Holding

The Court held that the tenant, having remained in possession after the lease was forfeited, is liable to pay mesne profits/occupational charges at the market rate and ordered the deposit of Rs 5,15,05,512.

Summary

The landlord, Bijay Kumar Manish Kumar HUF, sued tenant Ashwin Bhanulal Desai for non‑payment of rent on four premises where the lease, executed in 1991‑92, was allegedly forfeited due to arrears. The tenant remained in possession and the landlord sought payment of "monthly occupational charges" at the prevailing market rate of Rs 41 per sq ft, amounting to Rs 5,15,05,512. The Supreme Court examined whether the West Bengal Tenancy Act, 1997 or the Transfer of Property Act, 1882 governed the dispute and whether a tenant who continues in possession after lease termination is liable for mesne profit. Relying on precedents concerning forfeiture, tenancy at sufferance and mesne profit, the Court held that the tenant is liable to pay the claimed amount. Accordingly, the interlocutory applications were disposed and the tenant was directed to deposit the sum with the Court registry.

Issues considered

The applicability of the West Bengal Tenancy Act, 1997 versus the Transfer of Property Act, 1882 to the landlord‑tenant dispute.
Whether a tenant who remains in possession after lease forfeiture/termination is liable to pay rent or occupational charges (mesne profit) at market rates.

Legislation cited

Subjects

RentNon-payment of RentMonthly Occupational chargesIndependent valuerPossession of propertyRight of occupancyDenial of monetary benefitsCorpus Juris SecundumTenancy at sufferanceMesne ProfitExpiry of leaseDetermination of leaseForfeitureTermination

Judgment

[2024] 5 S.C.R. 859 : 2024 INSC 445

Bijay Kumar Manish Kumar HUF
v.
Ashwin Bhanulal Desai
(I.A. No.120219 of 2020)
In
Special Leave Petition (C) No.4049 of 2020
17 May 2024
[J.K. Maheshwari and Sanjay Karol,* JJ.]

Issue for Consideration
The interlocutory applications have been filed seeking direction for
payment of rent and other associated benefits in connection with
the property which is the subject matter of the dispute.

Headnotes†
Rent Control and Eviction – Non-payment of rent – The
lis governs four different tenancies – Petitioner-applicant
landlord alleges non-payment of rent and has filed
applications in the pending SLPs seeking direction for
payment of ‘monthly occupational charges’ following the
prevalent market rate:
Held: On account of non-payment of rent, the lease was
forfeited/determined – However, the respondent-tenant has
neither delivered the possession of the property nor paid the
rent – Also, the petitioner submitted a report of an independent
valuer – The assessment of the rentals, made by the valuer, is @
INR 41/- per Sq.ft. – It is settled that a tenant who once entered
the property in question lawfully, continues in possession after
his right to do so stands extinguished, is liable to compensate
the landlord for such time period after the right of occupancy
expires – Prima facie, it is clear that the respondent-tenant
had delayed the payment of rent and/or other dues, payable
to the petitioner-applicant landlord – This denial of monetary
benefits accruing from the property, when viewed in terms of
the unchallenged market report forming part of the record is
undoubtedly substantial – This order for deposit of the amount
claimed by the petitioner-applicant is being passed, to ensure

* Author
860 [2024] 5 S.C.R.

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complete justice inter se the parties – It is important to note that
when a property is rented out, it is to ensure that the landlord
by way of the property is able to secure some income – If the
income remains static over a long period of time or in certain
cases, as in the present case, yields no income, then such a
landlord would be within his rights, subject of course, to the
agreement with their tenant, to be aggrieved by the same –
Therefore, the respondent is directed to deposit the amount of
Rs. 5,15,05,512/-. [Paras 13, 19, 21 and 23]

Case Law Cited
Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. [2004]
Supp. 6 SCR 843 : (2005) 1 SCC 705; State of Maharashtra &
Anr. v. Super Max International Private Limited and Ors. [2009]
13 SCR 801 : (2009) 9 SCC 772; Achal Misra v. Ram Shanker
Singh & Ors. [2005] 3 SCR 439 : (2005) 5 SCC 531; Achal Misra
(2) v. Rama Shankar Singh & Ors. [2006] Supp. 1 SCR 617 :
(2006) 11 SCC 498; G.L. Vijain v. K. Shankar [2006] Supp. 9
SCR 583 : (2006) 13 SCC 136; Martin and Harris (P) Ltd. v.
Rajendra Mehta [2022] 16 SCR 38 : (2022) 8 SCC 527; Indian
Oil Corporation Ltd. v. Sudera Realty Private Limited [2022] 19
SCR 462 : (2022) SCC OnLine 1161; Mohammad Ahmed & Anr.
v. Atma Ram Chauhan & Ors. [2011] 6 SCR 822 : (2011) 7 SCC
755 – relied on.

