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Bombay High Court

JM FINANCIAL ASSET RECONSTRUCTION COMPANY LTDversusMUMBAI PORT AUTHORITY FORMERLY THE BOARD OF TRUSTEES OF THE PORT OF MUMBAI

Decided
Disposal
Disposed Off

Holding

A stay of the eviction order may be conditioned on the petitioner paying rent at the contractual rate (with 4% annual increase) from the date of possession, rather than a 20% deposit of the disputed compensation.

Summary

The petitioner, JM Financial Asset Reconstruction Company Ltd., a secured creditor under the SARFAESI Act, acquired leasehold rights over premises owned by the Mumbai Port Authority and occupied them from August 2012 without paying rent. The Port Authority initiated eviction proceedings under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971, and the Estate Officer ordered eviction and damages of Rs 275.78 crore, later directing the petitioner to deposit 20% of the compensation as a condition for a stay. The petitioner challenged this condition, arguing lack of natural justice, the quashing of the revised Scale of Rates by a Division Bench, and that a secured creditor should not bear rent liability for periods prior to possession. The High Court examined whether imposing a monetary condition on a stay is reasonable and whether the compensation assessment, based on the quashed rates, could support the 20% deposit. Relying on Supreme Court precedents that allow appellate courts to impose reasonable rent or compensation on stay orders, the Court held that the petitioner must pay rent at the contractual rate (with 4% annual increase) from the date of possession, but modified the deposit condition to reflect this amount rather than 20% of the disputed compensation. Consequently, the writ petition was allowed and the order was modified to require payment of rent arrears calculated on the original lease terms.

Issues considered

  • The legality and reasonableness of directing the petitioner to deposit 20% of the compensation awarded by the Estate Officer as a condition for stay of execution.
  • Whether the assessment of damages based on the revised Scale of Rates, which were later quashed, can be relied upon.
  • Whether a secured creditor under the SARFAESI Act is liable to pay rent/occupation charges for the period of possession.
  • The applicability of equitable principles in imposing rent or compensation on stay orders under the Public Premises Act.

Legislation cited

Subjects

  • eviction
  • unauthorized occupation
  • stay of execution
  • compensation
  • rent liability
  • leasehold rights
  • SARFAESI Act
  • Public Premises Act
  • equitable discretion
  • natural justice

Judgment

                                                                      WP--11194-26.DOC

                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                   CIVIL APPELLATE JURISDICTION

                                    WRIT PETITION NO. 11194 OF 2026


                   JM Financial Asset Reconstruction
                   Company Ltd.
                   Acting in its capacity as trustee of
                   JMFARC BOI 2009 Trust
                   Having its registered office at
                   7th Floor, Cnergy, Appasaheb Marathe
                   Marg, Prabhadevi, Mumbai – 400 025
                   and corporate office at
                   Office No.22, Lloyds Centre Point,
                   Appasaheb Marathe Marg,
SAINATH            Prabhadevi, Mumbai – 400 025.                      ...Petitioner
SANJAY
BODKHE
Digitally signed
by SAINATH
                           Versus
SANJAY BODKHE
Date: 2026.09.10
22:15:07 +0530

                   1. Mumbai Port Authority
                      (formerly the Board of Trustees
                      of the Port of Mumbai),
                      a statutory corporation
                      constituted under Section 3 of the
                      Major Port Authorities Act, 2021,
                      having its registered office at
                      Vijaydeep Building, Shoorji
                      Vallabhdas Marg, Fort,
                      Mumbai - 400001.

                   2. The Estate Officer, Mumbai
                      Port Authority, an officer
                      appointed under Section 3 of the
                      Public Premises (Eviction of
                      Unauthorized Occupants) Act,
                      1971, having his office at Estate
                      Division, 3rd Floor, Vijaydeep
                      Building, Shoorji Vallabhdas
                      Marg, Fort, Mumbai – 400001.

