Suresh Atalrai Keshwani and Anr v. Mahesh Atalrai Keshwani

Order XLI Rule 5 CPC.

¶30The Supreme Court held that the power to grant stay is discretionary and flows from the jurisdiction conferred upon the Appellate Court. Such jurisdiction is equitable in nature, and the Appellate Court is not ordinarily required to grant an order of stay merely because an appeal has been preferred and an application for stay has been made.

¶31An applicant seeking an order of stay must do equity while seeking equity. Depending upon the facts and circumstances of each case, the Appellate Court, while granting an order of stay, may impose such terms and conditions as would ensure that the ends of justice are met and that the interests of the party ultimately found to be successful in the appeal are adequately protected.

¶32The Supreme Court in Atma Ram Properties (supra) also relied upon the judgment of Southern Eastern Coalfields Ltd. Vs. State of Madhya Pradesh10, wherein the Court held that where the orders passed at an interim stage are reversed and in the event of the final decision going against the party successful in securing the interim order in its favour, 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 had the interim order not been passed against it. The Court thus opined that, while granting an order of stay under Order 41, Rule 5 CPC, the Appellate Court does have jurisdiction to put the party seeking the stay order on such terms as would reasonably compensate the party successful at the end of the appeal, insofar 10 (2003) 8 SCC 648 as those proceedings are concerned. The Supreme Court in Atma Ram Properties (supra) at paragraphs 11 and 18 has held as under : "11. Under the general law, and in cases where the tenancy is governed only by the provisions of the Transfer of Property Act, 1882, once the tenancy comes to an end by determination of lease under Section 111 of the Transfer of Property Act, the right of the tenant to continue in possession of the premises comes to an end and for any period thereafter, for which he continues to occupy the premises, he becomes liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises on being vacated by the tenant. In the case of Chander Kali Bai³ the tenancy premises were situated in the State of Madhya Pradesh and the provisions of the M.P. Accommodation Control Act, 1961 applied. The suit for eviction was filed on 8-3-1973 after serving a notice on the tenant terminating the contractual tenancy w.e.f. 31-12-1972. The suit came to be dismissed by the trial court but decreed in first appeal decided on 11-8-1975. One of the submissions made in this Court on behalf of the appellant tenant was that no damages from the date of termination of the contractual tenancy could be awarded; the damages could be awarded only from the date when an eviction decree was passed. This Court took into consideration the definition of tenant as contained in Section 2(i) of the M.P. Act which included "any person continuing in possession after the termination of his tenancy" but did not include "any person against whom any order or decree for eviction has been made". The Court, persuaded by the said definition, held that a person continuing in possession of the accommodation even after the termination of b his contractual tenancy is a tenant within the meaning of the M.P. Act and on such termination his possession does not become wrongful until and unless a decree for eviction is passed. However, the Court specifically ruled that the tenant continuing in possession even after the passing of the decree became a wrongful occupant of the accommodation. In conclusion the Court held the tenant was not liable to pay any damages or mesne profits for the period commencing from 1-1-1973 and ending on 10-8-1975 but he remained liable to pay damages or mesne profits from 11-8-1975 until the delivery of the vacant possession of the accommodation. During the course of its decision this Court referred to a decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain v. Kamlakars wherein the High Court had held that if a person continues to be in occupation after the termination of the contractual tenancy then on the passing of the decree for eviction he becomes a wrongful occupant of the accommodation since the date of termination. This Court opined that what was held by the Madhya Pradesh High Court seemed to be a theory akin to the theory of "relation back" on the reasoning that on the passing of a decree for eviction, the tenant's possession would become unlawful not from the date of the decree but from the date of the termination of the contractual tenancy itself. It is noteworthy that this Court has not disapproved the decision of the Madhya Pradesh High Court in Kikabhai Abdul Hussain cases but distinguished it by observing that the law laid down in Kikabhai Abdul Hussain cases was not applicable to the case before it in view of the definition of "tenant" as contained in the M.P. Act and the provisions which came up for consideration of the High Court in Kikabhai Abdul Hussain cases were different."

¶18That 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 evict must comply and vacate the premises. His right of appeal is statutory but his prayer for grant of 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.9 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".

¶33The Supreme Court in the case of Atma Ram Properties (supra) held that if the tenancy is governed only by the provisions of the Transfer of Property Act, 1882, once the tenancy comes to an end by determination of the lease under Section 111 of the Transfer of Property Act, the tenant's right to continue in possession of the premises comes to an end, and for any period thereafter during which he continues to occupy the premises, he becomes liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises upon being vacated by the tenant.

¶34The Court also held that the tenancy protected under the Rent Control Act comes to an end on the date of the decree of the trial Court. However, if the tenant continues in possession even after the passing of the decree, he becomes a wrongful occupant of the accommodation and becomes liable to pay mesne profits from the date of the decree until he delivers vacant possession.

