{"id":174757,"date":"1979-02-07T00:00:00","date_gmt":"1979-02-06T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/l-kochivareed-vs-p-meriappa-gounder-and-ors-on-7-february-1979"},"modified":"2016-01-25T09:30:26","modified_gmt":"2016-01-25T04:00:26","slug":"l-kochivareed-vs-p-meriappa-gounder-and-ors-on-7-february-1979","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/l-kochivareed-vs-p-meriappa-gounder-and-ors-on-7-february-1979","title":{"rendered":"L. Kochivareed vs P. Meriappa Gounder And Ors on 7 February, 1979"},"content":{"rendered":"
Supreme Court of India<\/div>\n
L. Kochivareed vs P. Meriappa Gounder And Ors on 7 February, 1979<\/div>\n
Equivalent citations: 1979 AIR 1214, \t\t 1979 SCC (3) 150<\/div>\n
Author: R S Sarkaria<\/div>\n
Bench: Sarkaria, Ranjit Singh<\/div>\n
           PETITIONER:\nL. KOCHIVAREED\n\n\tVs.\n\nRESPONDENT:\nP. MERIAPPA GOUNDER AND ORS.\n\nDATE OF JUDGMENT07\/02\/1979\n\nBENCH:\nSARKARIA, RANJIT SINGH\nBENCH:\nSARKARIA, RANJIT SINGH\nTULZAPURKAR, V.D.\nSEN, A.P. (J)\n\nCITATION:\n 1979 AIR 1214\t\t  1979 SCC  (3) 150\n\n\nACT:\n     Mesne Profits-Liability  for mesne\t profits,  principle\nof-Section 2(12)  of the Code of Civil Procedure 1908 (Act V\nof 1908).\n     Civil  Procedure\tCode,  1908,   Order  XX   Rule\t 12-\nConstruction of decree explained-Nature of the decree of the\nCourt dated April 22, 1958 clarified.\n     Words and\tPhrases-\"Whichever event  first\t occurs\"  in\nRule 12(1)(C)(iii) of order XX C.P.C.-Meaning of\n     Civil Procedure Code. S. 144-Scope of.\n\n\n\nHEADNOTE:\n     Meriappa Gounder  respondent No.  1 in  C.A. 466\/69 and\nappellant 1  in C.A. 2375\/69 filed a suit on August 23, 1950\nin the\tDistrict Court, Trichur, for specific performance of\nan agreement  dated  May  22,  1950  made  by  one  Soliappa\nChettiar. The  said Soliappa  Chettiar pleaded\tinability to\nperform\t the   contract\t in  view  of  the  refusal  of\t one\nNeelakanta  Iyer   a  lessee  of  the  factory\tto  give  up\npossession. Pending  the suit  Late Kochivareed,  husband of\nthe appellant  in C.A.\t466\/69 obtained an assignment of the\nlease from  Neelakanta Iyer  on March  5, 1951.\t On March 8,\n1951 Soliappa  Chettiar executed  a sale  deed of  the\tsuit\nproperty in  favour  of\t one  George  Thatil,  a  nephew  of\nKochivareed. In\t the course  of the  proceedings  the  trial\ncourt appointed\t a Receiver  to manage the suit property. On\nMarch 21,  1951, Late  Kochivareed obtained  a lease, of the\nsuit property  at a  rent of Rs. 15,000\/-for a period of one\nyear which  was renewed\t for another  year from the Receiver\nand a sum of Rs. 30,000\/- SO collected as rent for two years\nwas deposited in the Court by the Receiver.\n     The District  Court on August 28, 1952 decreed the suit\nfor specific performance and mesne profits at a reduced rate\nof Rs.\t15,000\/- per  annum, instead  of at Rs. 30,000\/- per\nannum as  claimed. Against the decree two appeals were filed\nin the High Court by Kochivareed and George Thatil. The High\nCourt allowed  the appeals  and dismissed  the suit  by\t its\njudgment dated\tMarch 21, 1953. The appeal filed by Meriappa\nGounder (CA  129\/56) was  allowed by  this Court  as per its\njudgment and decree dated April 22, 1958.\n     On the  question of the liability of the mesne profits,\nthe present  appeals arose  out\t of  interpretation  of\t the\ndirection (e) of this Court's decree dated April 22, 1958.\n     Allowing the appeals by certificate in part the Court\n^\n     HELD: 1.  Mesne profits being in the nature of damages,\nno invariable  rule governing  their award and assessment in\nevery case  can be  laid down  and the\t\"Court may  mould it\naccording to  the justice  of the  case\". Even\tso one broad\nbasic principle governing the liability for mesne profits is\ndiscernible\n59\nfrom section  2(12) of\tthe Code  of Civil  Procedure  which\ndefines 'mesne\tprofits' to  mean 'those  profits which\t the\nperson in  wrongful possession of property actually received\nor might  with ordinary\t deligence have\t received  therefrom\ntogether with  interest\t on  such  profits,  but  shall\t not\ninclude profits\t due to\t improvements made  by the person in\nwrongful possession.\" [68G-H, 69A]\n     Wrongful  possession  of  the  defendant  is  the\tvery\nessence of a claim for mesne profits and the very foundation\nof the defandant's liability therefor, Generally, the person\nin  wrongful  possession  and  enjoyment  of  the  immovable\nproperty  is  liable  for  mesne  profits.  But,  where\t the\nplaintiff's  dispossession,   or  his\tbeing  kept  out  of\npossession can\tbe regarded  as a  joint or concreted act of\nseveral persons,  each\tof  them  who  participants  in\t the\nCommission of  that act\t would be  liable for  mesne profits\neven though  he was not in actual possession and the profits\nwere received  not by  him but\tby some of his confederates.\nPossession  through   another,\tsuch  as  a  tenant  may  be\nsufficient to  create liability\t for mesne  profits, if such\npossession is wrongful. [69A-C and G]\n     2. In such a case, where the claim for mesne profits is\nagainst several\t tresoassers who  had combined\tto Keep\t the\nplaintiff out  of possession,  it Is  open to  the Court  to\nadopt either  of the  two courses. It may by its decree hold\nall such  trespassers jointly and severally liable for mesne\nprofits\t leaving   them\t to  have  their  respective  rights\nadjusted in  a separate suit for contribution; or it may, if\nthere is  proper material  before it ascertain and apportion\nthe liability  of each\tof them on a proper application made\nby the defendant during the same proceedings. [69C-D]\n     3. A decree under Order XX Rule 12 of C.P.C., directing\nenquiry into  mesne profits,  howsoever\t expressed  must  be\nconstrued to be a decree directing the enquiry in conformity\nwith  the   requirements  of  Rule  12(1)(c),  80  that\t the\ndecreeholder is\t not entitled  to mesne profits for a period\n(commencing from  the date  of the  institution of the suit)\nextending  beyond   three  years   from\t the   date  of\t the\npreliminary decree. [69E-Fl\n     Chitturi Subhanna\tv. Kudappa  Subbanna,<\/a> [1965]  2\t SCR\n661; referred to.\n     4. The  words \"whichever  event first  occurs\"  in\t sub\nclause (c)(iii)\t of clause  I of  Rule 12  of Order XX Civil\nProcedure Code\timply that  the\t maximum  period  for  which\nfuture mesne  profits can be awarded is three years from the\ndate of the decree for possession and mesne profits, finally\npassed. The period of three years is to be computed from the\ndate of decree of this Court i.e. from April 22, 1958 and it\nwill expire on the date on which possession was delivered or\nrelinquished by\t the defendant in favour of the decreeholder\npursuant  to   that  decree.  In  other\t words,\t the  decree\nmentioned in  sub clause  (iii) of  clause (c)\twould be the\nappellate decree  dated April  22, 1958\t of this  Court. The\nperiod of  three years\tmentioned in  the said subclause is,\ntherefore, to  be reckoned from April 22, 1958. [73G-H, 74A-\nB]\n     5. Section\t 144 of\t the Code  of  Civil  Procedure,  in\nterms, says  that for  the purpose  of the  restitution, the\nCourt may  make any orders, including orders for the payment\nof interest,  damages compensation  and mesne  profits which\nare properly  consequential on\tvariation or reversal of the\ndecree. [77A-B]\n     There is nothing in the decree, dated April 22, 1958 of\nthis Court  which expressly or by implication, prohibits the\npayment of interest on the sum of\n60\n     Rs.  30,000\/-  withdrawn  by  defendant  3\t by  way  of\nrestitution. The  trial court  had rightly allowed interest.