M/S Neospaces vs. Smt Geetha Shivamurthy

Facts

The petitioner, M/s Neospaces (defendant), filed a writ petition challenging an order passed by the XIII Addl. City Civil and Sessions Judge, Bangalore. The respondent-plaintiff had filed an application under Order 39 Rule 10 read with Section 151 of the CPC seeking a direction for the petitioner to deposit arrears of rent and continue depositing future rent. The Trial Court partly allowed the application, directing the petitioner to deposit admitted arrears of rent amounting to Rs. 31,82,500/- and to continue depositing the admitted monthly rent of Rs. 2,70,000/- from February 5, 2023, until the disposal of the suit. The suit was filed for ejectment, arrears of rent, and mesne profits. The petitioner had also filed a counter-claim for alleged losses.

Held

The High Court held that while the invocation of Order 39 Rule 10 of the CPC by the Trial Court was technically erroneous, the court possesses inherent powers under Section 151 of the CPC, read with Section 106 of the Transfer of Property Act, to direct a tenant to deposit admitted rent during the pendency of an ejectment suit. The Court found that the Trial Court had correctly considered the rival contentions and the material on record, particularly the admitted monthly rent of Rs. 2,70,000/- and the admitted arrears of Rs. 31,82,500/- up to December 2022. The Court noted that the petitioner had admitted the jural relationship of landlord and tenant and the monthly rent in its written statement. The High Court affirmed the Trial Court's direction for the petitioner to deposit the admitted arrears and continue depositing the monthly rent. The Court also clarified that all rival contentions, including the counter-claim, remain open for decision by the Trial Court, and no opinion was expressed on them. The petition was disposed of without interfering with the impugned order.

Key Issues

1. Whether the Trial Court erred in invoking Order 39 Rule 10 of the CPC for directing the deposit of rent arrears and future rent, considering it is not a case where the defendant is a trustee or holds money for the plaintiff, but rather a suit for recovery of rent due from a tenant to a landlord? Petitioner's Argument: The petitioner argued that Order 39 Rule 10 CPC was erroneously invoked as it applies to situations where a party admits holding money as a trustee or that it belongs to another party, which is not the case here. The petitioner contended that the suit is for recovery of rent, and there is no specific provision in the CPC applicable to Karnataka for such a direction, unlike amendments in UP and Punjab. Revenue/State's Argument: The respondent-plaintiff argued that while Order 39 Rule 10 might be technically misapplied, courts have inherent powers in ejectment suits filed under Section 106 of the Transfer of Property Act to direct tenants to deposit admitted monthly rent to protect the landlord's interest and prevent the tenant from using the suit property during the pendency of the litigation. The plaintiff also pointed out that the defendant admitted the jural relationship of landlord and tenant and the monthly rent.