* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM No. 4710/2008 in RFA No. 72/2005
Reserved on : 3rd July, 2008
Date of Decision : July 17th , 2008
CAPT. PRAVEEN DAVAR RETD. & ANR. ..... Appellants
Through: Mr. A.K. Singh, Sr. Advocate
with
Mr. Pankaj Gupta, Advocate.
Versus
HARVANSH KUMARI & ORS. ..... Respondents
Through: Mr. Ravi Nath, Advocate with
Mr. P.K. Jain, Advocate.
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE MANMOHAN
1. Whether Reporters of local papers may be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the digest? No
JUDGMENT
MANMOHAN, J :
1. The Respondent/Plaintiffs have filed the present application
being CM No. 4710/2008 under Section 151 of Code of Civil
Procedure praying for a direction to the Appellant/Defendants to
deposit a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) per
month as compensation for use and occupation of the suit
CM No. 4710/2008 in RFA No. 72/2005 Page 1 of 10
premises from December 1994 till final decision in the present
appeal.
2. Briefly sated the material facts for this application are that
the Appellant/Defendants in the year 1995 had filed a suit for
recovery of possession and damages in respect of first floor of
the premises bearing No. B-32, Connaught Place, New Delhi – 110
001, hereinafter referred to as the ‘suit premises’. The said suit
premises admittedly comprises of three bed rooms, kitchen,
bathroom, verandah facing the Central Park, Connaught Place.
3. On the basis of the pleadings of the parties, the trial court
framed the following issues :-
“(i) Whether the plaintiff are owners and
landlords? OPP
(ii) Whether the suit is barred by Section 50 of
the DRC Act? OPD.
(iii) Whether the plaintiff is estopped from
bringing the present suit in view of the
averments in para no. 3 of the Written
Statement of defendant no. 1 to 4? OPD.
(iv) Whether the tenancy of the defendant is
terminated by a valid and legal notice? If
not, its effect. OPP.
(v) Whether the defendants are still
continuing as tenants? OPD.
(vi) Whether the premises were taken for
residential-cum-commercial purpose? OPD.
CM No. 4710/2008 in RFA No. 72/2005 Page 2 of 10
(vii) Whether the plaintiff is entitled for the
possession of the premises as claimed?
OPP.
(viii) Whether suit is barred by res judicata?
OPD.
(ix) Whether the plaintiff is entitled for the
damages as claimed? If so, as what rate?
OPP.
(x) Relief.
4. On 11th January, 2005 the trial court passed a preliminary
decree of possession of the suit premises in favour of the
Respondent/Plaintiffs, but directed a further enquiry to be held
under Order 20 Rule 12 of Code of Civil Procedure in respect of
mesne profits/damages to be paid by the Appellant/Defendants
herein for unauthorized occupation of the suit premises.
5. However, on the present appeal being filed, this Court on 7 th
February, 2005 admitted the matter and in the interregnum the
learned counsel for the Respondent/Plaintiffs undertook not to
obtain warrants of possession of the suit premises. While the
present appeal was pending final disposal, the
Respondent/Plaintiffs have filed the present application seeking
payment of the interim compensation as detailed hereinabove.
6. In the present application, the Respondent/Plaintiffs have
stated that the owners are all senior citizens who, after several
CM No. 4710/2008 in RFA No. 72/2005 Page 3 of 10
years of court battle, have obtained a decree for possession. But,
they have not received any rent/occupation charges for the suit
premises since 1989. The Respondent/Plaintiffs have further
alleged that the Appellant/Defendants are two of the five children
of the original tenant who had died about 30 years ago and
further the tenant’s wife who was a statutory tenant had also
died about 15 years ago. In this application it has further been
stated that the present appeal has been pending adjudication in
this court for last about three years and the market rent of the
suit premises is approximately Rs. 2,00,000/- per month.
7. Though the Appellant/Defendants admit that they are in
occupation of the suit premises, they claim that rents of first floor
properties in Connaught Place are abysmally low as said
properties can be used only for residential purposes. The
Appellant/Defendants further allege that during the last 5 to 7
years there has been no letting out of first floor properties in
Connaught Place as no person is willing to take premises in that
area for residential purpose and further letting out of such
premises for commercial use is legally not permissible. The
Appellant/Defendants further claim that the finding of the trial
court with regard to issue No. 4 is untenable in law since it has
been passed without even considering the mandatory provision
of Section 10 of the Punjab Urban Rent Restriction Act, 1941.
CM No. 4710/2008 in RFA No. 72/2005 Page 4 of 10
8. In our view, Order 41 Rule 5 of Code of Civil Procedure gives
power and jurisdiction to the appellate court to put the appellant
on such reasonable terms as would in the courts opinion
reasonably compensate the decree holder for loss occasioned by
delay in execution of the decree by the grant of a stay order. The
relevant Sub-Rules (1) and (3) of Rule 5 of Order 41 of Code of
Civil Procedure are reproduced hereinbelow :-
“5. Stay by Appellate Court
(1) An appeal shall not operate as a stay of
proceedings under a decree or order appealed from
except so far as the Appellate Court may order, nor
shall execution of a decree be stayed by reason only
of an appeal having been preferred from the decree;
but the Appellate Court may for sufficient cause order
stay of execution of such decree……
(3) No order for stay of execution shall be made
under sub-rule (1) or sub-rule (2) unless the Court
making it is satisfied–
(a) that substantial loss may result to the party
applying for stay of execution unless the order is
made;
(b) that the application has been made without
unreasonable delay; and
(c) that security has been given by the applicant for
the due performance of such decree or order as may
ultimately be binding upon him.”
