Bijay Kumar Manish Kumar HUF Vs. Ashwin Bhanulal Desai [May 17, 2024]

15 Jun 2025 --
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Background of the Case

The dispute arose from a lease agreement dated 23 February 1991 between the landlord, Bijay Kumar Manish Kumar HUF, and the tenant, Ashwin Bhanulal Desai.

The property was commercial premises located in Dalhousie, Kolkata.

The landlord alleged that the tenant:

Defaulted on rent payments since 2002

Did not pay municipal taxes since 1996

Consequently, the landlord filed a civil suit for eviction under the Transfer of Property Act, 1882 (TPA).

The tenant contended that the lease should be governed by the West Bengal Premises Tenancy Act, 1997 (WBPT Act), which was enacted after the lease agreement.

He claimed that the suit under TPA was not maintainable and sought dismissal under Order VII Rule 11 of the Civil Procedure Code.

The trial court rejected the tenant’s claim, holding that the suit was maintainable under the TPA.

The Calcutta High Court upheld this decision.

The tenant then filed a Special Leave Petition (SLP) before the Supreme Court.

Legal Issues

Which law governs the lease agreement?

Whether the pre-1997 lease should be governed by the Transfer of Property Act, 1882, or the West Bengal Premises Tenancy Act, 1997.

Tenant’s liability for unpaid rent and municipal taxes

Whether the tenant is liable for mesne profits (compensation for unlawful retention of property).

Interim/interlocutory relief

Whether the Court could direct the tenant to deposit unpaid rent and other amounts during the pendency of the appeal.

Supreme Court’s Findings

Applicability of the Law:

The Court observed that the lease predated the WBPT Act, 1997.

Therefore, the Transfer of Property Act, 1882 governs the lease.

The landlord’s eviction suit under TPA was maintainable.

Tenant’s Liability for Mesne Profits:

The Court held that the tenant, who continued to occupy the property without paying rent or taxes, is liable to pay mesne profits.

This principle ensures that a landlord is compensated for unauthorized occupation.

Interim Relief / Deposit of Amount:

During the pendency of the SLP, the Court directed the tenant to deposit ₹5.15 crore with the Court registry.

This amount was based on market rent (₹41 per sq. ft.) as determined by an independent valuer.

The Court’s direction was meant to protect the landlord’s interest while the appeal is pending.

Significance of the Judgment

Clarification on Tenancy Laws:

Lease agreements before 1997 are governed by the Transfer of Property Act, not the WBPT Act.

This provides clarity on which tenancy law applies based on the date of the agreement.

Tenant’s Liability for Mesne Profits:

Tenants who unlawfully retain possession after lease termination must pay mesne profits.

This safeguards landlords’ rights and discourages tenants from occupying property without payment.

Interim Relief in Landlord-Tenant Disputes:

The Court’s order for the tenant to deposit substantial dues during appeal proceedings shows a proactive approach in protecting landlord interests.