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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Mr. Justice Bhagabati Prasad Banerjee
  • Mr. Justice Amal Kanti Bhattacharyya
Acts
  • provision of clause 12 of S. 2 read with Section 151 of the Code of Civil Procedure,
  • Clause (12) of Section. 2 of the Code of Civil Procedure
  • SECTION 2 CIVIL PROCEDURE CODE
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Mr. Justice Bhagabati Prasad Banerjee
  • Mr. Justice Amal Kanti Bhattacharyya
Acts
  • provision of clause 12 of S. 2 read with Section 151 of the Code of Civil Procedure,
  • Clause (12) of Section. 2 of the Code of Civil Procedure
  • SECTION 2 CIVIL PROCEDURE CODE
See more information ...
Smart Summary

Concise, Structured Summary of the Opinion

Factual and Procedural Background

This matter concerns an application for stay of the operation of a judgment and decree dated 12 June 1989 of the Chief Judge, City Civil Court, Calcutta in Title Suit No. 593 of 1976 (decreed) and Title Suit No. 1725 of 1978 (dismissed). By that judgment the plaintiffs/respondents were granted recovery of the suit premises and the defendant/appellant was directed to deliver vacant possession within one year.

Title Suit No. 593 of 1976 was filed by the plaintiffs/opposite parties for eviction of the defendant/appellant on the ground of expiry of a lease. The lease was a registered deed dated 31 March 1955 for a period of 21 years from 1 March 1955, reserving monthly rent of Rs. 1,400 for the premises at No. 64, Bentinok Street, Calcutta (area occupied: 11,700 sq. ft.). The original lessor's rights had vested in the Custodian of Enemy Property, who conveyed the property to the predecessors of the plaintiffs after the defendant failed to deliver vacant possession.

The defendant/appellant also filed Title Suit No. 1725 of 1978 seeking specific performance and registration of the lease. The present application seeks a stay of the execution of the lower court's decree (i.e., an injunction maintaining possession during the pendency of the appeal).

Legal Issues Presented

  1. Whether the appellant is entitled to a stay of the decree of eviction (i.e., to retain possession during the pendency of the appeal).
  2. Whether, as a condition of any stay, the Court may require the appellant to pay mesne profits or damages at a rate higher than the contractual rent fixed under the expired lease.
  3. If the Court may require mesne profits, what is the appropriate rate and the manner of payment pending disposal of the appeal?
  4. How should the concept of "mesne profits" under clause (12) of Section 2 of the Code of Civil Procedure be applied to a person who seeks to retain possession by an interim order after expiry of a lease?

Arguments of the Parties

Appellant's Arguments

  • Counsel for the appellant submitted that imposing mesne profits at a rate beyond the contractual rate as a condition for stay would unduly impede the appellant's right of appeal; effectively, such a condition could render the right of appeal nugatory.
  • The appellant opposed the plaintiffs' prayer that the appellant be directed to pay mesne profit at market rates from the date of expiry of the lease.

Decree-holder's (Plaintiffs') Arguments

  • Counsel for the plaintiffs argued it would be unjust and unfair to allow the judgment-debtor to continue in possession at the old contractual rate fixed decades earlier (1955), thereby depriving the decree-holder of market rent.
  • It was submitted that the Court should not allow unjust enrichment of the appellant on the strength of an interim order, given the sharp increase in rents in metropolitan areas and the advantageous position of the appellant in operating the premises (noted as running a modern hotel).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chinnammal v. Arumgham, (1990) 1 SCC 513 : AIR 1990 SC 1828 Procedural provisions should be construed to facilitate justice; procedural law should be interpreted so as to render justice wherever reasonably possible. The Court relied on this authority to support a purposive and liberal construction of mesne-profit provisions and broader procedural rules so as to avoid impracticable or unjust results from a narrow literal reading.
Hedley Byrne & Co. v. Heller & Partners Ltd., (1964) AC 465 (and (1963) 3 WLR 101) Authority cited for the proposition that legal systems must be logically coherent; quoted (via Lord Devlin) to support the view that law must avoid irrational consequences. Used by the Court to underline the importance of logical, purposive interpretation of legal provisions (i.e., avoid constructions that cure one mischief only by creating a worse mischief).

Court's Reasoning and Analysis

The Court began by identifying the statutory definition of "mesne profit" in clause (12) of Section 2 of the Code of Civil Procedure, which requires that mesne profits arise where a person is in wrongful possession of property and that such profit consists of what the person actually received or might with ordinary diligence have received (excluding profits due to improvements).