\n[77B-C]\n     6. The  decree dated April 22, 1958 of this Court was a\ncomposite decree,  partly final,  and party  preliminary. It\nwas final  in so  far as  it granted the reliefs of specific\nperformance and\t possession on\tdeposit of  the price by the\nPlaintiff. It  was preliminary\tin as much as it directed an\ninquiry with  regard to\t the assessment of mesne profits and\nas to  who out of the defendants was\/were liable for payment\nof those  mesne profits.  But? it  laid down in no uncertain\nterms that  only such  of the defendants would be liable for\nmesne profits  \"as  may\t have  been  in\t possession  of\t the\nproperty\". This\t direction in the decree means that only the\ndefendant or  defendants  found\t in  actual  possession\t and\nenjoyment of the property would be liable for mesne profits.\n[70A-C]\n     In the instant case:\n      (a) The third defendant was in sole, actual possession\nand control of the suit property from March 3, 1951, when he\nobtained the  alleged assignment of lease in his favour from\nNeelakanta Iyer.  In terms  of the  decree  of\tthis  Court,\ntherefore defendant  3 alone  is liable for mesne profits in\nrespect of  the period\the was\tin possession (excepting the\nperiod during which the property was under the management of\nthe Court Receiver). [71E-F]\n     (b) The  contention that  the possession of defendant 2\nwas the legal possession of an owner while that of defendant\n3 was  derivative possession  of a  lessee or licensee under\nthe former  is not correct, since at no stage, in the Courts\nbelow defendant\t 3 took\t up the\t position  that\t he  was  in\nderivative possession of the property under defendant 2. Nor\nwas there  even a  whisper in the pleadings that defendant 2\nand defendant 3 were joint-tortfeasors and therefore jointly\nand severally liable for mesne profits. [69H, 70C, G]\n     (c) There\tis nothing in the decree of this Court dated\nApril 22  1958, indicating  that the amount deposited by the\nplaintiff towards the price should have been sel off against\nthe liability  of defendant  3 for  mesne  profits.  On\t the\ncontrary, it  allowed deduction\t of the\t amounts  found\t due\nagainst defendant  1 and defendant 2 from the deposit of Rs.\n85.000\/- to  be made by the plaintiff towards the price, and\nfurther directed  that after  such deduction, the balance of\nsuch deposit made by the plaintiff, if any, shall be paid to\nthe third  respondent (defendant  2) who  is the assignee of\nthe second respondent (defendant 1) pendente lite. [71F-H]\n     (d) The  plaintiff was not bound to suffer a set off in\nfavour of  defendant 3,\t merely because\t defendant 2  or his\nassignee withdrew  the\tprice  deposited  by  the  plaintiff\nwithout furnishing any security for its refund or adjustment\ntowards\t the  liability\t of  defendant\t3,  there  being  no\nevidence whatever,  on record  to show\tthat such withdrawal\nwas the\t result of  any collusion  or conspiracy between the\nplaintiff and  defendant 2  and defendant  3. Even  assuming\nthat both  defendants 2\t and 3 were liable for mesne profits\njointly and severally, then also, the plaintiff could at his\noption. recover\t the whole  of the  amount of  mesne profits\nfrom either  of them; and how such inter se liability of the\ndefendants was\tto be  adjusted or  apportioned was a matter\nbetween the defendants only. [72A-C]\n     (e)  Defendant   3\t entered  into\tpossession  of\tsuit\nproperty under\ta-l assignment of sham lease from Neelakanta\nIyer on March 5, 1951 during the\n61\npendency of  the plaintiffs  suit, which  was instituted  on\nAugust 25,  1950. The A plaintiff had deposited Rs. 50,000\/-\nsometimes after\t the presentation  of the  plaint. Under the\nagreement of  the sale, dated May 22, 1950 made by defendant\n1 in  favour of the plaintiff, the total sale considerations\nwas fixed @ Rs. 90,003\/-. Out of it Rs 5,003\/- had been paid\nto defendant  I on  the very  date of  the agreement. It was\nfurther stipulated  that out  of the  balance, Rs.  50,000\/-\nwould be  paid by the plaintiff-purchaser at the time of the\nregistration of\t the sale  deed which was to be executed and\nregistered on  or before  July\t15,  1950.  It\twas  further\nstipulated that\t on  payment  of  the  further\tsum  of\t Rs.\n50,000\/- the  plaintiff would  be  entitled  to\t be  put  in\npossession of  the suit\t property.  Thus  when\tdefendant  3\nentered into possession, first under the garb of an assignee\nof  sham   lease  from\tNeelkanta  Iyer,  and  then  further\npurchased the  property with  his  on  funds  in  favour  of\ndefendant 2  pendente lite,  he was  fully conscious that he\nwas purchasing\ta litigation.  His possession  was therefore\nwrongful qua the plaintiff from its inception [72E-H]\n     (f)  Disallowance\t of  the  claim\t for  deduction\t for\ninterest on  the deposit  of Rs.  50,000 which the plaintiff\nhad withdrawn on August 19, 1953 and had redeposited on 9-2-\n1959 is\t incorrect. The\t defendant is entitled to interest @\n6% per\tannum for  the\tsaid  period,  after  deduction\t the\ninterest for  the period during which the property was under\nthe management of the Receiver. [74D-E]\n     (g) The  plaintiff`s claim for mesne profits @ the rate\nof Rs.\t25,000\/- has  correctly been  negatived.  Since\t the\nplaintiff did  not  object  to\tthe  lease  granted  by\t the\nReceiver to  defendant 3 on an annual rental of Rs. 15,000\/-\nand since  he did  not produce\tany other reliable evidence,\nthe High  Court was  not wrong\tin holding  that  the  mesne\nprofits should\tbe on  the basis of this rental value of Rs.\n15,000\/- [76A-C]\n     (h) The  plaintiff, in  view  of  the  long  drawn\t out\nlitigation is entitled to interest @ 6% per annum upto March\n29, 1959. [76E-F]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 466 and
\n2375 of 1969.\n<\/p>\n
     From the  Judgment and Order dated 6-8-78 of the Kerala
\nHigh Court in Appeal Suit Nos. 27\/63 and 245\/63.\n<\/p>\n
     K. S. Ramamurthy, Miss Pushpa Nambiar and A. S. Nambiar
\nfor the Appellant in C.A. 466\/69 and R 1 in C.A. 2375\/69.\n<\/p>\n
     P. Govindan  Nair, S.  Balakrishnan and K. L. Rathi for
\nR. 1 in C.A. 466\/69 and Appellant in CA 2375\/69.\n<\/p>\n
     N. Sudhakaran,  S. L. Aneja and K. L. Aneja for RR 2-3,
\nin C.A. 466\/69 and For RR 3-4-in C.A. 2375\/69.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     SAKARIA, J.-These\ttwo appeals on certificate arise out
\nof execution  petition No.  118 of  1962 on  the file of the
\nSubordinate Judge,  Trichur, filed  by P.  Meriappa  Gounder
\n(hereinafter referred  to as  the plaintiff) to execute the,
\ndecree of the Supreme Court in C.A. 129\/56
\n62<\/span>
\npassed on  April 22,  1958. The\t common facts,\tout of which
\nthese appeals arise, are as follows:\n<\/p>\n
     The plaintiff  filed a  suit on  August 23, 1950 in the
\nDistrict Court,\t Trichur, for  ‘specific performance  of  an
\nagreement, dated  May 22,  1950, made  by Soliappa  Chettiar
\n(hereinafter referred  to as  defendant 1) to sell a factory
\nknown as  “Sivakami Tiles Works”, for a consideration of Rs.
