Supreme Court of India Rules Tenants Liable for Compensation Post- Lease Expiry

Landmark Judgment Law Insider (1)

Published on: June 01, 2024 19:33 IST

Court: Supreme Court of India

Case: Bijay Kumar Manish Kumar Huf v. Ashwin Bhanulal Desai 2024

Honourable Supreme Court of India has held that if the tenant continues in possession after his right to do so stands extinguished, then such tenant is liable to compensate the landlord for such time period after the right of occupancy expires.

It is held that a tenant continuing in possession after the expiry of the lease may be treated as a tenant at sufferance, which status is a shade higher than that of a mere trespasser, as in the case of a tenant continuing after the expiry of the lease, his original entry was lawful.

But a tenant at sufferance is not a tenant by holding over. While a tenant at sufferance cannot be forcibly dispossessed, that does not detract from the possession of the erstwhile tenant turning unlawful on the expiry of the lease. Thus, the Tenant while continuing in possession after the expiry of the lease became liable to pay mesne profits.

20. It is to be noted that the Court in Sudera Realty (supra) observed that mesne profits become payable on continuation of possession after ‘expiry’ of lease. In our considered view, the effect of the words ‘determination’, ‘expiry’, ‘forfeiture’ and ‘termination’ would, subject to the facts applicable, be similar, i.e., when any of these three words are applied to a lease, henceforth, the rights of the lessee/tenant stand extinguished or in certain cases metamorphosed into weaker iteration of their former selves.

Illustratively, Burton’s Legal Thesaurus 3rd Edn. suggests the following words as being similar to ‘expire’ – cease, come to an end; ‘determine’ is similar to – come to a conclusion, bring to an end; ‘forfeiture’ is similar to – deprivation/destruction of a right, divestiture of property; and ‘terminate’ is similar to – bring to an end, cease, conclude. Therefore, in any of the these situations, mesne profit would be payable.

Drafted By Abhijit Mishra

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