Gool Rusi Vatcha vs Dilip Anant Chawan and Anr. — Bombay HC (2026) — LawSathi Research

Gool Rusi Vatcha vs Dilip Anant Chawan and Anr. — Bombay HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Impugned order dated 9 November 2022 passed by the Appellate Bench of the Small Cases Court set aside; the entire amount deposited by the Respondents in terms of order dated 1 November 2018 to be paid over to the Petitioner alongwith accrued interest; writ petition allowed in the above terms and disposed of.

Issue for consideration

Whether the Petitioner/landlord is entitled to withdraw the interim compensation deposited by the Defendant-tenants pursuant to order dated 1 November 2018, after final dismissal of the Appeal on 22 March 2022, notwithstanding the rejection of her withdrawal application by the Appellate Bench of the Small Causes Court on 9 November 2022.

Court's answer

It is a well settled position of law that a tenant who has suffered an eviction decree must deposit interim compensation as a pre-condition for grant of stay to the eviction decree; the tenant's possession becomes unlawful upon passing of the eviction decree, and the interim compensation is intended to compensate the landlord deprived of possession of the premises due to the stay of execution of the decree.

Ratio / Principle

Since the Appeal stood finally dismissed on 22 March 2022, the interim compensation deposited by the tenants for retention of possession of the premises must be necessarily paid over to the landlord; the Petitioner could not be denied withdrawal of the deposit.

Key takeaways

Converse branch of the rule: had the Appeal been allowed and the eviction decree set aside, the deposited amount would have needed to be refunded to the tenant (hypothetical in this case, as the Appeal was in fact dismissed).obiter¶20
The Appellate Court erred in adopting a hyper-technical approach in rejecting the Petitioner's application for withdrawal of the deposited interim compensation.ratio¶21

Detailed headnote1 paragraphs

High Court of Judicature at Bombay (Sandeep V. Marne, J.; decision dated 7 April 2026) allowed Writ Petition No. 5207 of 2025 filed by landlord Gool Rusi Vatcha against order dated 9 November 2022 of the Appellate Bench of the Small Causes Court rejecting her application to withdraw the interim compensation deposited by the Defendant-tenants pursuant to order dated 1 November 2018, which had directed monthly deposit of Rs.10,000/- as a pre-condition for stay of execution of the decree dated 3 May 2016. With the Appeal finally dismissed on 22 March 2022, the Court held that interim compensation is deposited by a tenant who has suffered an eviction decree to compensate the landlord deprived of possession during the stay, and that on dismissal of the Appeal the deposited amount must be necessarily paid over to the landlord; the converse (refund to tenant on success of the Appeal) was also stated. The Appellate Court's rejection was characterised as a hyper-technical approach. The impugned order was set aside and the entire deposit, alongwith accrued interest, was directed to be paid over to the Petitioner; the writ petition was allowed and disposed of.

5-WP-5207-2025.docx

Neeta Sawant

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 5207 OF 2025

Gool Rusi Vatcha : VERSUS :

Dilip Anant Chavan & Anr.

….. PETITIONER

…. RESPONDENTS

Mr. Nirman Sharma , a/w. Mr. Deeshank Doshi and Ms. Uma Sharma, for the Petitioners.

CORAM : SANDEEP V. MARNE, J.

DATED : 7 APRIL, 2026.

P.C. :

The petition challenges order dated 9 November 2022 passed by the Appellate Bench of the Small Causes Court by which Petitioner’s application for withdrawal of amount of interim compensation deposited by the Defendant-tenants in pursuance of order dated 1 November 2018 is rejected.

I have heard Mr. Sharma, the learned counsel appearing for the Petitioner. Respondents are privately served but have not shown any interest in appearing before the Court. This is possibly on account of the fact that Respondents have delivered possession of the suit property and are possibly no longer interested in the present proceedings.

The suit of the Petitioner/Plaintiff was decreed by the Trial Court on 3 May 2016. As a pre-condition for stay to the execution of decree, the Appellate Court directed deposit of interim compensation of Rs.10,000/- per month from the date of the decree till disposal of the Appeal vide order dated 1 November 2018. The Appeal has been finally dismissed on 22 March 2022. I

PAGE NO. 1 OF 2

TUESDAY, 7 APRIL 2026

Neeta Sawant 5-WP-5207-2025.docx

therefore do not see any reason why the Petitioner cannot withdraw the amount of interim compensation deposited in pursuance of order dated 1 November 2018. It is well settled position of law that interim compensation is required to be deposited by a tenant who has suffered decree of eviction as a pre-condition for grant of stay to eviction decree. The possession of tenant becomes unlawful with passage of eviction decree. Interim compensation is to be decided to compensate the landlord who is deprived of possession of the premises due to grant of stay to execution of decree. If the Appeal is allowed and eviction decree is set aside, the deposited amount needs to be refunded to the tenant. Conversely, if the Appeal is dismissed, the deposited amount has to be paid to the landlord.

In that view of the matter, the interim compensation deposited for retention of possession of the premises by the tenant must be necessarily paid over to the landlord. The Appellate Court has adopted a hyper-technical approach in rejecting the Petitioner’s application.

The petition accordingly succeeds and I proceed to pass the following order :

(i) The order dated 9 November 2022 passed by the Appellate Bench of the Small Causes Court is set aside.

(ii) The entire amount deposited by the Respondents in terms of order dated 1 November 2018 shall be paid over to the Petitioner alongwith accrued interest.

Digitally signed by NEETA NEETA SHAILESH SHAILESH SAWANT SAWANT Date: 2026.04.08 15:02:06 +0530

Writ Petition is allowed in the above terms and disposed of.

[SANDEEP V. MARNE, J.]

PAGE NO. 2 OF 2

TUESDAY, 7 APRIL 2026