UNIVERSITY OF PETROLEUM & ENERGY STUDIES

SCHOOL OF LAW
BBA LLB (HONS.), CORPORATE LAW
BATCH: 1
SEMESTER – V
ACADEMIC YEAR: 2019 - 20
SESSION: August - December

PROJECT TOPIC: MESNE PROFIT

UNDER THE SUPERVISION OF: Ms. HUMA MEHFOOZ

Submitted By:
Harsha Doddaka (29)
Aditi Vashist (05)
INTRODUCTION

Mesne Profit
The law of nature gives the primary right to compensation against the breach of legal right.
Likewise, wrongful interference with the immovable property of another is a legal wrong and
law of nature gives primary right to damages or compensation for such legal wrong.
The term ‘mesne profits’ relates to the damages or compensation recoverable from a person who
has been in wrongful possession of immovable property. The Mesne profits are nothing but a
compensation that a person in the unlawful possession of others property has to pay for such
wrongful occupation to the owner of the property. It is settled principle of law that wrongful
possession is the very essence of a claim for mesne profits and the very foundation of the
unlawful possessor’s liability therefore. As a rule, therefore, liability to pay mesne profits goes
with actual possession of the land. That is to say, generally, the person in wrongful possession
and enjoyment of the immovable property is liable for mesne profits.
Before comprehending the concept and relevant provision of mesne profits in the Code of Civil
Procedure, 1908, it would be appropriate to discuss & understand the concept of ownership and
possession in nutshell.

Ownership & Possession

The concept of ownership is one of the fundamental juristic concepts common to all system of
law. Ownership consists of an innumerable number of claims, liberties, powers & immunities
with regard to the things owned. According to some jurists there is no point in having the
concept of ownership without these claims. The idea of ownership developed slowly with the
growth of civilization. So long as the people were wondering from place to place and had no
settled place of residence they had no sense of ownership. The idea began to grow when they
started planting trees, cultivating land, building their homes. The transition from a pastoral to an
agricultural economy held the development of the idea of ownership. People began to think in
terms of ‘mine & thine’.

The concept of ownership is easy to understand but difficult to define with exactitude. The
Jurists have defined the ownership in different ways. · According to Austin “ownership means a
right which avails against everyone who is subject to the law conferring right to put thing to user
of infinite nature”.According to Hibbert “ownership involves four rights and those are the rights
of using the thing, excluding others from using it, the disposal of thing and the destruction of
thing.· In Blacks Law Dictionary, ownership has been defined as “collection of rights of rights to
use & enjoy property, including the right to transmit it to others”.
From the analysis of aforementioned definitions one can conclude that the ownership is nothing
but a right, which is available against everyone who is subject to law. Such claim consists of
following rights.
1. Right to posses & use,
2. Right to exclude others from possessing & using it,
3. Right to transmit, and;
4. Right to destroy thing owned.

Therefore ownership comprises of a number of rights, and among these rights one of the most
significant right is possession of property. Possession is prima facie evidence of ownership and
law always protect right to possession. According Savigny protection of possession is a branch
of protection to person and as any act of violence to person is unlawful, so is the act that disturbs
possession by fraud or force. He further stated that possession is not protected because it is so
intimately connected to the ownership, but in the interest of public order and safety. If the law
allows self-help it would certainly lead to breach of peace. Therefore in the interest of public
order and safety no one should be allowed to take the laws into his own hands. According to
Windschids protection to possession stands on the same ground as protection against injuria i.e.
violation of private legal right. Possession is well protected as a part of criminal law with the
objective to preserve & maintain peace. Possession is also protected as a part of law of tort.

In the property law, Possession is considered as a sufficient proof of ownership. Every person
may keep what he possesses unless someone can prove that he has better title. And the moment
someone can prove the better title against the person who was in prior possession, he is entitled
to compensation against the unlawful possessor of property. Mesne profits are one such mode of
compensation that can be claimed against a person in unlawful possession. Mesne profits are in
the nature of damages for being deprived of the benefit, which the person in possession derives
from the property.