Books and Periodicals Cited
Halsbury’s Laws of England 3rd Edn. Vol. 23; Wharton’s Law
Lexicon Seventeenth Edn.; Burton’s Legal Thesaurus 3rd Edn. –
referred to.

List of Acts
West Bengal Tenancy Act, 1997; Transfer of Property Act, 1882.

List of Keywords
Rent; Non-payment of Rent; Monthly Occupational charges;
Independent valuer; Possession of property; Right of occupancy;
Denial of monetary benefits; Corpus Juris Secundum; Tenancy at
sufferance; Mesne Profit; Expiry of lease; Determination of lease;
Forfeiture; Termination.
[2024] 5 S.C.R. 861

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

Case Arising From
CIVIL APPELLATE JURISDICTION: I.A. No. 120219 of 2020
In
Special Leave Petition (C) No. 4049 of 2020
With
I.A. No. 120227 of 2020 In SLP(C) No. 4050 of 2020, I.A. No. 120235
of 2020 In SLP(C) No. 4051 of 2020 and I.A. No. 120248 of 2020 In
SLP(C) No. 4052 of 2020
Appearances for Parties
Rana Mukherjee, Sr. Adv., Ms. Vijaya Bhatia, Ganesh Shaw, Kunal
Chatterji, Ms. Maitrayee Banerjee, Rohit Bansal, Ms. Kshitij Singh,
Sohhom Sau, Samarth Mohanty, Arjun Bhatia, Advs. for the Petitioner.
Rupak Ghosh, Debdut Mukherjee, Ms. Sonia Dube, Ms. Kanchan
Yadav, Ms. Surbhi Anand, Tanishq Sharma, Ms. Saumya Sharma,
M/s. Legal Options, Advs. for the Respondent.
Judgment / Order of the Supreme Court

Judgment
Sanjay Karol, J.
1. These petitions for special leave to appeal seek to lay a challenge
to the judgment and order dated 7th November 2019 passed in
C.O.Nos.1582-85 of 2019 by the High Court of Calcutta. The learned
Single Judge while deciding the issue as to whether the West Bengal
Tenancy Act, 19971 or the Transfer of Property Act, 18822 was to
be applied for framing of the issues in the instant landlord-tenant
dispute, held that the Tenancy Act would govern the same.
2. Impugning the judgment of the learned Single Judge, the present
Special Leave Petitions were filed before this Court. However, the
reasoning adopted therein is not within the scope of the present
adjudication. During the pendency of these Special Leave Petitions

1 Tenancy Act
2 T.P. Act
862 [2024] 5 S.C.R.

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interlocutory applications have been filed seeking direction for
payment of rent and other associated benefits in connection with
the property which is the subject matter of the present dispute. It is
these Interlocutory Applications that are sought to be disposed of
by way of the present judgment.
3. It would, however, be apposite to have a bird’s eye view of the
controversy. It is not in dispute that the lis governs four different
tenancies. Due to alleged non- payment of rent, the lease was
forfeited, and the petitioner-applicant initiated proceedings for
ejectment under the T.P. Act. Suit(s) were filed before the City Civil
Court at Calcutta seeking inter alia, a) recovery of possession by
eviction of defendant (respondent- tenant herein); b) permanent
injunction against the present respondents and his agents, servants,
employees or associates etc., from alienating, transferring or parting
with possession of the property. The respondent-tenant, in opposition
thereto, filed an application seeking the rejection of the plaint, on the
grounds of jurisdiction, and for the premises to be governed under
the Tenancy Act alleging particularly that, possession has been
sought in respect of a lease that is yet undetermined; the claim is
bad in law, illegal and arbitrary; the suit has been misvalued and the
plaint is insufficiently stamped, among others. The same came to be
rejected by the concerned Court by order dated 3rd February 20153.
It was observed: –
“…Without a full-fledged trial and evidence the court
cannot come to conclusion that the averments made
in the plaint are false and frivolous or that there is any
suppression of material fact. Notice of determination of
lease, if not at all served upon the defendant and if it is
mandatory, then the suit may fill in future. But that cannot
come under the ambit of the provision of O 7 R 11 CPC.
This court cannot take the view for rejection of plaint
without giving or affording opportunity to the parties to
bring evidence justifying their plea. On the other hand,
because of action of the suit has to be found out on the
conjoint reading of all paragraphs of the plaint. Because of