9. The Apex Court in the case of Atma Ram Properties (P)
Ltd. vs. Federal Motors (P) Ltd reported in (2005) 1
Supreme Court Case 705 has also held as under :-
CM No. 4710/2008 in RFA No. 72/2005 Page 5 of 10
“8. It is well settled that mere preferring of an appeal
does not operate as stay on the decree or order
appealed against nor on the proceedings in the court
below. A prayer for the grant of stay of proceedings or
on the execution of decree or order appealed against
has to be specifically made to the appellate Court and
the appellate Court has discretion to grant an order of
stay or to refuse the same. The only guiding factor,
indicated in the Rule 5 aforesaid, is the existence of
sufficient cause in favour of the appellant on the
availability of which the appellate Court would be
inclined to pass an order of stay. Experience shows
that the principal consideration which prevails with the
appellate Court is that in spite of the appeal having
been entertained for hearing by the appellate Court,
the appellant may not be deprived of the fruits of his
success in the event of the appeal being allowed. This
consideration is pitted and weighed against the other
paramount consideration: why should a party having
succeeded from the Court below be deprived of the
fruits of the decree or order in his hands merely
because the defeated party has chosen to invoke the
jurisdiction of a superior forum. Still the question
which the Court dealing with a prayer for the grant of
stay asks to itself is: Why the status quo prevailing on
the date of the decree and/or the date of making of
the application for stay be not allowed to continue by
granting stay, and not the question why the stay
should be granted.
9. Dispossession, during the pendency of an appeal of
a party in possession, is generally considered to be
‘substantial loss’ to the party applying for stay of
execution within the meaning of Clause (a) of Sub-rule
(3) of Rule 5 of Order 41 of the Code. Clause (c) of the
same provision mandates security for the due
performance of the decree or order as may ultimately
be passed being furnished by the applicant for stay as
a condition precedent to the grant of order of stay.
However, this is not the only condition which the
appellate Court can impose. 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 the 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 beenCM No. 4710/2008 in RFA No. 72/2005 Page 6 of 10
preferred 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. and Ors., 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 of the 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 in so far as those
proceedings are concerned. Thus, for example, though
a decree for payment of money is not ordinarily stayed
by the appellate Court, yet, if it exercises its
jurisdiction to grant stay in an exceptional case it may
direct the appellant to make payment of the decretal
amount with interest as a condition precedent to the
grant of stay, though the decree under appeal does
not make provision for payment of interest by the
judgment-debtor to the decree-holder. Robust
commonsense, common knowledge of human affairs
and events gained by judicial experience and judicially
noticeable facts, over and above the material
available on record – all these provide useful inputs as
relevant facts for exercise of discretion while passing
an order and formulating the terms to put the parties
on. After all, in the words of Chief Justice
Chandrachud, speaking for the Constitution Bench inCM No. 4710/2008 in RFA No. 72/2005 Page 7 of 10
Olga Tellis and Ors. v. Bombay Municipal
Corporation and Ors. – “commonsense which is a
cluster of life’s experiences, is often more dependable
than the rival facts presented by warring
litigants”………………….
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 in so far 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 (I) 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 the superior forum at a latter date.”
(emphasis supplied)
10. Following the aforesaid judgment, one of us Hon’ble Mr.
Justice Mukul Mudgal vide judgment and order dated 7th April,
CM No. 4710/2008 in RFA No. 72/2005 Page 8 of 10
2008 in M/s. C.E. Construction Ltd. Vs. Mr. Ajay Relan and
Others in CM No. 1773/2008 in EFA (OS) No. 05/2008 held
as under :-
“………it is amply clear that the Appellate court is not
bound to grant an order of stay merely because an
appeal has been preferred and an application for an
order of stay has been made. An applicant who comes
to the court for seeking a stay order must do equity
for seeking equity. While granting an order of stay
under Order 41 Rule 5 of the CPC the appellate court
does have the jurisdiction to put the parties seeking
the stay order on such terms, as would in its opinion
reasonably compensate the decree holder, for the loss
occasioned by the delay in the execution of the decree
by the grant of stay order….”
11. Since the trial court has categorically held that the
Appellant/Defendants are not entitled to the continued
possession of the suit premises and the trial court has not
calculated the use/occupation charges, we deem it necessary
ourselves to compute the occupation charges payable by the
Appellant/ Defendants for continued possession of the suit
property during the pendency of the present appeal, taking
judicial notice of the rents prevalent in this area as well as the
exponential increase in the rents every year. It is pertinent to
mention that it was the Appellant/Defendants’ case before the
trial court that the suit premises had been initially let out to them
both for commercial as well as residential use.
CM No. 4710/2008 in RFA No. 72/2005 Page 9 of 10
12. Consequently, we direct the Appellant/Defendants to
deposit in this Court from the date of filing of application i.e. 24th
March, 2008 a sum of Rs. 30,000/- per month. The aforesaid
amount shall be deposited on or before 1st November, 2008.
Thereafter every month the Appellant/Defendants shall deposit a
sum of Rs. 30,000/- per month on or before 10th of each month.
In case there is failure to make the above payments within the
stipulated period mentioned above, the interim arrangement that
the Respondent/Plaintiffs would not obtain warrants of possession
shall be liable to be vacated. The amount so deposited by the
Appellant/Defendants shall be invested in a short term fixed
deposit for a period of one year by the Registry of this Court. The
principal and interest amount shall enure for the benefit of the
successful party in the present appeal.
13. With these observations, the present application stands
disposed of.
Manmohan, J.
Mukul Mudgal, J.
July 17th, 2008
rn
CM No. 4710/2008 in RFA No. 72/2005 Page 10 of 10