Mesne Profits
Contents
1. Meaning and Scope of Mesne Profits
2. Objectives
3. Principles
4. Difference b/w Mesne Profits & Interim Compensation
5. Against whom Mesne Profits can be claimed
6. Circumstances when Mesne Profits are not granted u/ CPC
7. Assessment and calculation of Mesne Profits
8. Limitation Period
Meaning and Scope of Mesne Profits
As per Section 2(12) of CPC, mesne profits of property mean those
profits which the person in wrongful possession of such property
actually received or might with ordinary diligence have received
therefrom, together with interest on such profits, but shall not include
profits due to improvements made by the person in wrongful
possession.
Order XX Rule 12
Objectives
● Every person has a right to possess his property. And when he is
deprived of such property by another person, he is not only entitled
to restoration of possession of his property, but also damages for
wrongful possession from that person.
● The object of awarding a decree for mesne profits is to compensate
the person who has been kept out of possession and deprived of
enjoyment of his property.
Principles
● No profit by a person in wrongful possession.
● Restoration of status before dispossession of decree holder.
● Use to which a decree holder would have put the property if he
himself was in possession.
Difference b/w Mesne Profits & Interim Compensation
Provision: Order XX Rule 12 of the Provision: Order XLI Rule 5 of the
Code of Civil Procedure, 1908 Code of Civil Procedure, 1908
Basis: Basis:
Wrongful possession: The claimant Stay of execution: The court grants a
must prove that they were wrongfully stay of execution on an eviction
dispossessed of the property. decree.
Loss of profits: The claimant must Equitable relief: The court may require
demonstrate that they suffered a loss the appellant (applicant for the stay) to
of profits due to the wrongful pay interim compensation to the
possession. decree-holder to maintain the status
quo and prevent undue hardship.
Key Differences
Purpose: Mesne profits are intended to compensate for actual losses due to
wrongful possession, while interim compensation is intended to maintain the
status quo during the appeal process.
Timeframe: Mesne profits are generally calculated from the date of
institution of the suit until delivery of possession, while interim
compensation is typically awarded from the date of the stay order until the
final determination of the appeal.
Calculation: Mesne profits are calculated based on the actual or potential
profits from the property, while interim compensation is determined based
on the court's discretion and the specific circumstances of the case.
Against whom Mesne Profits can be claimed
● Wrongful possession of the defendant is the essence of a claim for
mesne profits and the very foundation of the defendant’s liability,
therefore.
● A person in wrongful possession and enjoyment of immovable
property is liable for mesne profits.
● Mesne profits can be claimed with regard to immovable property
only.
● Where a plaintiff is dispossessed by several persons, every one of
them would be liable to pay mesne profits to the plaintiff.
Against whom Mesne Profits can be claimed
Tenant Continuing In Possession After Expiry Of Tenancy Liable
To Compensate Landlord By Paying 'Mesne Profits'
BIJAY KUMAR MANISH KUMAR HUF VERSUS ASHWIN BHANULAL DESAI,
2024 LiveLaw (SC) 413.
Contd, Tenant Continuing In Possession After Expiry Of Tenancy Liable To Compensate Landlord By
Paying 'Mesne Profits'
The question that appeared before the Supreme Court was whether the
tenant would be liable to pay compensation to the landlord in the form
of 'mesne profit' when there was no eviction order against the
tenant but continued to remain in the rented premise.
Answering affirmatively, the Judgment authored by Justice Sanjay Karol
observed that the tenant would be liable to pay the mesne profit to the
landlord for the period he had been a 'tenant at sufferance'.
Three different types of cases in which a question of profits or mesne profits might arise:
(1) Suits for ejectment or recovery of possession of immovable property
from a person in possession without title, together with a claim for past
or past & future mesne profits.
(2) Suits for partition by one or more tenants-in-common against others
with a claim for account of past or past and future profits.
(3) Suits for partition by a member of a joint Hindu family with a claim
for an account from the manager.
Order 20 Rule 12 CPC deals with the first class of suit above referred to,
while Order 20 Rule 18 deals with the second and the third categories.
Circumstances when Mesne Profits are not granted u/ CPC
Single co-owner/co-landlord cannot, by himself, terminate a
tenancy.
Navin Chander Anand v. Union Bank of India,2018 SCC OnLine Del 9902,
17-07-2018].
Order 20 Rule 12 does not apply to partition suits.
Babburu Basavayya And Ors. vs Babburu Guravayya And Anr., AIR 1951
MADRAS 938, relied on by Karnataka HC in Parvathi And Anr. vs
Venkatramana Prasad And Ors, 12 December, 2002.
Contd, Order 20 Rule 12 does not apply to partition suits.
The Full Bench held that Order 20 Rule 12 deals only with suits for
ejectment or for recovery of possession of immovable property from a
person in possession without title and for recovery of past or past and
future mesne profits; and that Order 20 Rule 18 deals with suits for
partition by one or more tenants-in-common against others with a claim
for account of profits and suits for partition by a members of a joint Hindu
family with a claim for an account from the manager. It was held that
the words "mesne profits" as defined in Section 2(12) of CPC
being in the nature of damages were not applicable to a case
where relief is sought as against a tenant-in-common or the
manager of a Joint Family for accounts.
Assessment and calculation of Mesne Profits
Mesne profits being in the nature of damages, no invariable rule governing their
award and assessment in every case can be laid down and the Court may
mould it according to the case.
In assessing the mesne profits, usually the Court will take into account what the
defendant has gained by his wrongful possession of the property.