Origin of the Concept of Mesne profit

The concept of mesne profits has its origin in the medieval period. Under the feudal system, the
King owned all land. The King would let out a part of these lands to his barons on the condition
that they will provide him with soldiers whenever he wanted to raise an army.
Soon this turned into a nice way of raising money by charging rent for the land. In turn, the
barons would let out part of the land to tenant farmers and they would pay rent – usually in kind,
by providing livestock or crops – for the privilege of being able to keep some of the produce for
themselves. Thus the concept of chains of tenancies was born.
The person to whom they paid rent became known as the ‘mesne landlord’. The word meant
‘intermediate’ in old French. The phrase was originally ‘mesne rents and profits’ meaning all the
rent or profit from the land that could be extracted by the intermediate landlord. In the modern
time the term ‘mesne profits’ means the claim that a lawful owner of the property has against the
unlawful possessor of the property.

NATURE OF Mesne Profits

All the legal system, which governs the civilized nations of the world agree upon the basic
principal of natural justice to obtain reparation for wrongs or infringement of legal rights. In
other words, the law of nature gives primary right to a compensation for injuries. Mesne profit is
one such right to compensation granted against injuria i.e. breach of legal right. Mesne profit is a
positive right available against infringement of private legal right.
The main object of awarding mesne profit is to compensate the actual owner of the property for
all the loss he has suffered. In other words the object of awarding a decree of mesne profits is to
compensate the person who has been kept out of possession and deprived of enjoyment of his
property even though he was entitled to possession of property, and the word compensation
would embrace in its purview any actual loss suffered by a lawful owner. The idea of granting
mesne profits as compensation normally connotes reparation for some past wrongful act i.e.
unlawful possession.

Legal provision related to Mesne Profits

Mesne profits may be defined as the profits or other pecuniary benefits, which one who disposes
the true owner receives between disseizin and the restoration of possession. Therefore mesne
profits corresponds to the profits which the person in wrongful possession is receiving or might
receive with due diligence for the wrongful occupation of property. Mesne profits are defined
under Section 2(12) if Code of Civil Procedure.
Section 2 (12) of the Code of Civil Procedure provides that: “Mesne profits” of property means
those profits which the person in wrongful possession of such property actually received or
might with the ordinary diligence have received therefrom, together with interest on such profits
but shall not include profits due to improvement made by the person in wrongful possession.
From the analysis of the above stated definition on can conclude that “Mesne profits” are the
profits, which the person in unlawful possession actually earned or might have earned with the
ordinary diligence. According to Section 2(12) a person becomes entitled to mesne profits only
when he has right to obtain possession but another person whose occupation is unauthorized
keeps him deprived of that possession. The first and foremost condition for awarding mesne
profits is unlawful possession of the occupant of the property. The section further provides that
Mesne profits also include interest on such profits. However it explicitly excludes any profit
earned due to improvement in the property made by the person in unlawful possession of such
property.

In Phiraya Lal alias Piara lal v. Jia Rani Hon’ble Delhi high Court while defining the term
mesne profits observed that, “when damages are claimed in respect of wrongful occupation of
immovable property on the basis of the loss caused by the wrongful possession of the trespasser
to the person entitled to the possession of the immovable property, these damages are called
mesne profits”.

In Nataraja Achari v. Balambal Ammal, taking into consideration the definition of mesne
profits provided under Section 2(12) Hon’ble Madras High Court observed that there are three
different types of cases in which question of rights of profits arise:
1. Suit for ejectment or recovery of possession of immovable property from a person in
possession without title, together with a claim for past or past and future mesne profits.
2. A suit 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 joint Hindu family with a claim for an account from the
manager.

The Court observed, “In the first case, the possession of the defendant not being lawful, the
plaintiff is entitled to recover mesne profits such profits being really in the nature of damages. In
second case the possession and receipt of profits by the defendant not being wrongful the
plaintiffs remedy is to have an account of such profits making all jus allowance in the favour of
the collecting tenant in common. In the third case the plaintiff must take the joint family property
as it exists at the date of the demand for partition and is not entitled to open up past account or
claim relief on the ground of past inequality of enjoyment of the profit, except where the
manager has been guilty of fraudulent conduct or misappropriation. The plaintiff would however,
be in the position of the tenant in common from the date of severance in status and his right
would have to be worked out on that basis.