                   3. Shubh Hospitality Pvt. Ltd.,
                      a private ltd. company having
                      its registered office at 30,

                   SAINATH, PA                        1/23
                                                    WP--11194-26.DOC

     P. J. Ramchandani Marg,
     Opposite Radio Club, Colaba,
     Mumbai – 400 005.
     And
     Flat No.2001, Bulding No.116,
     Sayba Elegant, Nehru Nagar,
     Near Nehru Nagar Police Station,
     Mumbai – 400024.

4. Bank of India,
   Corporate Banking Branch,
   4th floor, 70/80 M. G. Road,
   Mumbai – 400023.                              …Respondents
_____________ _______ ___                        _________


Mr. Ashish Kamat, Senior Advocate, Ms. Huzan Bhumgara,
Mr. Areez Gazdar, Mr. Dhruv Dandekar, Ms. Letishiya
Chaturvedi i/b Veritas Legal, for the Petitioner.

Mr. Girish Godbole, Senior Advocate, Mr. Mandar Bangale,
     Ms. Sarita Yadav, Ms. Pearl Pais, i/b Bangale &
     Associates, for the Respondent No.1.

Mr. Vividh Tandon, i/b Mr. Mehul Thakkar, for Respondent
      No.3.

Mr. Ojas Gole, for Respondent No.4 – Bank of India.
_____________________________________

              CORAM               :     N. J. JAMADAR, J.
              RESERVED ON         :     31st AUGUST 2026
              PRONOUNCED ON :           10th SEPTEMBER 2026


JUDGMENT:


1.      Rule. Rule made returnable forthwith, and with the

consent of learned Counsel for the parties, heard finally.



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2.      By this petition, the petitioner takes exception to an order

dated 02nd July, 2026, passed by the Principal Judge, City Civil

Court, Mumbai in Miscellaneous Appeal No. 0100286/2026,

whereby while granting stay to the execution and operation of

the order passed by the Estate Officer (R-2) in case No.

EO/E/(135)(135-A)(135-B)/2013 under the provisions of the

Public Premises (Eviction of Unauthorized Occupants) Act,

1971 (“PP Act, 1971”), the learned Principal Judge, City Civil

Court, directed the petitioner – appellant to deposit 20% of the

amount ordered to be paid by the Estate Officer (R-2) by way of

compensation for unlawful occupation of the inquiry premises.


3.      Shorn of superfluities, the background facts necessary

for the determination of this petition, can be stated as under :-


3.1     The Petitioner is an Asset Reconstruction Company

registered with the Reserve Bank of India under Section 3 of

the Securitization and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (“SARFAESI Act,

2002”).


3.2     The Respondent No.1 is a Port Authority constituted

under Section 3 of the Major Port Authorities Act, 2021 (“Port

Act, 2021”). The Respondent No.1 is the owner of the land
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admeasuring 1,036.71 sq. mtrs. bearing C.S. No.10/384 of

Colaba Division, together with all buildings standing thereon

(“inquiry premises”).


3.3     The Respondent No.3 is a Private Ltd. Company registered

under the Companies Act, 1956.       The Respondent No.3 was

assigned leasehold rights in the inquiry premises by the

Respondent No.1 under a letter dated 04 th September, 2006.

The Respondent No.3 obtained credit facilities from Respondent

No. 4 – Bank against the mortgage of the leasehold rights in

the inquiry premises.


3.4     On 18th August, 2009, the petitioner acquired the said

debt together with security interest in the inquiry premises

from Respondent No.4 – Bank, under an assignment agreement

and a subsequent deed of rectification dated 02nd December,

2012. The petitioner claimed to have obtained the possession of

the inquiry premises on 06th August, 2012 by following the

procedure prescribed under SARFAESI Act, 2002.


3.5     On 13th February, 2013, the Respondent No.1 instituted

an Eviction Petition before the Estate Officer (R-2). The

Respondent No.1, inter alia, sought an amount of Rs.

8,07,02,917.27/- (Rupees Eight Crores Seven Lakhs Two
SAINATH, PA                       4/23
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Thousand Nine Hundred Seventeen and Twenty Seven Paise)

towards arrears of rent/compensation and service tax.


3.6     During the pendency of the said eviction proceeding, the

Respondent No.1 purportedly introduced a new Scale of Rates

(SORs) of rent for the period 01 st October, 2012 to 30th

September, 2017; 01st October, 2017 to 30th September, 2022

and for the period 01st October, 2022 to 30th September, 2027.