3 Annexure P 11 of the paper book at page 132
[2024] 5 S.C.R. 863

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

action does not mean only a date. Above all, the Plaintiff
has specifically mentioned cause of action in paragraph
15 of the plaint. The allegations or the averments made
in the plaint has to be proved by the Plaintiff had the
time of trial by producing evidence and it is the duty of
the Plaintiff to prove that the lease has been determined
properly or not.”
Allowing the matter not to rest there, the respondent-tenant pursued
the matter further. The High Court, in its Civil Revisional Jurisdiction
under Article 227 of the Constitution of India, vide order dated 31st
March 20154 upheld the dismissal of the application under Order
VII Rule 11. Eventually, this Court vide judgment and order dated
12th December 20185 directed the remand of the matter, observing
thus: –
“9. Taking into consideration the peculiar facts and
circumstances of the case, since the suit is still in the
preliminary stage, we dispose of the appeal is directing the
trial court to frame the issue, relating to the maintainability
of the suit and applicability of enactments, as mentioned
supra and decide the same in accordance with law as a
preliminary issue as expeditiously as possible, preferably
within a period of 6 months from the date of communication
of this judgment.”
4. The Trial Court thereafter framed the following issues:-
"1. Is the suit triable under the provisions of the W.B.P.T
Act, 1997 or the Transfer of Property Act 1882?
2. Whether the suit is maintainable as framed or at all?”
5. The Trial Court in all four suits, answered the issues in favour of
the plaintiff, primarily on the ground that since the tenancy, subject
matter of the suit, was created with w.e.f. 20th November 1992 and
the Tenancy Act came into force w.e.f. 10th July 2001. The agreement
inter se the parties, therefore, was governed only by the T.P. Act.
The observation of the trial court is extracted as under: –

4 Annexure P 12 of the paper book at page 138
5 Annexure P - 29 of paper book
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“… It is pertinent to mention here that the lease deed was
executed on 20.11.1992 for the period of 99 years and the
W. B. P. T. Act, 1997 came into force on 10. 07. 01 i.e.
much more earlier than the enforcement of the W. B. P. T.
Act, 1997 and there is or was no express word in the W.
B. P. T. Act, 1997 that alright accrued by any party from
the prevailing any law will be extinguished since the W. B.
P. T. Act, 1997 came into force on 10. 07.01. Therefore,
it can be said that the present suit squarely governed by
the T. P. Act and no under West Bengal Premises tenancy
act, 1997 and in view of such factual aspect the present
is perfectly maintainable…”
6. It is in appeal from such order of the Trial Court that the impugned
judgment with particulars as noticed above, came to be passed. The
High Court while upholding the jurisdictional issue in favour of the
respondent-tenant, dismissed all the four suits of the plaintiff for the
same not to be maintainable. Thus, the issue as already observed
is as to whether the order passed by the High Court holding the
respondent-tenant to be governed by the Tenancy Act, is legally
sustainable or not.
7. In these Special Leave Petitions preferred by the landlord, notice
was issued on 17th February 2020.
8. During the course of the hearing on 15th February 2024 petitioner-
applicant (landlord) had offered time to the tenants to vacate the
premises. Certain suggestions for amicably resolving the dispute for
all times to come were exchanged, and as such the matters were
adjourned. We are now informed that the petitioner-landlord’s offer of
giving time to the tenant to hand over the vacant possession of the
premises stands rejected. Thus, the landlord insisted on the disposal
of the applications asking the tenant to pay the rent at the market
rate for the lis to have been determined at the institution of the plaint.
I.A. No.120219/2020 in SLP(C)No.4049/2020 :
9. The Interlocutory Application bearing the above particulars has been
taken as the primary application for the sake of facts. It is noted that
similar applications seeking similar prayer have been filed in other
special leave petitions which shall be disposed of in accordance
with this order.
[2024] 5 S.C.R. 865

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

10. We notice that these applications in issue have been pending for
almost three years.
11. The applicant (petitioner in the SLP) seeks direction for payment of
‘monthly occupational charges’ following the prevalent market rate.
The prayer as made, is reproduced below:-
“(a) Direct the Respondent to forthwith pay monthly
occupational charges at the rate of INR 41/- (Indian
Rupees Forty One) per Square feet, for 1208 Sq.ft = INR
49528/- since August, 2007 during the pendency of the
present Special Leave Petition in respect of the present
lease in dispute…”
12. Certain facts are required to be taken note of. The property in
question is situated in the Dalhousie area, which has been termed
as a commercial hub in Kolkata. The lease Agreement inter se
the parties was entered into on 23rd February 1991 executed by
the predecessor-in-interest of the petitioner. It is alleged that the
respondent has been in default on payment of rent since 2002 and
in default on payment of his share of municipal tax since 1996.
13. On account of non-payment of rent, the lease was forfeited/
determined. However, the respondent has neither delivered the
possession of the property nor paid the rent. The petitioner has
submitted a report of an independent valuer dated 12th March 2020.
The assessment of the rentals, made by the valuer, it is submitted,
is fair and reasonable @ INR 41/- per Sq.ft.
14. It is submitted on behalf of the respondent that since no court has
declared the end of the landlord-tenant relationship, the petitioner-
applicant asking the respondent to pay occupational charges as
opposed to contractual rent would amount to the re-writing of the
tenancy Agreement. Further, it is argued that occupation charges are
only payable after the lease is validly determined or after the decree of
eviction. Since both these eventualities are yet to occur, no question
of such payment arises. It is also urged that the petitioner-applicant
accepted rent from the respondent till August 2002 but thereafter
refused to do so. According to the respondent-tenant, a total amount
of Rs,2,06,400/- is payable on their part to the petitioner-applicant
in the following terms :-
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PARTICULARS