Interest on Mesne profits

The definition of the term ‘Mesne profit’ provided under section 2(12) of the Code of civil
Procedure, 1908 explicitly provides that interest is an integral part of mesne profits. From the
expression ‘together with interest on such profits’ InSection2(12)it is apparent that ‘mesneprofit’
includes together with interest on such profits in Section 2(12) it is apparent that mesne profit
includes within its fold an interest component. And the rate of interest to be allowed in regard to
mesne profits varies depending upon the facts and circumstances of each case. Since the statute
does not fix any rate of interest it is left at the discretion of court to determine the rate of interest.
Generally, the rate of interest is awarded at 6 % per annum.
Very early in the year 1922, in Lata Prasad v. Sri Ganeshji Hon’ble Allahabad High Court,
held that the term ‘Mesne profits’ also includes interest on the profits earned by the unlawful
possessor of the property and where the decree of granting mesne profits say nothing about
interest, the decree holder can claim that the decree of mesne profits includes interest.

In N. Dasjee v. Tirupathi Devasthanam, Hon’ble Supreme Court observed that, “Under

Section 2(12) of the Civil Procedure Code which contains the definition of mesne profits, interest
is an integral part of mesne profits and has, therefore, to be allowed in the computation of mesne
profits itself. That proceeds on the theory that the person in wrongful possession appropriating
income from the property himself gets the benefit of the interest on such income”.

In Tarquino Raul Henriques v. Damodar Mangalji and Co. Pvt. Ltd., the question directly
came up for the consideration before the Hon’ble Bombay High Court. In this case appellate
filed review application against the order of the Hon’ble Court. The impugned order granted
mesne profits but it was silent interest as far as interest on such profits was concerned. It was,
therefore, urged by the appellate that the interest being an integral part of the mesne profits it was
implicit in the order. On the other hand defendants contended that grant of interest is
discretionary and once the impugned order is silent on the point of interest it is safe to assume
that the interest was negatived. The issue was whether the grant of interest is implicit when an
order for mesne profits is directed S. 2(12) of Code of Civil Procedure. Having considered the
observations of the Supreme Court in N. Dasjee v. Tirupathi Devasthanam and the definition of
the term ‘Mesne profits’ under Section 2(12) the court held that the expression "together with
interest on such profit" clearly indicates that the mesne profits would not only include the actual
damage suffered as a result of wrongful possession, but also the interest accrued thereon and in
that sense the mesne profits would always comprise both the damage and the interest. And the
grant of interest is implicit in the mesne profits.

Improvements in the property by unlawful possessor

Latter part of Section 2(12) expressly provides that mesne profits do not include profits due to
improvement made in the property by the person in wrongful possession.

In The Hindustan Petroleum Corporation Ltd., Chairman and Managing Director v. Khwaja
Asadullah Baig and Ors, while assessing the quantum of mesne profits Hon’ble Andhra Pradesh
High Court held that, taking into consideration concept of mesne profits under Section 2(12), the
courts have to exclude the profit attributable to the improvements made on the property.
However a person in wrongful possession of the property is not entitled to claim expenses
incurred on improvements in such property. In other words, plaintiff in not bound to pay the
defendant compensation for improvements as a condition precedent to obtaining possession. The
defendant being in the rank of trespasser is not entitled to such compensation.

Assessment of the Mesne profits.

One broad principle governing the liability for mesne profits is evident from Section 2(12) of the
Code of Civil Procedure, 1908 which defines ‘mesne profits' to mean "those profits which the
person in wrongful possession of 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". But the Section does not provide any
fixed rule for the assessment of such profit. The provision simply states that mesne profits
include interest on such profits. And profits due to improvement are excluded from the
assessment of the quantum of mesne profits.

In Kesardeo Baijnath Vs. Nathmal Kisanalal, it was held, “that determination of mesne profits
on the basis of rental value of the property would be in correct test in the context of the definition
of menses of profits in section 2[12] Rent could be relevant factor, for considering the quantum
of mesne profits but not a decisive of the matter”.

