Can a Trial Court Direct Tenants to Clear Arrears During Eviction Suits? SC Says Yes Under Order XV-A CPC

The Supreme Court has held that in suits filed by a lessor or licensor seeking eviction and arrears of rent or license fee, the trial court may, in its discretion, direct the defendant to deposit arrears and continue paying the regular rent or license fee month to month, failing which the defence of the licensee can be struck off.

A bench of Justices J K Maheshwari and Vijay Bishnoi said this flows from Order XV-A of the Code of Civil Procedure as applicable in Maharashtra, which was inserted to protect landlords from gratuitous occupation of premises during long-running eviction litigation.

The direction came while partly allowing an appeal filed by Atul J. Doshi and others challenging the Bombay High Court’s refusal to order such payment by the occupant of their commercial premises.

Court said that Order XV-A squarely applied to the case as the suit was based on a licensor–licensee relationship and sought eviction along with arrears. It noted that the Leave and License Agreement dated 8 October 2013 between the parties was undisputed, was valid for 36 months, and required the respondent licensee to vacate on 31 October 2016. Under Clause 2 of the agreement, the license fee was to increase by 7 per cent annually, and under Clause 19 the licensee was liable to pay Rs.10,000 per day as liquidated damages for failure to vacate after expiry.

After the expiry of the agreement, the respondent did not vacate the premises and did not pay the increased license fee. The licensors filed a suit before the Court of Small Causes in 2019 seeking possession, arrears of Rs.1.39 crore and mesne profits at Rs.10,000 per day, along with an injunction restraining alienation. In 2021, the respondent filed a separate suit seeking declaration of tenancy, contrary to Clause 16 of the agreement, which specifically barred any claim of tenancy or sub-tenancy.

When the licensors sought interim relief under Order XXXIX Rules 1 and 2, the trial court directed payment of Rs.10,000 per day by treating the clause as liquidated damages, relying on Order XV-A of the Bombay Amendment. This was upheld by the appellate court but later set aside by the Bombay High Court, which retained the injunction but refused the direction for payment of Rs.10,000 per day.

Restoring the statutory scheme, the Supreme Court said the High Court erred by interfering with the court belows’ application of Order XV-A but not directing payment of arrears and monthly license fee as mandated under the provision. Court observed that Order XV-A requires the defendant to deposit arrears up to the date of the order and continue depositing the rent or license fee claimed in the suit every succeeding month until disposal, and provides for striking off the defence if the defendant defaults.

Court recorded that fixing the license fee at Rs.18,000 per month in the respondent’s tenancy-declaration suit was “farce on the face of the document,” since the respondent had paid higher amounts as per the agreement during its subsistence and had not disputed the terms. It held that once the agreement was undisputed and the licensee had paid the contractual fee for three years, the licensee could not avoid paying arrears and regular monthly payments after expiry. Court clarified that while liquidated damages of Rs.10,000 per day would not be granted at the interim stage, the question of such damages remained open for adjudication after evidence.

Accepting the calculation jointly submitted by the parties, court recorded arrears of Rs.1,46,37,440 up to 31 October 2025 and granted the licensee two months to deposit the amount, subject to adjustment of deposits already made in the separate suit. It further directed the licensee to continue paying the regular license fee with 7 per cent annual increase till disposal of the suit. In case of non-compliance, the licensor would be entitled to seek striking off the defence under Rule 2 of Order XV-A. Court also ordered that both pending suits concerning the same property be placed before the same trial court and disposed within one and a half years.

Case Title: Atul J Doshi & Ors Vs Pramukh Properties And Developers Pvt Ltd

Judgment Date: October 08, 2025

Bench: Justices J K Maheshwari and Vijay Bishnoi