Thereupon, an amendment was sought in the Eviction Petition

seeking enhanced arrears of rent/compensation.


3.7     Eventually, by an order dated 09th June, 2026, the

Respondent         No.2   passed    an    order   for    eviction   of   the

Respondent No.3, Respondent No.4 and the petitioner from the

inquiry premises under the provisions of Section 5(1) of the PP

Act, 1971. The Respondent No.2 also assessed the damages on

account of unauthorized occupation of the inquiry premises

and           directed    the      respondents          in    the        said

proceedings/petitioner and Respondent Nos.3 and 4 herein, to

pay an amount of Rs.275,78,61,569/- (Rupees Two Hundred

Seventy Five Crores Seventy Eight Lakhs Sixty One Thousand

Five Hundred and Sixty Nine) by invoking the powers contained

in Section 7(1)(2)(2A) of the PP Act, 1971.


SAINATH, PA                              5/23
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3.8     Being aggrieved, the petitioner preferred an appeal before

the learned Principal Judge, City Civil Court, Mumbai. In the

said appeal, the petitioner filed an application for stay to the

execution and operation of the order passed by the Estate

Officer (R-2). The learned Principal Judge, City Civil Court after

taking into account the fact that, the petitioner has been in the

occupation of the inquiry premises since more than 13 years

and prima facie there was nothing to show that, the petitioner

was entitled to occupy the inquiry premises without payment of

any charges, granted stay to the execution and operation of the

order passed by the Estate Officer subject to deposit of 20% of

the amount of compensation granted by the Estate Officer (R-2)

within a period of 8 weeks.


3.9     Being aggrieved by the imposition of the condition to

deposit 20% of the compensation awarded by the Estate Officer

which comes to Rs.55,15,72,313/- (Rupees Fifty Five Crores

Fifteen Lakhs Seventy Two Thousand Three Hundred and

Thirteen), the petitioner has invoked the writ jurisdiction of

this Court.


4.      I have heard Mr. Ashish Kamat, the learned Senior

Advocate for the petitioner, and Mr. Girish Godbole, the learned
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Senior Advocate for the Respondent No.1, at some length. The

learned Counsel for the parties took the Court through the

pleadings and the material on record including the various

orders passed by the Authorities under the SARFAESI Act,

2002 and this Court in writ petitions preferred by the parties.


5.      Mr. Ashish Kamat, the learned Senior Advocate for the

petitioner, submitted that, the impugned order suffers from the

vice of non-consideration of any of the grounds urged by the

petitioner while seeking stay to the execution and operation of

the order passed by the Estate Officer (R-2). The impugned

order, Mr. Kamat would urge, borders on an order sans reasons

and betrays non-application of mind. Secondly, the learned

Principal Judge did not properly appreciate the fact that there

was a complete failure of justice as the Estate Officer (R-2)

passed        the   final   order   without   providing   an    effective

opportunity of hearing. The order passed by the Estate Officer,

thus suffers from patent legal infirmity on account of breach of

the principles of natural justice and fundamental principles of

judicial process. Thirdly and most importantly, the very

substratum of the determination of compensation by the Estate

Officer (R-2) was dismantled with the Division Bench judgment

of this Court in the case of Arsheesh Jamshed Wadia & anr. vs.
SAINATH, PA                            7/23
                                                   WP--11194-26.DOC

The Board of Mumbai Port Authority & ors. 1, delivered on 25th

August, 2026 as the new Scale of Rates (SORs) were quashed

and set aside by the Division Bench. Although the Division

Bench judgment was delivered subsequent to the passing of

the impugned order by the learned Principal Judge, yet, the

orders passed by both the Estate Officers and the learned

Principal Judge are rendered untenable as the principle of

consequential orders applies.


6.      Mr. Kamat, took the Court through the history of the

proceedings in the matter of the determination of rent by the

Respondent No.1 and the decisions of this Court as well as the

Supreme Court holding that, the Respondent No.1 cannot

resort to profiteering like a private landlord.


