Landlord-Tenant Dispute Resolved on Use and Occupation Charges of Property: Delhi High Court
Case Title: Juglal Ram Chander v. Sh. Surinder Pal Jain
Date of Decision: 10.08.2023
Case Number: RC.REV. No. 500/2019 & CM Appl.38094/2019
Coram: HON’BLE MS. JUSTICE TARA VITASTA GANJU
Introduction
This case revolves around a dispute between a tenant (Juglal Ram Chander) and a landlord (Surinder Pal Jain) over the payment of use and occupation charges for a commercial property located in Sadar Bazar, Delhi.
Factual Background
The tenant had been in possession of the property for several decades, and an eviction order was issued against him in February 2019. The tenant filed a revision petition against the eviction order, and during the pendency of the petition, the landlord sought directions from the court to compel the tenant to pay use and occupation charges for the property. The tenant, on the other hand, argued that the building was old and dilapidated, and the shop’s location was less accessible and less valuable than claimed by the landlord. The dispute centered around the determination of the use and occupation charges for the premises during the pendency of the revision petition.
Legal Issues
- Whether the tenant should be directed to pay use and occupation charges for the property during the pendency of the revision petition.
- What would be the appropriate rate for calculating the use and occupation charges?
- Whether the landlord’s reliance on certain lease deeds for similar properties is justified in determining the use and occupation charges?
- What are the consequences of non-payment of the use and occupation charges by the tenant?
Court’s Analysis
Use and Occupation Charges Calculation
The court referred to a recent Supreme Court judgment (Martin and Harris Private Limited v. Rajendra Mehta) that upheld the principle that once an eviction order has been passed, the tenant should pay use and occupation charges at the market rate of similar properties until the final disposal of the petition. However, the court noted that the specific rate could vary based on factors such as property location, nature (commercial or residential), and standard rental rate.
Comparison with Lease Deeds
The court evaluated the two lease deeds presented by the landlord for similar properties. While acknowledging that the demised property was larger and situated in a prime commercial area, the court also took into consideration the property’s old and dilapidated condition. The court determined that the user charges should be discounted due to the property’s state.
Court’s Decision
The court ordered the tenant to pay use and occupation charges during the pendency of the revision petition. The court fixed the user charges at Rs. 25,000 per month, considering the property’s size, location, and condition. The payment schedule was established for different periods, with arrears, past use and occupation charges, and future use and occupation charges specified. The court also maintained that this calculation of user charges was tentative and could be subject to change based on the outcome of the petition. The court maintained the interim order allowing the tenant to occupy the premises subject to payment of the specified charges.
Significance of the Judgment
The court’s judgment in this case balanced the interests of the landlord and the tenant. It relied on legal principles established by previous judgments and applied them to the specific circumstances of this case to determine the appropriate use and occupation charges. The decision provided a clear payment schedule and outlined the consequences of non-compliance, ensuring that both parties were treated fairly in light of the eviction order and the ongoing revision petition. It establishes the principle that tenants are required to pay use and occupation charges at market rates for premises during the pendency of eviction cases, taking into account factors such as location, condition, and commercial value.
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Written by – Ananya Chaudhary