What are Mesne Profits? How it is Measured?

Introduction

Ownership and Possession of a Property are considered as one of the most important legal rights provided by the law. Moreover, there are many rights, powers, immunities, and liabilities included under the provisions related to the concept of ownership. Some of those rights are the right to possession and enjoyment, right to refuse others from using it, right to transmit, and right to destroy someone’s things. And if there is any kind of unlawful action that violates the rights of a person in terms of ownership and possession, then that owner becomes entitled to seek justice in the Court. The court is bound to provide damages and compensation to the plaintiff and Mesne Profits is one fine example of them.

The concept of Mesne Profits originated during the medieval period when rich barons used to give lands in tenancy and collect rents from the tenant farmers. The provision for Mesne profits is provided in the Code of Civil Procedure, 1908.

Mesne Profits Meaning

According to the Legal Dictionary,” Mesne” means intermediate, i.e. middle between two extremes, a part between the start and the end of a time period. In other words, it can refer to the profits earned starting from the unlawful possession until the rightful owner gets back the possession.

Section 2 Clause 12 of the Code of Civil Procedure states that “mesne profits of property means 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”.

Whereas, in the words of Delhi High Court, Mesne Profits refers to “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”.[1]

From the above statements, it can be interpreted that Mesne Profits are profits or pecuniary benefits a person has earned or might have received from ordinary diligence by wrongfully possessing the property of another.

And the law gives the owner, the right to claim all the profits, only when the unlawful possession has caused him to be deprived of benefits and profits which he might have received otherwise.

The Madras High Court in a case has observed that the rights of profits generally arise in three situations[2]:

  1. A suit for eviction and recovery of possession of the immovable property from an unauthorized possessor having no title on the property, along with a claim for past and future mesne profits.
  2. When a suit for partition is instituted by a tenant or tenants in common against others with a claim for an account of past and future profits.
  3. In the suits for partition by a member of Hindu Undivided family along with a claim for an account from the manager/head.

Conditions Of Mesne Profits

There are two conditions that need to be fulfilled in order to bring forth a claim for Mesne Profit. Those conditions are:

  1. Possession of the property must be unlawful and unauthorized.
  2. The person must have received some benefits or might have earned profits through such possession.

It is to be noted that Section 2(12)[3] states any profits received via improvement in the property by the wrongful possessor are not included as mesne profits.

And the possessor is neither entitled to claim the expenses incurred due to the improvements, from the owner as he is legally a trespasser.[4]

As per Order 2 Rule 4 of the Code, it is necessary that the claim for mesne profits has to be joined with a suit for recovery for possession of the property and no separate claim will be entertained.

Against Whom Mesne Profits Can Be Claimed?

An individual becomes liable for mesne profit when he or she possess and enjoy the benefits derived from an immovable property that doesn’t belong to him or her legally.[5] They could be:

Tenants- If the tenant refuses to leave even after a service of notice to vacate the property.

Trespassers[6]

Mortgagor- If the mortgagor continues to possess the mortgaged property after a decree for foreclosure was passed against them.

Mortgagee- If the mortgagee is still in possession of the property after a decree of redemption.

Any other person against whom a decree of possession has been passed[7].

However, in a case where the plaintiff is dispossessed by several persons, then every single one of them will be held liable to pay mesne profits to the plaintiff, irrespective of whether they are in actual possession or have received any kind of benefits through the property.

The court may hold the trespassers jointly liable and have their respective rights plead in a separate suit for contribution and ascertain the liability of each of them[8].

For example, ‘A’ owns a farmhouse. ‘B’, ‘C’, ‘D’ & ‘E’ wrongfully claimed the possession of that farmhouse and makes some profits with only ‘C’ actually living on the premises. This has deprived ‘A’ of his right to enjoy the said property, so ‘A’ is entitled to bring forth a suit for recovery of possession and a claim for mesne profits against all four of them.

Another example, ‘K’ owns a house and ‘M’ claims the possession of the said house and starts collecting rents. This will be considered as Mesne Profits. After some time, ‘M’ builds more rooms and rent them out to be converted into a guest house. The profits that will arise from this improvement are not Mesne Profits.

How Mesne Profits Is Measured?

The Civil Procedure Code doesn’t provide any specific criteria as to how the mesne profits should be assessed. The provision only states that the interest on such profits is included and any profits derived because of improvement are ruled out. Also according to the law of equity, Mesne profits must be in net profits.

As Mesne Profits are a form of damages, the government can’t lay down an invariable rule for its assessment.