7.      Fourthly, Mr. Kamat would submit, the petitioner being a

secured creditor, it could not have been saddled with the

liability to pay the rent and/or compensation at all or at least

for the period prior to the date, the petitioner came into

possession of the inquiry premises.


8.      Lastly, Mr. Kamat would urge, the direction to deposit

20% of an exorbitant and fanciful compensation determined by

1       WP(O)/3143/2022
SAINATH, PA                        8/23
                                                   WP--11194-26.DOC

the Estate Officer (R-2) is wholly onerous and unreasonable.

Such a condition frustrates the statutory right of appeal,

submitted Mr. Kamat.


9.      To lend support to his submission that, it is not

peremptory that in every case where stay is granted to the

execution of a money decree, the condition of deposit be

imposed, Mr. Kamat placed reliance on the judgment of the

Supreme Court in the case of Lifestyle Equities C. V. & anr. Vs.

Amazon Technologies INC.2


10.     Per contra, Mr. Girish Godbole, the learned Senior

Advocate for the Respondent No.1, submitted that, in the

peculiar facts of the case, the direction to deposit 20% of the

compensation ordered to be paid by the Estate Officer (R-2)

cannot be said to be unreasonable. Laying emphasis on the fact

that, the petitioner has not paid any amount towards the

rent/charges for the occupation of the inquiry premises, for

over 14 years, Mr. Godbole submitted that, it is not open for the

petitioner to urge that, being a secured creditor, the petitioner

cannot be directed to pay the rent/occupation charges. Mr.

Godbole submitted with a degree of vehemence that, the



2       (2026) 3 SCC 641
SAINATH, PA                      9/23
                                                   WP--11194-26.DOC

petitioner went ahead with the acquisition of the debt and the

purported security interest in the inquiry premises despite a

clear and categorical condition in the letter of assignment of

leasehold rights that, the Respondent No.3 was not entitled to

mortgage the leasehold rights in the inquiry premises, without

prior written permission of the Respondent No.1.


11.     Mr. Godbole, further urged that, in WP/502/2013, the

petitioner was put to notice that the Respondent No.1 had the

claims against the Respondent No.3. Thus, while disposing of

the said writ petition, the petitioner and Respondent No.4 –

Bank were directed to bring the notice of the prospective

auction purchaser of the property, the Respondent No.1’s

claims in respect thereof, the said writ petition, the order

passed therein and the proceedings under PP Act, 1971

pending before the Estate officer (R-2). Yet the petitioner

brazenly continued to occupy the inquiry premises without

paying any rent/occupation charges in clear breach of the

terms subject to which the leasehold rights in inquiry premises

were assigned to the Respondent No.3. Thus, there are no

equities in favour of the petitioner.




SAINATH, PA                        10/23
                                                          WP--11194-26.DOC

12.     Mr. Godbole further submitted that, the Division Bench

judgment of this Court in the case of Arsheesh Jamshed Wadia

(supra), does not govern the assignment of the leasehold rights

in the inquiry premises, under the letter dated 04 th September,

2006. The petitioner having acquired the purported security

interest in the inquiry premises with open eyes, cannot be

permitted     to   wriggle   out   of   the   liability   to   pay    the

rent/occupation charges in accordance with the terms of the

contract.


13.     I have given anxious consideration to the submissions

canvassed across the bar.


14.     At the outset, it is necessary to note that the instant

petition assails a discretionary order granting stay to the

execution and operation of the eviction order passed by the

Estate Officer (R-2), during the pendency of the appeal

thereagainst. All the issues in regard to the legality, propriety

and correctness of the order passed by the Estate Officer (R-2),

impugned in the said appeal, are to be adjudicated by the

Appellate Authority. It would, therefore, be inadvisable to

trench upon the merits of the challenges to the order passed by

the Estate Officer (R-2), impugned before the Appellate


SAINATH, PA                         11/23
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Authority, as there is a clear risk of pre-judging the matter

before a decision is rendered by the Appellate Authority.

