Imp. Rulings - Expiry of Lease - “Mesne Profits” & “Tenant at Sufferance”

 Imp. Rulings - Expiry of Lease - “Mesne Profits” & “Tenant at Sufferance”

Index;

1.  SCI (2024.05.21) in Bijay Kumar Manish Kumar HUF Vs. Ashwin Bhanulal Desai [Neutral Citation 2024 INSC 445, I.A. No.120219/2020 IN SLP(C) 4049 of 2020]

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SCI (2024.05.21) in Bijay Kumar Manish Kumar HUF Vs. Ashwin Bhanulal Desai [Neutral Citation 2024 INSC 445, I.A. No.120219/2020 IN SLP(C) 4049 of 2020] held that; 

• Forfeiture, as defined by Corpus Juris Secundum is “the right of the lessor to terminate a lease because of lessee’s breach of covenant or other wrongful act”

• It would also be useful to refer to the concept of tenant at sufferance. As defined in the very same treatise, such a tenant is a person who enters upon a land by lawful title, but continues in possession after the title has ended without statutory authority and without obtaining consent of the person then entitled.

• it is also within the bounds of law, that a tenant who once entered the property in question lawfully, continues in possession after his right to do so stands extinguished, is liable to compensate the landlord for such time period after the right of occupancy expires.

• A tenant continuing in possession after the expiry of the lease may be treated as a tenant at sufferance, which status is a shade higher than that of a mere trespasser, as in the case of a tenant continuing after the expiry of the lease, his original entry was lawful.

• While a  tenant at sufferance cannot be forcibly dispossessed, that does not detract from the possession of the erstwhile tenant turning unlawful on the expiry of the lease. Thus, the appellant while continuing in possession after the expiry of the lease became liable to pay mesne profits.

• It is to be noted that the Court in Sudera Realty (supra) observed that mesne profits become payable on continuation of possession after ‘expiry’ of lease. In our considered view, the effect of the words ‘determination’, ‘expiry’, ‘forfeiture’ and ‘termination’ would, subject to the facts applicable, be similar, i.e., when any of these three words are applied to a lease, henceforth, the rights of the lessee/tenant stand extinguished or in certain cases metamorphosed into weaker iteration of their former selves. Illustratively, Burton’s Legal Thesaurus 3rd Edn. suggests the following words as being similar to ‘expire’ - cease, come to an end; ‘determine’ is similar to - come to a conclusion, bring to an end; ‘forfeiture’ is similar to – deprivation/destruction of a right, divestiture of property; and ‘terminate’ is similar to – bring to an end, cease, conclude. Therefore, in any of the these situations, mesne profit would be payable.

• After all, we cannot lose sight of the fact that the very purpose for which a property is rented out, is to ensure that the landlord by way of the property is able to secure some income. If the income remains static over a long period of time or in certain cases, as in the present case, yields no income, then such a landlord would be within his rights, subject of course, to the agreement with their tenant, to be aggrieved by the same.

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