In a detailed ruling delivered on Tuesday, the Supreme Court of India upheld the eviction of tenants from a commercial property in Coimbatore, concluding that their repeated delays in rent payments amounted to “wilful default.” The case, which has travelled across multiple legal forums over nearly two decades, culminated in a clear message from the Bench - tenants cannot hide behind pending appeals to withhold rent.
The judgment, authored by Justice Dipankar Datta and concurred by Justice Manmohan, dismissed the appeal filed by the legal heirs of one K. Subramaniam, who had leased the property from M/s Krishna Mills Pvt. Ltd. The Court granted the tenants six months to vacate the premises.
Background
The dispute began in 1999, when Krishna Mills leased three portions of its property each about 5,000 square feet to Subramaniam’s firm, Royal Agencies. The agreed rent, according to the landlord, was ₹48,000 per month; the tenant insisted it was only ₹33,000.
In 2004, the landlord moved the Rent Controller, Coimbatore, seeking fixation of “fair rent,” arguing that the agreed rent was far below market value. After inspection, the Controller fixed a steep fair rent of ₹2,43,600 per month, effective February 2005. This sparked a series of appeals and revisions that would continue for years.
The tenant contested the amount, depositing partial payments as directed by interim court orders. Even when the High Court reduced the fair rent slightly to ₹2,37,500 per month in 2011, arrears continued to pile up. By the time the matter reached the Supreme Court, the arrears crossed one crore rupees.
Court’s Observations
Justice Datta’s judgment took a firm view on the tenants’ conduct. The Bench noted that no stay had ever been granted against the fair rent orders, meaning the tenants were bound to pay the revised amount from the date of fixation. Yet, they continued to pay only a fraction for years.
“Mere filing of an appeal does not operate as a stay of the decree or order under appeal,” the Court reminded, citing Order XLI Rule 5 of the Civil Procedure Code.
The Court also referred to the Madras High Court ruling in Giridharilal Chandak & Bros v. Mehdi Ispahani, where Justice V. Ramasubramanian had made a similar observation: an appellant who does not seek a stay must be presumed to accept the order below.
Rejecting the tenants’ plea that their payments were delayed due to pending appeals, Justice Datta remarked that such an excuse “cannot be reconciled with bona fide doubt as to liability.”
The Bench also relied on the landmark three-judge ruling in Sundaram Pillai v. V.R. Pattabiraman (1985) to explain what constitutes “wilful default.” The Court reiterated that default becomes wilful when it is deliberate, conscious, and continued despite opportunity to pay.
“The lessee’s conduct of paying arrears years after fixation of fair rent, without ever seeking a stay, squarely satisfies the attributes of wilful default,” the judgment said.
Decision
Upholding the concurrent findings of the appellate authority and the Madras High Court, the Supreme Court held that both the original tenant and his legal heirs were guilty of wilful default under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
The appeal was dismissed as “unmeritorious,” but the Court granted the appellants six months to vacate the property on the condition that they file the required undertakings within two weeks. Failure to comply would allow the landlord to initiate execution proceedings immediately.
“The High Court rightly refrained from re-examining factual determinations. Its approach is reasonable and unexceptionable,” Justice Datta concluded.
The ruling once again underlines a critical principle in tenancy law: pendency of legal proceedings is no shield against the obligation to pay rent.
Case Title: K. Subramaniam (Died) through LRs K.S. Balakrishnan & Ors. v. M/s Krishna Mills Pvt. Ltd.
Case Number: Civil Appeal No. 2561 of 2025