Stay on eviction decree may carry compensatory terms; tenancy ends on eviction decree and mesne profits can run from then.

Under Order 41 Rule 5 CPC, an appellate court may stay an eviction decree on reasonable compensatory terms, including payment above contractual rent where that is justified to protect the decree-holder during the appeal. Under the Delhi Rent Control Act, tenancy ends when the eviction decree is passed, not only when it attains finality, so the occupant becomes unauthorized from that date and liability for mesne profits or compensation for use and occupation begins then. The doctrine of merger does not postpone that termination date merely because the decree is challenged in a superior forum.

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Issues: (i) Whether, while granting stay of an eviction order under Order 41 Rule 5 of the Code of Civil Procedure, 1908, the appellate court can impose reasonable terms requiring payment of an amount higher than the contractual rent; (ii) whether, under the Delhi Rent Control Act, 1958, tenancy continues until the eviction decree attains finality or terminates on the passing of the eviction decree, so as to determine the tenant's liability to pay mesne profits or compensation for use and occupation; (iii) whether the doctrine of merger postpones the date of termination of tenancy until disposal by the superior forum.

Issue (i): Whether, while granting stay of an eviction order under Order 41 Rule 5 of the Code of Civil Procedure, 1908, the appellate court can impose reasonable terms requiring payment of an amount higher than the contractual rent.

Analysis: An appeal does not operate as a stay by itself, and stay under Order 41 Rule 5 is a discretionary and equitable relief. The appellate court may protect the successful decree-holder from being deprived of the fruits of the decree during the pendency of the appeal. In appropriate cases, the court may impose reasonable conditions to compensate for delay in execution, including payment of an amount assessed as reasonable for use and occupation, even if it exceeds the contractual rent.

Conclusion: The appellate court has jurisdiction to grant stay on reasonable compensatory terms, and such a condition is valid.

Issue (ii): Whether, under the Delhi Rent Control Act, 1958, tenancy continues until the eviction decree attains finality or terminates on the passing of the eviction decree, so as to determine the tenant's liability to pay mesne profits or compensation for use and occupation.

Analysis: The definition of tenant in the Delhi Rent Control Act, 1958 includes a person continuing in possession after termination of tenancy but excludes a person against whom an order or decree for eviction has been made. Once an eviction order is passed, the tenant ceases to have the protection of tenancy and becomes an unauthorized occupant. From that date, liability arises to pay mesne profits or compensation for use and occupation at the rate the landlord could have earned had the premises been vacated.

Conclusion: Tenancy terminates on the passing of the eviction decree, and liability for mesne profits or compensation begins from that date.

Issue (iii): Whether the doctrine of merger postpones the date of termination of tenancy until disposal by the superior forum.

Analysis: The doctrine of merger does not operate universally so as to defer the legal effect of the original eviction order for all purposes. Although the superior forum's order is operative for adjudicatory purposes, the date on which tenancy ceased is not postponed merely because the eviction order is challenged and later affirmed on appeal or revision.

Conclusion: The doctrine of merger does not postpone the date of termination of tenancy.

Final Conclusion: The stay condition imposed by the Rent Control Tribunal was legally sustainable, the High Court erred in setting it aside, and the landlord was entitled to reasonable compensation during the pendency of the appeal.

Ratio Decidendi: In proceedings under Order 41 Rule 5 of the Code of Civil Procedure, 1908, an appellate court may impose reasonable compensatory conditions for stay, and in premises governed by the Delhi Rent Control Act, 1958, tenancy ends on the passing of the eviction decree so that mesne profits may be awarded from that date without postponement by the doctrine of merger.

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