Supreme Court Mandates Mesne Profits after Tenancy Expires

The Supreme Court in Bijay Kumar Manish Kumar HUF v. Ashwin Bhanulal Desai ruled that landlords receive compensation, or “mesne profit,” if tenants stay after tenancy rights end through forfeiture, termination, or expiration. This compensation, based on market rent value, ensures landlords earn the income they would have if they rented the property. The court highlighted that this compensation is due even without formal lease termination by a court, recognizing landlords’ right to income from their property.

The judgment cites several key precedents to support this ruling. In Martin and Harris (P) Ltd. v. Rajendra Mehta (2022), the court reaffirmed that landlords are entitled to mesne profits after tenancy termination, referencing Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. and State of Maharashtra v. Super Max International (P) Ltd. Further, Mohammad Ahmed & Anr. v. Atma Ram Chauhan & Ors. (2011) highlighted the necessity for tenants to pay market-rate rent, outlining fair rental value parameters. Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd. (1999) held that tenants must pay reasonable mesne profits if eviction execution is delayed, ensuring landlords receive rightful income. Lastly, Achal Misra v. Ram Shanker Singh & Ors. (2005) reinforced tenants’ liability to pay mesne profits from the date they lose entitlement to possession.

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