The judgment stems from a lease that ran from January 1, 2002 to December 31, 2004, when a landlady in Defence Colony Market rented out a two‑storey building with a terrace. The monthly rent was fixed at ₹62,000, with a 20% increase clause for renewal that was never invoked.
The tenant continued to occupy the premises on a month‑to‑month basis after the original agreement expired, paying the increased rent and even agreeing to a loan arrangement in 2007. The landlady borrowed ₹25 lakh from the tenant, and a notarised undertaking bound her to allow the tenant to stay until the loan was repaid, which occurred in May 2012.
In May 2008, the landlady issued a legal notice demanding the tenant vacate the property and seeking mesne profits of ₹4 lakh per month from June 2008 until the premises were actually cleared. The court held that the 2008 notice could not override the earlier undertaking, so no mesne profits were due for 2008‑2012. After the loan was cleared, the tenancy effectively ended, and the tenant’s continued occupation was deemed unauthorized.
The court calculated mesne profits from January 1, 2013 to December 31, 2017, totaling ₹3.27 cr, and added a 6% annual interest rate. The judgment clarifies that mesne profits apply when a tenant remains after the lease terminates, even if rent is paid.
The landlady will likely pursue eviction proceedings if the tenant does not pay the sum, while the tenant, a small‑business owner, faces a substantial liability. The case serves as a precedent for landlords seeking compensation for unauthorized occupancy in Delhi.