Courts may direct enhanced occupation-charge deposits under Order XV-A where periodic rent escalation is admitted.

The respondent-plaintiff instituted a suit for eviction, mesne profits and interest concerning Flat No. 198, Munirka Enclave, New Delhi.

The parties had executed a lease deed dated 23 December 2011 for 11 months commencing 1 January 2012 at a monthly rent of ₹47,500, with a contractual 10% enhancement upon extension.

The lease was periodically extended, lastly from November 2016 to 31 October 2017 at ₹61,000 per month.

Thereafter, pursuant to an amendment stated to be effective from 1 December 2017 to 30 June 2018, the rent was reduced to ₹50,000 per month on the understanding that the appellant would vacate by 30 June 2018. He did not vacate and continued in possession.

Although the appellant admitted the lease deeds and their periodic-enhancement clauses, he defended the suit by asserting that the respondent had agreed to sell the property to him.

The Trial Court, exercising jurisdiction under Order XV-A read with Order XXXIX Rule 10 CPC, directed him to deposit ₹26,70,849 as differential occupation charges for July 2018 to April 2023, calculated with 10% escalation, and further directed monthly payment of future occupation charges from May 2023 onwards with similar escalation.

During the appeal, the Court was informed that the suit had subsequently been decreed under Order XX Rule 12 CPC; the challenge to that decree in RFA No. 193/2024 and SLP No. 22463/2026 had been dismissed. The appellant had also handed over possession. Consequently, the surviving question concerned the correctness of the occupation-charge determination and whether the matter required remand to the Trial Court for assessment of mesne profits.

Whether the Trial Court was justified in directing the appellant to deposit occupation charges under Order XV-A read with Order XXXIX Rule 10 CPC by applying the agreed 10% periodic enhancement in rent

Whether, in light of the appellant’s contention that the 10% enhancement had not been consistently implemented, the issue of assessing mesne profits required remand for a full trial and determination on evidence

The Court applied Order XV-A CPC, which permits the Court in a landlord–tenant proceeding to direct deposit of rent or use-and-occupation charges during the pendency of the proceedings, read with Order XXXIX Rule 10 CPC, concerning deposit or payment of admitted amounts.

It also considered Order XX Rule 12 CPC, governing the adjudication and determination of mesne profits.

Relying on the Division Bench judgment in Raghubir Rai v. Prem Lata, 2014 SCC OnLine Del 3045, the Court reiterated that mesne profits ordinarily require reliable and cogent evidence and cannot be fixed arbitrarily merely by judicial notice; however, where the erstwhile tenant has agreed to periodic increases in rent or user charges, the Court may, under Order XV-A, direct deposits incorporating those increases unless there are strong grounds to hold that they are not payable.

The contractual admission of lease terms and enhancement clauses may therefore justify interim directions for payment at escalated rates.

The appellant did not dispute the execution or contents of the lease deeds, including the clause providing for 10% enhancement upon extension.

His objection was limited to the submission that the enhancement had not always been strictly followed and that, on one occasion, the rent had been reduced from ₹61,000 to ₹50,000.

The Court rejected this as insufficient to displace the contractual enhancement because the amendment agreement was expressly limited to the period from 1 December 2017 to 30 June 2018.

Applying Raghubir Rai, the Court held that the admitted contractual stipulation permitted directions for payment of enhanced use-and-occupation charges under Order XV-A.

Since the appellant had admitted the relevant lease documents and no strong ground existed to treat the enhancement as inapplicable after expiry of the limited amendment, a remand for separate assessment of mesne profits was unnecessary.

It upheld the Trial Court’s direction requiring deposit of ₹26,70,849 towards differential occupation charges for July 2018 to April 2023, together with future occupation charges calculated at ₹1,18,871 per month from May to December 2023 and thereafter with 10% escalation every 11 months.

The Court declined to remand the matter for reassessment of mesne profits, holding that the admitted lease terms and enhancement clause justified the occupation-charge directions.

The appeal was dismissed and the pending applications were disposed of as infructuous.