ARREARS OF RENT INTEREST TOTAL
FROM SEPTEMBER, CALCULATED
2002 TO FEB, 2024 @10% TILL FEB,
2024
Tenancy 1 Rs.50/- X 258 Rs.14625/- Rs.27525/-
(Car Parking) months = Rs.12900/-
Tenancy 2 Rs.150/- X 258 Rs.43875/- Rs.82575/-
(Godown1) months = Rs.38700/-
Tenancy 3 Rs.250/- X 258 Rs.73125/- Rs.137625/-
(Godown 2) months = Rs.64500/-
Tenancy 4 Rs.350/- X 258 Rs.102375/- Rs.192675/-
(Office Space) months = Rs.90300/-
TOTAL 2,06,400 + 2,34,400 = Rs.4,40,400/-

15. On the other hand, the petitioner-applicant’s(landlord) calculation is
tabulated as under:-
SLP No. SLP(C) 4049 SLP(C) 4050 of SLP(C) 4051 of SLP(C) 4052 of
of 2020 2020 2020 2020
Date of 23.02.1991 20.11.1992 20.11.1992 20.11.1992
Lease
Deed
Area 1208 sqft 2500 sqft. 1650 sq.ft 800 sq.ft
Rent Area * Rs.41 Area * Rs.41 Area * Rs.41 per Area * Rs.41
Amount per sq.ft per sq.ft sq.ft =Rs.67,650 per sq.ft
per month =Rs.49,258/- =Rs.1,02,500 =Rs.32,800/-
Rent due Amount* (17 Amount* (17 Amount* (17 Amount *
till date years* 12 years* 12 years* 12 (17 years *
(from months)= months)= months)= 12 months)
2007) Rs.1,01,03712 Rs.2,09,10,000/- Rs.1,38,00,600/- =Rs.66,91,200
TOTAL Rs.5,15,05,512/-

16. Landlord-tenant disputes often make their way to this Court, and
obviously, the payment of rent/mesne profit/occupation charges/
damages becomes, more often than not a matter of high contest.
Determination, as alleged to have taken place by the petitioner,
can take place at the instance of both the landlord and the tenant.
Halsbury’s Laws of England 3rd Edn. Vol.23 defines ‘determination
by landlord’ as follows :
“The tenancy is impliedly determined by the landlord when
he does any act on the premises which is inconsistent with
[2024] 5 S.C.R. 867