In Dr. J K Bhakthavasala Rao v. Industrial Engineers, Nellore, Hon’ble Andhra Pradesh

High Court observed that, “fixing the damages for the use and occupation of the suit building by
its very nature, involves adjudication of a pure question of fact and there exists hardly any
uniform and standard pattern of assessment in this regard. The court should take into
consideration comparative assessment of the nature, location etc of the suit premises vis-à-vis
similar characteristics of premises in the surrounding area. It is, however, very difficult to find
the premises of similar nature, size and quality of at the same location. Even if there exists any
broad similarity in this aspect, the rent in respect of such premises would depend, mostly, upon
the need of lessee and the circumstances under which the leases are granted. Prevalence of amity
or enmity, as the case may be, between the landlords and the tenants and the duration of lease are
certain factors, which would have bearing of this. And therefore the mesne profits cannot be
determined solely on the basis of rental value of the land”.
Burden of Proof
It is settled principle of law that in case of mesne profits the burden of proof rests on the claimant
i.e. the plaintiff. And mesne profits being in the form of compensation, before claiming mesne
profits the plaintiff have to establish before the Hon’ble court that he was lawful owner of the
property and he was deprived of it by the unlawful possession of the defendant. The plaintiff
having proved the aforementioned facts becomes entitled to mesne profits. Further the onus of
proving what profits he might have received with the ordinary diligence lies on the claimant.
In the case of Ramakka v. Nagesam, Hon’ble Madras High Court while considering thee
question of onus of proof in case of mesne profits held that “onus of proving what profits might,
with due diligence, have been received in any year lies upon the party claiming mesne profits”.
The court further observed that, “Plaintiff may also adduce evidence to prove that the occupant
was not diligent and might have got greater profits by proper diligence”.

Judicial Pronouncements
Chhaganmull Agarwalla v. Amanathulla Mohammad Prodhan
Facts: In this case the only issue with regard to mesne profits was whether the defendant is liable
to pay mesne profits for the land that remained under attachment under the provisions of Section
146, Code of Criminal Procedure. It was contended by the defendant that they cannot be said to
be in unlawful possession of property while the land in dispute was under attachment and
therefore they are not entitled to mesne profits for that period of time.

Judgment: Taking into consideration the definition of mesne profits under Section 2(12) of
Code of Civil Procedure Hon’ble Court held that, “Wrongful possession by the defendant is the
very essence of a claim for mesne profits, and the very foundation of a decree therefor. Applying
these principle it is impossible to hold by any stretch of imagination, that during the time that the
land remained under attachment by the operation of the order under Section 146, Code of
Criminal Procedure and this Court was in custody of it on behalf of the rightful owners, that is to
say of the plaintiffs in the present case, that the defendants were in possession of the lands. The
defendant, therefore not being in the unlawful possession of the property, is not liable to pay
mesne profits for the land that remained under attachment under the provisions of Section 146,
Code of Criminal Procedure
Fateh Chand v. Balkishan Das
Facts: The leasehold rights in certain land together with the building were sold to Lala Balkishan
Das (Hereinafter be referred to as 'the plaintiff') by a sale deed. By an agreement dated 21st
March 1949 the plaintiff contracted to sell his rights in the land and the building to Seth Fateh
Chand (Hereinafter called 'the defendant') It was recited in the agreement that the plaintiff agreed
to sell the building for Rs.112500, and that Rs.1000 were paid to him as earnest money at the
time of the execution of the agreement.
On 25th March 1949 the plaintiff received Rs.24000 and delivered possession of the building
and the land in his occupation to the defendant, but the sale of the property was not completed
before the expiry of the period stipulated in the agreement. Each party blamed the other for
failing to complete the sale according to the terms of the agreement. Alleging that the agreement
was rescinded because the defendant had committed default in performing the agreement and the
sum of Rs.25000 paid by the defendant stood forfeited, the plaintiff in an action filed in the
Court of the Subordinate Judge, Delhi, claimed a decree for possession of the land and building
and a decree for Rs.6500 as compensation for use and occupation of the building from 25th
March 1949 to 24th January 1950 and for an order directing enquiry as to compensation for use
and occupation of the land and building from the date of the institution of the suit until delivery
of possession to the plaintiff.
The trial Judge held that the plaintiff had failed to put the defendant in possession of the land
agreed to be sold and could not therefore retain Rs.25000 received by him under the contract.
Accordingly trial Judge directed that the plaintiff on depositing Rs.25000 less Rs.1400 (being the
amount of mesne profits prior to the date of the suit) the defendant do put the plaintiff in
possession of the land and the building, and awarded to the plaintiff future mesne profits at the
rate of Rs.140 per mensem from the date of the suit until delivery of possession or until
expiration of three years from the date of the decree whichever event first occurred. In appeal the
High Court of Punjab modified the decree passed by the trial Court and declared that the plaintiff
was entitled to retain out of Rs.25000 paid by the defendant under the sale agreement, a sum of
Rs.11250" being compensation for loss suffered by him and directed that the plaintiff do get
from the defendant compensation for use and occupation at the rate of Rs. 265 per mensem.

