SC Explains: Factors to be considered in determination of mesne profit under CPC

 

Read Judgement 

The Supreme Court has held that on the determination of the mesne profit there are certain factors that need to be taken into consideration.

A division bench comprising Justice Indira Banerjee and Justice J.K Maheshwari observed that these factors are the place where the property is situated, the nature of the premise i.e commercial or residential, and the rate of rent precedent on which premises can be let out.

Brief Facts of the Case

The factual matrix of the case is that the plaintiff purchased the property through six different registered sale deeds executed on 23.12.1985. by virtue of the sale deed, the plaintiff became the owner of the tenanted property. The appellants were the former owner's tenants, but after the property was sold, they were made tenants of the plaintiffs and respondents by the attorney. Earlier, the suit was filed under Section 6 of the old act by the petitioner/ respondent against the appellant for the determination of the said rent. While the case was pending, a request under Section 7 of the Old Act was made to set the temporary rent, which was approved by an order dated January 9th, 2004, setting the temporary rent at Rs. 100,000 per month.

When the aforementioned order was contested, the High Court upheld it in an order dated April 18, 2007. The appellant filed the special leave petition wherein this court fixed the ad hoc provincial rent of Rs 60,000 per month with direction to the trial court to decide the issue of standard rent expeditiously. The trial court fixed the standard of Rs 45,000 per month. Further, in the present appeal, the order of the high court directing to pay the mense profit of Rs 2,50,000 has been questioned.

 

Contentions of Counsels

The learned counsel for the Appellant contended that according to Section 20 of the Rajasthan rent control act, 2001 the maximum amount of mense profit payable for the commercial property is three times the standard rent. Further, it was contended that the mense profit has been decided by the high court, is excessive without looking to the year of construction of premises, location of the property, and also without taking note of the DLC rate. Therefore, the order may be set aside and the quantum of mense profit may be revised to three times the amount of rent making it Rs 1,50,000 per month.

The Learned Counsel for the plaintiff/respondent contended that the provisions of the new act do not apply to suit or proceedings initiated under the old act. The argument of the appellant that the mense profit should be fixed three times the standard rent is meritless. It was also argued that the property is located on the main road of New Colony, Jaipur situated in the heart of the city being a commercial area fixed mense profit. Therefore, the mense profit decided by the high court is just equitable, just, and reasonable with a direction to re-deposit of mense profit with 9% interest. In such circumstances, interference in such appeal is not warranted.

Supreme Court's Judgement

The Top Court held that the amount of mesne profit, which was set at Rs. 2,50,000/­, is also just and appropriate when considering the period of time, which is 10 years from the day the standard rent was fixed and 6 years from the date the eviction judgment was issued. As a result, when issuing the ruling that is being challenged, the High Court acted correctly in determining the amount of mesne profit.

CASE NAME- M/S Martin & Harris Private Limited & Anr Vs Rajendra Mehta & Ors

CORAM - Justice Indira Banerjee and Justice J.K Maheshwari

 

Social media is bold.

Social media is young.

Social media raises questions.

 Social media is not satisfied with an answer.

Social media looks at the big picture.

 Social media is interested in every detail.

social media is curious.

 Social media is free.

Social media is irreplaceable.

But never irrelevant.

Social media is you.

(With input from news agency language)

 If you like this story, share it with a friend!  

We are a non-profit organization. Help us financially to keep our journalism free from government and corporate pressure