Therefore,    this    Court    considers      it   expedient     to   confine

consideration in this petition to the justifiability of the direction

to deposit of 20% of the compensation amount ordered to be

paid by the Estate officer (R-2) as a condition for the stay to the

execution and operation of the order passed by the Estate

Officer (R-2).


15.     First and foremost, the nature of the order impugned

before the Appellate Authority deserves to be noted.                  By the

said order, the Estate Officer has directed the eviction of the

Petitioner and Respondent Nos.3 and 4 invoking the power

under Section 5(1) of the PP Act, 1971. The Estate Officer has

assessed      the    damages    in   respect       of   the   unauthorized

occupation of the inquiry premises and directed payment of

damages along with interest aggregating to Rs.275,78,61,569/-

under Section 7 of the PP Act, 1971.


16.     The assessment of damages is at the heart of the

controversy. It is the case of the Petitioner that the damages

have been assessed taking into account the revised SORs




SAINATH, PA                           12/23
                                                     WP--11194-26.DOC

which have been quashed and set aside by the Division Bench

in the case of Arsheesh Jamshed Wadia (supra).


17.      Before adverting to this contentious issue, it may be

apposite to note the initial terms of the assignment of leasehold

rights by Respondent No.1 in favour of Respondent No.3. Under

the letter dated 4 September 2006, the leasehold rights were

assigned in favour of Respondent No.3 for the residual period of

lease, expiring on 7 August 1932.           The agreed rent was

Rs.6,64,147.53 p.m. with a stipulation for increase in rent by

4% p.a. The rent was to be subject to the decision of the Board

on the approach paper to deal with the gray areas in the

implementation of the Supreme Court judgment. Clause 20 of

the said letter provided for levy of interest @ 18% p.a., or at

such rate as may be revised by the Board of Trustees, on late

payment of monthly rent / compensation.


18.      Evidently, the terms of assignment of leasehold rights as

to the term of assignment and the rent payable, were explicitly

clear.        The submission of Mr. Kamat was that the caveat in

clause 3 of the said letter made it clear that, the Respondent

No.1 was also cognizant of the fact that the rent agreed to be

paid was subject to the implementation of the Supreme Court

SAINATH, PA                         13/23
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judgment in regard to the charge of rent by Respondent No.1.

Thus,         the   decision      in     the     case   of      Arsheesh

Jamshed Wadia (supra), governs the initial fixation of rent for

the inquiry premises.


19.     With this clarity on facts and the contours of dispute, it

is imperative to note that, the directions for deposit of rent even

at a rate higher than the contractual rate, as a condition for

the grant of stay to the execution and operation of decree for

eviction is a well recognized measure to balance equities, where

the possession of the person seeking protection from eviction is

declared to be unlawful and unauthorized.


20.     In the case of Atma Ram Properties (P) Ltd. V/s. Federal

Motors (P) Ltd.3, on which reliance was placed by Mr. Godbole,

the     Supreme     Court,     inter   alia,   enunciated    that,   while

exercising the jurisdiction under Order 41 Rule 5 of the Code of

Civil Procedure, 1908, the Appellate Court has the power to put

the tenant-appellant on terms. Though the right to file an

appeal against the order of eviction is statutory, yet, the prayer

for grant of stay to the execution of the eviction decree is

required to be dealt with in exercise of equitable discretionary


3(2005) 1 SCC 705
SAINATH, PA                            14/23
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jurisdiction of the appellate Court. While ordering stay the

appellate Court has to be alive to the fact that it is depriving

the successful landlord of the fruits of the decree and is

postponing the execution of the order for eviction. There is

every justification for the appellate Court to put the tenant-

appellant on terms and direct the appellant to compensate the

landlord by payment of a reasonable amount which is not

necessarily the same as the contractual rate of rent. However,

such terms shall be reasonable.


