Ablitt Company Private Limited vs Life Insurance Corporation Of India & Anr.

The present revisional application has been preferred by the judgment debtor in a composite proceeding under Sections 5 and 7 of the Public Premises

(Eviction of Unauthorised Occupants) Act, 1971. Challenging such composite order, the petitioner preferred an appeal and filed a stay application in

connection with the said appeal. By the impugned order dated June 22, 2018, the appellate court granted stay on condition that the petitioner goes on

paying occupational charges at the rate of Rs. 1,09,920/- per month as well as deposits an amount of Rs. 50,00,000/- towards arrear rents and

damages with the respondent by August 2018.

Learned senior advocate appearing on behalf of the petitioner, argues that the impugned order ought to be modified, in so far as the direction for

payment as condition of the stay is concerned, on two-fold grounds. First, the deposit of rupees fifty lakh towards arrear rents and damages ought to

have been related to stay of operation of the Estate Officer’s award in so far as the payment of arrear of rents was concerned, the latter being in

the nature of a money decree. On the other hand, the occupational charges ought to have been relatable to stay of execution of the portion of the

Estate Officer’s award, whereby eviction of the petitioner was granted. Second, the quantum of occupational charges so assessed by the court

was erroneous. Such assessment, according to the petitioner, was on the basis of an adjudication by this court in a different matter in respect of a

building apparently adjacent to the disputed premises in the present lis. In consonance with such adjudication by this court, the appellate court directed

payment of Rs. 1,09,920/- per month as occupational charges.

It was pointed out by learned senior advocate for the petitioner that the Estate Officer in the present case has, upon an elaborate consideration of the

available yardstick, assessed the current market rate of rent for the premises in question to be Rs. 30,400/- per month. Such assessment, according to

the petitioner, was on the basis of eight per cent escalation annually and such finding, as per the petitioner, was never challenged by the opposite party

no. 1. As such, it is argued that the opposite party no. 1 could not resile from that assessment and seek higher occupational charges at an exorbitant

rate.

In controverting such argument, the learned advocate appearing on behalf of the opposite party no. 1 argues that mesne profit/damages could not be

equated with occupational charges granted as a condition of stay by the appellate court on application of the principle embodied under Order XLI,

Rule 5 of the Code of Civil Procedure. The yardsticks for the two, according to the opposite party no. 1, are different and not on the same footing. In

support of his contention, the learned advocate for the opposite party no. 1 cites two decisions of the Supreme Court â€" one in the case of Anderson

Wright & Co. vs. Amar Nath Roy & ors. reported in (2005) 6 S.C.C. 489 and the other in the case of Atma Ram Properties (P) Ltd. vs. Federal

Motors (P) Ltd. reported in (2005) 1 S.C.C. 705.

In both the said decisions, it was held by the Hon’ble Supreme Court that the basis of quantification of occupational charges ought to be the rate at

which the landlord would have been able to let out the premises on being vacated by the tenant. It was further held that while determining the quantum

of the amount so receivable by the landlord, the landlord was not bound by the contractual rate of rent prevailing prior to the date of decree.

The learned advocate for the opposite party no. 1 also cites two unreported decisions dated June 25, 2017 and August 25, 2017, both rendered by a

co-ordinate bench of this court in relation to C.O. 900 of 2017 (Life Insurance Corporation of India vs. Esplanade Stores & anr.) in support of the

aforesaid proposition. It is argued by the learned advocate for the opposite party no. 1 that the appellate court was free to prima facie decide the

occupational charges payable at the present market rate, unfettered by any adjudication of mesne profit/damages which might have been made by the

Estate Officer. It was further argued that the quantum arrived at by the Estate Officer was not merely restricted to the contemporaneous yardsticks

of the year 2018, but related back till the year 1991, since the damages directed to be paid by the Estate Officer covered a period ranging from 1991

to 2018. As such, it was submitted that the quantification by the Estate Officer could by no stretch of imagination be a basis for determining the

occupational charges payable by the present petitioner.

