that keeping in
February, 2006.
dated
interim
buttress
order
dated 22nd February,
2006. To
this contention, reliance is placed on the
decision of the Apex Court in the case of Haridas Das
Usha
v/s.
Rani
Banik(Smt) and ors.
(2006) 4 SCC page 78.
that
would
it
reported
in
The argument clearly overlooks
is not a case of review of the
order. It
been a case of review, if the Court was
upon to recall the entire interim order. The
have
called
landlord
by
this application is merely
asking
for
imposing additional condition to allow the tenants to
enjoy the suit property in lieu of interim protection
the pendency of the Writ Petition.
of this relief at best would result in
of the
Granting
modification
during
interim order and not review thereof.
Thus
Das(Supra)
Moreover,
the
fact that the
interim order
cannot preclude
the order
of
landlord
condition
tenants.
unconditional
from
so as
sides
applying for
impose some
to
to meet the ends
of
justice.
in mind that the Writ Petition is not likely
reach
for
landlord who
eviction is
hearing
for
to
the
ig
Keeping
earlier
the
was granted after hearing both
modification
legitimate
is of no avail to
Haridas
understood, the principle stated by the Apex Court in
has
quite
succeeded in
entitled
to
some
the
decree of
getting
time,
claim
suitable
interim
arrangement to meet the ends of justice.
8.
It
stated
was
by
the
then argued that the legal
Apex
Court
in
the
position
Atma
Ram
Properties(supra) case could have been invoked by the
landlord, when
February, 2006.
the
matter
was
argued
on
22nd
The fact that such argument was not
canvassed on behalf of the landlord on 22nd February,
2006
in my opinion, in no way preclude the
landlord
to lateron apply for imposing additional condition to
enable the tenants to avail of the interim protection
in
terms
of
the Order dated 22nd
February,
2006.
There
is
in doing so.
preclude
the
In other words, the fact that
landlord
nothing in law, which would
no argument for imposing condition, now prayed by the
come
in
was canvassed on 22nd February, 2006, will
the
landlord,
way of the landlord to call
upon
the
Court to impose appropriate condition in terms of the
legal
position stated by the Apex Court in Atma
Properties case(supra).
Ram
Indeed, the question whether
the landlord would be entitled for arrears of interim
compensation with retrospective effect is
ig
monthly
matter within the discretion of the Court.
The Court
confine the relief to the landlord from the date
may
a
of the filing of the present Application.
meet
That would
the ends of justice and address the concern
of
the tenants as well to that extent.
9. I
shall now deal with the argument that
amount claimed
by
the landlord
month towards
at
the
per
compensation is excessive or otherwise.
Rs.70,500/-
amount
rate
of
the
rate
interim
monthly
Even if the
fair market price of the property at
by
the landlord is to be ignored and the contention of
the tenant
would
Rs.1,88,400/- per sq.
mtr.
the
as assumed
value
of
of
is accepted, even then the
fair
market
of the suit property as per the Ready Reckoner
be
around
Rs.53.50
Lakhs,
as
the
price
indicated
at
for office premises in the Ready
Rs.1,37,300/-
per sq.
mtr.
Reckoner
It was argued
that
the present market condition being precarious one, it
the
suit
stated
premises.
to
be
is not possible to fetch amount of Rs.53,50,000/- for
The argument will have
rejected
as
the
tenants
to
be
have
not
produced any comparable instance to substantiate that
contention.
the
basis
of the price indicated in
which
aforesaid, even
less
if
the
an
official
the
than
of
Ready
As
contention is
value of the property should
Rs.53.50 Lakhs.
practice
the
document.
tenants’
accepted,
is
ig
Reckoner,
on
Instead, the Court will have to proceed
Applying the
not
be
fair returns of 10% P.A.
commercial
against
the
value of the property, the tenants would be liable to
pay atleast amount of Rs.5,35,000/- per annum towards
the interim compensation or fair market rent to avail
of
the protection given by the Court in terms of the
Order
dated
however,
22nd
would
February,
compensation
be
with
liable
2006.
to
pay
The tenants
such interim
effect from 2nd July,
2008
i.e.
the date of filing of the present application and not
for
the
anterior
period.
The
monthly
interim
compensation would work out to around Rs.44,583/-.
10.
To
get
over this position Counsel
for
the
10%
would argue that fair returns at the rate of
is very excessive.
mind
the
return
present
should
According to him, keeping in
market condition, the
not be more than 5%.
amount
of
Once again,
tenants
no
instance or document has been produced by the tenants
to substantiate this position. Assuming that
is slack properties
in
demand of rental
fallen
some
the
have
benefit I
tenants should be made to pay atleast at the rate of
that instead
giving
of
that
10%
the
assume
extent,
and
return
would
to
there
on the fair market value determined on the
of the amount indicated in the Ready Reckoner.
come
finding,
interim
to
around
the
around
which
That
pay
this
yearly
Rs.4,28,000/-.
off that figure to Rs.4,00,000/-
round
of
basis
On
tenant would be liable to
compensation
would
Rs.4,28,000/-P.A.
would
ig
8%
comes to monthly compensation of
I
p.a.,
Rs.33,333/-.
