Former Business Partner Must Vacate Ahmedabad Shop; Gujarat HC Upholds Eviction But Cuts Mesne Profit To ₹27,000 A Month

The plaintiff, owner of Shop No. LL-31, Ahmedabad, had carried on a medical-store business with the defendant in partnership from the premises. After dissolution of the partnership, the defendant continued in occupation as a tenant.

The plaintiff alleged that rent was progressively increased to Rs. 27,000 per month and sought possession, arrears and mesne profits. The defendant disputed the increased rent and claimed permanent tenancy.

The City Civil Court decreed possession and rent/mesne profits, assessing mesne profits at Rs. 30,000 per month. The defendant appealed, challenging jurisdiction, the treatment of his defence, and the mesne-profit assessment.

Section 28 of the Gujarat Rents, Hotel and Lodging House Rates Control Act, 1947 confers jurisdiction over landlord–tenant proceedings concerning premises governed by the Act on the specified rent court, including the Court of Small Causes in Ahmedabad.

Section 4(1-A)(b), inserted by the Gujarat amendment effective 5 September 2001, excludes qualifying existing premises where the premises were self-occupied by the owner or vacant on or after commencement of the amendment and were let after that commencement; both conditions must be satisfied for the exemption to apply.

The Court also considered Sushil Kumar Mehta v. Gobind Ram, (1990) 1 SCC 193, on the nullity of a decree passed without inherent jurisdiction, but held that its principle did not apply because the Rent Act did not govern these premises.

The rent-deposit orders made in this case provided that non-compliance would result in the defence being struck off, and that consequence was affirmed in the related appeal.

The premises existed before the 2001 amendment, had been used in the partnership business, and were let to the defendant from 1 April 2004. The partnership deed recorded that ownership, title and possession remained with the plaintiff; the Court therefore treated the premises as self-occupied by the owner before the post-amendment letting. It held that both requirements of Section 4(1-A)(b) were met, so Section 28 did not bar the City Civil Court from hearing the suit.

The defendant did not deposit the rent as directed. The trial court’s order expressly provided for striking off the defence, the High Court confirmed that order and its consequences, and the defendant’s own application acknowledged that his defence had been struck off. The Court therefore rejected the challenge to the trial court’s refusal to permit him to lead evidence.

On rent, the defendant-issued TDS certificates supported a final monthly rent of Rs. 27,000. However, because the plaintiff had led no evidence establishing mesne profits at a higher rate, the Court reduced the award from Rs. 30,000 to Rs. 27,000 per month.

It partly allowed the appeal by reducing mesne profits to Rs. 27,000 per month and left the remainder of the judgment and decree unchanged.

The connected civil applications were disposed of, and the appellant’s request for a 90-day stay was rejected.