The Supreme Court, while deciding a long-pending landlord-tenant dispute between Mohit Suresh Harchandrai and Hindustan Organic Chemicals Limited (HOCL), expressed deep concern over the 25-year delay in adjudication and urged the Chief Justice of the Bombay High Court to take steps for the expeditious disposal of similar cases.
The judgment was delivered by a Bench comprising Justice Sanjay Karol and Justice Manoj Misra in cross-appeals filed against the Bombay High Court’s decision in Writ Petition No. 16741 of 2024 dated December 4, 2024. The core issue was the determination of mesne profits payable by HOCL, which occupied the landlord’s premises even after the termination of tenancy.
Background of the Case
HOCL had initially leased the second floor of “Harchandrai House” at 81/A, Maharshi Karve Road, Mumbai, for a period of three years starting April 1, 1962. After the lease expired on March 31, 1966, HOCL continued as a monthly tenant. The landlords terminated the tenancy on April 25, 2000, and filed a suit for eviction and recovery of possession on September 2, 2000, before the Small Causes Court, Mumbai.
The eviction suit was decreed on April 15, 2009, and possession was eventually handed over to the landlords on April 23, 2014. The Court also directed an enquiry under Order XX Rule 12 CPC to determine mesne profits for the period of unlawful occupation from June 1, 2000, to April 23, 2014.
Mesne Profit Proceedings and Appeals
On May 2, 2022, the Small Causes Court directed HOCL to pay mesne profits at ₹138 per sq. ft. per month for the period from June 1, 2000, to December 31, 2006, and ₹274 per sq. ft. per month for the remaining period, with 9% interest per annum.
HOCL appealed against this order, and the appellate bench of the Small Causes Court, by order dated September 3, 2024, revised the rate to a uniform ₹183 per sq. ft. per month for the entire period. This order was challenged before the High Court, which found errors in computation, noting incorrect reliance on comparative instances and incorrect area calculations.
The High Court fixed the mesne profits at a uniform ₹160 per sq. ft. per month, citing errors in the valuation and the fact that HOCL was a public sector undertaking (PSU), which lost rent control protection due to Section 3(1)(b) of the Maharashtra Rent Control Act, 1999.
Supreme Court’s Observations
The Apex Court upheld the High Court’s findings but modified the interest rate from 8% to 6% per annum, simple interest. It directed that the entire mesne profit amount be paid within three months from the date of the order.
Crucially, the Court voiced strong concern over the prolonged delay in adjudication, noting:
“From inception to its end, this dispute has been in the domain of the courts for more than two-and-a-half decades… The landlord took steps for termination of tenancy at the turn-of-the-century in 2000, and today, after a quarter of the century has already passed, only now, will they get the monetary fruits of the property that belongs to them.”
It further noted:
“When it comes to landlord-tenant disputes, there is an angle of being deprived of the enjoyment of the property and also the monetary benefits that accrue from owning such property. The courts… are duty-bound to ensure that on their account, no party is made to suffer.”
Direction to Bombay High Court
In view of the systemic delay, the Court issued a significant direction:
“We request the learned Chief Justice, High Court of Judicature at Bombay, to take up this issue and call for a report from the concerned courts regarding the period of pendency in landlord-tenant disputes. Should it be found that there are many such instances as the present case, then appropriate steps should be taken or directions issued to further the cause of expeditious disposal of these cases.”
Final Order
The civil appeals were disposed of with the above modifications, and all pending applications were also disposed of.