The Court recognized the legal tension that where an appellant seeks a stay of an eviction decree, the possession is rendered lawful while an injunction remains in force; otherwise it remains unlawful. Thus the central legal issue was whether the Court, while protecting possession during appeal, may impose conditions to prevent unjust enrichment of the appellant and to protect the decree-holder's interests.

The Court balanced competing considerations: the appellant's right of appeal versus the risk of unjust enrichment of the appellant and corresponding loss to the plaintiffs if possession were maintained at an antiquated contractual rent (Rs. 1,400 fixed in 1955). It noted the substantial increase in market rents in the metropolitan area and judicially took notice of the value and scarcity of accommodation in the heart of Calcutta supported by a report of a Special Officer.

Applying the rules of statutory interpretation, the Court rejected a strictly literal construction of clause (12) that would permit the appellant to remain at the expired contractual rate to the detriment of the decree-holder. Instead it adopted a purposive and equitable approach—grounded in the duty of courts to prevent unjust enrichment and to secure a fair balance of convenience between parties—so as to avoid a disproportionate counter-mischief that would defeat the purpose of the mesne-profit rule.

Concluding that the appellant's possession had become unlawful after expiry of the lease (a fact confirmed by the decree below), the Court held it was empowered to impose terms as a condition of stay. Relying on clause (12) of Section 2 read with Section 151 of the Code of Civil Procedure (residual powers), the Court fixed a mesne-profit/damages figure and prescribed a detailed payment regime; the grant of stay was made expressly conditional on compliance with those financial conditions.

Holding and Implications

STAY GRANTED SUBJECT TO PAYMENT OF MESNE PROFITS AND SECURITY

Holding (core rulings):

  • The appellant was held liable to pay mesne profit/damages at the rate of Rs. 11,700 per month, reckoned from 1 March 1976 until the disposal of the appeal.
  • Specific payment and security arrangements were ordered: the appellant must pay Rs. 5,000 in cash immediately and furnish a bank guarantee for the balance of Rs. 6,700 covering the period 1 March 1976 to June 1991 to the Registrar, Appellate Side, within four weeks. The arrears at the Rs. 5,000 monthly rate from 1 March 1976 to June 1991 were to be paid in cash within that period. From July 1991 until disposal of the appeal, the appellant must pay Rs. 11,700 per month in cash.
  • On compliance with these conditions (and timely monthly deposits by the 15th of each succeeding month, the first being 15-8-1991), there would be a stay of operation of the lower court's order during the pendency of the appeal; default in payment would result in the interim order being vacated.
  • The ordered payments are to abide by the ultimate decision in the appeal (i.e., the final appellate determination may affect the ultimate liability). Additional procedural directions were given (costs deposit, record transmission by Special Messenger at appellant's cost, filing of paper book, priority listing of the appeal).

Implications:

  • Direct effect on the parties: The appellant may retain possession during the appeal only if it complies with the court's financial conditions. Failure to comply will vacate the interim stay and expose the appellant to execution of the eviction decree.
  • The order balances the appellant's right of appeal against the decree-holder's right not to suffer unjust enrichment; the Court exercised its discretionary power to impose equitable conditions under clause (12) of Section 2 read with Section 151 CPC.
  • The opinion applies existing principles and cited authorities to a factspecific exercise of discretion; it does not purport to create a novel general rule of precedent beyond the disposition in this case.

Judge: BHAGABATI PROSAD BANERJEE, J. (with AMAL KANTI BHATTACHARYYA, J. agreeing). Order accordingly.

Show full summary ...

    Jagat Narayan Singh v. Rabinder Mohan Bhandari And Others

    (1963) 3 WLR 101:(1964) AC 465, Hedley Byrne and Co. v. Heller and Partners Ltd. 7