The test to ascertain mesne profits is not what the plaintiff has lost by being out
of possession but what the defendant gained or might reasonably and with
ordinary prudence would have gained by such wrongful possession.
While awarding mesne profits, the Court may allow deductions to be made from
the gross profits of the defendant in wrongful possession of the property.
Assessment and calculation of Mesne Profits
“The basis of determination of the amount of mesne profit, in our view,
depends on the facts and circumstances of each case considering place
where the property is situated i.e. village or city or metropolitan city,
location, nature of premises i.e. commercial or residential are and the
rate of rent precedent on which premises can be let out are the guiding
factor in the facts of individual case.”
Martin & Harris Private Limited and Ors. Vs. Rajendra Mehta and Ors.,
2022 INSC 663.
Assessment and calculation of Mesne Profits
Mesne profits, under Section 2(12) CPC, also include interest
payable thereon; some honest guess work while calculation
acceptable.
Hindustan Motors Ltd. v. Seven Seas Leasing Ltd.,2018 SCC OnLine Del
11391, decided on 19-09-2018].
Interest is an integral part of the mesne profits and, therefore,
the same has to be allowed in the computation of mesne profits
itself.
Consep India Pvt Ltd V CEPCO Industries Pvt Ltd –(2010) ILR 3 Del 766
A tenant cannot be permitted to urge that mesne profits which in fact
ought to have been paid years ago, should not bear any interest.
Contd, Mesne profits, under Section 2(12) CPC, also include interest payable thereon; some honest
guess work while calculation acceptable.
The High Court noted that the trial court relied on the rent paid by
another tenant to calculate the mesne profits.
It was also observed that some amount of honest guess work is always
involved in calculation of mesne profits, therefore, once the rent paid on
similar premises on same area was taken as the basis, there was no
illegality in the award of the mesne profits passed by the trial court.
Furthermore, the definition of mesne profits in Section 2(12) CPC
provides that mesne profits include the interest payable thereon.
Matter of granting mesne profits is exclusively within the trial court’s discretion.
“the matters about grant of future mesne profits i.e. from the date of
filing of the suit till the delivery of possession are exclusively within the
discretion of the Trial Court.”
Future mesne profits were held to be of two types: from the date of the
filing of the suit till the decree is passed and from the date of the decree
till actual delivery of the possession.
[M/s Suvarn Rajaram Bandekar v. Armando Cardozo, Writ Petition No. 2
of 2017, decided on 07.08.2017].
Limitation Period
Inquiry About Mesne Profits Continuation Of Original Suit;
Application For Such Inquiry Not Barred By Limitation.
CHOUDAPPA & ANR. VERSUS CHOUDAPPA SINCE DECEASED BY LRS. &
ORS., SPECIAL LEAVE PETITION (CIVIL) NO. 3056 OF 2023,
In the present case, the trial court while passing the decree in the year
1973 for recovery of possession and correction of mutation entries had
directed holding of an inquiry regarding future mesne profits of the said
suit lands from the date of the suit.
Limitation Period
Contd.
However, the decree-holder/respondent filed an application, purported to
be under Section 141 C.P.C. or under Order XX Rule 12 C.P.C, in 2014 for
the determination of the mesne profits as directed by the judgment, order,
and decree delivered in 1973.
Protesting the degree-holders application, the Appellant contended that
the application allegedly moved by the respondents for an inquiry for
mesne profits is like a second execution and since, it has been filed
decades after the decree has attained finality, it is liable to be dismissed
on the ground of limitation.
Limitation Period
Opposing the Appellant's contention, the respondent submitted that
such is not like a second execution or in the form of a fresh suit or a
plaint, rather it is only a reminder to the Court to complete the process
of inquiry about the determination of mesne profits as has been
directed by the Court of first instance vide judgment and order dated
12.07.1973.
Rejecting the Appellant's contention, the Court said that filing of a
reminder application by the respondent cannot be considered as a fresh
suit or a second execution to declare such application as barred by
limitation.
Limitation Period
Claim for mesne profits is not barred by limitation if it is based on a
continuing cause of action, as mesne profits accrue daily. Specifically, it
suggests that if a suit for mesne profits falls under Article 113 of the
Limitation Act, the limitation period is three years from when the right to
sue accrues, not necessarily from when profits were received. Additionally,
acknowledgment of the jural relationship can also negate the limitation
period for any part of the claim.
INDIAN OIL CORPORATION LTD. versus SUDERA REALTY PRIVATE LIMITED,
2022 LiveLaw (SC) 744 | CA 6199 OF 2022 | 6 September 2022 | Justices
KM Joseph and PS Narasimha
Webliography
Matter of granting mesne profits is exclusively within the trial court’s discretion | SCC Times
Single co-owner/co-landlord cannot, by himself, terminate a tenancy | SCC Times
Inquiry About Mesne Profits Continuation Of Original Suit; Application For Such Inquiry Not Bar
red By Limitation: Supreme Court
Mesne profits, under Section 2(12) CPC, also include interest payable thereon; some honest g
uess work while calculation acceptable | SCC Times
Tenant Continuing In Possession After Expiry Of Tenancy Liable To Compensate Landlord By Pa
ying 'Mesne Profits' : Supreme Court
Understanding the fine line of distinction between Mesne Profits and Interim Compensation – T
he Law Blog
Scope Of Enquiry And Judicial Notice While Granting Mesne Profits And Damages For Unauthor
ized Occupation Of The Leased Premises
Thank You!
