Case Note & Summary
The petitioners, heirs of the original lessee Hashambhai Jetha, were granted a lease of a plot of land admeasuring 3341 sq. yards by an Indenture of Lease dated 7th April 1941, along with an additional plot of 109 sq. yards by assignment. The respondents, who are the landlords, filed a suit for eviction and recovery of possession in the Small Causes Court, Mumbai. The trial court decreed the suit in favor of the respondents. The petitioners appealed against the decree before the Appellate Bench of the Small Causes Court. During the pendency of the appeal, the respondents filed an application (Exhibit 7) seeking interim compensation under Section 43(1) of the Presidency Small Cause Courts Act, 1882. The Appellate Bench allowed the application and directed the petitioners to pay interim compensation at the rate of Rs.10,00,000 per month to the respondents and to furnish undertakings as directed. The petitioners challenged this order by way of a writ petition before the Bombay High Court. The main legal issue was whether the Appellate Bench was justified in granting interim compensation and whether such compensation is compensatory or penal in nature. The petitioners argued that interim compensation under Section 43(1) is penal and cannot be granted without proof of loss, while the respondents contended that it is compensatory and the court has discretion to grant it. The High Court analyzed the provisions of Section 43(1) and held that interim compensation is compensatory in nature, intended to compensate the landlord for use and occupation during the pendency of the appeal. The court further held that there is no requirement of pleading or proof of actual loss, and the appellate court has discretion to grant such compensation. The court also noted that the quantum of Rs.10,00,000 per month was based on the rent of the premises and was not exorbitant. Accordingly, the High Court dismissed the writ petition and upheld the order of the Appellate Bench, directing the petitioners to pay the interim compensation and furnish the undertakings as directed.
Headnote
A) Presidency Small Cause Courts Act, 1882 - Section 43(1) - Interim Compensation - Nature - Interim compensation under Section 43(1) is compensatory and not penal - It is intended to compensate the landlord for use and occupation during pendency of appeal - No requirement of pleading or proof of actual loss - Appellate court has discretion to grant such compensation (Paras 7-10). B) Presidency Small Cause Courts Act, 1882 - Section 43(1) - Interim Compensation - Grant pending appeal - Appellate court can grant interim compensation even if not claimed in plaint - The power under Section 43(1) is independent of the merits of the appeal - Compensation is based on the rate of rent or mesne profits (Paras 11-13). C) Presidency Small Cause Courts Act, 1882 - Section 43(1) - Interim Compensation - Quantum - Appellate court fixed interim compensation at Rs.10,00,000 per month based on the rent of the premises - No interference warranted as the amount is not exorbitant - Petitioners directed to pay and furnish undertakings (Paras 14-16).
Issue of Consideration
Whether the Appellate Bench of the Small Causes Court was justified in granting interim compensation at Rs.10,00,000 per month pending appeal, and whether such compensation is compensatory or penal in nature.
Final Decision
The High Court dismissed the writ petition and upheld the order of the Appellate Bench of the Small Causes Court dated 18-3-2017, directing the petitioners to pay interim compensation of Rs.10,00,000 per month and furnish undertakings as directed.
Law Points
- Interim compensation under Section 43(1) of the Presidency Small Cause Courts Act
- 1882 is compensatory in nature
- not penal
- Appellate court has discretion to grant interim compensation pending appeal
- No requirement of pleading or proof of loss for interim compensation
- Interim compensation can be granted even if not claimed in plaint
- Order granting interim compensation is appealable under Section 43(1) itself.