\n90,003\/-. The plaintiff made an advance payment on that very
\ndate of\t a sum\tof  Rs.\t 5,003\/-  to  defendant\t 1.  It\t was
\nstipulated in  the agreement  that the\tsale  deed  must  be
\nexecuted and  registered on  or before July 15, 1950. It was
\nfurther\t provided   that  out\tof  the\t  balance  of\tsale
\nconsideration, Rs.  50,000\/- would  be paid by the plaintiff
\nat the\ttime of\t the registration  and for the remaining Rs.
\n35,000\/-, the  plaintiff was  to execute  a mortgage  of the
\nsuit property  to be  redeemed on or before May 31, 1951. It
\nwas further  agreed that  on payment  of Rs. 50,000\/- at the
\ntime  of   registration,  the  plaintiff  would\t be  put  in
\npossession of  the suit property. The plaintiff pleaded that
\nhe was\tready  and  willing  to\t perform  his  part  of\t the
\nagreement, but\tcame to\t know that defendant 1 was trying to
\nevade his  obligation under  the agreement. Accordingly, the
\nplaintiff sent\ta registered  notice, dated  July  7,  1950,
\nthrough his  lawyer to\tdefendant 1,  to  which\t the  latter
\nreplied the  same day, that the factory was in possession of
\none Neelakanta\tIyer as\t lessee, who  had refused to give up
\npossession and\ttherefore, it  had become impossible to give
\neffect to  the agreement  to sell  the\tfactory,  as  giving
\npossession to the plaintiff was a condition precedent to the
\nexecution of  the sale\tdeed. The  plaintiff further pleaded
\nthat the suit property was really in possession of defendant
\n1 and  the alleged lease. in favour of Neelakanta Iyer was a
\nsham transaction  and a\t device to  evade payment  of income
\ntax, and  hence defendant 1 was bound to carry out the terms
\nof the agreement to sell.\n<\/p>\n
     The suit  was contested  by defendant 1 (who originally
\nwas the sole defendant). – His case was that, although there
\nwas an agreement to sell the suit property, it had been made
\nclear at  the time  when negotiation  for sale was going on,
\nthat the factory was in the possession of Neelakanta Iyer as
\nlessee and  that it  was a  condition precedent\t to the sale
\nthat Neelakanta\t Iyer would  surrender his  right under\t the
\nlease and  give up  possession and  that if he refused to do
\nso, the\t agreement to sell would not be given effect to. The
\ndefendant urged Neelakanta Iyer to surrender the possession,
\nbut he\trefused to do so. In the circumstances” the contract
\nfor sale had become incapable of performance. He denied that
\nthe lease in favour of Neelakanta was a sham transaction.\n<\/p>\n
63<\/span><\/p>\n
     Pending the  suit,\t T.  V.\t Kochivareed  (the  deceased
\nhusband of the A appellant, Lucy Kochivareed in C.A. 466\/69)
\nobtained  an   assignment  of\tthe  lease  (Ex.  D-3)\tfrom
\nNeelakanta Iyer\t on March  5, 1951.  Since  Kochivareed\t was
\nlater on,  when the  suit was  pending in  the Supreme Court
\nimpleaded as  defendant 3,  for the  sake of convenience the
\nappellant in C.A. 466\/69, will hereinafter be referred to as
\ndefendant 3
\n     On March  8, 1951,\t defendant 1 executed a sale deed of
\nthe suit  property in  favour of  George Thatil,  who is the
\nnephew of  defendant 3,\t and will hereinafter be referred to
\nas  defendant  2.  Like\t defendant  3,\the  also  joined  as
\ndefendant 2  at his own request, when the appeal was pending
\nin this Court.\n<\/p>\n
     On December 23″ 1950, the Court appointed a Receiver to
\nmanage the  suit property.  On March  21, 1951,\t defendant 3
\nobtained a  lease of  the suit\tproperty at  a rent  Or\t Rs.
\n15,000\/- for  a period\tof one\tyear from  the Receiver. The
\nterm of\t the lease  was extended  for one  more year and two
\nyears’ rent,  amounting to  Rs 30,000\/-\t was  collected\t and
\ndeposited in the Court by the Receiver.\n<\/p>\n
     The  District  Court,  Trichur,  on  August  28,  1952,
\ndecreed the  suit for specific performance and mesne profits
\nat a  reduced rate of Rs. 15,000\/- per annum, instead of Rs.
\n30,000\/- per annum claimed by the plaintiff.\n<\/p>\n
     Against the decree of the Trial Court, two appeals were
\nfiled in  the High Court-one by defendant 3 and the other by
\ndefendant  2.\tThe  High  Court  allowed  the\tappeals\t and
\ndismissed the plaintiff’s suit by a judgment dated March 31,
\n1953.\n<\/p>\n
     Aggrieved, the  plaintiff filed  C.A.  129\/56  in\tthis
\nCourt. The  plaintiff’ appeal  was allowed  by this Court as
\nper its judgment and decree, dated April 22, 1958.\n<\/p>\n
     Since  a  good  deal  of  argument\t centers  round\t the
\nconstruction of\t this Court’s  decree, dated April 22, 1958,
\nit will\t be pertinent  to extract  here the material part of
\nthat decree.\n<\/p>\n
\t  “(a) That  the appellant  herein do deposit within
\n     thirty days  of the receipt in the decree of this Court
\n     the sum  of Rs.  85,000\/-\tin  the\t District  Court  of
\n     Trichur  and   that  on   the  aforesaid  amount  being
\n     deposited\tthe   said  District  Court  of\t Trichur  do
\n     forthwith\tgive   notice  thereof\tto  the\t respondents
\n     abovenamed and  that on  the aforesaid  amount  of\t Rs.
\n     85,000\/- being  deposited\trespondents  Nos.  2  and  3
\n     herein, namely  S. M. R. Solaiyappa Chettiar and George
\n     Thatil do within 30
\n64<\/span>
\n     days from the date of receipt of the notice of the said
\n     deposit execute  and register  a sale deed in favour of
\n     the  plaintiff  (Appellant)  in  respect  of  the\tsuit
\n     property.\n<\/p><\/blockquote>\n
\t  (b) ………………\n<\/p><\/blockquote>\n
\t  (c) That the respondents above-named do pay to the
\n     appellant the  cost incurred by him in the Court of the
\n     District Judge,  Trichur, in  Suit No.  183 of 1950 and
\n     the costs\tincurred by  him in  the former\t High  Court
\n     of………..\n<\/p><\/blockquote>\n
\t  (d) ………………\n<\/p><\/blockquote>\n
\t  (e) …. AND THIS COURT DOTH FURTHER DE CLARE that
\n     appellant shall be entitled to:\n<\/p><\/blockquote>\n
\t  (a) mesne  profits against such of the respondents
\n     (Is may  have been in possession of the property except
\n     during the\t period that the property was in the custody
\n     and management  of the  receiver appointed by the trial
\n     court;\n<\/p><\/blockquote>\n
\t  (b) the  net sum  collected by the Receiver during
\n     his management; and\n<\/p><\/blockquote>\n
\t  (c) credit  for all  such  sums  as  he  may\thave
\n     advanced to  the receiver\tunder the  direction of\t the
\n     Court for the management of property;
\n\t  AND THIS  COURT DOTH\tACCORDINGLY DIRECT  that the
\n     trial Court do hold an enquiry about the mesne pro fits
\n     and such  sums as\tmay be\tfound to  be due  on inquiry
\n     against the  second and third respondents in respect of
\n     the mesne\tprofits be  deducted from  the amount  to be
\n     deposited\tin  cash  in  the  Court  by  the  appellant
\n     aforesaid in  accordance with  clause (a) supra, and do
\n     direct the\t payment of the remaining amount, if any, to
\n     the third\trespondent (defendant 2) who is the assignee
\n     of the second respondent (defendant 1) pendent lite;”\n<\/p><\/blockquote>\n
\t\t\t\t\t (Emphasis supplied)
\n     On\t September   12,  1958,\t  the  plaintiff   filed  an
\napplication in\tthe District Court for execution of the said
\ndecree, dated  April 22, 1958″ in respect of all the reliefs
\nallowed thereunder.  After the decree-holder had deposited a
\nsum  of\t Rs.  85,000\/-,\t as  directed  in  the\tdecree,\t the
\nexecution  application\twas  eventually\t made  over  to\t the
\nSubordinate Judge, Trichur. As per the decree, the sale deed
\nwas executed  on March\t16″ 1959!  by the Court on behalf of
\ndefendants 1 and 2 in favour of
\n65<\/span>
\nthe  plaintiff\t and  the  possession  of  the\tproperty  in
\nconsequence thereof was delivered to him on March 29. 1959.<\/p><\/blockquote>\n
     Thereafter, the  plaintiff filed Miscellaneous Petition
\nNo. 229\/60 in the Trial Court. Before the Court, defendant 3
\non November  11, 1958,\tfiled objections  that\the  was\t not
\niliability for\tmesne profits, as he was never in possession
\nand occupation\tof the\tsuit property.\tHe further contended
\nthat his liability for mesne profits, if any. was limited to
\nthe period commencing from the date of notice of the deposit
\nin Court  of the  amount of  Rs. 85,000\/-  till the  date of
\ndelivery of  possession\t and  that  the\t plaintiff  was\t not
\nentitled to interest on mesne profits, or on costs by way of
\nrestitution. Defendant\t2 contended  that he was not liable,
\nfor mesne  profits as  he had  never been  in possession and
\nmanagement  of\tthe  suit  property,  and  that\t the  entire
\nliability, if  at all  any, for\t mesne profits\twas that  of
\ndefendant 3,  who had  been in\texclusive possession  of the
\nproperty.\n<\/p>\n
     On December  22, 1962,  the  court\t of  first  instance
\npassed orders  in respect  of mesne  profits, costs  etc. It
\nfound that  defendant 1,  2 and 3 were jointly and severally
\nliable to  the plaintiff  for a\t sum  of  Rs.  10,162.67  on
\naccount of  costs of  the Trial Court and the Supreme Court.
