CR No.1132 of 2011(O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR No.1132 of 2011(O&M) Date of decision: 9.8.2011 Sunil Kumar ......Petitioner(s) Versus Lal Chand and others ......Respondent(s) CORAM:- HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Ajay Jain, Advocate for the petitioner. Mr. Amit Jain, Advocate for the respondents. Rakesh Kumar Garg, J. This is tenant's revision petition challenging the impugned order dated 10.1.2011 whereby the Appellate Authority, Hisar has assessed the mesne profits for the use and occupation of the demised premises from the date of eviction order i.e. 27.10.2005 till the decision of the appeal pending before it. Briefly stated, the Rent Controller, Hisar vide order dated 27.10.2005 directed the petitioner-tenant to deliver the vacant possession of the demised premises to the respondent-landlord. The petitioner filed an appeal before the Appellate Authority. The interim stay against the eviction order of the Rent Controller was granted by the Appellate Authority to the petitioner. The respondent moved an application on 19.2.2007 for vacation of the stay order and for issuance of a direction to a petitioner to pay the arrears of rent w.e.f 6.9.2003 till the date of eviction order i.e 27.10.2005 and also to pay the mesne profits for the use and occupation of the demised premises at the rate of ` 5000/- per month along with interest at the rate of 8% per annum from the date of eviction order till the decision of CR No.1132 of 2011(O&M) 2 the appeal pending before the Appellate Authority. The aforesaid application filed by the respondent-landlord was contested by the petitioner stating that the respondents were not entitled to mesne profits and even the fair rent as fixed by the Rent Controller at ` 558/- was on the higher side as the shop in dispute cannot fetch more than ` 500/- per month. The Appellate Authority vide its order dated 10.1.2011 fixed the mesne profits of the demised premises at the rate of ` 4000/- per month w.e.f 27.10.2005 i.e date of eviction order. It was further held that the respondent-landlord was also entitled to the interest at the rate of 6 % per annum on the mesne profit from 27.10.2005 till the disposal of the present appeal but the amount of rent already paid during the pendency of the appeal shall be adjusted accordingly. The Appellate Authority further directed that mesne profits be deposited with Court for its disbursal to the party found entitled thereto after disposal of the appeal. Challenging the aforesaid order, learned counsel for the petitioner has vehemently argued that the assessment of mesne profits at the rate of ` 4000/- per month is on the basis of conjectures and surmises as there is no positive evidence that premises of the same nature can fetch the rent as assessed. Counsel for the petitioner has stated that the rent notes/agreements as produced by the respondent-landlord are not relevant as the same does not belong to the area in which the shop in dispute is situated and in fact, the aforesaid rent deeds/agreements pertain to the busiest commercial area of the city where the shop in dispute is situated in a street. Learned counsel for the petitioner has also referred to the receipts issued by C.J. Mangaliwala Dharamarth Trust, Hisar at the rate of ` 600- 615/- per month respectively for shop Nos. 3 & 4 to support his case. On the other hand learned counsel appearing on behalf of CR No.1132 of 2011(O&M) 3 respondent has supported the impugned order. It is relevant to refer to the relevant paras of the impugned order of the Appellate Authority which reads thus: “Learned counsel for petitioners landlords submitted that mesne profit of the demised shop deserves to be fixed at the rate of Rs.5000/- per month from the date of decision i.e. ejectment order dated 27.10.2005 as such like shops in the vicinity are fetching a monthly rent of Rs.5000/- to Rs.10000/-. In support of his contention, he has also referred to rent note bearing No.4669 dated 22.10.1999 of a shop situated in Pooja Market, Hisar showing the rent of Rs.3462.40p per month from 1.4.1999 to 31.3.2004; rent note bearing No.883 dated 10.5.2000 showing the rent of Rs.45444/- annually of a shop situated in Pooja Market, Hisar, rent note dated 2.4.1998 executed by Anil Kumar of a shop situated in Moti Bazar, Hisar showing rent at the rate of Rs.6250/-, rent note dated 4891 dated 12.6.2003 showing a rent of Rs.10000/- per month of a shop situated inside Nagori Gate, Hisar and rent note dated 9.8.2004 showing the rent at the rate of Rs.6000/- per month from 10.8.2004 to 9.11.2004, situated at Gulab Singh Chowk, Hisar and rent note executed in between Vijay and Lalita of a shop situated at Moti Bazar, Hisar showing the rent at the rate of Rs.7500/- per month. Suresh Kumar one of the petitioners – landlords also filed an affidavit that one shop of Atam Parkash is situated in Mohalla Birkhuwala measuring approximately 6'9” x 8 feet and is carrying a rent of Rs.3500/- per month. Shop bearing No.6 and later on shop No.5 was taken and now the size of shops No.5 and 6 are 13'6” x 8 feet and the total rent of shop No.5 and 6 are Rs.5300/- per month. It is also mentioned that Atam Parkash is doing the business of cloth merchant under the name and style of M/s. Shimla Cloth Emporium. The petitioners-landlords also placed on CR No.1132 of 2011(O&M) 4 record receipt dated 8.9.2008 showing the payment of Rs.5300/- as rent of the aforesaid shops. On the other hand, respondent-tenant has filed an affidavit that one Bhagirath had taken a shop on rent in the Gali about six shops away towards the western side from the demised premises on a rent of Rs.375/- from its owner Anil Jain in the year 2006. It is also