Ratilal Thakordas Tamkhuwala And Another v. Vithaldas Magandas Gujarathi .

1. This orginal defendants' revision is directed against the order quantifying the liability of mesne profits. The Appeal Court quantified the same in the sum of Rs. 400/- per month from the date of the decree till the date of the delivery of possession. The quantification from the date of the suit till the date of the order was at the rate of Rs. 60.75 per month.

2. In this Court Mr. Gumaste submitted that this quantification at the rate of Rs. 400/- from the date of the order till the date of the delivery of possession is contrary to law. In the submission of learned Counsel the mesne profits could not be charged more than the standard rent or the statutory rent fixed by the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. Reliance is placed on the decision of the Delhi High Court reported in the case of Hindustan Steel (Pvt.) Ltd. v. Smt. Usha Rani Gupta, AIR 1969, Delhi 59, and the decision of Privy Council in the case of Gurudas Kundu Choudhary v. Kumar Hemendra Kumar Roy, AIR 1929 PC 300. For drawing support for his propositions, learned Counsel submitted that the decision of the Supreme Court in the case of Devan Daulat Raj Kapoor v. New Delhi Municipal Committee, AIR 1980 SC 541, laid down the principles and that the Appeal Court was in error in fixing the mesne profits over and above the standard rent.

3. As against this, Mr. Shah contended that as far as this question is concerned, the law is settled by the case of Kesardeo Baijnath v. Nathmal Kisanlal, AIR 1966 Bom 266, following the Judgment of the Nagpur High Court in the case of Bhagwandas v. Mt. Kokabai, AIR 1953 Nag 186, and the decision in the case of Nathumal Chandanmal and Co. v. Damodar Prabhat Sharma, 1979 Mah LJ 22. In the submission of learned Counsel the position of the Judgment-Debtor subject to a decree for possession is not clearly governed by the provisions of the rent act and the measure of mesne profits would not be the standard rent. Such an argument did not even prevail before the Supreme Court in the case of Dalhousie Properties Ltd. v. Sooraj Mull Nagar Mull, AIR 1977 SC 223.

4. The crucial, question in matters concerning the measure of mesne profits is, as the definition of that term suggests, to find out the profits which the person in wrongful possession of the property in question actually receives or might, with ordinary diligence, have received from such property. For that purpose, the possession of the judgment-debtor against whom a decree for possession is passed could be treated as wrongful from the date of the decree. Such possession surely is not governed thereafter by the provisions of the Bombay Rent Act. The matters laid down by that Act deal with lawful possession and the lawful return to be made by the person in possession to the landlord of such property.

5. Two Privy Council decisions throw considerable light that can guide the considerations of such matter. In Harry Kempson Gray v. Bhagu Mian, AIR 1930 PC 82 following the law laid down in the earlier judgment in Gurudas Kundu Choudhury v. Kumar Hemendra Kumar Roy, AIR 1929 PC 300, the Privy Council ruled that the test set out by the statutory definition of “mesne profits” was clearly not what a person has lost by his exclusion but what the trespasser has or might reasonably have made by his wrongful possession. What the person in such a case might or would have made can only be relevant as evidence of what the trespasser might, with reasonable diligence have received. The position of the judgment-debtor and his wrongful possession are thus the prime matters of consideration and not the position of the landlord or the decree holder.

6. Thus, the law with regard to the mesne profits would not admit the consideration of only the standard rent fixed under the Rent Act as the measure of such profits. In fact, there would be no question of rent being earned by the person in wrongful possession, nor would the statutory quantification of rent by the Rent Act govern his liability. At the most and at the maximum, the rent so fixed by the Rent Act could be treated as merely a relevant piece of evidence so as to find out what the person could have, reasonably and with due diligence, had the property been let, earned and nothing more. That would not however, necessarily lead to the conclusion that the measure of mesne profits also is frozen by reason of statutory fixation of rent. If the concept of such a frozen fixation is permitted, then anomalous results would follow. Even though the judgment-debtor's possession had become wrongful and he was liable to be evicted from such possession and liable to surrender the same, he would for the purpose of law be treated on par with the tenant and his liability equated as that of the tenant. The definition of “mesne profits” clearly rules out such an anomaly. It is the value of the wrongful possession that is determinative of the mesne profits.

7. The decision of the Supreme Court in the case of Smt. Chander Kali Bail v. Jagdish Singh Thakur, AIR 1977 SC 2262, did consider the question, amongst other questions, of the measure of profits in the context of the rent legislation like the Madhya Pradesh Accommodation Control Act 1961. That decision, read closely puts the matter beyond doubt. In that case, the Court had approved and confirmed the decree for mesne profits at the higher rate than the fair rent under the provisions of the Act but for the period after the date of eviction decree. With regard to this higher rate, the Court observed that the defendants would be liable to pay at that rate damages which could not be and were not challenged before the Court. These observations that the higher rate of rent could not be challenged even in the context of the Rent Act are ample to show that such a measure of the quantum of mesne profits at a higher rate was clearly approved. Before the date of the eviction decree, the quantum at the rate of fair rent was approved. To the similar effect is the decision of this Court in Nathumal Chandanmal and Co. v. Damodar Prabhat Sharma, 1979 Mah LJ 22, which took the view that upon eviction decree being passed, the possession of the tenant became unlawful and for the period after, the mesne profits could be higher than the one fixed by standard rent. That worked out the liability of mesne profits at Rs. 125/- per month while the rate of rent was Rs. 34/- per month. In Kesardeo Baijnath v. Nathmal Kisanlal, AIR 1966 Bom 226, the argument that the quantum of mesne profits even after the decree should be the fair rent under the Rent Control Order was expressly repelled.

8. Thus, the law does not appear to have been read in the manner Mr. Gumaste seeks to contend that once the property is governed by the provisions of the rent act, even for the purpose of mesne profits the rent fixed by the Rent Act should be the quantum. Reliance placed on the decision of the Supreme Court in Devan Daulat Rai Kapoor v. New Delhi Municipal Committee, AIR 1980 SC 541 does not further this position. That was a case dealing with the assessment of property of municipal taxation. The Court considered the definition of the term “annual value” which, in turn, had a reference to the gross annual rent at which the building could reasonably be expected to let from year to year and in the context of the statute, the Supreme Court observed that the criterion was the rent realisable by the landlord and not the value of the holding in the hands of the tenant. The case is clearly distinguishable and would not be applicable when the value of the holding in the hands of the judgment-debtor is in question. As indicated earlier, it is the value of the wrongful possession that is the point of reference for the purpose of deciding the quantum of mesne profits. Rent could be a relevant factor for considering such a value but not decisive of the matter. The standard rent, as the law indicates, has different point of reference statutorily and is not indicative of the value of the possession at the date when such possession becomes wrongful. The possession of a judgment-debtor becomes wrongful upon the passing of the eviction decree, while the provisions like those of the Rent Act have a different point of reference with regard to lawful possession.

9. This being the obvious position, the higher rate for mesne profits upon evidence, than the standard rent of the property could be fixed, as is done by the appeal Court. There is hardly any error of jurisdiction in that regard, that can be reached in these proceedings.

10. Rule discharged with costs.

Revision dismissed.