¶35It is pertinent to note that Atma Ram Properties (supra) concerned a case involving a tenant and not a gratuitous licensee.

¶36Coming to the next judgment of the Supreme Court in the case of State Vs. Supermax (Supra), the Supreme Court considered a case of a tenant protected under the Rent Control Act, where eviction was directed under one of the provisions of the Rent Control Act. In Supermax (supra), the Court noticed that the Appellate Court, while granting a stay, passed interim orders fixing the rent, which was very excessive. The Supreme Court held, in paragraphs 76 and 77, as under: " 76. The Court answered the first issue as follows: (Atma Ram Properties case, SCC pp. 716-17, para 16) "16. We are, therefore, of the opinion that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed, would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy." The second issue was answered as follows: (Atma Ram Properties case, a SCC p. 718, para 19) "(2) With effect from that date [the passing of the decree of eviction], 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 b contractual rate of rent effective for the period preceding the date of the decree." (words in parenthesis added) (emphasis supplied) We are in respectful agreement with the decision of the Court in Atma Ram Properties :

¶77In the light of the discussions made above we hold that in an appeal or revision preferred by a tenant against an order or decree of an eviction passed under the Rent Act it is open to the appellate or the Revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. Needless to say that in fixing the amount subject to payment of which the execution of the order/decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount."

¶37In Safset Vs. Riddhi (supra), this Court considered a case with respect to a leave and license agreement, wherein this Court relied upon the judgment in Atma Ram Properties (supra), directing interim compensation at the market rate from the date of termination of the license. However, in the instant case, we are dealing with slightly different facts. The case before me is not one of a tenancy protected under the Rent Control Act, or of a licensee under a leave and license agreement. The instant case relates to a category of family dispute where the younger brother has claimed that the elder brother is his gratuitous licensee in respect of the suit premises, situated in a building where the elder brother and his family also have other flat premises in the same building. The suit flat stands in the name of the Plaintiff, but there is a suit for declaration of title filed by Defendant No.1 claiming ownership of the suit flat, contending therein that the flat was purchased in the name of his younger brother/Plaintiff, as the society was not granting him permission to purchase another flat in the same building. Since the matter pertains to a gratuitous licensee, more particularly in the context of a family dispute, and the determination of title is also substantially in issue in the suit filed by Defendant No.1, the parameters for computing compensation as laid down in Atma Ram Properties (supra) in the leave and license cases or Rent Act cases may not strictly apply. However, Atma Ram Properties (supra) also holds that the Appellate Court, while granting an order of stay, may impose such terms and conditions as may meet the ends of justice and protect the interests of the party ultimately found to be successful in the appeal.

¶38The Trial Court has decreed the eviction suit on the basis of the Plaintiff's ownership certificate as the suit property stands in the name of the Plaintiff. The Small Causes Court does not adjudicate upon the issue of title, and has proceeded on the basis of ownership, having regard to the limited scope of enquiry before it.

¶39The Petitioner had not placed any valuation before the Appellate Court. However, the Plaintiff had produced a report prepared by Architects, assessing the market rent of the suit premises at Rs.6,65,200/- per month with effect from November 2024. Nevertheless, the Appellate Court has granted Rs.3,00,000/- per month as interim compensation. In the circumstances, the said amount does not warrant interference.

¶40The Supreme Court has held that, while granting a stay of an eviction decree under Order 41, Rule-5, the Appellate Court is required to balance the equities between the parties. In the facts and circumstances of the present case, this Court is of the view that the Petitioner be directed to pay a sum of Rs. 3,00,000/- per month to the Plaintiff with effect from the date of the decree of the trial Court, so as to avoid the imposition of extremely onerous conditions of deposit from the date of the suit, more particularly when the suit for declaration of ownership is pending consideration before the Civil Court. The amount directed by the Appellate Court to be paid from the date of the suit until the date of the decree, can secure by an undertaking to be given by the Petitioners.

¶41Accordingly, the compensation of Rs.3,00,000/- per month, as directed, shall be deposited in the Court with effect from the date of the decree, i.e. 26th November 2024. The Plaintiff shall be permitted to withdraw the said compensation upon furnishing an undertaking to the satisfaction of the Court.

¶42This Court has thus attempted to balance the equities by permitting the Plaintiff to withdraw the amount subject to an undertaking.

¶43With the above observations, the impugned order stands modified.

¶44Accordingly, the Writ Petition is disposed of with following directions. The directions/conditions impugned in the impugned order passed on Exhibit-10 stands modified, as under :-

(i) The applicant shall deposit Rs.3,00,000/- per month as interim compensation from the date of decree i.e. 26th November 2024, within a period of two months.

(ii) The Petitioner shall also continue to deposit monthly compensation at the same rate on or before 10th day of each succeeding month till the final disposal of the Appeal.

(iii) If an application is made by the Defendant to withdraw this amount, the same shall be permitted on an undertaking and the Petitioner shall not create any third party interest in the suit premises.