Judgment: With regard to the issue related to assessment of quantum of mesne profits, Hon’ble
Supreme Court held that, “The plaintiff is undoubtedly entitled to mesne profits from the
defendant and 'mesne profits' as defined in Section 2(12) of the Code of Civil Procedure are
profits which the person in wrongful possession of property actually received or might with
ordinary diligence have receivedtherefrom togetherwithinterestonsuchprofits
butdonotincludeprofitsdueto received therefrom, together with interest on such profits, but do not
include profits due to improvements made by the person in wrongful possession. The normal
measure of mesne profits is therefore the value of the user of land to the person in wrongful
possession. The assessment made by the High Court of compensation at the rate of five per cent
of what they regarded as the fair value of the property is based not on the value of the user, but
on an estimated return on the value of the property. Therefore the same cannot be sustained. It
was, therefore, directed that mesne profits should be computed at the rate of Rs.140 per mensem
from 1st June1949 till the date on which possession was delivered to the plaintiff (such period
not exceeding three years from the date of decree) together with interest at the rate of six percent
on the amount accruing due month after month”

Mesne profits and Order 20 Rule 12 :

Mohammad Amin and Ors v. Vakil Ahmed and Ors

Facts: The only issue before the Hon’ble Supreme Court was whether mesne profits can be
granted when the plaintiff had not specifically prayed for an inquiry relating to mesne profits in
terms of Order XX Rule 12, Code of Civil Procedure, 1908. The learned Solicitor General
appearing on behalf of plaintiffs contended that there was no demand for mesne profits as such
but the claim for mesne profits would be included within the expression "awarding possession
and occupation of the property aforesaid together with all the rights appertaining thereto."
Issue: Whether mesne pr ofits can be gr anted when the plaintiff had not specifically pr ayed for
an inquiry r elating to mesne pr ofits in terms of Or der XX Rule 12, Code of Civil Pr ocedur e,
1908.
Judgment: Hon’ble Supreme Court held that, “The claim for mesne profits cannot be included
within the expression referred by learned counsel on behalf of plaintiff and the High Court was
in error in awarding to the plaintiff’s mesne profits though they had not been claimed in the
plaint. The provision in regard to the mesne profits will therefore have to be deleted from the
decree.

K. Hatiza Begum and Ors v. K. M. Usman Pasha and Ors

Facts: The plaintiff-respondents filed a suit for partition and allotment of separate half share in
the property. The suit was decreed. The plaintiff-respondents put the decree in execution. The
decreeholders filed an application before the executing court under Order 20, Rule 12, Code of
Civil Procedure for enquiry into the future mesne profits. The appellants, who are the judgment-
debtors, objected this. The application of the decree-holder was allowed by overruling the
objection raised by the appellants herein. The judgment-debtor-appellants thereafter filed a
revision before the High Court, which was also dismissed. It is against the said judgment of the
High Court; the appellants have preferred this appeal.
Issue: Whether e x ecuting court can dir ect inquiry into the futur e mesne pr ofits under Or der
20, Rule 12 of Code of Civil Pr ocedur e?
Judgment: Hon’ble Supreme Court observed that, “Perusal of record shows that the decree-
holder in their plaint did not pray for the grant of any future mesne profits. It is also manifest
from the decree passed by the trial court that the court did not grant either past or future mesne
profits to the decree-holder. Further, the decree-holder did not move any application either for
amendment of the plaint by incorporating prayer for grant of future mesne profits or amendment
of the decree for grant of future mesne profits. Moreover, it is true that in the absence of any
prayer in the plaint, it is open to the court to grant past mesne profits. So far the future mesne
profits is concerned, the court has a discretionary power to pass a decree directing the enquiry
into the future mesne profits and the court may grant such mesne profits, although it is not
specifically asked for in the plaint. In the present case, the court has not exercised its discretion
to grant future mesne profits. In the absence of such an order or direction, it was not open to the
executing court to direct the enquiry for ascertaining the future mesne profits under Order 20,
Rule 12, Code of Civil Procedure.