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

the continuance of tenancy; for example, when he re-enters
to take possession (b), or puts in a new tenant (c), or cuts
down trees or carries away stone (d), the trees and stone
not being excepted from the demise (e), and also when
he does an act off the premises which is inconsistence
with the tenancy, as when he conveys the reversion (f), or
grants a lease of the premises to commence forthwith (g).
An act done off the premises, however, does not determine
the tenancy until the tenant has notice of it (h).”
16.1 According to the petitioner, as already taken note of above, the
lease was ‘forfeited’ due to non-payment of rent. Forfeiture, as
defined by Corpus Juris Secundum is “the right of the lessor to
terminate a lease because of lessee’s breach of covenant or
other wrongful act”. Further, it mentions as under :
“The word as used in a lease does not, strictly
speaking, refer to any right given to the lessee to
terminate the lease. Accordingly, it has been held that
provisions for forfeiture, cancelation or termination
of a lease are usually inserted for the benefit of the
lessor and because of some default on the part of
the lessee. A forfeiture is in the nature of a penalty
of doing of failing to do a particular thing, and results
from failure to keep an obligation.”
16.2 It would also be useful to refer to the concept of tenant at
sufferance. As defined in the very same treatise, such a tenant
is a person who enters upon a land by lawful title,but continues
in possession after the title has ended without statutory authority
and without obtaining consent of the person then entitled.
16.3 Wharton’s Law Lexicon Seventeenth Edn. discusses ‘tenancy
at sufferance’ in the following terms :
“Sufferance, Tenancy at, This is the least and lowest
estate which can subsist in realty. It is in strictness
not an estate, but a mere possession only it arises
when a person after his right to the occupation,
under a lawful title, is at an end, continues (having
no title at all) in possession of the land, without the
agreement or disagreement of the person in whom
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the right of possession resides. Thus if A is a tenant
for yes, and his terms expires, or is a tenant at will,
and his lessor dies, and he continues in possession
without the disagreement of the person who is entitled
to the same, in the one and the other of these cases
he said to have the possession by sufferance – that
is, merely by permission or indulgence, without any
right : the law esteeming it just and reasonable, and
for the interest of the tenant, and also of the person
entitled to the possession, to deem the occupation
to be continued by the permission of the person who
has the right, till it is proved that the tenant withholds
the possession wrongfully, which the law will not
presume. As the party came to the possession by
right, the law will esteem that right to continue either
in point of estate or by the permission of the owner
of the land till it is proved that the possession is held
in opposition to the will of that person.”
17. Before adverting to the present facts and claims advanced by the
parties it would be appropriate to refer to certain pronouncements
of this Court where mesne profit, which is the mainstay of the
interlocutory application(s) before us, have been awarded.
17.1 The respondent has referred to Atma Ram Properties (P) Ltd.
v. Federal Motors (P) Ltd.6 to submit that the landlord’s claim
for mesne profit is not maintainable, given that, no decree of
ejectment stands passed by the concerned civil court. We may
refer to the observations made in the said judgment, which
are, thus:
“9…….The power to grant stay is discretionary and
flows from the jurisdiction conferred on an appellate
court which is equitable in nature. To secure an
order of stay merely by preferring an appeal is not
a statutory right conferred on the appellant. So also,
an appellate court is not ordained to grant an order of
stay merely because an appeal has been preferred

6 [2004] Supp. 6 SCR 843 : (2005) 1 SCC 705
[2024] 5 S.C.R. 869

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

and an application for an order of stay has been
made. Therefore, an applicant for order of stay must
do equity for seeking equity. Depending on the facts
and circumstances of a given case, an appellate court,
while passing an order of stay, may put the parties
on such terms the enforcement whereof would satisfy
the demand for justice of the party found successful
at the end of the appeal. In South Eastern Coalfields
Ltd. v. State of M.P. [(2003) 8 SCC 648] this Court
while dealing with interim orders granted in favour
of any party to litigation for the purpose of extending
protection to it, effective during the pendency of
the proceedings, has held that such interim orders,
passed at an interim stage, stand reversed in the
event of the final decision going against the party
successful in securing interim orders in its favour;
and the successful party at the end would be justified
in demanding compensation and being placed in the
same situation in which it would have been if the
interim order would not have been passed against it.
The successful party can demand (a) the delivery to
it of benefit earned by the opposite party under the
interim order of the High Court, or (b) compensation
for what it has lost, and to grant such relief is the
inherent jurisdiction of the court. In our opinion, while
granting an order of stay under Order 41 Rule 5 CPC,
the appellate court does have jurisdiction to put the
party seeking stay order on such terms as would
reasonably compensate the party successful at the
end of the appeal insofar as those proceedings are
concerned.
x x x x
18. That apart, it is to be noted that the appellate court
while exercising jurisdiction under Order 41 Rule 5 of
the Code did have power to put the appellant tenant
on terms. The tenant having suffered an order for
eviction must comply and vacate the premises. His
right of appeal is statutory but his prayer for grant of
870 [2024] 5 S.C.R.

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stay is dealt with in exercise of equitable discretionary
jurisdiction of the appellate court. While ordering stay
the appellate court has to be alive to the fact that it
is depriving the successful landlord of the fruits of
the decree and is postponing the execution of the
order for eviction. There is every justification for the
appellate court to put the appellant tenant on terms
and direct the appellant to compensate the landlord
by payment of a reasonable amount which is not
necessarily the same as the contractual rate of rent.
In Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P)
Ltd. [(1999) 2 SCC 325] this Court has held that
once a decree for possession has been passed and
execution is delayed depriving the judgment-creditor
of the fruits of decree, it is necessary for the court to
pass appropriate orders so that reasonable mesne
profits which may be equivalent to the market rent is
paid by a person who is holding over the property.”
(Emphasis supplied)
17.2 A Bench of three learned Judges in State of Maharashtra &
Anr. v. Super Max International Private Limited and Ors7
observed as under :
“67. The way this Court has been looking at the
relationship between the landlord and the tenant
in the past and the shift in the Court’s approach in
recent times have been examined in some detail in the
decision in Satyawati Sharma v. Union of India [(2008)
5 SCC 287] . In that decision one of us (Singhvi,
J.) speaking for the Court referred to a number of
earlier decisions of the Court and (in para 12 of the
judgment) observed as follows: (SCC pp. 304-05)
“12. Before proceeding further we consider
it necessary to observe that there has been
a definite shift in the Court’s approach while
interpreting the rent control legislations.

