The Supreme Court has ruled that if a tenant remains in the rented premises after the tenancy rights have expired, the landlord is entitled to receive compensation in the form of ‘mesne profits’ from the tenant.
“While this position is generally accepted, it is also within the bounds of the law that a tenant who initially entered the property lawfully but continues to occupy it after their right to do so has expired is liable to compensate the landlord for that period,” stated the bench comprising Justices JK Maheshwari and Sanjay Karol.
A “tenant at sufferance” is a tenant who initially occupies the land lawfully but remains in possession after their legal right has expired.
The Court’s observation was supported by its judgment in Indian Oil Corporation Ltd. v. Sudera Realty Private Limited, 2022 LiveLaw (SC) 744, which similarly held that a tenant who remains in possession after the lease expires becomes liable to pay mesne profits.
“In our considered view, the effects of the terms ‘determination,’ ‘expiry,’ ‘forfeiture,’ and ‘termination’ are similar when applied to a lease. In these scenarios, the rights of the lessee or tenant are either extinguished or significantly weakened. Therefore, in any of these situations, mesne profits would be payable,” the court observed.
“We also note, prima facie, that the respondent-tenant has been delaying the payment of rent and other dues owed to the petitioner-landlord for reasons not yet demonstrated. This denial of monetary benefits from the property, as evidenced by the unchallenged market report on record, is substantial. Therefore, subject to just exceptions, we order the deposit of the amount claimed by the petitioner to ensure complete justice between the parties,” the court concluded.
**For Petitioner(s):**
– Mr. Rana Mukherjee, Sr. Adv.
– Ms. Vijaya Bhatia, Adv.
– Mr. Ganesh Shaw, Adv.
– Mr. Kunal Chatterji, AOR
– Ms. Maitrayee Banerjee, Adv.
– Mr. Rohit Bansal, Adv.
– Ms. Kshitij Singh, Adv.
– Mr. Sohhom Sau, Adv.
– Mr. Samarth Mohanty, Adv.
– Mr. Arjun Bhatia, Adv.
**For Respondent(s):**
– Mr. Rupak Ghosh, Adv.
– Mr. Debdut Mukherjee, Adv.
– Ms. Sonia Dube, Adv.
– Ms. Kanchan Yadav, Adv.
– Ms. Surbhi Anand, Adv.
– Mr. Tanishq Sharma, Adv.
– Ms. Saumya Sharma, Adv.
– M/S. Legal Options, AOR