\nThe Court  further found  that defendant  2  was  separately
\nliable to  pay to  the plaintiff,  a sum  of  Rs.  11,941.63
\nconsisting of  three items, namely, Rs. l, 239.02 on account
\nof costs  recovered by\tdefendant 2  from decree-holder\t and
\npayable by  former with\t interest by way of restitution, Rs.
\n2,577.01 on  account of-costs  in the  High Court,  and\t Rs.
\n8125\/-on account  of mesne profits from the factory from the
\ndate of\t suit till  date of  Ex. D-3.  The aggregate! amount
\nunder these  two heads\tcame to\t Rs.  23,103.70,  which\t was
\nallowed to  be set  off against\t Rs. 85,000\/-  deposited  in
\nCourt by  the plaintiff\t and the  balance was directed to be
\npaid to the second defendant’s mother, his assignee.\n<\/p>\n
     Apart  from  the  sum  of\tRs.  10,162.67\tjointly\t and
\nseverally payable  by the  third and second respondents, the
\nDistrict Court found that the third defendant was separately
\nliable to  pay the  plaintiff  a  sum  of  Rs.\tl  57.086.81
\nconsisting of these items:\n<\/p>\n
     (a) Rs.  7,298.l0, by  way of restitution on account of
\ncosts recovered\t from the  decree-holder including  interest
\nthereon;\n<\/p>\n
     (b) Rs.  39,975.00 Rent  deposited and withdrawn by him
\ntogether with interest thereon;\n<\/p>\n
     (c) Rs.  1,177.00, costs  payable by him for the appeal
\nin the High Court; and
\n66<\/span>\n<\/p>\n
     (d) Rs.  1,08,636.71 net  mesne profits  payable by him
\nfrom April  1, 1963  to the  date of delivery of possession,
\nduring which  period, he  was found  to be in possession and
\nmanagement. After  giving credit  of a\tsum  of\t Rs.  48,321
\ndeposited by  the third defendant in Court on March 9, 1959,
\na net  sum of Rs. 1,08,765.81 was directed to be realised by
\nthe plaintiff from the estate of defendant 3 in the hands of
\nhis legal  representative (appellant in C.A. 466\/69). By the
\nsame order,  the Court\tdismissed Misc.\t Petition No. 229\/60
\nthat had  been filed  by the  plaintiff for determination of
\nthe extent of waste committed upon the property by defendant\n<\/p>\n
3.
\n     Aggrieved by that Judgment and Order, Lucy Kochivareed,
\nwife of defendant 3, as well as the plaintiff and the second
\ndefendant, preferred appeals in the High Court of Kerala. By
\na common  judgment, dated  August 6,  1968, the\t High  Court
\npartly\tallowed\t the  appeals  filed  respectively,  by\t the
\nplaintiff and  the legal representatives of defendant 3; but
\ndismissed the appeal (A.S. 248\/63) filed by defendant 2. The
\nHigh Court,,  inter alia,  affirmed the finding of the Trial
\nCourt that  the third  defendant was  in sole  and exclusive
\npossession  of\tthe  suit  property  during  the  period  in
\nquestion. The  Trial Court’s  findings with  regard  to\t the
\nquantum of  mesne profits  per year,  were not\tfound  satis
\nfactory. The High Court assessed the mesne profits at a flat
\nrate of Rs. 15,000\/- per year and determined the obligations
\nof the\tparties accordingly.  The High\tCourt further  found
\nthat the  second  and  third  defendants  were\tjointly\t and
\nseverally liable  to pay  Rs. 10,200\/-\tby way of costs, and
\nthe second defendant alone was liable to pay Rs. i 1,000\/ by
\nway of\trestitution, costs  in\tthe  High  Court  and  mesne
\nprofits to  the plaintiff,  and that  the aggregate  of\t Rs.
\n21,200\/-  be  set  off\tagainst\t the  sum  of  Rs.  85,000\/-
\ndeposited by  the plaintiff  and the  balance be paid to the
\nmother of defendant 2.\n<\/p>\n
     Aggrieved by the judgment, dated August 8, 1968, of the
\nHigh Court, Lucy Kochivareed, wife of the deceased defendant
\n3, has\tfiled Civil  Appeal 466 of 1969; while the plaintiff
\nhas preferred Civil Appeal No. 2375 of 1969.\n<\/p>\n
     Both the  appeals will  be disposed  of by\t this common
\njudgment.\n<\/p>\n
     We will first take up Civil Appeal 466 of 1969 filed by
\nthe widow of defendant 3.\n<\/p>\n
     The main  contention of  Mr. K.  S. Ramamurthy, learned
\ncounsel for the appellant (Luci Kochivareed), is that if the
\ndecree, dated  April 22,  1958, passed by this Court in C.A.
