A tenant’s admissions can establish the agreed rent despite an unsupported mortgage defence.

The respondents claimed that they jointly owned a shop let to the appellant in 2014 at a monthly rent of ₹25,500, later enhanced to ₹29,000 under a rent agreement dated 22 August 2018.

After the tenancy ended, they served a notice terminating it and sued for possession, rent arrears, and mesne profits.

The appellant admitted being a tenant but claimed that he had paid ₹10 lakh as a mortgage amount and that only ₹2,900 per month was payable.

The Trial Court decreed the suit.

In appeal, the appellant challenged, among other things, proof and admissibility of the 2018 agreement and the basis for calculating mesne profits.

1. Whether the evidence, including the parties’ admissions, established the appellant’s tenancy and the applicable rent despite his denial of the 2018 rent agreement?

2. Whether the appellant proved his defence that he had paid ₹10 lakh as a mortgage amount, reducing the monthly payment to ₹2,900?

3. Whether the award of mesne profits, including periodic enhancement of rent, was sustainable?

Section 106 of the Transfer of Property Act, 1882, governs a month-to-month tenancy where the fixed tenancy has expired and the tenant continues in occupation.

Section 2(12) CPC defines mesne profits as profits received, or which might with due diligence have been received, by a person in wrongful possession; Order XX Rule 12 CPC provides for an inquiry and decree concerning mesne profits.

In M/s Sahara India v. M.C. Agrawal HUF, 2011 SCC OnLine Del 3715, the Court held that mesne profits may reflect the rent the premises could fetch during unauthorised occupation and that, absent evidence of comparable rents, a court may take judicial notice of rent increases and apply an appropriate enhancement.

The Court also referred to M/s Priya Exhibitors (P) Ltd. v. Oriental Bank of Commerce, CS(OS) No. 1012/1996, decided 9 October 2012, which applied a 15% enhancement to the preceding year’s rent for continued occupation.

The appellant’s challenge also invoked Section 67 of the Indian Evidence Act, 1872, concerning proof of a disputed signature, and Sections 57 and 114 concerning judicial notice and presumptions.

The Court relied on the appellant’s admissions that he entered the premises as a tenant in 2014, that the initial rent was ₹25,500 per month, and that successive rent agreements—including one in 2018—had been executed.

It also considered corroborating evidence from the appellant’s mother and found that the alleged ₹10 lakh mortgage payment had not been proved; the appellant’s alternative account of the tenancy therefore did not displace the evidence of the agreed rent.

On mesne profits, the Court applied the principles in Sahara India and Priya Exhibitors, and upheld the award of occupation charges based on the rent found applicable, with a 15% increase every three years.

The Court concluded that the appeal disclosed no ground to disturb the decree.

It upheld the award of occupation charges with a 15% increase every three years until possession was handed over, and disposed of any pending applications accordingly.