M/S Martin and Harris Private Limited vs Rajendra Mehta & Ors.
Background
The respondents (landlords) owned a commercial property in Jaipur and had obtained an eviction decree against the appellant tenant, which was upheld by both the trial court and the first appellate court. While the tenant's second appeal was pending before the Rajasthan High Court with a stay on eviction, the landlords sought "mesne profits" (compensation for continued use of the property during the litigation delay), which the High Court fixed at Rs. 2,50,000 per month. The tenant challenged this, arguing that under the newer Rajasthan Rent Control Act, 2001, mesne profits should be capped at three times the standard rent (i.e., Rs. 1,35,000), not the higher amount fixed by the High Court.
Decision Breakdown
The Supreme Court held that the eviction suit had been filed under the old Rajasthan Premises (Control of Rent and Eviction) Act, 1950, before the new 2001 Act came into force, and under the new Act's own repeal-and-savings clause, such pending proceedings continue to be governed entirely by the old Act, meaning the new Act's cap on mesne profits did not apply. The Court also found no error in the High Court's factual finding on the extent of tenanted area, since the tenant was estopped from disputing it having earlier admitted the area in an affidavit before the Supreme Court. On the amount itself, relying on precedents like Atma Ram Properties and Marshall Sons, the Court held that mesne profits must reflect the real market rent for the location, and given the property's prime commercial location, Rs. 2,50,000 per month was just and reasonable; both appeals were accordingly dismissed.
Lesson Learnt
When a law is repealed and replaced, pending cases filed under the old law continue to be governed by it unless the new law's savings clause says otherwise: tenants and landlords cannot pick and choose provisions from a newer, more favourable law for a dispute that started under the older regime.