Surinder Mohan vs. Raj Kumar Mehra

Held

The Court held that the use and occupation charges for the demised premises should be fixed at Rs. 70,000/- per month from the date of the eviction order. The Court reasoned that while the adjacent shop occupied by Raman Jain had use and occupation charges fixed at Rs. 1,64,340/- per month from December 15, 2017, the demised premises were smaller and used for a tailoring business, unlike Raman Jain's jewelry business. The Court noted that the shop fronts of Raman Jewellers and the demised premises were almost equal, and the floor plan indicated Raman Jewellers had an area of 19.76 square metres. Even assuming the demised premises were half the size, they would warrant at least half the charges. Considering the location, the adjacent property's charges, the purpose of the tenant's business, and potential increases from 2018 to 2024, the Court arrived at Rs. 70,000/- per month as a reasonable amount. The tenant was directed to pay current charges from June 2024 by the 15th of each month and arrears in two equal installments by August 31, 2024, and November 30, 2024. The application was disposed of on these terms.

Facts

The applicants/landlords filed an eviction petition against the petitioner/tenant under the Himachal Pradesh Urban Rent Control Act, 1987. The Rent Controller allowed the eviction petition on May 19, 2022. The Appellate Authority dismissed the tenant's appeal on April 17, 2023. The tenant then filed a civil revision petition before the High Court, and the execution of the Rent Controller's order was stayed on June 20, 2023. During the pendency of the revision, the landlords filed an application seeking determination of use and occupation charges for the demised premises. The landlords claimed the premises were approximately 210 sq ft, located on Mall Road, Shimla, with a prevailing market rent of Rs. 1,215.27 per sq ft plus 18% GST in 2018, amounting to approximately Rs. 3,00,000/- per month. They also referred to use and occupation charges fixed at Rs. 1,64,340/- for an adjacent shop occupied by one Mr. Raman Jain.

Key Issues

1. What are the appropriate use and occupation charges for the demised premises during the pendency of the civil revision petition, considering the location, size, and prevailing market rates? (Mixed question of law and fact, turning on principles of fair rent determination under rent control legislation). Petitioner/Tenant's Arguments: - The premises are only approximately 90 sq ft, not 210 sq ft. - The premises are not in a commercial hub and do not have a great rental value. - The market rate claimed by the landlords is denied; the value is not more than Rs. 300/- per month inclusive of taxes. - The building is over 100 years old. - The use and occupation charges fixed for Mr. Raman Jain's shop are irrelevant as his shop is six times larger. - Annexure A-2 (agreement for a nearby shopping complex) is not comparable due to new construction, larger frontage, and higher commercial value. - The tenant is running a tailoring business and his income is not substantial enough to warrant exorbitant charges. Applicants/Landlords' Arguments: - The premises are approximately 210 sq ft and are located in the commercial hub of Shimla. - The prevailing market rent in 2018 was Rs. 1,215.27 per sq ft + 18% GST, leading to approximately Rs. 3,00,000/- per month, with annual increases. - Use and occupation charges for an adjacent shop (Mr. Raman Jain's) were fixed at Rs. 1,64,340/- by the Appellate Authority, and this court upheld that determination. - The premises in question have prime commercial value. - The tenant is a man of means and capable of paying reasonable charges. - The area of the demised premises is indeed 210 sq ft, supported by documents.