\n129\/56 is properly construed in the
\n67<\/span>
\nlight of  the material on record and the law on the subject,
\nthen three  consequences inevitably follow:\n<\/p>\n
     (i) Both defendant 2 and defendant 3 would be deemed to
\nbe in  possession of  the suit property during the period in
\nquestion. The  possession of  defendant 2  was juridical  or
\nlegal possession  of an owner, he being the purchaser of the
\nproperty from  defendant l; while that of defendant 3 was on
\nactual permissive  possession with  the consent of defendant\n<\/p>\n
2. Defendant  2 and  defendant 3  being in  the position  of
\njoint-tort-feasors would be jointly and severally liable for
\nmesne profits or compensation.\n<\/p>\n
     This being\t the case, the plaintiff was bound to suffer
\na set  off to the purchase price (Rs. 85,000\/-) deposited by
\nhim, against  his claim\t for mesne profits against defendant\n<\/p>\n
3. But\tafter the  decree of  this Court,  the plaintiff  in
\npursuance of  a\t collusion  between  him  and  defendant  2,
\nallowed the  High Court\t to cancel  the\t security  given  by
\ndefendant 2  for withdrawal  of Rs.  62,900\/-  out  of\tthe
\npurchase price deposited by the plaintiff. The plaintiff was
\nthus precluded\tby his\tconduct from  claim-  in  that\tmuch
\namount from  defendant\t3.  After  setting  off\t the  entire
\ndeposit of  Rs. 85,000\/-,  defendant 3\twill be liable only,
\nfor the\t balance of the mesne profit, jointly with defendant\n<\/p>\n
2.\n<\/p>\n
     (ii)  The\t plaintiff’s  right  to\t possession  of\t the
\nproperty under\tthe decree  accrued when  he  deposited\t the
\nprice in Court and thereafter obtained the conveyance in his
\nfavour on March 16, 1959. The possession of defendants 2 and
\n3 as  against the  plaintiff became  wrongful only  from the
\ndate on\t which the conveyance was executed in his favour, at
\nany rate  on the date (September 12, 1958) on which he fully
\ndeposited the price in Court.\n<\/p>\n
     (iii) The\tperiod for which the mesne profits have been
\nawarded., is  to be  restricted to the one permissible under
\nOrder XX Rule 12(1) (c) of the Code of Civil Procedure. Such
\nperiod in  the light  of this  provision would\tbe  the\t one
\ncommencing from\t the date  the institution  of the  suit and
\nending on the expiration of three years from the date of the
\ndecree of  the Trial  Court. The  expression  “the  decree”,
\noccurring in the aforesaid clause (according to the counsel)
\nmeans the  decree of  the Trial\t Court. In  other words, the
\nmaximum period\tfor which  mesne profits  can be awarded-and
\nwould be deemed to have been awarded-is three years from the
\ndate of\t the decree of the Trial Court; and the Courts below
\nwere wrong  in awarding\t mesne profits\tfor a period of more
\nthan six years, commencing from the date of the institution
\nof the\tsuit till  the delivery\t of possession in accordance
\nwith the decree of this Court to the plaintiff.\n<\/p>\n
68<\/span><\/p>\n
     Upon the  above premises, Mr. Ramamurthy maintains that
\nthe plain  tiff will  not be  entitled to  any mesne profits
\nbecause his  right to possession did not accrue within three
\nyears of  the date  of the decree of the Trial Court. Such a
\nright, according  to the  counsel, accrued  to the plaintiff
\nonly on\t April 22,  1958 when  his amended suit for specific
\nperformance and\t possession and\t future\t mesne\tprofits\t was
\ndecreed. In  the alternative,  as already  noticed,  counsel
\nsubmits that  mesne profits  could not\tbe awarded  for\t any
\nperiod prior  to the  date (September 12, 1958) on which the
\nplaintiff  deposited   the  price,   because  his  right  to
\npossession accrued on that date and not earlier
\n     In support\t of his\t contentions,  Shri  Ramamurthy\t has
\ncited a\t decision of  this Court  in  Chitturi\tSubbanna  v.
\nKudapa Subbanna & Ors.<\/a>(l) He has also referred to some other
\nrulings,  wherein   some  general   principles\t have\tbeen
\nenunciated as to who can be made liable for mesne profits.\n<\/p>\n
     On the  other hand,  Mr. Govindan Nair, learned counsel
\nfor the plaintiff, submits that the. decree” dated April 22,
\n1958 of\t this Court  is crystal-clear. There is no ambiguity
\nin it.\tRead in\t the light  of\tthis  Court’s  judgment,  it
\nunmistakably shows  that whosoever,  out of  the  defendants
\nwas\/were in actual possession, would be liable for the mesne
\nprofits from  the date\tof the\tsuit till  the\tdelivery  of
\npossession. It\tis pointed out that in the courts below, the
\npositive stand taken by defendant 3 was that he was never in
\npossession of  the Suit\t property  and\ttherefore,  was\t not
\nliable for mesne profits. It was never the case of defendant
\n3 that\the was\tin derivative  possession under defendant 2.
\nCounsel submits\t that defendant\t 3 should  not be allowed to
\ntake a\tstand diametrically  opposed to the one taken by him
\nin the courts below. It is further submitted that the decree
\nof this\t Court was  final decree so far as it laid down that
\nthe liability  for the\tmesne profits  shall be fixed on the
\nbasis of  the defendant\t found in  actual possession  of the
\nsuit property.\n<\/p>\n
     Before dealing  with the  contentions canvassed on both
\nsides,\tit   will  be\tprofitable  to\tnotice\tthe  general
\nprinciples relating to the liability formesne profits.\n<\/p>\n
     Mesne profits  being in  the  natural  of\tdamages,  no
\ninvariable rule\t governing their  award\t and  assessment  in
\nevery case,  can be  laid down\tand “the  Court may mould it
\naccording to  the justice  of the  case”. Even so, one broad
\nbasic principle governing the liability for mesne profits is
\ndiscernible  from   Section  2(12)  of\tthe  Code  of  Civil
\nProcedure which\t defines  ‘mesne  profits’  to\tmean  “those
\nprofits which  the person in wrongfil possession of property
\nactually received or might with ordinary
\n     (1) [1965] 2 S.C.R. 661.\n<\/p>\n
69<\/span><\/p>\n
diligence have\treceived therefrom together with interest on
\nsuch  profits,\t but  shall   not  include  profits  due  to
\nimprovements made  by the  person in  wrongful\tpossession”.
\nFrom a\tplain reading  of this\tdefinition, it is clear that
\nwrongful possession  of the defendant is the very essence of
\na claim\t for mesne  profits and\t the very  foundation of the
\ndefendant’s  liability\t therefor.  As\ta  rule,  therefore,
\nliability to  pay mesne\t profits goes with actual possession
\nof the\tland. That  is to  say,\t generally,  the  person  in
\nwrongful possession  and enjoyment of the immovable property
\nis liable  for mesne  profits. But,  where  the\t plaintiff’s
\ndispossession, or  his being  kept out\tof possession can be
\nregarded as  a joint  or concerted  act of  several persons,
\neach of\t them who participates in the commission of that act
\nwould be  liable for mesne profits even though he was not in
\nactual possession  and the  profits were received not by him
\nbut by some of his confederates.\n<\/p>\n
     ln such  a case  where the\t claim for  mesne profits is
\nagainst\t several   trespassers\twho  combined  to  keep\t the
\nplaintiff out  of possession;  it is  open to  the Court  to
\nadopt either  of the  two courses. It may by its decree hold
\nall such  trespassers jointly and severally liable for mesne
\nprofits,  leaving  them\t to  have  their  respective  rights
\nadjusted in a separate suit for contribution; or, it may, if
\nthere is  proper material before it, ascertain and apportion
\nthe liability  of each\tof them on a proper application made
\nby the defendant during the same proceedings.\n<\/p>\n
     Another principle, recognised by this Court in Chitturi
\nSubbanna v.  Kudapa Subbanna<\/a>  (ibid) ‘is that a decree under
\nOrder XX  Rule 12  of the Code, directing enquiry into mesne
\nprofits, howsoever  expressed, must  be construed  to  be  a
\ndecree\tdirecting   the\t enquiry   in  conformity  with\t the
\nrequirements of\t Rule 12(1)(c), so that the decree-holder is
\nnot entitled  to mesne profits for a period (commencing from
\nthe date  F of the institution of the suit) extending beyond
\nthree years from the date of the preliminary decree.\n<\/p>\n
     Again, possession\tthrough another,  such as  a tenant,
\nmay be\tsufficient to  create liability for mesne profits if
\n‘such possession is wrongful.\n<\/p>\n
     We will  now deal\twith the contentions advanced by Mr.
