An eviction order terminates tenancy, making tenants liable for market-based mesne profits during further proceedings.

Amarjeet Ahuja, the landlord, instituted an eviction petition under Section 14 of the Himachal Pradesh Urban Rent Control Act, 1987, seeking eviction of the tenants from Shop No. 69, Lower Bazaar, Shimla, on the ground of bona fide requirement for rebuilding and reconstruction.

The Rent Controller allowed the petition on 29 December 2022 and directed the tenants to hand over possession within three months; the Appellate Authority dismissed the tenants’ appeal on 11 July 2025 and allowed the landlord’s cross-objections, thereby setting aside the tenants’ right of re-entry.

The tenants thereafter instituted a revision before the High Court, in which execution of the eviction order was stayed on 5 August 2025.

During the revision, the landlord sought directions under Section 151 CPC for payment of use-and-occupation charges at ₹2,50,000 per month from the date of the eviction order.

The Appellate Authority had earlier dismissed a similar application as infructuous, observing that the landlord could pursue execution and that no stay had been granted.

Whether the landlord’s application under Section 151 CPC for use-and-occupation charges was maintainable despite the earlier application before the Appellate Authority having been dismissed as infructuous.

Whether the dismissal of the earlier application attracted the bar of res judicata under Section 11 CPC.

Whether the tenants were liable to pay mesne profits or use-and-occupation charges from the date of the eviction order, notwithstanding the pendency of an appeal or revision and the absence of an interim stay before the Appellate Authority.

What would constitute a reasonable rate and quantum of use-and-occupation charges for the disputed commercial premises.

The Court applied Section 151 CPC to grant appropriate relief in the interests of justice and relied on the principle that, after an eviction decree is passed, the tenancy stands terminated and the occupant becomes liable to pay mesne profits or compensation at the rate at which the landlord could reasonably have let out the premises.

Applying Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd., (1999) 2 SCC 325, the Court held that reasonable mesne profits may be directed to protect the successful landlord from the consequences of delayed execution.

Under Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705, and State of Maharashtra v. Super Max International Pvt. Ltd., (2009) 9 SCC 772, an appellate or revisional court may stay execution on reasonable terms, including payment above the contractual rent; the tenant’s liability is assessed from the date of the eviction decree and is not confined to the earlier contractual rent.

Section 11 CPC does not bar a subsequent proceeding where the earlier application was not heard and finally decided on merits, as recognised in Noharlal Verma v. District Cooperative Central Bank Ltd., Civil Appeal No. 6161 of 2008.

The maxim actus curiae neminem gravabit—an act of the court shall prejudice no person—was applied with reference to Odisha Forest Development Corporation Ltd. v. Anupam Traders, (2020) 15 SCC 146, and Bharat Damodar Kale v. State of Maharashtra, (2003) 8 SCC 559.

The compensation must be reasonable, evidence-based, and neither fanciful nor punitive, as explained in Rena Drego v. Lalchand Soni, (1998) 3 SCC 341, and Union of India v. Shiv Shankar Kesari, (2007) 7 SCC 798.

The High Court held that the Appellate Authority had not adjudicated the landlord’s earlier application on merits but had merely dismissed it as infructuous; consequently, there was no final adjudication attracting Section 11 CPC.

The landlord had also filed an execution petition and could not be faulted for not obtaining possession when the execution proceedings were subsequently stayed in the revision.

Applying Atma Ram Properties and Super Max International, the Court concluded that the tenants’ liability to pay compensation arose from the eviction order dated 29 December 2022, notwithstanding their statutory right to pursue appellate and revisional remedies and the absence of an earlier stay.

For quantification, the Court considered the commercial location of the shop in Lower Bazaar, its area, and the absence of reliable documentary evidence from either side.

It rejected the landlord’s claim of ₹2,50,000 per month as unsupported and also declined to rely mechanically on the disputed measurements, rounding the area to 130 square feet.

Considering the locality and prior judicial assessments of comparable Shimla premises, it fixed the reasonable rate at ₹500 per square foot per month.

The Court held that the tenants’ possession became unauthorised upon passing of the eviction order and that they were liable to pay use-and-occupation charges from 29 December 2022.

The charges were fixed at ₹500 per square foot for 130 square feet, amounting to ₹65,000 per month.

The tenants were directed to deposit ₹28,60,000, calculated for 44 months from 29 December 2022 up to 31 August 2026, within eight weeks, and to pay the continuing monthly charges of ₹65,000 to the landlord by the 10th of each succeeding month, commencing in September 2026.

The Court clarified that its observations were confined to disposal of the interlocutory application and would not affect the merits of the pending revision.