Mesne profits

Mesne profits

Once in a while, in the arena of law, we might have come across the term Mesne profits. But what does it means? Are this some kinds of profits we derive? Yes. Are these as the “Mesne” name suggests are related to proprietary. Studying it exhaustively and etymologically, this term “Mesne” bears root origin from Scotland. During the Middle English era the term “menske” held the meaning of honour. The Old Norse holds meaning of “mennska” for humanity and akin to the old English man.[1] As a whole Mesne means an honorary or proprietary interest which can be considered as a valid or genuine interest and if read together, the term Mesne profits bears the meaning of genuine interest profits which a person deserves.

Section 2(12) of C.P.C bearing elementary language defines the term. “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.”

Like every provision of every statute is made by virtue of legislators having some specific purpose, this provision is based on the intent of legislators to protect the interest of person for his property. When a person is deprived of the right to possess his property, then the amount of delay that it takes for restoration of such property must also be considered. The amount of delay being accommodative in its nature of all the profits incurred by the wrongful possessor of such property must also be considered. These can be termed as compensatory profits paid to the possessor along with actual restoration of the property. It has been observed by the Supreme Court that the object of awarding a decree for Mesne profits is to compensate the person who has been kept out of possession and deprived of enjoyment of his property even though he was entitled to possession thereof.[2]

The general rule on which this concept is based is that a person in wrongful possession and enjoyment of immovable property is liable for Mesne profits.[3] The subject matter for Mesne profits is not to be determined since on examination of language of section 2(12) it is very apparent that the subject matter for Mesne profits is only immovable property.

The liabilities which may arise for immovable property may be foreclosure against the decree, or redemption after a decree or against a reluctant tenant and even against the trespasser. The test which is to be accounted for is that what profits are being incurred by defendants gained or might have gained reasonably from such property by wrongful possession and not what plaintiff has lost being out of possession of such property.[4] For example, where a suit is filed for possession and title of a property which is given for rent, the mense profits are to be provided by not for the value of property but for the rents which were due. It has also been considered that this does not mean that the tenant could derive maximum rents in cases like these. The standard amount of rent will only be provided to the plaintiff provided such amount is relevant when such premises of tenancy were lent out afresh. At the same time, the rule of standard amount of rent may be derived, but is not decisive. [5]Therefore to ascertain the assessment of these profits, being in nature of damages, it varies from case to case since no liquidated damages can be affixed in cases for profits arising from immovable property. It has been held by Supreme Court that the court may mould it according to the justice of the case since it varies from case to case.[6] But it should be deduced in realm of gross profits.[7]

It must also be considered that the cases wherein the person is being dispossessed by several persons, every such person shall be liable for Mesne profits. The court in such cases may hold all the trespassers jointly and severally liable, leaving them to have their respective rights adjusted in a separate suit for contribution; or, may ascertain and apportion the liability of each of them.[8]

There are provisos attached to the section as well which is the “…profits due to improvements made by the person in wrongful possession”[9] This provides a justifiable and if deduced critically bears a lacunae for the favour of person being dispossessed of. At one point where it provides an equitable interest for the positive act of improvement done by the person in wrongful possession, it in fact creates a defence by shedding majority of profits under the umbrella of profits incurred from improvements. In such circumstances the court has to apply its judicial mind in being decisive.

The last but an important factor in deducting the Mesne profits is also the interest. Interest can be called an integral element of mesne profits since it stands on the footings of reasonableness and fairness for person being deprived of his possession of immovable property. This rule has been observed to provide the actual value of loss which the person might have incurred at the time when he was disposed of and which have had been profited by the wrongful possessor. This could be years, quoting, for instance, a period of ten years during which a drastic devaluation of Rs. 10 would occur. The rate of interest is to be calculation along with the mesne profits at the discretion of the court. But it has been appreciably observed that the limitation to the said rate shall not exceed six per cent per annum and be allowed till the date of payment. [10]

These are the provisions and rules regarding Mesne profits which can be perused in cases arising out of immovable property.

[1] First known use in Circa 1500.

[2] Lucy Kochwareed v. P. Mariappa Gounder (1979) 3 SCC 150

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

[4] R. P. David v. M. Thiagarajan 1996 AIHC 1194

[5] Purifcacao Fernandes v. Hugo Vicente de Perpetuo AIR 1985 Bom 202

[6] Fateh Chand v. Balkishan Dass AIR 1963 sc 1405

[7] Dakshina v. Saroda ILR (1894) 21 Cal 142 (PC)

[8] ibid

[9] S. 2(12)

[10] Lucy v. Mariappa (1979) 3 SCC 150