\nRamamurthy, in the light of these principles.\n<\/p>\n
     The first\targument, as  already noticed,\tis that both
\ndefendants 2  and 3  were in possession of the suit property
\nduring the  period in  question. It  is contended  that\t the
\npossession of  defendant 2  was the  legal possession  of an
\nowner while  that of  defendant 3 derivative possession of a
\nlessee or licensee under the former.\n<\/p>\n
70<\/span><\/p>\n
     A perusal\tof the\tdecree dated April 22, 1958, of this
\nCourt, extracted  in a\tforegoing  part\t of  this  judgment,
\nshow’s that  it was a composite decree, partly final, partly
\npreliminary. It\t was final  in so  far\tas  it\tgranted\t the
\nreliefs of specific performance and possession on deposit of
\nthe price  by the  plaintiff. It was preliminary inasmuch it
\ndirected an  inquiry with  regard to the assessment of mesne
\nprofits, and as to who out of the defendants was\/were liable
\nfor payment  of those mesne profits. But, it laid down in no
\nuncertain terms\t that only  such of  the defendants would be
\nliable for  mesne profits “as may have been in possession of
\nthe  property”.\t Construed  in\tconformity  with  the  legal
\nprinciples enunciated  above, this  direction in the decree,
\nmeans that  only the defendant or defendants found in actual
\npossession and enjoyment of the property would be liable for
\nmesne profits.\n<\/p>\n
     In the  courts below,  at no stage, defendant 3 took up
\nthe position  that he  was in  derivative possession  of the
\nproperty  under\t  defendant  2.\t On  the  contrary,  in\t his
\nobjection-petition  filed   before  the\t District  Court  on
\nNovember 11, 1958, defendant 3 emphatically asserted that he
\n“is not liable for mesne profits for the suit property as he
\nwas never  in pos  session  and\t occupation  of\t the  same”.
\nDefendant 3  further vehemently\t pleaded that  it was  never
\nintended at  any time  that he\t(defendant 3)  “should be  a
\nlessee of  the property nor was he a lessee at any time”. In
\npara 3 of his petition, defendant 3 further pleaded that the
\npurchase of  the factory  was made in favour Of defendant 2,
\nwith money  advanced by him (defendant 3), and the intention
\nthen  was  that\t the  suit  property  should  be  worked  by
\ndefendant 2 with funds advanced by defendant 3 who should be
\n“recouped from\tthe profits  accrued from  the\tproper-y  or
\notherwise in  respect of  the purchase money advanced by him
\nas also the advances for the working expenses”. In paragraph
\n5, he  further pleaded\tthat “in any event he cannot be held
\nliable for  any amount\tmore than  what is stipulated in the
\nlease deed (EX. I) in favour of Neelakantha Iyer”.\n<\/p>\n
     There is  not even\t a whisper  in\tthe  pleadings\tthat
\ndefendant 2  and defendant  3  were  joint-tort-feasors\t and
\ntherefore, jointly and severally liable for mesne profits.\n<\/p>\n
     The plea now pressed into argument by Mr. Ramamurthy is
\nthus a\tcomplete somersault  of the  position that  had been
\ntaken in the courts below.\n<\/p>\n
     The  Court\t of  first  instance  after  an\t exhaustive.
\nconsideration  of   the\t overwhelming\tevidence,  oral\t and
\ndocumentary, on\t record reached\t the finding that ever since
\nMarch 5, 1951, defendant 3 was, while defendant
\n71<\/span>
\n2 was  not, in\tactual control, management and possession of
\nthe suit  property, and\t therefore, in\tterms of  the decree
\ndated April  22, 1958 of this Court, defendant 3 alone would
\nbe liable  for mesne profits of the property. In appeal, the
\nHigh Court  found that\t“the Court below was perfectly right
\nin holding  that the 3rd defendant was in sole and exclusive
\npossession during  the period in question and it is idle for
\nhim 3  to pretend  otherwise”. Indeed,\tthe third  defendant
\nhimself had repeatedly admitted in various documents that he
\nwas in possession. In his application, Ex 77(a), made in the
\nCourt of  first instance,  on March  7, 1951,  the defendant
\nadmitted  that\t he  was   in  possession  in  pursuance  of
\nassignment of  lease made. in his favour by Neelakantha Iyer
\non March 5, 1951. This lease has been found by this Court to
\nbe a  sham transaction.\t Further, defendant  3 on  March 21,
\n1951, executed\ta lease\t in favour of the Receiver appointed
\nby the\tCourt. In  this cease  also, he admitted that he had
\nbeen in\t possession of the property since March 5, 1951. The
\nlease executed\tby defendant  3 in  favour of  the  Receiver
\nensured for  a period of two years on a yearly rental of Rs.
\n15,000\/- and  he deposited  Rs. 30,000\/’- therefor as rental
\nin Court. Then, the Bank accounts of the factory (except for
\na short\t period from  March 25,\t 1953 to  November 11, 1954)
\nwere throughout in the name of the third defendant as lessee
\nthereof.\n<\/p>\n
     We have  absolutely  no  reason  to  differ  from\tthis
\nconcurrent finding  of\tthe  courts  below  that  the  third
\ndefendant was  in sole, actual possession and control of the
\nsuit property  from March  3, 1951,  when  he  obtained\t the
\nalleged\t assignment   of  the\tlease  in  his\tfavour\tfrom
\nNeelakantha Iyer.  In terms  of the aforesaid decree of this
\nCourt, therefore,  defendant 3\talone is  liable  for  mesne
\nprofits in  respect of\tthe period  he\twas  in\t p(excepting
\n(excepting the period during which the property was under he
\nmanagement of the Court Receiver).\n<\/p>\n
     As regards\t the appellant’s  contention that the amount
\ndeposited by  the plaintiff  towards the  price should\thave
\nbeen set  off against the liability of defendant 3 for mesne
\nprofits, it  may be  observed that,  there is nothing in the
\ndecree, dated April 22, 1958, of this Court which say’s that
\nsuch a\tset off\t should be  allowed.  On  the  contrary,  it
\nallowed deduction of the amounts found due against defendant
\n1 and  defendant 2  from the  deposit of  Rs. 85,000\/- to be
\nmade  by  the  plaintiff  towards  the\tprice,\tand  further
\ndirected that  after such  deduction, the  balance  of\tsuch
\ndeposit made by the plaintiff” if any, shall be paid “to the
\nthird 1\t respondent (defendant 2) who is the assignee of the
\n‘second respondent (defendant l ) pendente lite.”\n<\/p>\n
72<\/span><\/p>\n
     Assuming arguendo,\t that both  defendants 2 and 3 were,
\nliable for  mesne profits  jointly and severally, then also,
\nthe plaintiff could, at his option, recover the whole of the
\namount of  mesne profits  from either  of them; and how such
\ninter se  liability of\tthe defendants was to be adjusted or
\napportioned, was  a matter  between the defendants only. The
\nplaintiff was  not bound  to suffer  a set  off in favour of
\ndefendant 3,  merely because  defendant 2  or  his  assignee
\nwithdrew  the  price  deposited\t by  the  plaintiff  without
\nfurnishing any security for its refund or adjustment towards
\nthe liability  of defendant  3,\t there\tbeing  no  evidence,
\nwhatever, on  record to\t show that  such withdrawal  was the
\nresult of  any collusion or conspiracy between the plaintiff
\nand defendant 2 against defendant 3.\n<\/p>\n
     Assuming  further,\t for  the  sake\t of  argument,\tthat
\ndefendant 2  and defendant 3 were’ both acting in concert to
\nkeep the  plaintiff out of pos session, it was not necessary
\nfor the\t courts below  to decide  the issue  with regard  to
\napportionment  of   liability  and  its\t adjustment  between
\ndefendants 2  and 3.  Indeed, the  adoption of such a course
\nwould have  militated against  the finding  that defendant 3
\nalone was  in exclusive\t possession and\t control of the suit
\nproperty ever since March 5, 1951.\n<\/p>\n
     We therefore,  negative the  first\t contention  of\t the
\nappellant.\n<\/p>\n
     This takes\t us to\tthe second  and third points pressed
\ninto argument  by Mr.  Ramamurthy. It  is to  be noted\tthat
\ndefendant 3  entered into  possession of  the suit  property
\nunder an  assignment of\t sham lease  from Neelkantha Iyer on
\nMarch 5,  1951 during  the pendency  of the plaintiff’s suit
\nwhich was  institute`d on August 25, 1950. The plaintiff had
\ndeposited Rs.  50,000\/- some  time after the presentation of
\nthe plaint Under the agreement for sale, dated May 22, 1950,
\nmade by\t defendant 1  in favour\t of the plaintiff, the total
\nsale consideration was fixed at Rs. 90,003\/-. Out of it, Rs.
