1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPLICATION NO.2756 OF 2007 IN WRIT PETITION NO.2435 OF 2004 M/s.Mavji Bhura & Company .. Applicant versus Mr.Pravin D. Soma & Ors. .. Respondents Mr.K.T.Kukreja i/by Mr.D.M.Shah for the applicant. Mr.C.R.Sonawane for the respondents. CORAM : A.S.OKA, J. DATE ON WHICH ORDER IS RESERVED : 16th October 2009. DATE ON WHICH ORDER IS PRONOUNCED : 24th November 2009. P.C.: 1) This civil application is taken out by the respondents in the writ petition. The respondents in the civil application are the petitioners in writ petition. The respondents in the civil application are the legal representatives of the original petitioner who died during the pendency of the petition. The dispute relates to suit premises bearing shop no.3 on the ground floor of the building known as ‘Bhagwan Bhavan’,M.G.Road, Rajawadi, Ghatkopar (East), Bombay. The carpet area of the suit premises is 147 square feet. The agreed rent in respect of the suit premises fixed in the year 1963 was Rs. 2 60/-per month. In the suit for eviction filed by the applicants, a decree for possession was passed against the predecessor of the respondents on the ground of carrying out additions and alterations of permanent nature in the suit premises. Decree was also passed on the ground of breach of terms and conditions of the tenancy. The said decree was confirmed in appeal preferred by the predecessor of the respondents. The said predecessor of the respondents filed the aforesaid writ petition for challenging the decree for eviction. The writ petition has been admitted and by way of interim relief, the decree for possession has been stayed. 2) The prayer in the civil application is for a direction against the respondents to deposit compensation at the rate of RS.13,090 per month from the date of the decree passed by the trial court till the disposal of the writ petition. The said prayer is based on a report of architects and valuers M/s Poonager Bilimoria & co annexed to the civil application. The civil application was adjourned from time to time to enable parties to settle the dispute. However, parties could not arrive at any settlement. Hence, the civil application was heard. 3) The learned counsel appearing for the applicants submitted that in view of the decision of the Apex Court in the case of Atma Ram Properties (P)Limited versus Federal Motors (P)Limited ( [2005]1 SCC 705), the respondents will have to pay compensation equivalent to market rate of rent 3 in respect of the suit premises. He submitted that the respondents have not produced opinion of any valuer to show that the opinion of the valuer produced by the applicants is incorrect. He pointed out that the valuer appointed by the applicants has stated that the market rate of rent of the suit premises is Rs. 13,090 /-per month from April 1996 onwards. He submitted that the order of stay passed in the writ petition will have to be modified by directing that the stay will operate subject to the respondents depositing the compensation at the aforesaid market rate from the date of the decree passed by the trial court. The learned counsel appearing for the respondents submitted that the area of the suit premises is very small in which the first respondent is carrying on a small tailoring business. He pointed out that the contractual rent in respect of the suit premises is Rs. 90.60/-per month. He submitted that the respondents are not in a position to pay more than the agreed rent. He submitted that it is impossible for the respondents to pay compensation as prayed by the applicants. He submitted that the compensation as prayed for by the applicants will be punitive in nature. He submitted that the income received from the business in the suit premises is very meagre. He prayed that the application be dismissed. 4) I have given careful consideration to the submissions. In the case of Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., [(2005) 1 Supreme Court Cases 705], the Apex Court held thus: 4 “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 not 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 (1) 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 superior forum at a latter date.” The said decision of the apex court has been affirmed in a recent decision of the apex court in the case of the state of Maharashtra versus the super Max(P)Limited. The power of this court of granting stay to the execution of a decree for eviction will be governed by the same principles. The apex court in the said subsequent decision held that the amount of compensation has to be reasonable and the same cannot be punitive in nature. 5) The applicants have relied upon an opinion of architects and valuers 5 dated 22nd March 2004. In the said opinion the valuers have stated that the suit premises is situated in a very important locality on a major road leading from the eastern express highway to Ghatkopar railway station. It is stated that there are large number of shops and commercial establishments along the said road on which the building in question is situated. He stated that the suit premises is situated in a prime locality of a suburb of Bombay like Ghatkopar. The respondents have not disputed the said part of the report of the valuers. The agreed rent has been fixed in the year 1963. The trial court passed a decree for possession in the year 2002 which has been confirmed in appeal in the year 2003. Surely the respondents cannot enjoy relief of interim stay subject to deposit of agreed rent ofRs.94.60/-per month. The area of the suit shop premises is 147 square feet of carpet area. It is situated in a prime locality of an important suburb of Bombay. Therefore, the respondents will have to pay a reasonable amount by way of compensation as a condition for grant of stay. 6) In paragraph 19 of the opinion, the valuers have observed thus: “19) On the basis of above working, the mesne profits chargeable on the basis of return on investment basis are tabulated hereunder: 1987 to 31.3.1990 @ Rs.3,500/- per month 1.4.1990 to 31.3.1993 @ Rs.4,926/- per month 1.4.1993 to 31.3.1996 @ Rs.7,392/- per month 1.4.1996 onwards @ Rs.13,090/- per month”. The valuers opined that the market rate of rent of the suit premises till March 1990 was Rs. 3500/- per month and by April 1996, it was more than to Rs. 6 13,000/- per month. The market rate of 1996 as suggested by the valuers appears to be on the higher side. 7) During the pendency of the appeal preferred by the predecessor of the respondents, there was no direction sought for payment of compensation. Therefore, the respondents can be directed to pay a reasonable compensation from the date of decree passed by the appellate court. As held by the apex court, the compensation amount has to be reasonable and the same cannot be punitive. It is stated that the first respondent is carrying on tailoring business in the suit premises. It is contended that the business is very small. However, it cannot be ignored that the suit shop premises is situated in a prime locality where there are large number of shops and business establishments. Though the final opinion submitted by valuers cannot be accepted, the details incorporated in the opinion show the trend of market value in the locality in which suit premises is situated. Considering all the relevant aspects such as prime location of the suit shop premises, the area of the premises and the fact that the respondents are carrying on tailoring business in the suit premises , a reasonable amount of Rs. 7500/- per month will to be fixed as compensation payable by the respondents from the date of the decree of the appellate court. A reasonable time will have to be granted to the respondents to deposit the arrears. After the compensation amount is deposited, the applicants will be entitled to withdraw the agreed amount of rent. The 7 balance amount of compensation can be withdrawn by the applicants only after furnishing security for the said amount to the satisfaction of the trial court. This course will to be adopted in view of the subsequent decision of the apex court in the case of the state of Maharashtra versus super Max (supra). 8) Hence, the civil application is disposed of by passing following order: : O R D E R : (A) The order of interim relief passed by this court on 16 July 2004 will continue to operate till the final disposal of the writ petition subject to respondents (the petitioners in the writ petition) depositing with the trial court compensation at the rate of Rs. 7500/- per month from January 2004 onwards. (B) The respondents are granted time of six months from today to deposit the arrears payable up to November 2009. The compensation amount from the month of December 2009 onwards shall be deposited by the respondents with the trial court on or before 10th day of every calendar month. (C) Out of the amount deposited by the respondents, the applicants will be entitled to withdraw the agreed amount of rent without security. The balance amount can be withdrawn by the applicants on furnishing security for the said amount to the satisfaction of the trial court. 8 (D) If the respondents fail to deposit the arrears of compensation within the stipulated period of six months, the interim relief granted in the writ petition will stand forthwith vacated without further reference to the court. (E) If the respondents commit any further default, it will be open for the applicants to apply for vacating interim relief. (F) There will be no order as to costs. (A.S.OKA,J)