- The Supreme Court bench composed of Justice Indira Banerjee and Justice J.K. Maheshwari have restated in the case M/s. Martin & Harris Private Limited &Anr. V Rajendra Mehta &Ors that once a decree for possession has been passed and the execution is delayed, thus depriving the decree holder to reap the fruits of his possession, it is necessary for the Appellate Court to pass appropriate orders, fixing reasonable mesne profits which may be equivalent to the market rent which is required to be paid by a person who is holding over the property.
- These observations were made by the bench while considering a special leave petition which was filed by a tenant that challenged the order of the Rajasthan High Court, putting a condition to pay 2.50 lakh as monthly rent to the landlord to stay the execution of the eviction decree.
- The appellant asserted that as per Section 20 of the Rajasthan Rent Control Act, 2001 - the maximum amount of mesne profit payable may be three times the standard rent in case premises is used for outside purposes.
- It was contended that, as determined by the High Court, the mesne profit is excessive without looking at the year of construction on the premises, as well as location of the property which is on the inside road of the colony and also without taking note of the DLC rate.
- Therefore, the impugned order may be set aside and the quantum of mesne profits may be revised to three times the amount of the rent, making it 1.35 lakh per month.
- The Supreme Court noted that the 2001 Act had come into effect from the 1st of April in 2003 and had no applications to the proceedings initiated under the 1950 Act, which had been applied in the present case.
- The Court further observed that the basis of determining the amount of the mesne profit depends on the facts and circumstances of each case considering place where the property is situated, for example, village or city, as well as the nature of the premises, i.e., commercial or residential and the rate of rent precedent on which the premises can be let out. These are guiding factors in the facts of individual cases.
- It dismissed the petitions as it did not find any fault in the manner of determining the amount adopted by the High court.
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