\n5,003\/- had  been paid to defendants on the very date of the
\nagreement.  It\twas  further  stipulated  that\tout  of\t the
\nbalance, Rs.  55.000\/-\twould  be  paid\t by  the  plaintiff-
\npurchaser at  the time\tof the registration of the sale deed
\nwhich was  to be  executed and\tregistered on or before July
\n15, 1950.  It was  further stipulated that on payment of the
\nfurther sum of Rs. 50,000\/-, the plaintiff would be entitled
\nto be  put in  possession of  the suit\tproperty. Thus, when
\ndefendant 3  entered into  possession, first, under the garb
\nof an  assignee of  a sham  lease from Neelakantha Iyer, and
\nthen further  purchased the  property with  his own funds in
\nfavour of defendant 2, pendente lite, he was fully conscious
\nthat he\t was purchasing\t a litigation.\tHis possession was,,
\ntherefore,  wrongful   qua  the\t  plaintiff  from  its\tvery
\ninception
\n73<\/span>
\n     The material part of Rule 12(1) of Order XX of the Code
\nof Civil procedure, provides:\n<\/p>\n
\t  “Where a suit is for the recovery of possession of
\n     immoveable property  and for rent or mesne profits, the
\n     Court may pass a decree-\n<\/p><\/blockquote>\n
\t  (a) for the possession of the property;\n<\/p><\/blockquote>\n
\t  (b) ……………….\n<\/p><\/blockquote>\n
\t  (ba) ………………\n<\/p><\/blockquote>\n
\t  (c)\tdirecting an  inquiry as  to rent  or  mesne
\n\t       profits from  the  institution  of  the\tsuit
\n\t       until-<\/p><\/blockquote>\n
\t       (i)  the\t delivery   of\tpossession   to\t the
\n\t\t    decree-holder,\n<\/p>\n
\t       (ii) the\t expiration  of\t possession  by\t the
\n\t\t    judgment  debtor   with  notice  to\t the
\n\t\t    decree-holder through the Court, or\n<\/p>\n
\t       (iii)the expiration  of three  years from the
\n\t\t    date  of  the  decree,  whichever  event
\n\t\t    first occurs.” D
\n     Mr. Ramamurthy  argued, if\t we may say so with respect,
\nsomewhat inconsistently,  that the  word  “decree”  in\tsub-
\nclause (iii)  of clause\t (c) of\t the aforesaid\trule  12(1),
\nmeans the  decree for possession and mesne profits which the
\ntrial court  ought to  have passed, and that in this view of
\nthe matter,  the period\t of three  years mentioned  in\tsub-
\nclause (iii)  will be counted from August 28, 1952, the date
\nof the\ttrial court’s  decree, whereby\tmesne profits at the
\nreduced rate  of Rs.  15,000\/- instead\tof Rs.\t30,000\/- per
\nannum claimed  by the  plaintiff, were awarded. In that view
\nof the\tmatter, according  to the counsel, the plaintiff was
\nnot entitled under the law to get a decree for mesne profits
\nbeyond August  27, 1955.  It is\t pointed out  that since the
\nplaintiff  had,\t as  a\tresult\tof  the\t acceptance  of\t the
\ndefendants’ appeal  and dismissal  of his  suit by  the High
\nCourt, withdrawn  the deposit  of Rs. 50,000\/- on August 19,
\n1953 and he had not redeposited the amount until February g,
\n1959, he  was  not  then  entitled  to\tpossession  and,  in
\nconsequence, to any mesne profits during this period.\n<\/p>\n
     The argument  is certainly\t ingenious,  but  untenable,
\nbeing founded  on fallacious  premises. The  period of three
\nyears mentioned\t in sub-clause\t(iii) of  clause (c) of Rule
\n12(1) is  to be computed from the date of the decree of this
\nCourt, i.e.  from April\t 22, 1958  and it will expire on the
\ndate on\t which possession  was delivered  or relinquished by
\nthe defendant  in favour  of the  decree-holder pursuant  to
\nthat decree.  In other\twords, the  decree mentioned in sub-
\nclause
\n6-196SCI\/79
\n74<\/span>\n<\/p>\n
(iii) of  the aforesaid\t clause (c),  would be the appellate
\ndecree, dated  April 22,  1958, of this Court. The period of
\nthree years  mentioned in the said sub-clause is, therefore,
\nto be  reckoned fro`m  April 227  1958. The words “whichever
\nevent first  occurs” in\t sub-c1ause  (iii)  imply  that\t the
\nmaximum\t period\t for  which  future  mesne  profits  can  be
\nawarded, is  three years  from the  date of  the decree\t for
\npossession and\tmesne profits,\tfinally passed.\t The  courts
\nbelow, therefore,  while holding that defendant 3 was liable
\nto  pay\t mesne\tprofits\t for  a\t period\t of  about  6  years
\ncommencing from\t March\t5,  1951\/March\t21,  195l  till\t the
\ndelivery of  possession in  September, 1958 (less the period
\nduring which  the property  was under  the management of the
\nReceiver), were\t acting in  conformity with  the law and the
\nterms of the decree, dated April 22, 1958, of this Court.\n<\/p>\n
     We, therefore, reject these contentions, also.
\n     Another contention canvassed by Mr. Ramamurthy was that
\nthe courts  below  have\t wrongly  disallowed  deduction\t for
\ninterest on the deposit of Rs. 50,000\/-, which the plaintiff
\nhad withdrawn  on August  19, 1953  and had  redeposited  on
\nFebruary 9, 1959. It appears to us that in all fairness, the
\ndefendant is  entitled to  deduction for  interest  for\t the
\nperiod from  August 19,\t 1953 to February 9, 1959 on the sum
\nof Rs.\t50,000\/-, which,  at ,6\t per cent  per annum,  after
\ndeducting the  interest for  the  period  during  which\t the
\nproperty  was\tunder  the   management\t of   the  Receiver.
\n(According to  the agreed  calculations made the counsel for
\nthe parties  it works  out to Rs. 14,000\/- approximately. We
\nsee no\treason why  deduction of  this amount be not allowed
\nfrom the mesne profits assessed against defendant 3.\n<\/p>\n
     We will now take up Civil Appeal No. 2375 of 1969 filed
\nby the plaintiff
\n     Mr. Govindan  Nair, learned  counsel for the plaintiff-
\nappellant. has contended-\n<\/p>\n
     (i) that  mesne profits  ought to\thave been awarded at
\nthe Rate  of Rs.  25,000\/- per\tannum. The High Court was in
\nerror in awarding the same at the rate of Rs. 15,000\/-;\n<\/p>\n
     (ii) that\tthe High Court was not justified in reducing
\nthe rate  on interest  from 6  per cent per annum awarded by
\nthe Trial Court to 4 per cent per annum;\n<\/p>\n
     (iii) that interest at 6 per cent per annum was rightly
\nawarded by  the court  of first\t instance on  the sum of Rs.
\n30,000\/-, which\t was two  years rental\tpaid by defendant 3,
\nunder the  lease taken from the Receiver for the period from
\nAugust 19,  1953 to March 9, 1959, and the High Court was in
\nerror in disallowing that interest; and
\n75<\/span>\n<\/p>\n
     (iv) that\tthe  Courts  below  were  not  justified  in
\ndenying costs  to the  plaintiff in  the inquiry as to mesne
\nprofits or in appeal arising therefrom.\n<\/p>\n
     We will deal with these contentions ad seriatim.
\nContention (i):\n<\/p>\n
     In this  connection, Mr.  Nair drew  our  attention  to
\nExhibits D-8  to D-15, which are Balance Sheets and Profit &
\nLoss Accounts  of the  Sivakami Tile  Works, relating to the
\nperiod from  March 31,\tl953  to  November  S,\t1958.  These
\ndocuments  were\t prepared  at  the  instance  of  the  third
\ndefendant for  the purposes  of his  Income-tax returns. The
\nHigh Court found that these Balance Sheets and Profit & Loss
\nAccounts prepared  for Income-tax  puropses were  suspicious
\ndocuments and  by themselves  were not\tproof of the profits
\nderived. Mr.  Nair has\tno quarrel  with this  finding.\t He,
\nhowever, contended  That the High Court ought to have worked
\nout the\t real profits by taking into account the quantity of
\nclay  purchased\t  according  to\t these\tdocuments.  In\tthis
\nconnection, it\tis submitted  that according to the evidence
\nproduced on  the side of the plaintiff about five candies of
\nclay are  required for\tproducing 1000\tsmall tiles and even
\naccording to  the evidence of the second defendant as C.P.W.