This arrangement would meet the ends of justice and
also address the
of
amount
the argument of the tenants
compensation claimed by the
that
landlord
is
excessive.
11. It
that they
compensation
was then argued on behalf of the
would
will
not
be
able
to
claimed by the landlord.
pay
tenants
monthly
This argument
interim
have been relevant if this Court were to grant
compensation at the rate of Rs.70,500/-,
as
claimed
the
by the landlord as it is.
above
logic,
I
However, applying
am satisfied
that
amount
of
to
question is:
pay
record
even
For,
it
whether the tenants will be unable
this amount.
From
the
documents
is not possible to infer
the
latest
Respondent
on
The
Rs.33,333/- per month would meet the ends of justice.
that
yearly return filed on
position.
record
of
Nos.1(a) would indicate that the exempted
income of Respondent No.1(a) is Rs.9,44,004/- towards
income,
Rs.8,50,118/-
towards
dividend
interest
and Rs.17,19,210/- towards long term
gains. The aggregate annual income as per the return
Rs.29,13,332/-.
income
long term capital gains is to be set apart,
nevertheless
the
income of the
interest
income
towards
aggregate
is
learned
schedule
for
No.1(b)
E1
position.
and
Respondent
dividend
around Rs.18 Lakhs.
Counsel
Respondent
if the amount
capital
of
towards
Even
is
ig
income
of
as
in
According to
not
the
income
Rs.1,99,454/-.
the return does
Insofar
income
the tenants, gross
is
No.1(a)
of
However,
support
Respondent
that
No.1(b)
is
concerned, once again return under column Schedule E1
indicates
dividend
capital
that the interest income is Rs.4,90,943/-,
income
gains
Rs.1,66,286/-.
head
is
is
Rs.6,81,000/-
Rs.642792/-
and
and
long
other
term
income
The aggregate income under all these
is shown as Rs.19,81,021/-.
Once again even in
the
case
capital
of
gains
long
is to be set apart, the other
term
income
interest and dividend exceeds over Rs.10 Lakhs.
from
Respondent No.1(b), if the
Counsel for the tenants however, submits that income
of Respondent No.1(b) is
position
is
not
Rs.5,54,462/-,
supported
by
the
particular, column schedule E1.
Accordingly,
the
view
that
I have no hesitation in
it is not a case as if
interim
compensation
at
by
in
taking
imposing
the
rate
ig
monthly
return,
12.
which
the
of
Rs.33,333/-, the tenants will not be able to pay that
or
other
it would be a harsh arrangement.
amount
hand, the premises in question are
situated
On
the
admittedly
in prime locality at Fort in front of
GPO,
Mumbai.
13.
it
Taking overall view of the matter, therefore,
is
ordered
that the tenant
shall
pay
interim
compensation in respect of the suit premises
at rate
monthly
the
protection
2006.
from
Rs.33,333/- to
granted
avail
of
by this Court on 22nd
interim
February,
Liability to pay the said amount would accrue
the
month
application
tenants
today
of
has
shall
and
of
July,
2008
as
the
present
been filed on 2nd July, 2008.
pay arrears within eight
regularly
pay
future
weeks
interim
The
from
monthly
compensation
of
in terms of this order on or before 5th
every English calender month.
Failure to
comply
with any of the above condition or in case of any one
default, the interim protection granted by this Court
stand
reference
will
vacated
be
without further
the Court, in which case the
to
forthwith
landlord
shall
free to proceed with the execution
decree.
Indeed,
the
above
the
would be
arrangement
of
subject to the outcome of this Writ Petition.
In the
committed
by the tenants and
the
landlord
proceeds
ig
default
event the interim relief stands vacated on account of
to take possession of the suit premises
the decree, then the landlord will have to
executing
ensure
by
that the premises are kept in such
condition
and utilised in such a way that the possession of the
premises
will
suit
tenants, if
the
through his
have
Court so
Counsel
to
be
restored
directs.
assures
to
The
to
the
abide
landlord
by this
event the
condition.
14.
Needless
landlord
observe that in the
eventually
proceeding,
to
the
succeeds
in
the
landlord would be free to
present
ask
for
mesne profits in respect of the suit premises
claim will have to be considered on its own merit in
accordance with
the
decision. Indeed,
law,
uninfluenced
which
by
the tenant would be entitled
this
to
claim
for
adjustment of the amount paid by them
by
way of interim monthly compensation against the claim
The
would
Application
file
succeed
preferred by
the
landlord
15.
of mesne profits.
on condition that the landlord
would
undertaking in this Court that in the event the
tenants
amount
succeed in the present Petition, the
of
by them in excess of
the
the suit premises, in terms of
monthly
this
order
rent
recovered
entire
ig
shall be reimbursed to the tenants with interest, not
less than 12% per annum, or such other amount, as may
fixed
by
the Court at the relevant
time.
All
be
questions in that behalf are left open.
Application
16.
is
disposed
of
on
the
above
terms.
(A.M.KHANWILKAR,J)
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