Conclusion
Legal rights and remedies for the breach of legal rights are two sides of the same coin. Stated
simply legal rights and remedies for the breach of these rights have always coexisted. It is
provided in the famous maxim ubi jus ibi remedium, which literally means where there is right
there is remedy. Accordingly unlawful interference with the immovable property of another
person amounts to breach of a legal right; and there is remedy in the form of mesne profits for
wrongful interference with the property.
Section 2(12) of the Code of Civil Procedure provides for mesne profits. According to Section
2(12) the term mesne profits relates to the ‘the damages or compensation recoverable from a
person who has been in wrongful possession of immovable property. The term mesne profits,
under Section 2(12) of Code of Civil Procedure, also include within its ambit interest on such
profits, but it does not include profits made due to improvement in the immovable property.
Plethora of judgment signifies that the wrongful possession of the defendant is the very essence
of the claim of mesne profits. And the moment the plaintiff is successful in establishing the
wrongful possession of the other person he is entitled to claim mesne profits. Therefore our first
assumption that the wrongful possession of the defendant forms the basis of the claim of mesne
profits stands true.
Mesne profits being in the nature of compensation, the enactment rightly does not lay down any
uniform standard for the assessment of mesne profits. Section 2(12) merely lays a broad
principle for the assessment of mesne profits [i.e. Mesne profits = Profits made from the
unlawful possession of the property Interest on such profits – Profits made due to improvement
in the property]. And the assessment of the quantum of mesne profits is rightly left at the
discretionary power of the court depending on the facts and circumstances of each case. The
courts are required to into consideration various factor while determining the quantum of mesne
profits and thereby use their power judiciously. Therefore our second hypothesis that the there is
a uniform criterion for the assessment of mesne profits is inaccurate.
Lastly, from the analysis of numerous judgment of Hon’ble Supreme Court we can conclude that
the third hypothesis that mesne profits can be granted even if they are not specifically claimed in
the plaint under Order 20 Rule 12 of Code of Civil procedure does not stands true. Though, there
has been difference of opinion with regard to this issue but in the most recent judgment on this
issue Hon’ble Supreme Court had held that in mesne profits cannot be awarded in such cases.

Suggestions
The definition of the term ‘mesne profits’ under section 2(12) should be defined more accurately.
The term mesne profit is defined as those profits which the person in wrongful possession of the
actually received or might with the ordinary diligence have received therefrom. This definition
merely provides that profits earned by unlawful possession means mesne profits but it fails to
provide the circumstances under which it can be granted. Therefore it is required to redefine
mesne profits.
Secondly, the maximum rate of interest & minimum rate of interest to be allowed on such profits
should be fixed in the enactment. Generally it is allowed at the rate of 6% per annum, but it
should be explicitly provided in the enactment.
 BIBLIOGRAPHY

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Case Laws:

1) Purificacao Fernandes v. Hugo Vincente de Perpetuo Socorro Andhrade, AIR 1985 Bom.
202
2) K. B. Singh v. M. D. U. Co-Operative Association Ltd., AIR 1957 Manipur 9
3) Phiraya Lal alias Piara lal v. Jia Rani, AIR 1973 Del 186
4) Nataraja Achari v. Balambal Ammal, AIR1980Mad222
5) Lalta Prasad v. Sri Ganeshji, AIR 1922 All 117
6) N. Dasjee v. Tirupathi Devasthanam, AIR 1965 SC 1213
7) Tarquino Raul Henriques v. Damodar Mangalji and Co. Pvt. Ltd., AIR 1989 Bom 309
8) The Hindustan Petroleum Corporation Ltd., Chairman and Managing Director v. Khwaja
Asadullah Baig and Ors, 1996(2) ALT 198
9) K. C. Alexander v. Nair Service Society Ltd., AIR 1966 Ker 286
10) Kesardeo Baijnath Vs. Nathmal Kisanalal, AIR 1966 Bom 266