(iv) The Petitioners to give an undertaking that in the event the Petitioner fails in the Appeal, he would deposit the compensation @ Rs.3,00,000/- per month from the date of Suit till the date of decree within 8 (eight) weeks before the Appellate Bench of Small Causes Court. Undertaking to be filed in this Court.

¶45Any observations made in this order are prima facie in nature, are confined solely to the adjudication of the present Petition, and shall have no bearing whatsoever on the title suits pending between the parties or on any application pending in the present matter. [ ARUN R. PEDNEKER, J. ] BHALCHANDRA GOPAL DUSANE Date: 2026.09.21 20:17:42 +0530

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.10799 OF 2026 1. Mr. Suresh Atalrai Keswani Aged : 68 years, Occ. : Business, Indian Inhabitant, Residing at 2D, 2nd Floor, Pallonji Mansion, 43, Cuffe Parade, Mumbai – 400 050 2. Mrs. Shakuntala Suresh Keswani Aged : 65 years, Occ. : Housewife, Indian Inhabitant, Residing at 2D, 2nd Floor, Pallonji Mansion, 43, Cuffe Parade, Mumbai – 400 050 …. Petitioners. Vs. Mr. Mahesh Atalrai Keswani Aged : 56 years, Occ. : Business, Indian Inhabitant, Having Permanent Address at : 1D, Pallonji Mansion, 4, Cuffe Parade, Mumbai – 400 005 And present having temporary address for Service at : C/o Gautam Bhachani, 703-704, Golden Peak Society, Khar (West), Mumbai – 400 052 …. Respondent Sr. Adv. Vineet Naik a/w Adv. Sukand Kulkarni, Adv. Pranita Sabool, Adv. Kartikeya Desai and Adv. Tanvi Parmar i/by Kartikeya & Associates for Petitioners. Adv. Sanjay Jain a/w Adv. Nishant Vyas, Adv. Ishwar Nankani, Adv. Huzefa Khokhawala & Adv. Kartik Gupta i/by M/s. Nankani & Associates for Respondent. CORAM : ARUN R. PEDNEKER, J. RESERVED ON : 2nd September 2026 PRONOUNCED ON : 21st September 2026 P.C. : 1. Heard the learned Counsel appearing for the parties. 2. By the present Writ Petition, the Petitioners challenge the Order dated 23rd April 2026 passed by the learned Appellate Bench of the Small Causes Court at Mumbai on an application filed by the Petitioners (Original Defendants), being Exhibit 'A' in P. Appeal No. 6 of 2026 in L.E. Suit No. 150/188 of 2011. 3. By the said Order, the learned Appellate Court has conditionally allowed the Application (Exhibit-10) taken out by the Applicants (Original Defendants) under Order XLI Rule 5 of the Code of Civil Procedure, 1908 ("CPC"), seeking stay of the execution of the eviction Decree dated 26th November 2024 passed in L.E. Suit No. 150/188 of 2011. 4. The stay to the eviction decree has been granted subject to the conditions set out in Clause 2 of the impugned Order dated 23rd April 2026. 5. The Petitioners challenge the conditions imposed for granting stay to the operation of the eviction Decree passed by the Trial Court, contending that such conditions are onerous and excessive. 6. The facts giving rise to the present Petition, in brief, are as under : The Plaintiff/ present Respondent filed L.E. Suit for eviction and mesne profits pleading that Defendant No. 1, who is the Plaintiff's elder brother, is occupying the Suit Premises, being Flat No. 2D, admeasuring approximately 4,000 sq. ft., situated on the 2nd Floor of Pallonji Mansion, 43, Cuffe Parade, Mumbai – 400 050 (hereinafter referred to as "the Suit Premises"), as a gratuitous licensee. . It is the case of the Plaintiff that, sometime in or about 1982–1983, the Plaintiff permitted Defendant No. 1 to use and occupy the Suit Premises for residential purposes. Such occupation was purely permissive and was granted without charging any compensation, rent or license fee. Accordingly, Defendant No. 1 occupied the Suit Premises as a gratuitous licensee of the Plaintiff. 7. Defendant No. 1 is also a member of the housing society in which the Suit Premises is situated. Defendant No. 1 owns Flat No. C on the Ground Floor of C Wing, whereas Defendant No. 2 is the wife and Defendant no.1 is also the owner of Flat No. 5B on the 5th Floor of B Wing. 8. The Plaintiff called upon Defendant No. 1 to vacate the Suit Premises. However, Defendant No. 1 failed and neglected to do so. Consequently, by a letter dated 10th August 2011, the Plaintiff terminated the gratuitous licence granted to Defendant No.1 and called upon him to vacate and hand over peaceful possession of the Suit Premises to the Plaintiff. 9. In response, Defendant No. 1 called upon the Plaintiff to establish and produce proof of his ownership in respect of the Suit Premises, thereby disputing and challenging the Plaintiff's title thereto. 10. In view of the continued occupation of the Suit Premises by Defendant N