Supreme Court Rules Tenants Must Pay ‘Mesne Profits’ for Staying Beyond Lease Term

The Supreme Court has ruled that tenants who remain in rented properties after their tenancy rights have expired are required to compensate landlords by paying ‘mesne profits’. This decision was made by a bench comprising Justices JK Maheshwari and Sanjay Karol.

The court clarified that a tenant who lawfully enters a property but continues to occupy it after their legal right to do so has ended is liable to compensate the landlord for the period of unlawful occupation. This principle applies even if there is no formal eviction order against the tenant.

Key Judgment and Legal Reasoning

The judgment, authored by Justice Sanjay Karol, affirmed that tenants would be liable to pay mesne profits to landlords during the period they are considered ‘tenants at sufferance’—a term used for tenants who continue to occupy the property after their lawful title has ended.

The court drew support from a previous ruling in the case of Indian Oil Corporation Ltd. v. Sudera Realty Private Limited, 2022 LiveLaw (SC) 744, which established that tenants remaining in possession after lease expiry are liable for mesne profits.

Legal Definitions and Implications

The court explained that terms like ‘determination’, ‘expiry’, ‘forfeiture’, and ‘termination’ of a lease lead to the extinguishment or weakening of the tenant’s rights. In such scenarios, the tenant must pay mesne profits to the landlord.

Case Details

In the case titled Bijay Kumar Manish Kumar HUF versus Ashwin Bhanulal Desai, the court noted that the respondent-tenant had been delaying rent payments and other dues. This denial of monetary benefits to the landlord was considered substantial, prompting the court to order the deposit of the claimed amount to ensure justice.

Counsel Representation

For the petitioner, the legal team included Mr. Rana Mukherjee (Sr. Adv.), Ms. Vijaya Bhatia, Mr. Ganesh Shaw, Mr. Kunal Chatterji (AOR), Ms. Maitrayee Banerjee, Mr. Rohit Bansal, Ms. Kshitij Singh, Mr. Sohhom Sau, Mr. Samarth Mohanty, and Mr. Arjun Bhatia. The respondents were represented by Mr. Rupak Ghosh, Mr. Debdut Mukherjee, Ms. Sonia Dube, Ms. Kanchan Yadav, Ms. Surbhi Anand, Mr. Tanishq Sharma, Ms. Saumya Sharma, and M/S. Legal Options (AOR).

. For a detailed reading or to download the judgment, click here.

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