Appellate courts in India have significant discretionary power to impose reasonable conditions when granting stays on eviction decrees. The Supreme Court in Atma Ram Properties v. Federal Motors established the legal framework allowing appellate courts to impose such conditions to compensate landlords for losses due to delayed execution of eviction decrees.
Key Conditions That Can Be Imposed
Payment of Enhanced Rent or Compensation
- Legal Basis and Rationale
Once an eviction order is passed, the tenant loses their statutory protection and remains in possession only by virtue of the stay order, not by any right under the Rent Control Act. This legal position justifies the appellate court’s authority to attach reasonable conditions to the stay order.
The Supreme Court has emphasized that after an eviction decree, “the appellate court is fully justified in putting the appellants to terms by way of ordering reasonable amount as rent as a condition for the grant of stay of eviction”.
Important Limitations and Guidelines
Reasonableness Standard
The Supreme Court has directed courts to exercise restraint while issuing directions for rent deposit, ensuring conditions are not “excessive, fanciful or punitive”. The conditions must be reasonable and proportionate to the circumstances.
Timing Requirements
Applications for compensation or enhanced rent conditions should be made shortly after the appeal is admitted and stay is granted. The Bombay High Court has held that such applications cannot be entertained much later when the appeal is ready for final hearing, especially when both parties were heard at admission.
Protection of Deposited Amounts
The amount fixed by courts over and above contractual rent should ordinarily not be paid to the landlord during the appeal’s pendency and should be paid to either side only upon final disposal of the matter. This ensures protection for tenants if the eviction decree is ultimately set aside.
Consequences of Non-Compliance
If a tenant fails to satisfy the conditions imposed for the stay, the conditional stay order becomes inoperative, and the tenant loses protection except for the remedy of restitution if the appeal is later allowed.