bsb IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION WRIT WRIT WRIT PETITION NO. 6320 OF 2008 PETITION NO. 6320 OF 2008 PETITION NO. 6320 OF 2008 Ratty P. Jhaveri & anr. ... Petitioners v/s The Life Insurance Corpn. of India & anr. ... Respondents Mr.Navroze Seervai with Mrs.S.R.Moghe i/by Mehta & Girdharlal for the petitioners. Mr.V.Y.Sanglikar for the respondent No.1. CORAM: CORAM: CORAM: SMT.NISHITA MHATRE, J. SMT.NISHITA MHATRE, J. SMT.NISHITA MHATRE, J. DATED: DATED: DATED: 6TH OCTOBER, 2008 6TH OCTOBER, 2008 6TH OCTOBER, 2008 P.C. P.C. P.C.: 1. Rule. Rule made returnable forthwith by consent of the parties. 2. The petition challenges the order passed by the Principal Judge, City Civil Court, Mumbai in Misc. Appeal No.137 of 2008 filed under Section 9 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (in short, "the Act"). By this order, the Principal Judge has directed the petitioners to deposit an amount of Rs.25 lacs with the Life Insurance Corporation - the respondents herein, as a condition 2 precedent for granting a stay of the order of the Estate Officer passed under the aforesaid Act. 3. A show cause notice was issued under Section 4 of the Act, on 15.3.1990 to the petitioners. The Estate Officer, after hearing the petitioners has passed an order for eviction on 25.2.2008. The notice under Section 7(3) was also issued to the petitioners for recovery of bank debts from them. The petitioners have challenged both the show cause notices by preferring Writ Petition No.1756 of 1990. This petition was disposed of directing the petitioners to contest the notice issued to them under Section 4 of the Act. The Court has also accepted the statement made on behalf of the respondents that the notice under Section 7(3) of the Act stands withdrawn. Liberty was granted to the respondents to take fresh steps for recovery of the debts after the conclusion of the eviction proceedings. 4. Undisputedly, the eviction proceedings have been disposed of by an order dated 25.2.2008 by the Estate Officer. An appeal has been preferred before the City Civil Court under Section 9 of the Act. However, no steps were taken for recovery of the damages although liberty was granted to respondent No.1 to do so by the order of the Division Bench in the aforesaid writ 3 petition. The Principal Judge of the City Civil Court has, on 30.7.2008 directed the petitioners to the amount of Rs.25 lacs. Thereafter a show cause notice was issued on 23.9.2008 requiring the petitioners to show cause why they should not pay damages of Rs.1,26,70,977/-. 5. It is submitted on behalf of the petitioners that this direction for depositing the amount is without jurisdiction as the damages have not been assessed by issuing notice under Section 7(3) of the Act. It is submitted that the judgment of the Division Bench in L.P.A. No.194 of 2008 decided on 27.8.2008 would apply to the facts in the present case. According to the petitioners, the appellate authority had passed directions for depositing the amount payable as damages without there being any show cause notice issued to them prior to 15.9.2008 and, therefore, the order was required to be set aside. 6. Mr.Sanglikar, learned advocate for the respondents submits that the appellate authority can always impose such conditions as it deems fit while admitting the appeal and granting stay. According to him, the appellate authority has directed the deposit of the amount as a condition precedent for hearing the appeal 4 which order has been passed within the powers conferred on the appellate authority under Section 9 of the Act. He brings to my notice the judgments of the Supreme Court in the case of Atma Ram Properties (P) Ltd. v/s Atma Ram Properties (P) Ltd. v/s Atma Ram Properties (P) Ltd. v/s Federal Federal Federal Motors (P) Ltd., reported in (2005) 1 SCC 705 Motors (P) Ltd., reported in (2005) 1 SCC 705 Motors (P) Ltd., reported in (2005) 1 SCC 705 and in the case of Anderson Wright & Co. v/s Amar Nath Anderson Wright & Co. v/s Amar Nath Anderson Wright & Co. v/s Amar Nath Roy Roy Roy & ors., reported in (2005) 6 SCC 489, & ors., reported in (2005) 6 SCC 489, & ors., reported in (2005) 6 SCC 489, in support of his submissions that no interference is called for by this Court under Articles 226 and 227 of the Constitution of India. According to him, the Supreme Court has, in terms, said that a tenant must be put to some terms while his appeal is being decided. The submission that no amount is payable while the appeal is being decided, has been expressly negatived. 