Supreme Court Affirms Eviction for Wilful Default—Failure to Seek Stay on Fair Rent Order Makes Arrears Binding

Case Name: K. Subramaniam (D) through LRs v. Krishna Mills Pvt. Ltd.
Citation: Civil Appeal No. 2561 of 2025; 2025 INSC 1309
Date of Judgment/Order: 11 November 2025
Bench: Hon’ble Mr. Justice Dipankar Datta & Hon’ble Mr. Justice Manmohan

Held: The Supreme Court held that the tenant and thereafter his legal heirs had committed wilful default in payment of rent since, after the fair rent was fixed at ₹2,43,600 per month (later marginally reduced to ₹2,37,500), they continued paying only the original rent and never sought a stay of the fair rent order. Mere pendency of proceedings against the fair rent fixation did not suspend the obligation to pay. The Court confirmed that non-payment over several years, despite judicial directions and notices, satisfied the “deliberate, intentional, and conscious” criteria of wilful default under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, and upheld the eviction order.

Summary: The case involved a long-standing commercial tenancy over 15,500 sq. ft. of land and building in Coimbatore. Krishna Mills, the landlord, initiated fair rent proceedings in 2005, resulting in fixation of fair rent at ₹2,43,600 per month from February 2005. The tenant (Subramaniam) challenged the order but never sought a stay, leading arrears to accumulate to over ₹68 lakh by mid-2007. Though the High Court marginally reduced the rent in 2011, the tenant continued paying only a fraction of the fair rent. After the tenant’s death, his heirs were impleaded. Despite several directions—including this Court’s order enabling installment payments “without prejudice”—the tenant cleared arrears fully only on 11 January 2013, nearly six years after fair rent fixation. The Rent Controller dismissed the eviction petition, but the appellate authority reversed the decision and ordered eviction for wilful default. The High Court affirmed, holding that arrears remained unpaid for an unreasonably long period without any legal justification. Before the Supreme Court, the tenant’s heirs argued absence of notice, pendency of SLPs, and bona fide dispute as to quantum. The Court rejected these arguments, relying on Sundaram Pillai, Girdharilal Chandak, Visalakshi Ammal, and principles of stay under Order XLI Rule 5 CPC, holding that absent a stay, the tenant had no protective shield and was bound to pay fair rent.

Decision: The Supreme Court dismissed the appeal and upheld the eviction, holding that the concurrent findings of wilful default were justified since the tenant repeatedly failed to pay the fair rent despite no stay being in force and despite ample opportunity to clear arrears. The Court reiterated that paying arrears belatedly does not erase earlier default and that interim directions “without prejudice” do not bar the landlord from pursuing eviction. The appellants were granted six months’ time to vacate the premises subject to filing an undertaking within two weeks, failing which the landlord may initiate execution proceedings.