Landlord is entitled to ‘mesne profits’ if the tenant continues in possession after his right of occupancy expires: Supreme Court

Recently, the Supreme Court (SC) of India in the Bijay Kumar Manish Kumar HUF vs. Ashwin Bhanulal Desai case held that after passing the decree of eviction the tenancy terminates, and from the said date the landlord is entitled to mesne profits or compensation depriving him of the premises. The bench constituting Justice Sanjay Karol and Justice JK Maheshwari said, “...it is also within the bounds of law, that a tenant who once entered the property in question lawfully, continues in possession after his right to do so stands extinguished, is liable to compensate the landlord for such time period after the right of occupancy expires.” The top court was hearing a batch of SLPs (Special Leave Petitions) against the Calcutta High Court judgment where the West Bengal Tenancy Act, 1997 was held to be applicable. In this case, a suit was filed by the petitioner-applicant on account of non-payment of rent. The Civil Court and the High Court rejected the suit; therefore, the matter was mentioned before the top court. 

While hearing the matter, the SC bench cited various judgments. It observed that “mesne profits become payable on continuation of possession after ‘expiry’ of lease. In our considered view, the effect of the words ‘determination’, ‘expiry’, ‘forfeiture’ and ‘termination’ would, subject to the facts applicable, be similar, i.e., when any of these three words are applied to a lease, henceforth, the rights of the lessee/tenant stand extinguished or in certain cases metamorphosed into weaker iteration of their former selves. Illustratively, Burton’s Legal Thesaurus 3rd Edn. suggests the following words as being similar to ‘expire’ - cease, come to an end; ‘determine’ is similar to - come to a conclusion, bring to an end; ‘forfeiture’ is similar to – deprivation/destruction of a right, divestiture of property; and ‘terminate’ is similar to – bring to an end, cease, conclude. Therefore, in any of the these situations, mesne profit would be payable.”

After hearing the contentions from both sides, the SC directed Ashwin Bhanulal Desai (respondent) to deposit an amount of Rs.5,15,05,512/- with the Registry of this Court within four weeks from May 17, 2024. It also told to file an affidavit of compliance in the Registry of SC within a week thereafter. It added, “Failure to comply with the aforementioned shall entail all consequences within the law, including wilful disobedience of the order.”