7 [2009] 13 SCR 801 : (2009) 9 SCC 772
[2024] 5 S.C.R. 871

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

An analysis of the judgments of 1950s to
early 1990s would indicate that in majority
of cases the courts heavily leaned in
favour of an interpretation which would
benefit the tenant—Mohinder Kumar v.
State of Haryana [(1985) 4 SCC 221] ,
Prabhakaran Nair v. State of T.N. [(1987)
4 SCC 238], D.C. Bhatia v. Union of India
[(1995) 1 SCC 104] and C.N. Rudramurthy
v. K. Barkathulla Khan [(1998) 8 SCC
275] . In these and other cases, the Court
consistently held that the paramount
object of every rent control legislation is
to provide safeguards for tenants against
exploitation by landlords who seek to take
undue advantage of the pressing need
for accommodation of a large number
of people looking for a house on rent for
residence or business in the background
of acute scarcity thereof. However, a
different trend is clearly discernible in the
later judgments.”
x x x x x
68. The learned Judge then referred to some later
decisions and (in para 14 at SCC p. 306 of the
judgment) quoted a passage from the decision in
Joginder Pal v. Naval Kishore Behal [(2002) 5 SCC
397], to the following effect: (Joginder Pal case [(2002)
5 SCC 397] , SCC p. 404, para 9)
“14. … ‘9. … The courts have to adopt
a reasonable and balanced approach
while interpreting rent control legislations
starting with an assumption that an equal
treatment has been meted out to both the
sections of the society. In spite of the overall
balance tilting in favour of the tenants,
while interpreting such of the provisions as
to take care of the interest of the landlord
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the court should not hesitate in leaning in
favour of the landlords. Such provisions
are engrafted in rent control legislations
to take care of those situations where the
landlords too are weak and feeble and
feel humble.’ ”
(emphasis in original)
x x x x x
79. Before concluding the decision one more question
needs to be addressed: what would be the position if
the tenant’s appeal/revision is allowed and the eviction
decree is set aside? In that event, naturally, the status
quo ante would be restored and the tenant would
be entitled to get back all the amounts that he was
made to pay in excess of the contractual rent. That
being the position, the amount fixed by the court over
and above the contractual monthly rent, ordinarily,
should not be directed to be paid to the landlord
during the pendency of the appeal/revision. The
deposited amount, along with the accrued interest,
should only be paid after the final disposal to either
side depending upon the result of the case.”
17.3 It has been held that tenants shall be liable to pay a rent
equivalent to mesne profit, from the date they are found not to
be entitled to retain possession of the premises in question. In
Achal Misra v. Ram Shanker Singh & Ors.8 this Court held -
“23. From the material available on record it does not
appear that any rate of rent was appointed at which
rent would be payable by the respondents to the
landlord. The respondents also do not seem to have
taken any steps for fixation of rent of the premises
in their occupation. They have been happy to have
got the premises in a prime locality, occupying and
enjoying the same for no payment. We make it clear

8 [2005] 3 SCR 439 : (2005) 5 SCC 531
[2024] 5 S.C.R. 873

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

that the respondents shall be liable to pay the rent
equivalent to mesne profits with effect from the date
with which they are found to have ceased to be entitled
to retain possession of the premises as tenant and
for such period the landlord’s entitlement cannot be
held pegged to the standard rent. Reference may
be had to the law laid down by this Court in Atma
Ram Properties (P) Ltd. v. Federal Motors (P) Ltd.
[(2005) 1 SCC 705].”
This position was reiterated in Achal Misra (2) v. Rama Shankar
Singh & Ors.9.
17.4 The power to grant stay on the execution proceedings which
would then result into an order for payment of mesne profit is
what has been described as incidental or subject to the final
outcome of the case. This Court has observed, in G.L. Vijain
v. K. Shankar10 as under -
“10. It must be borne in mind that incidental power
is to be exercised in aid to the final proceedings.
In other words an order passed in the incidental
proceedings will have a direct bearing on the result
of the suit. Such proceedings which are in aid of the
final proceedings cannot, thus, be held to be on a par
with supplemental proceedings which may not have
anything to do with the ultimate result of the suit.
11. Such a supplemental proceeding is initiated
with a view to prevent the ends of justice from
being defeated. Supplemental proceedings may not
be taken recourse to in a routine manner but only
when an exigency of situation arises therefor. The
orders passed in the supplemental proceedings may
sometimes cause hardships to the other side and,
thus, are required to be taken recourse to when it is
necessary in the interest of justice and not otherwise.