On the other aspect as to segregation of the conditions of payment in respect of stay of operation of payment of arrear rents and operation of the

award of eviction, the learned advocate for the opposite party no. 1 opposes the same on principle. Upon hearing both sides and going through the

materials on record, it is evident that it would be rational to segregate the quanta fixed as conditions for stay of operation of the award relating to

payment of arrear of rents and damages on the one hand, and eviction of the petitioner on the other, respectively. It is evident that the direction to

deposit rupees fifty lakh towards arrear rents and damages could be relatable only to the portion of the Estate Officer’s award, by which the

petitioner was directed to pay such arrear rents, and could not be mixed up with the portion of the award directing eviction of the petitioner. Similarly,

the occupational charges payable could only be relatable to occupation of the premises in question by the petitioner and obviously was connected with

the portion of the award relating to eviction.

As to the quantum of occupational charges, there is substance in the contention of the petitioner that an elaborate conclusion as to the

contemporaneous market rate of rent of the premises in question, arrived at by the Estate Officer while assessing the mesne profit/damages as late as

on March 31, 2018, could not be overlooked by the appellate court while assessing the current rate of occupational charges. This court cannot accept

the arguments extended on behalf of the opposite party no. 1 as to such assessment of the Estate Officer being relatable to the entire period from

1991 to 2018.

Although the damages calculated were for the entire period, as mentioned above, it was categorically found, by application of the eight per cent per

annum escalation yardstick, that with reference to fairly contemporaneous circumstances, more specifically, the rate of rent hypothetically obtained in

2018, the rate of monthly payment had to be Rs. 30,400/-. As such, compared to the assessment in a different matter relating to an adjacent building,

the assessment by the Estate Officer relating to the premises in question in the present matter, that too on elaborate reasoning was far more

acceptable as occupation charges in the present context. More so, such order of the Estate Officer has not been challenged by the present opposite

parties.

In such view of the matter, this court is of the considered opinion that the assessment of occupational charges at Rs. 1,09,920/- per month, as done by

the appellate court, was entirely without jurisdiction and the assessment of the Estate officer in that regard, that is at Rs. 30,400/- per month, ought to

be the only yardstick on that score. Accordingly, C.O. 2049 of 2018 is allowed on contest, thereby setting aside the portion of the impugned order,

whereby the occupational charges were directed to be paid at the rate of Rs. 1,09,920/- per month and reducing the same to Rs. 30,400/- per month.

By way of further modification, it is held that the payment of occupational charges at the rate of Rs. 30,400/per month would operate as condition for

the stay of operation of the Estate Officer’s award whereby eviction of the petitioner was granted under Section 5 of the Public Premises

(Eviction of Unauthorised Occupants) Act, 1971. The direction to deposit rupees fifty lakh would operate as condition for the stay of operation of the

other part of the Estate Officer’s award, whereby the petitioner was directed to pay arrear rents and damages.

It is made clear that the amount of rupees fifty lakh will have to be deposited by the present petitioner within August 2018, as directed in the impugned

order, with the opposite party no. 1, with the rider that the opposite party no. 1 will park the same in a separate account. The arrear occupational

charges at the rate of Rs. 30,400/- per month for the period from March 31, 2018 till July 31, 2018 will have to be paid by the petitioner within August

14, 2018 to the opposite party no. 1. The current occupational charges at the rate of Rs. 30,400/- per month will be paid by the petitioner to the

opposite party no. 1 within the fifteenth of each succeeding English Calendar month, beginning with September 15, 2018, within which the current

occupational charges for the month of August 2018 shall be paid. The default clause imposed by the appellate court in the impugned order remains

unchanged.

The effect is, that the failure to deposit the occupational charges (current as well as arrears), even for a single instance, and to deposit rupees fifty

lakh, would result in the Estate Officer’s award of eviction of the petitioner under Section 5 of the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971, and the other portion of the Estate Officer’s award relating to payment of arrear of rents and damages respectively being

vacated automatically without any further reference to court. There will be no order as to costs.