7. In the case of Atma Ram Properties (P) Ltd Atma Ram Properties (P) Ltd Atma Ram Properties (P) Ltd. (supra), the Supreme Court concluded thus- "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, 5 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 doctribe 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 superiod forum at a latter date." 8. However, it must be borne in mind that these findings or conclusions were passed in a case where a tenant was found to be in unauthorised occupation of premises under the Rent Act. The Supreme Court was of the view that once an order of eviction has been passed under the Rent Act, the tenant must pay a reasonable amount to the landlord till his appeal is heard. In the case of Anderson Wright & Co. Anderson Wright & Co. Anderson Wright & Co. (supra), the Supreme Court has followed its earlier decision in the case of Atma Atma Atma Ram Properties (P) Ltd Ram Properties (P) Ltd Ram Properties (P) Ltd.(supra). 9. In the case of Uday More v/s The Western Naval Uday More v/s The Western Naval Uday More v/s The Western Naval Command Command Command & anr., in L.P.A. No.194 of 2008, & anr., in L.P.A. No.194 of 2008, & anr., in L.P.A. No.194 of 2008, the Division Bench, while considering the case in almost identical 6 facts and circumstances, has observed as follows:- "6. There is no issue over the fact that no monetary claim has been adjudicated by theEstate Officer under the impugned order. As such, the issue as to the liability of the appellants for their occupation of the premises in question is yet to be adjudicated and determined by the competent authority. Therefore, in the given facts and circumstances it was not just and proper on the part of the appellate authority to impose a precondition to deposit specified sums of money against the appellants to grant ad-interim order staying the effect and operation of the order passed by the Estate Officer. 7. The impugned order merely permits the appellants occupation of the respective tenements on fulfillment of certain conditions i.e. on depositing the sums specified in the order. In our view, if the appeal is expeditiously heard and disposed of that would subserve the ends of justice rather than keeping it pending for indefinite period by imposing such a stringent condition of depositing huge amount assessed by the appellate authority on the basis of certain assumptions, particularly when no such claim was made and determined by the Estate Officer." 10. In the present case, it is undisputed that no show cause notice was issued after the order of the Division Bench in Writ Petition No.1756 of 1990 until the impugned order was passed. A show cause notice under Section 7(3) was issued only on 23.9.2008. Thus, when the appellate authority passed the impugned order there was no claim for damages which had been raised against the petitioners. 7 11. In my opinion, imposing a direction to deposit Rs.25 lacs as a condition precedent to decide the appeal is uncalled for in the facts and circumstances of this case, when the damages are still to be assessed. Although the Act empowers the appellate authority to impose conditions for granting a stay, the conditions should not have the effect of rendering the appeal infructuous. In the present case, the appellate Court has concluded that the claim made against the petitioners was for Rs.56,000/-in the year 1989 and that today the damages would be Rs.88,000/- to Rs.90,000/- per month. Thus the total balance would go beyond Rs.1.02 crores. There is no material on record to indicate as to how the learned Judge has arrived at this figure of Rs.88,000/- to Rs.90,000/- per month as damages. 12. In my opinion, therefore, the impugned order is unsustainable and therefore is set aside. 13. The learned Principal Judge of the City Civil Court is requested to dispose of the appeal within three months from today. 14. Mr.Sanglikar had pointed out that the interim orders were obtained by the petitioners, ex-parte, 8 although a caveat had been filed by the respondents. This petition has been resisted by the respondents by filing an affidavit. I need not consider the objection in view of the petition having been disposed of. 15. Writ petition disposed of accordingly.