9 [2006] Supp. 1 SCR 617 : (2006) 11 SCC 498
10 [2006] Supp. 9 SCR 583 : (2006) 13 SCC 136
874 [2024] 5 S.C.R.

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There are well-defined parameters laid down by the
Court from time to time as regards the applicability
of the supplemental proceedings.
12. Incidental proceedings are, however, taken
recourse to in aid of the ultimate decision of the suit
which would mean that any order passed in terms
thereof, subject to the rules prescribed therefor, may
have a bearing on the merit of the matter. Any order
passed in aid of the suit is ancillary power.”
17.5 This Court in Martin and Harris (P) Ltd. v. Rajendra Mehta11
speaking through one of us (J.K. Maheshwari, J.) observed that -
“18. Thus, after passing the decree of eviction
the tenancy terminates and from the said date the
landlord is entitled for mesne profits or compensation
depriving him from the use of the premises. The view
taken in Atma Ram [Atma Ram Properties (P) Ltd.
v. Federal Motors (P) Ltd., (2005) 1 SCC 705] has
been reaffirmed in State of Maharashtra v. Super
Max International (P) Ltd. [State of Maharashtra v.
Super Max International (P) Ltd., (2009) 9 SCC 772 :
(2009) 3 SCC (Civ) 857] by three-Judge Bench of this
Court. Therefore, looking to the fact that the decree
of eviction passed by the trial court on 3-3-2016 has
been confirmed in appeal; against which second
appeal is pending, however, after stay on being asked
the direction to pay mesne profits or compensation
issued by the High Court is in consonance to the
law laid down by this Court, which is just, equitable
and reasonable.
19. The basis of determination of the amount of
mesne profits, in our view, depends on the facts and
circumstances of each case considering the place
where the property is situated i.e. village or city or
metropolitan city, location, nature of premises i.e.

11 [2022] 16 SCR 38 : (2022) 8 SCC 527
[2024] 5 S.C.R. 875

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

commercial or residential area and the rate of rent
precedent on which premises can be let out are the
guiding factor in the facts of individual case.”
(Emphasis supplied)
18. A perusal of the judgments extracted above as also other cases
where Atma Ram Properties (supra) one common factor can be
observed, i.e., the decree of eviction stands passed and the same
having been stayed, gives rise to the question of payment of mesne
profit. As observed above, the respondent contends that since, in the
present case no decree of eviction is passed, and there is no stay
awarded, the question of such payment does not arise.
19. While the above-stated position is generally accepted, it is also
within the bounds of law, that a tenant who once entered the
property in question lawfully, continues in possession after his
right to do so stands extinguished, is liable to compensate the
landlord for such time period after the right of occupancy expires.
In this regard, we may refer to Indian Oil Corporation Ltd. v.
Sudera Realty Private Limited12, wherein this Court in para 64
observed as under :
“64. A tenant continuing in possession after the expiry of
the lease may be treated as a tenant at sufferance, which
status is a shade higher than that of a mere trespasser,
as in the case of a tenant continuing after the expiry of
the lease, his original entry was lawful. But a tenant at
sufferance is not a tenant by holding over. While a tenant
at sufferance cannot be forcibly dispossessed, that does
not detract from the possession of the erstwhile tenant
turning unlawful on the expiry of the lease. Thus, the
appellant while continuing in possession after the expiry
of the lease became liable to pay mesne profits.”
(Emphasis supplied)
20. It is to be noted that the Court in Sudera Realty (supra) observed
that mesne profits become payable on continuation of possession

12 [2022] 19 SCR 462 : 2022 SCC OnLine 1161
876 [2024] 5 S.C.R.