\n2, 51 to 6 candies are required for 1000 small tiles.\n<\/p>\n
     We are  not impressed  by this argument. The High Court
\nhas fully  considered the  evidence produced  on the side of
\nthe plaintiff.\tIt noted  that the  plaintiff, also, had not
\nproduced any  cogent evidence  to show what were the profits
\nearned by  him by  working the\tfactory in  dispute for\t the
\nperiod of one year preceding the date of his examination. By
\nthe time  plaintiff appeared in the witness-box, he had been
\nworking this factory for about one year.\n<\/p>\n
     In the alternative, Mr. Nair submitted that even during
\nthe period  of two  years when\tthe Receiver  was there\t and
\ndefendant 3 worked the factory as a lessee under the former,
\nhe had\tmade a\tprofit of  Rs. 22,000\/-.  Our attention has,
\nalso been  drawn to  the document (Ex. D-8), that the income
\nfor the\t first year  ending 1952 was Rs. 20,000\/-. The point
\npressed into argument is that the highest profit made by him
\naccording to these Balance Sheets and Profit & Loss Accounts
\nduring any  year by defendant 3, should be taken as the rate
\nfor calculating the mesne profits.\n<\/p>\n
     The contention  does not appear to tenable. Once it was
\nfound that  these Balance  Sheets and Profit & loss Accounts
\nwere  not   reliable,  nor  the\t evidence  produced  by\t the
\nplaintiff, the\tonly reliable  evidence left on the file was
\nthe rate at which the factory was leased out
\n76<\/span>
\nby the\tReceiver to  defendant 3.  When the  lease  for\t the
\nsecond year  was granted to defendant 2 by the Receiver on a
\nrental of  Rs. 15,000\/-,  the plaintiff should have objected
\nthat the rent was less or he could himself take the lease on
\npaying higher rent. The High Court was, therefore, not wrong
\nin holding  that this  rent fixed under the lease granted by
\nthe Receiver  represented  the\treal  rental  value  of\t the
\nfactory during\tthe year  in question  and in the absence of
\nany  other  reliable  evidence\tfor  assessing\tthe  profits
\nactually earned\t or which,  with due  diligence, could\thave
\nbeen earned the mesne profits may reasonably be fixed at Rs.
\n15,000\/- per annum.\n<\/p>\n
We, therefore, negative the first contention of Mr. Nair,
\nContention (ii):\n<\/p>\n
     The Trial\tCourt had  awarded interest at the rate of 6
\nper cent  per annum on the mesne profits assessed by it. The
\nHigh Court  reduced that  rate\tto  4  per  cent,  with\t the
\nobservation that  having regard\t to all the circumstances of
\nthe case,  including that  the plaintiff  had the use of the
\nsum of Rs. 85,000\/- which he was to pay towards the price of
\nthe property  a rate  of 4  per\t cent  per  annum  would  be
\nreasonable and just.\n<\/p>\n
     Even Mr.  Ramamurthy has  not been able to support this
\nreduction in the rate of interest. It was after a long drawn
\nout litigation\tthat the  plaintiff got\t possession  of\t the
\nproperty. The  Trial Court,  therefore rightly\tawarded\t the
\ninterest at the rate of 6 per cent per annum.\n<\/p>\n
     We, therefore,  accept this  contention and direct that
\ninterest as part of the mesne profits assessed in this case,
\nshall be  payable at  the rate\tof 6 per cent per annum upto
\nMarch 29, 1959 when possession was delivered in pursuance of
\nthe decree  of this  Court, to\tthe plain  tiff and  further
\ninterest at  6 per  cent per annum on the outstanding amount
\nshall be payable till the date of payment.\n<\/p>\n
Contention (iii):\n<\/p>\n
     A sum  of Rs. 30,000\/-, being the rent collected by the
\nReceiver from  the third  defendant, was deposited in Court.
\nThis amount  was withdrawn  by the third defendant on August
\n19, 1953 following the dismissal of the plaintiff’s suit, by
\nthe High  Court. When  the plaintiff’s\tappeal succeeded  in
\nthis Court  and a  decree was  passed in  his favour by this
\nCourt, then defendant 3 redeposited the sum of Rs. 30,000\/-,
\nonly on\t March 9, 1959. The Trial Court had awarded interest
\nat 6  per cent\tper annum on this amount of Rs. 30,000\/- for
\nthe period  from August\t 19, 1953,  the date  on  which\t the
\ndefendant withdrew  that deposit,  until March\t9, 1959, the
\ndate when  he  redeposited  the\t sum.  The  High  Court\t has
\ndisallowed interest on this account
\n77<\/span>
\nfor the\t aforesaid period  on the  ground “that\t the Supreme
\nCourt does not award that”.\n<\/p>\n
     We\t are   unable  to  agree  with\tthis  reasoning.  It
\noverlooked the fact that interest on the sum of Rs. 30,000\/-
\nwas being  claimed under  Section 144  of the  Code of Civil
\nProcedure, by  way of restitution. Section 144 in terms says
\nthat for  the purpose of the restitution, the Court may make
\nany orders,  including orders  for the\tpayment of interest,
\ndamages, compensation  and mesne  profits which are properly
\nconsequential on  variation or reversal of the decree. There
\nis nothing  in the  decree, dated  April 22,  1958, of\tthis
\nCourt which  expressly\tor  by\timplication  prohibited\t the
\npayment of  interest on this sum, by way of restitution. The
\nTrial Court  had rightly allowed interest on amount for this
\nperiod at  6 per  cent per  annum, and\twe restore  the same
\ndirection.\n<\/p>\n
Contention (iv):\n<\/p>\n
     The argument is that costs have been unfairly denied to
\nthe plaintiff  by the  Courts below.  We do  not agree.\t The
\nCourts below could not have been oblivious of’ the fact that
\ndefendant 3  has since died and the respondent is his widow.
\nWe, therefore,\tdo not want to interfere with the discretion
\nof the Courts below in the matter of costs.\n<\/p>\n
     For  the\tforegoing  reasons,  we,  partly  allow\t the
\nplaintiff’s appeal  (Civil Appeal  No. 2375  of 1969) to the
\nextent indicated  above, with  proportionate costs.  We will
\ndismiss the defedant’s appeal (Civil Appeal No. 466 of 1969)
\nexcept to  the extent  that the defendant shall be allowed a
\nset off\t in the\t sum of\t Rs. 14,000\/-, being the interest on
\nthe sum\t Or Rs. 50,000\/- for the period from August 19, 1953
\n(the date of the withdrawal of the deposit by the plaintiff)
\nto  the\t date  when  he\t redeposited  it.  Interest  on\t the
\noutstanding amount  at 6 per cent per annum shall be payable
\ntill the  date of  payment. In\tCivil Appeal  466  of  1969,
\nhowever, the  parties will  bear their\town  costs  in\tthis
\nCourt.<\/p>\n
\n\t\t\t\t\t  CA 2375\/69 allowed\n\t\t\t\t\t  in part. CA 466\/69\nS.R.\t\t\t       dismissed with modifications.\n78<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India L. Kochivareed vs P. Meriappa Gounder And Ors on 7 February, 1979 Equivalent citations: 1979 AIR 1214, 1979 SCC (3) 150 Author: R S Sarkaria Bench: Sarkaria, Ranjit Singh PETITIONER: L. KOCHIVAREED Vs. RESPONDENT: P. MERIAPPA GOUNDER AND ORS. DATE OF JUDGMENT07\/02\/1979 BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH TULZAPURKAR, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-174757","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nL. Kochivareed vs P. Meriappa Gounder And Ors on 7 February, 1979 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/l-kochivareed-vs-p-meriappa-gounder-and-ors-on-7-february-1979\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"L. Kochivareed vs P. 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