Tenant Taking Shelter Of Pending Appeal Against Order Fixing Fair Rent Without Seeking Stay Can’t Be Absolved From Tendering Payment: Supreme Court

The Apex Court was considering an appeal filed by the heirs of a lessee seeking reversal of a revisional judgment of the Madras High Court. The impugned order affirmed an appellate order of eviction, which, in turn, had reversed the original order of dismissal of the eviction petition.

The Division Bench of Justice Dipankar Datta and Justice Manmohan held, “Having bestowed anxious consideration to the rival submissions and on perusal of the materials placed on record, we find ourselves in agreement with Ms. Mohana that the lessee, and subsequently the appellants, taking shelter of the pending appeal against the order fixing fair rent without, however, seeking a stay thereof and also in light of the parting observation made by this Court while disposing of SLP (C) Nos. 6500–6501 of 2012, had no protective umbrella over him/them so as to remain absolved from tendering payment to M/s. Krishna.”

Senior Advocate Jaideep Gupta represented the Appellant, while Senior Advocate V Mohana represented the Respondent.

Factual Background

The sole respondent, Krishna Mills, was the owner of a godown and the adjacent building. The three appellants are sons and heirs of the deceased (proprietor of M/s. Royal Agencies). A lease agreement was executed between M/s. Krishna and the lessee, whereby a portion of the petition property was leased out at a monthly rent of Rs. 15,000 for a period of 15 years. A total extent of 15,500 sq. ft. of land, and the building was leased. However, the lessee contended that the rent payable was Rs. 33,000 p.m. In 2004, Krishna Mills filed an application for the fixation of fair rent. The Rent Controller allowed the application in part and fixed the fair rent at Rs 2,43,600 p.m.

Krishna Mills then filed an application seeking eviction of the lessee on the ground of wilful default. The lessee challenged the fixation of fair rent by carrying it in an appeal before the Rent Control Appellate Authority, which came to be dismissed, thereby confirming the fair rent. Later, following the demise of the lessee, M/s. Krishna filed an amended application under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, impleading the appellants (i.e., the heirs of the deceased lessee). Appellants filed their additional counter in February 2018, contending that no arrears were outstanding.

The Rent Controller, Coimbatore, dismissed the Petition, holding that M/s. Krishna had failed to establish that the original rent was Rs 48,000 p.m. and further that since the lessee had paid fair rent in terms of the orders of this Court, no wilful default was made out. Aggrieved thereby, M/s. Krishna preferred an appeal. The Principal Subordinate Judge held that the appellants were liable to be evicted on the ground of wilful default. The High Court dismissed the appellants’ application, holding that the interim direction to deposit Rs. 25,00,000 and to pay Rs 75,000 p.m. was only for the admission of the civil revision petition and the Court had not granted any stay of the order. Although the appellants commenced paying rent as fixed by the High Court from October 21, 2011, belated payment of accumulated arrears constituted wilful default.

Reasoning

Referring to Section 10(2)(i) of the Rent Control Act, 1960, the Bench explained that the statute, when read as a whole, does not render notice an indispensable condition precedent to the assumption of jurisdiction by the Rent Controller. The Explanation merely provides an additional instance where, upon service of notice and continued nonpayment, the default may be presumed to be wilful; it does not, by necessary implication, obliterate the discretion vested in the Controller under the proviso to determine wilfulness even in the absence of such notice. “That apart, the nature of default committed by the lessee satisfies the attributes of a wilful default as explained in Sundaram Pillai (supra) and leaves little room for us to hold that no wilful default had been committed”, it stated.

The Bench observed, “Judicial proceedings attain finality upon a decision being rendered by the apex court in the hierarchy of courts. There is, as such, no quarrel with the said proposition of law. Nonetheless, proceedings do attain finality even at the level of the high courts, or the district courts or the trial courts if the immediate next superior forum is not approached by the party suffering the decree/order of the court seized of the lis. However, the principle of finality of a judicial decision would have no applicability in a situation where a party, despite owing money (unpaid rent, here) to his adversary in terms of a judicial determination, approaches the superior forum but prefers not to seek a stay of such determination pending the proceedings leaving the other party deprived of the benefits flowing from the said judicial determination. The bogey of judicial finality cannot, thus, be pressed into service to unfairly deny a party the benefits of a judicial decision, operation of which does not suffer from any interdiction by the superior court.”

“We conclude that the High Court, in exercise of its revisional jurisdiction, rightly refrained from re-examining factual determinations and such an approach being reasonable and unexceptionable, it committed no error in affirming the appellate order of eviction passed against the appellants on the ground of wilful default”, it stated.

Finding the appeal to be unmeritorious, the Bench dismissed the same. “The appellants are, however, granted time of six months from the date of this order to vacate and hand over vacant possession of the decretal property to M/s. Krishna, subject to the usual undertakings being filed within a fortnight from date positively”, it concluded.

Cause Title: K. Subramaniam (Died) Through Lrs K.S. Balakrishnan v. M/s Krishna Mills Pvt.ltd (Neutral Citation: 2025 INSC 1309)

Appearance

Appellant: Senior Advocates Jaideep Gupta, Senthil Jagadeesan, AOR Sajal Jain, Advocates Punit Agarwwal, Riddhi Bose, Racheeta Chawla, Rishi Agarwal, Sampriti Baksi

Respondent: Senior Advocate V Mohana, Advocates B Ragunath, NC Kavitha, AOR Sriram P.

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