21.     In the said case, the Supreme Court has culled out the

propositions, as under :

         “19. To sum up, our conclusions are:-
         (1) while passing an order of stay under Rule 5 of
         Order 41 of the Code of Civil Procedure, 1908, the
         appellate Court does have jurisdiction to put the
         applicant on such reasonable terms as would in its
         opinion reasonably compensate the decree-holder
         for loss occasioned by delay in execution of decree
         by the grant of stay order, in the event of the
         appeal being dismissed and in so far as those
         proceedings are concerned. Such terms, needless
         to say, shall be reasonable;
         (2)   In case of premises governed by the provisions
         of the Delhi Rent Control Act, 1958, in view of the
         definition of tenant contained in clause (l) of

SAINATH, PA                         15/23
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         Section 2 of the Act, the tenancy does not stand
         terminated merely by its termination under the
         general law; it terminates with the passing of the
         decree for eviction. With effect from that date, the
         tenant      is   liable   to   pay     mesne   profits   or
         compensation for use and occupation of the
         premises at the same rate at which the landlord
         would have been able to let out the premises and
         earn rent if the tenant would have vacated the
         premises. The landlord is not bound by the
         contractual rate of rent effective for the period
         preceding the date of the decree…..”


22.     A three-Judge Bench of the Supreme Court in the case of

State of Maharashtra and Anr. V/s. M/s. Super Max

International Pvt. Ltd. and Ors.4, affirmed the aforesaid

conclusions in the case of Atma Ram Properties (P) Ltd.

(supra). The Supreme Court further clarified the position, as

under :

              “46.    In light of the discussions made above we
              hold that in an appeal or revision preferred by a
              tenant against a order or decree of an eviction
              passed under the Rent Act, it is open to the
              appellate or the revisional Court to stay the
              execution of the order or the decree on terms,
              including a direction to pay monthly rent at a rate
              higher than the contractual rent. Needless to say

4
SAINATH, PA                             16/23
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              that in fixing the amount subject to payment of
              which the execution of the order/ decree is
              stayed, the Court would exercise restraint and
              would not fix any excessive, fanciful or punitive
              amount.”


23.     These decisions were followed by the Supreme Court in

the case of Sumer Corporation V/s. Vijay Anant Gangan5.



24.     This Court is conscious of the fact that the aforesaid

decisions have been rendered in a situation where the

possession of the tenant was declared to have become unlawful

from the date of the passing of the decree of eviction. However,

the propositions that, the person who seeks stay to the

execution of the decree for eviction is liable to pay the rent /

compensation for the unlawful occupation of the subject

premises and while fixing the amount of compensation for the

unlawful occupation to be paid as a condition for the stay to

the execution of the order/decree, the Appellate Court should

exercise restraint and would not fix excessive, fanciful or

punitive amount, apply with equal force in a situation of the

present nature.          Lest, the statutory right of appeal would be

rendered illusory.


5AIR 2022 SC 5756
SAINATH, PA                            17/23
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25.     In the case at hand, it is pertinent to note, it is nowhere

the claim of the Petitioner that, it has paid any rent or

occupation     charges   since   the   date    it   entered   into   the

possession of the inquiry premises.           The fact remains that

since 6 August 2012, the Petitioner has been in the occupation

of the inquiry premises without payment of any rent / charges

whatsoever. The liability to pay arrears of rent in accordance

with the contractual obligations of Respondent No.3 – debtor,

before the Petitioner obtained the possession of the inquiry

premises in the capacity of the secured creditor may be

debated. Whether the Petitioner is liable to pay those arrears

of rent and charges, etc., can be said to be a matter to be

decided by the Appellate Authority in the pending appeal.

However, the Petitioner can hardly dispute the liability to pay

the rent / charges for the occupation of the inquiry premises at

least since the date it came in possession thereof.


26.     It cannot be ignored that, what was acquired by the

Petitioner was the security interest in the nature of leasehold

rights in the inquiry premises. Thus, the Respondent No.1 can

under no circumstances be deprived of the right to recover the

rent / occupation charges in respect of the inquiry premises, of

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which the Respondent No.1 is indubitably the owner.


27.     At this stage, it is necessary to note that, initially the

claim of the Respondent No.1 before the Estate Officer was

confined to the arrears of rent / charges for the period 4

December      2006   to   30   September   2012,   aggregating    to

Rs.8,07,02,917.27/-. Incontrovertibly, during the pendency of

the eviction proceedings, Respondent No.1 amended the claim

so as to recover the arrears of rent / charges as per the revised

scale of rates.