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after ‘expiry’ of lease. In our considered view, the effect of the words
‘determination’, ‘expiry’, ‘forfeiture’ and ‘termination’ would, subject
to the facts applicable, be similar, i.e., when any of these three
words are applied to a lease, henceforth, the rights of the lessee/
tenant stand extinguished or in certain cases metamorphosed into
weaker iteration of their former selves. Illustratively, Burton’s Legal
Thesaurus 3rd Edn. suggests the following words as being similar to
‘expire’ - cease, come to an end; ‘determine’ is similar to - come to
a conclusion, bring to an end; ‘forfeiture’ is similar to – deprivation/
destruction of a right, divestiture of property; and ‘terminate’ is similar
to – bring to an end, cease, conclude. Therefore, in any of the these
situations, mesne profit would be payable.
21. Having considered the submissions made across the Bar, we note that
the disputed nature of the lease deed, in other words, its continuation
or forfeiture on account of non-payment is heavily contested and
stemming therefrom, so is the nature of payment to be made. We also
note that the location of demised premises is in the heart of Kolkata
and if the submissions of the petitioner are to be believed, they have
been deprived of rent for a considerable period of time. Taking a lock
stock and barrel view of the present dispute, the averments and the
documents placed before us, we may record a prima facie view,
that the respondent-tenant has for the reasons yet undemonstrated,
been delaying the payment of rent and/or other dues, payable to the
petitioner-applicant landlord. This denial of monetary benefits accruing
from the property, when viewed in terms of the unchallenged market
report forming part of the record is undoubtedly substantial and as
such, subject to just exceptions, we pass this order for deposit of the
amount claimed by the petitioner-applicant, to ensure complete justice
inter se the parties, After all, we cannot lose sight of the fact that
the very purpose for which a property is rented out, is to ensure that
the landlord by way of the property is able to secure some income.
If the income remains static over a long period of time or in certain
cases, as in the present case, yields no income, then such a landlord
would be within his rights, subject of course, to the agreement with
their tenant, to be aggrieved by the same. The factors considered
by us have been referred to in Martin and Harris (Supra). We are
supported in our conclusion by the observations and guidelines issued
by this Court in Mohammad Ahmed & Anr. v. Atma Ram Chauhan
[2024] 5 S.C.R. 877

Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai

& Ors.13. We reproduce the ones relevant to the adjudication of the
present dispute hereinbelow-
“21. According to our considered view majority of these
cases are filed because the landlords do not get reasonable
rent akin to market rent, then on one ground or the other
litigation is initiated…
(i) The tenant must enhance the rent according to the
terms of the agreement or at least by ten per cent, after
every three years and enhanced rent should then be
made payable to the landlord. If the rent is too low (in
comparison to market rent), having been fixed almost
20 to 25 years back then the present market rate should
be worked out either on the basis of valuation report or
reliable estimates of building rentals in the surrounding
areas, let out on rent recently.
(ii) Apart from the rental, property tax, water tax,
maintenance charges, electricity charges for the actual
consumption of the tenanted premises and for common
area shall be payable by the tenant only so that the
landlord gets the actual rent out of which nothing would
be deductible. In case there is enhancement in property
tax, water tax or maintenance charges, electricity charges
then the same shall also be borne by the tenant only.
x x x x
(v) If the present and prevalent market rent assessed and
fixed between the parties is paid by the tenant then the
landlord shall not be entitled to bring any action for his
eviction against such a tenant at least for a period of 5
years. Thus for a period of 5 years the tenant shall enjoy
immunity from being evicted from the premises.
(vi) The parties shall be at liberty to get the rental fixed by
the official valuer or by any other agency, having expertise
in the matter.

13 [2011] 6 SCR 822 : (2011) 7 SCC 755
878 [2024] 5 S.C.R.

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(vii) The rent so fixed should be just, proper and adequate,
keeping in mind the location, type of construction,
accessibility to the main road, parking space facilities
available therein, etc. Care ought to be taken that it does
not end up being a bonanza for the landlord.”
22. Since the Special Leave Petitions are pending adjudication, we
make it clear that directions made in the above-stated Interlocutory
Applications herein are subject to the final outcome of the former.
Keeping in view the location of the demised premises, the rent as
agreed, the alleged non-payment of rent, the default in payment of
interest, as alleged, and other such like factors we are inclined to
accept the calculation of dues as made by the petitioner-applicant,
submitted to this Court during hearing, as reproduced hereinabove.
23. Consequently, keeping in view the observations made in Super
Max International (supra) and G.L. Vijain (supra), we direct the
respondent to deposit the above-stated amount of Rs.5,15,05,512/-
with the Registry of this Court within four weeks from today. An
affidavit of compliance shall be filed in the Registry of this Court within
a week thereafter. Failure to comply with the aforementioned shall
entail all consequences within the law, including wilful disobedience
of the order. The Registry is directed to place the amount received
in a short-term, interest-bearing fixed deposit.
24. The Interlocutory Applications for directions seeking similar relief filed in
SLP(C)Nos.4050 (I.A. No.120227/2020), 4051 (I.A. No.120235/2020),
and 4052 (I.A. No.120248/2020) of 2020 shall stand disposed of
in the same and similar terms as the I.A. No.120219/2020 filed in
SLP(C)No.4049/2020, discussed above.
25. Let the Special Leave Petitions appear in the month of July, 2024.

Result of the case: IAs disposed of.

†
Headnotes prepared by: Ankit Gyan