So, it’s upon the discretion of the court to determine the quantum of mesne profits based on the following things:

  1. Nature and Condition of the property;
  2. Location of the property;
  3. Value of the property;
  4. The actual profit gained by the possessor or reasonably might have received with the use of the said property[9].

The court also measures the mesne profits based on what the defendant has gained or reasonably might have gained with ordinary diligence by wrongfully possessing the property and not what the plaintiff has lost because of being deprived of possession[10].

Principles In Awarding Mesne Profits

There are some principles that the Court is obliged to follow when awarding mesne profits to the plaintiff. They are:-

  1. The profit taken the account is made by the person in wrongful possession;
  2. The restoration of status before the dispossession of the Decree-holder;
  3. The uses to which the decree-holder could have put the property in if he was the possessor.

Interest And Deductions Of Mesne Profits

The Civil Procedure Code has specified in Section 2 Clause 12, that mesne profits must include interests received during the wrongful possession. As there is no fixed rate of interest, it solely depends upon the court to determine the rate after taking all necessary information into account. However, there is a limitation that says it should not exceed 6% per annum.

While computing mesne profits, some deductions have to be made from the gross profit of the defendant in wrongful possession of the property, these deductions are:-

  1. Costs of cultivation and reaping the crops,
  2. Government revenue, Ceases.
  3. Charges for collecting rent, etc.

Burden of Proof

According to the law, in a suit for Mesne Profits, the burden of proof lies upon the claimant. The plaintiff is required to prove that he is the lawful owner of the property and he is being deprived of his right to enjoy it by the wrongful possession of the defendant.

Only after the ownership and deprivation of rights of the plaintiff are established, he can claim for mesne profits. And the plaintiff also has to prove what profits he might have received with ordinary diligence[11].

Power Of Court In Suit Relating Mesne Profits

According to Order 20 Rule 12[12], whenever there is a suit for the recovery of possession, the court has the discretion of passing a decree

  1. For Possession of immovable property.
  2. For Collection of mesne profits or directing an inquiry for the same.
  3. A preliminary decree directing inquiry about mesne profits acquired before the suit was instituted; or
  4. Directing an inquiry as to mesne profits acquired until the possession is returned, or relinquished, and before 3 years from the decree.

Conclusion

Mesne Profits was introduced with the intent to protect the interests of the lawful owner of the property and at the same time to hold the wrongful possessor accountable by compensating the owner. However, a court cannot pass a decree for mesne profits unless the claim is for immovable property only and the plaintiff has placed an explicit demand for it.

It should also be noted that as mesne profits are a form of damages, the right to sue for mesne profit is a right to sue for damages. This right cannot be attached or sold in execution of a decree against the person entitled to the decree under Section 60 of the Code of Civil Procedure.

FAQs on Mesne Profits

Can the right to mesne profits be transferred?

Yes. the right to mesne profit can be transferred where the claim has been decided by the decree to the claimant, this was held in case of Venkatarama Aiyar v. Ramasami Aiyar by the Madras High Court.

Is Mesne profit is an actionable claim?

No. Mesne profit is not an actionable claim. This was decided in the case of Jai Narayan v. Kishun Dutta.

[1] Phiraya Lal alias Piara lal v. Jia Rani, AIR 1973 Del 186.

[2] Nataraja Achari v. Balambal Amma, AIR 1980 Mad 222.

[3] Civil Procedure Code, 1908.

[4] K. C. Alexander v. Nair Service Society Ltd., AIR 1966 Ker 286.

[5] Chittoori v. Kudappa, AIR 1965 SC 1325.

[6] Sita Ram Lakshmanji v/s Dipnarain Mandal, AIR 1977 SC 1870.

[7] Prabhakaran & Ors vs M. Azhagiri Pillai, AIR 2006 SC 1567.

[8] Lucy Kochuvareed Vs P. Mariappa Gounder And Ors, AIR 1979 SC 1214 a, (1979) 3 SCC 150, 1979 3 SCR 58.

[9] Harry Kempson Gray Vs Bhagu Mian, AIR 1930 PC 82.

[10] P.L.Kapur Vs Jia Rani, AIR 1973 DEL 186.

[11] Ramakka Vs V. Nagesam, AIR 1925 Mad 145.

[12] Code of Civil Procedure, 1908.

This article has been written by Shruti Sudha Samantaray, 3rd Year, BA LLB (Hons) at University Law College, Bhubaneswar, Odisha.

Also Read – Can A Person Be Liable For Theft of His Own Property?

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