What do you understand by the expression mesne what are the princple to guide a court in determining the amount of mesne Profit? Discuss with relevant provisions and judicial decisions. Also explain whether the right to mesne profit be attached in execution of decree?

 

Understanding Mesne Profits and Principles for Determining Their Amount

The term "mesne profits" refers to the profits or benefits derived from a property by a person who is in wrongful possession of it. It represents the compensation that the rightful owner of the property is entitled to recover from such a wrongful possessor.

1. Meaning of Mesne Profits

The expression mesne profits is defined under Section 2(12) of the Code of Civil Procedure, 1908 (CPC) as follows:

"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.

Thus, mesne profits include:

• The actual benefits derived by the trespasser from the property.

• The benefits that could have been obtained with reasonable diligence.

• Interest on such profits.

• However, mesne profits do not include the value of any improvements made by the wrongful possessor.

2. Principles for Determining the Amount of Mesne Profits

The assessment of mesne profits is guided by the following principles:

1. Actual or Potential Profits:

   • Mesne profits are based on either actual earnings from the property or the reasonable earning capacity of the property.

   • The rightful owner does not need to prove the loss he suffered; rather, the focus is on the wrongful gain of the trespasser.

2. Market Rent or Fair Rental Value:

   • The amount of mesne profits is often calculated based on the market rental value of similar properties.

   • If the wrongful possessor was earning rent from sub-tenants, that amount could be considered.

3. Nature and Use of Property:

   • The profits depend on the type of property (residential, commercial, agricultural, etc.).

   • If agricultural land is wrongfully occupied, mesne profits may be based on the average crop yield and income from cultivation.

4. Standard of Reasonable Diligence:

   • The wrongful possessor is liable not only for actual profits received but also for what they could have earned with reasonable care.

5. Interest on Mesne Profits:

   • Interest is typically awarded on mesne profits to compensate the rightful owner for the delayed recovery of possession.

   • Courts generally allow an interest rate of 6% to 12% per annum, depending on the case.

6. No Deduction for Improvements:

   • If the wrongful possessor made any improvements, they cannot deduct their value from the mesne profits unless explicitly allowed by the court.

3. Relevant Judicial Decisions

Several landmark judgments have provided clarity on mesne profits:

• Sambhunath Mitra v. Khaitan Sons & Co. (1968)

  • The court held that mesne profits must be calculated based on fair rental value, and the wrongful possessor cannot claim deductions for expenses incurred.

• Fakirappa v. Channaveerappa (2005) 10 SCC 483

  • The Supreme Court clarified that mesne profits include not only actual earnings but also potential earnings, along with interest.

• Krishna Kumar Khemka v. Grindlays Bank (1993)

  • Held that mesne profits must be calculated based on market rates prevailing during the period of wrongful possession.

4. Attachment of Right to Mesne Profits in Execution of a Decree

A crucial question arises: Can the right to mesne profits be attached in execution of a decree?

• Yes, the right to mesne profits can be attached and executed under Order 21, Rule 42 of CPC.

• If a decree is passed for possession along with mesne profits, the decree-holder can apply for execution to recover the mesne profits.

• However, if mesne profits are unascertained, a separate inquiry under Order 20, Rule 12 of CPC is required to determine the exact amount before execution.

5. Conclusion

Mesne profits serve as a compensatory mechanism to ensure that a wrongful possessor does not unjustly benefit from possession of another's property. Courts assess mesne profits based on rental value, nature of the property, and reasonable diligence. Furthermore, once mesne profits are determined, they can be executed like any other money decree under the CPC.