Right of possession is a right granted to all law-abiding citizens in India. If a person is deprived of this right and along with that the person is deprived of the income, he/she can obtain from that possession, then he/she must be compensated with damages. In such type of situation, the concept of Mesne Profits come into play. Mesne profits are the profits to which a person is entitled but he is kept away from those profits by the defendant. If a person is in wrongful possession of a property and he makes profit from that property, so mesne profits are the profit that the person made and interest on the profit he/she made. The claim for mesne profits is filled along with the case for recovery of possession of property from the defendant. The money that the defendant is making or might make in ordinary circumstances along with the interest on it is called mesne profits.
Illustration 1: Rishabh is in wrongful possession of Rahul’s property. Rishabh has rented out some part of the property to subtenants. Thus, depriving Rahul from receiving profits from such property. Hence Rahul has a right to file a case for claim of that profits and the interest on such profits from Rishabh.
Illustration 2: Rohan has mortgaged his property to Saksham. There has been an order for foreclosure of the mortgage and decree for redemption is passed. But Saksham refuses to give possession of the property back to Rohan, so in thus case the profit Saksham would make out of the property, or he might make in due diligence and the interest on that property is Mesne profits and Rohan has the right to file a case for recovery of possession and right to be compensated for mesne profits by Saksham.
Provisions related to Mesne profits are specified under Section 2(12) of Code of Civil Procedure and Order 2 Rule 4 and Order 20 Rule 12 of Code of Civil Procedure. There are two conditions to be fulfilled for filing a claim of Mesne Profits that are:
- There must be wrongful possession of property by the defendant
- The defendant possessing the property is earning profit from that property or can earn profit from that property in ordinary circumstances.
Mesne Profits includes the profit received by the person in wrongful possession of property or the profit that person will make in ordinary diligence, along with the interest on those profits. The rate of property is fixed by the court, and it is the discretion of court to decide the rate of interest, but there is a limitation to it that the rate of interest must not exceed 6 percent per annum. It is difficult to law down provisions that will apply to each case so it is the discretion of the court to decide what rate will be fixed on every case. There are also some kinds of deductions that can be made from the mesne profits that are:
- The charge or expense of collecting rent, etc.
- Public charges that are made for the property or for preservation of property, e.g., Government revenue
- In case of agriculture land the cost of cultivating and reaping of crops.
- In the case Lucy Kochuvareed v. P Mariappa grounder, the court said that the main object of awarding a decree for mesne profits is to compensate that person who has been kept out of possession of his own property also has not been given the profits that were made from his property.
- In the case Mahant Narayana Dasjee Varu v. Tirupathi Devasthanam, the court said that for the first time it was observed that the Code of Civil Procedure included interest on profits as a part of mesne profits. The court said that it was correctly done interest in an important and necessary part of mesne profits.
- In the case Fateh Chand v. Balkrishna Dass, it was observed by the court that mesne profits are given or granted in the form of damages and no rule governing the damages and their assessment can be laid down, so the court has the discretion to alter the rule as per the circumstances of the case and according to the justice in the case.
- In the case Dakshina v. Saroda, it was held by the court that while awarding or assessing the mesne profits the court has the right to make deductions from profits of the defendant in wrongful possession of the property, some of the deductions that can be done are expenses incurred for collection of rent, land revenue, cost of cultivation and reaping of land etc. It was held that mesne profits are the net profits.
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