28.     In this proceeding, having regard to the limited nature of

the controversy, this Court is not inclined to delve deep into the

implications of the judgment of the Division Bench in the case

of    Arsheesh Jamshed Wadia (supra), on the claim of

Respondent No.1 for the arrears of rent / charges as the appeal

before the Appellate Authority is yet to be heard. Suffice to note

that, the Division Bench quashed and set aside the Notification

dated 29 October 2021 fixing the scale of rates for the period 1

October 2012 to 30 September 2017 and the Notification dated

18 December 2021 fixing the scale of rates from 1 February

2017 to 30 September 2022 as those Notifications overreached

the compromise proposals and the decision of the Supreme

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Court and also on the ground that the scale of rates were

revised with retrospective effect.


29.     Prima facie, this Court finds substance in the submission

of Mr. Kamat that the determination of the damages by the

Estate Officer (R2) draws support and sustenance from the

revised scale of rates, which the Division Bench has quashed

and set aside. Therefore, the direction for the deposit of the

amount equivalent to 20% of the compensation awarded by the

Estate Officer (R2) as a condition for stay to the execution and

operation of the order passed by the Estate Officer (R2), as a

measure of balancing equities, may not be sustainable as the

edifice of the determination of the compensation becomes

tenuous.


30.     Conversely, this Court is not inclined to accede to the

submission on behalf of the Petitioner that the Petitioner does

not     bear   any   liability   to   pay   rent/occupation   charges.

Incontrovertibly, the Petitioner is in the occupation fo the

inquiry premises since 6 August 2012.              In the least, the

Petitioner would be required to pay rent/charges for the

occupation of the inquiry premises at the contractual rate with

an increase of 4% p.a.

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31.     Whether the very fixation of the contractual rate of rent is

affected by the Division Bench decision in the case of Arsheesh

Jamshed Wadia (supra), is a matter which may be required to

be adjudicated upon by the Appellate Authority. It would be

inadvisable for this Court to embark upon an inquiry on this

aspect while the appeal awaits adjudication.


32.     Nonetheless,   even   on    conservative   basis,   in     the

considered view of this Court, the Petitioner cannot escape the

liability to pay rent/occupation charges at the contractual rate

from 6 August 2012, subject to the final order that may be

passed by the Appellate Authority.



33.     For the foregoing reasons, this Court is inclined to

interfere with the impugned order and modify the quantum of

the amount to be deposited by the Petitioner as a condition for

grant of stay to the execution and operation of the order passed

by the Estate Officer (R2).    A condition to deposit the amount

equivalent to the rent fixed and payable under the letter        dated

4 September 2006 by which leasehold rights were assigned to

Respondent No.3, from the date the petitioner has been in the

occupation of the inquiry premises upto this month, but


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without interest, would balance the equities between the

parties.


34.     Hence, the following order :-

                               ::ORDER::


       (i)      The Writ Petition stands party allowed.

       (ii)     The impugned order stands modified as under:

       (a)      The effect, operation and execution of the order

       passed by the Estate Officer (R2) in Case No.

       EO/E/(135)(135-A)(135-B)/2013 shall remain stayed

       until further orders by the Appellate Authority

       subject to the Petitioner-Appellant depositing an

       amount towards compensation at the rate of rent

       fixed under the letter dated 04 th September, 2006, as

       it obtained on 6th August 2012, alongwith 4% annual

       increase in the rent, from 6 th August 2012 till 5th

       September 2026 (i.e. for 14 years and one month) in

       the Court of learned Principal Judge, City Civil

       Court, Mumbai, within a period of four weeks from

       today.

       (b)      It is clarified that the observations were

       confined to determine the justifiability of condition to


SAINATH, PA                          22/23
                                                         WP--11194-26.DOC

       deposit the amount and the learned Principal Judge,

       City Civil Court shall decide the Appeal on its own

       merits and in accordance with law without being

       influenced   by   any   of   the   observations    in   the

       impugned order.

       (c)    Rule made absolute to the aforesaid extent.

       No costs.



                                             [N. J. JAMADAR, J.]




SAINATH, PA                          23/23


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