sworn that Moti Bazar, Pooja Market, Tilak Bazar, Gulab Singh Chowk, Vakilan Bazar are full fledged bazaar situated far away on the road having no similarity with the location where demised premises is situated. The shop of C.J. Mangaliwala is not in Mohalla Birkhuwala but it is in Nagori Gate itself. The respondent tenant has also placed on record receipt dated 5.5.2007 showing the rent receipt issued by C.J. Mangaliwala Dharmarth Trust, Hisar of shop No.4 at the rate of Rs.600/- and shop No.3 at the rate of Rs.615/-. In support of his contention, learned counsel for respondent-tenant has relied upon case titled as M/s Jewellers Khanna Versus Dr. Naresh Mittal, 2009 (2) R.C.R. (Civil) 567, Surinder Kumar Versus Rattan Lal 2006 (2) P.L.R. 200, Bhim Sain and another Versus Smt. Puspa Devi 1984 (2) R.C.R. 54 (Punjab and Haryana) and State of Maharashtra and another Versus. M/s Super Max International Pvt. Ltd. and others, 2009 (4) C.C. Cases 318 (Supreme Court). On the other hand, learned counsel for petitioner- landlords in support of his contention has relied upon case titled as M/s Atma Ram Properties (Private) Limited Versus. M/s. Federal Motors Private Limited, 2005 (1) H.R.R. 225, Pradeep Kumar Versus Hajari Lal, 2008 (1) R.C.R. 348, Sadhu Ram Versus Parminder Singh 2008 (4) C.C.Cases 209 and State of Maharashtra and another Versus M/s Super Max International Pvt. Ltd. And others 2009 (4) C.C. Cases 318 (Supreme Court). I have gone through the case Law cited by both CR No.1132 of 2011(O&M) 5 the parties above carefully. The ratio of aforesaid authorities are that the mesne profits should not be excessive, fanciful, or punitive in nature; the mesne profits should be based upon some material placed on record by the parties; the mesne profits has to be fixed keeping in view the situation and locality of such premises. In the case is hand, the petitioners landlords are saying that such like shops in the vicinity are fetching a rent of Rs.4000/- to Rs.5000/- per month whereas the respondent-tenant is claiming that such type of shops are not fetching rent Rs.500/- per month and the fair rent of demised premises has already been fixed at the rate of Rs.558/- which is already on the higher side. However, it is an admitted fact that the demised premises was rented out to the respondent tenant in the year 1984 at the rate of Rs.400/- per month. It is not in dispute that the respondent doing the business of cloth selling. Therefore, since the letting out of demised shop to respondent tenant in the year 1984, more than a period of 21 years has already been elapsed. At the time of fixing of mesne profits, the fair rent of the demised premises is not to be considered but the market rent as obtaining on the date of passing the impugned judgment i.e. 27.10.2005 is to be seen. Hence, keeping in view the documents placed on record by both the parties regarding rent of shops in the vicinity, of the demised premises and keeping in view the fact the demised premises was rented out in the year 1984 at a monthly rent of Rs.400/-, the market rate of rent of such type of shop wherein the respondent is doing the business of clothes, cannot be less than Rs.4000/- per month in the year 2005. Therefore, in my considered opinion the mesne profit of demised premises at the rate of Rs.4000/- per month would be fair and reasonable rent. In view of my above discussion, the application under consideration is allowed. The mesne profit of CR No.1132 of 2011(O&M) 6 demised premises is fixed at the rate of Rs.4000/- per month from the date of judgment dated 27.10.2005. The petitioners-landlords would also be entitled to the interest at the rate of 6% per annum on the mesne profit from 27.10.2005 till the disposal of present appeal. However, the amount of rent already paid during the pendency of appeal shall be adjusted accordingly. Mesne profits be deposited with Court for its disbursal to the party found entitled thereto after disposal of appeal.” A perusal of the impugned order would show that the order assessing the mesne profits has been passed by considering all the facts on record. Not only this, the Appellate Authority found that the documents placed on record regarding rate of rent of the shops are of the vicinity. Moreover, counsel for the petitioner has failed to show any prejudice which may have been caused to him from the impugned order as vide impugned order, the Appellate Authority has only directed him to deposit the amount of mesne profits with the Court and it has been ordered that the amount shall be paid to the party found entitled to the same on the decision of the appeal. It is well settled that while passing the order of stay, the Court can put the parties to terms. Moreover, it is not in dispute that the Hon’ble Supreme Court in the case of M/s Atma Ram Properties (P) Ltd. v. M/s Federal Motors Pvt. Ltd. 2005(1) SCC 705, has authoritatively held that a tenant is liable to pay mesne profits from the date of eviction order, during the pendency of the appeal for the use and occupation of the demised premises. Faced with this situation learned counsel for the petitioner has raised further arguments that no interest could have been granted by the Appellate Authority on the amount of mesne profit as imposed by the Court. CR No.1132 of 2011(O&M) 7 The aforesaid argument is again without any merit in view of the judgment of the Hon’ble Supreme Court in Ramnik Vallabhdas Madhvani and others v. Taraben Pravinlal Madhvani 2004(1) SCC 497 wherein it has been held that on mesne profits, interest has to be calculated on yearly basis. Thus, in view of the aforesaid discussion, no error can be found in the impugned order. Dismissed. August 9, 2011 (RAKESH KUMAR GARG) ps JUDGE