    Judgement

    BHAGABATI PROSAD BANERJEE, J. :- This is an application for stay of the operation of the judgment and decree passed by the Court below in Title Suits Nos. 593 of 1976 and 1725 of 1978 passed by the Chief Judge, City Civil Court, Calcutta dated 12th June, 1989, whereby Title Suit No. 593 of 1976 was decreed and the Title Suit No. 1725 of 1978 was dismissed with costs. By the said judgment and decree the plaintiffs/respon dents were to get recovery of the suit premises by evicting the defendant/appellant and the defendant was directed to deliver vacant possession within one year from the said date. The Title Suit No. 593 of 1976 was filed by the plaintiffs/opposite parties for eviction of the defendant/appellant from the suit premises on the ground of expiry for a period of lease. By a registered deed of lease dated 31st March, 1955 the owner of the premises No. 64, Bentinok Street, Calcutta granted lease in favour of the lessee. The lease was for a period of 21 years from 1-3-55 reserving the monthly rent of Rs. 1400/- only. The right title and interest of the original lessor was vested to the custodian of enemy properties and the custodian of enemy properties had conveyed and transferred absolutely to the predecessors of the plaintiffs/opposite parties as the defendant failed and neglected to deliver vacant possession within the expiry date and the said suit was filed.

    2. The defendant/appellant also filed a Title Suit No. 1725 of 1978 against the plaintiffs/opposite parties for specific per formance and contract for execution and registration of the lease deed in respect of the suit premises. The prayer for stay of operation of the judgment and decree by which the defendant/appellant was directed to vacate the premises, had not been seriously opposed. But it was submitted on behalf of the plaintiff- opposite parties that in case the Court grants any stay of operation of the said decree, this Court shall direct the appellant to pay mesne profit at the market rate from the date of the expiry of the lease. Admittedly, the area under the occupation of the appellant was 11,700 sq. ft. at the heart of the City of Calcutta. The prayer for mesne profit as made by the plaintiffs/opposite parties has been opposed by the appellant.

    3. There are different types of cases in which the question of profit or mesne profit arises. In a suit for ejectment or recovery of possession of immovable property from a person in possession without title together with a claim for past or future mesne profits may also arise. Clause (12) of Section. 2 of the Code of Civil Procedure defines mesne profit as

    "those profits which the person in wrongful possession of such property actually received or might with ordinary deligence have re ceived therefrom together with interest on such profits shall not include profits due to improvements made by the person in wrong ful possession"
    . So in order to claim mesne profit, one of the preconditions is that the party from whom it may be claimed, must be in wrongful possession of such property. In a case where a decree for eviction has been passed and the person against whom the decree for eviction, files an appeal and makes a prayer for stay of the execution of the decree for eviction, can it be said that such a person is in unlawful possession of the property and can the Court direct the party to pay mesne profit for his occupation on the strength of the interim order that may be passed by the Court. The possession of such party becomes lawful in case the injunction is granted, otherwise it would remain unlawful.

    4. Mr. Sakti Nath Mukherjee learned Advocate appearing for the appellant con tended that if the appellant had to pay mesne profit for maintaining possession on the strength of an interim order during the pendency of the appeal at a rate beyond the contractual rate, that would cause an im pediment on the right of appeal of such person. In other words, if the power of the Court to impose any financial burden as a condition of stay, is conceded in that event, the right of appeal would become nugatory.

    5. On behalf of the decree-holder Mr. Sudhis Dasgupta learned Advocate, submitted that it would be unjust and unfair to allow the judgment-debtor to continue at the old rate fixed 30/35 years ago depriving the market rate to the decree-holder, and that the Court would not allow a party to be unjustly enriched at the cost of other on the strength of an interim order. It was also submitted by Mr. Dasgupta that there has been sharp increase in the rate of rents in the metropoles and a lessee against whom a decree for eviction had been passed, cannot be allowed to continue in possession on the strength of the interim order at the contractual rate which had come to an end in 1976. Admittedly, if the decree-holder could get possession of the property in the year 1976, he could earn huge amount of profit from the property in question. Admittedly, the rate of rent for 11,700 sq. ft. area at the heart of the city was fixed at Rs. 1400/- for the year 1955 up to 1976, was very low.

    6. When the appeal is pending before this Court, it is necessary to protect the possession of the appellant during the pendency of the appeal. The question is whether the appellant is liable to pay mesne profit within the meaning of clause (12) of Section 2 of the Code of Civil Procedure. In the facts and circumstances of the case, the Court is entitled to impose conditions while granting stay. The question is whether the Court would direct the appellant to pay mesne profit in the facts and circumstances of the case. Admittedly, the lease period expired in the year 1976 and the appellant had not paid anything on account of damages and/or mesne profit from 1976, or whether in the facts and circumstances of the case, the Court would grant any injunction without any condition as to the amount of damages and/or mesne profit payable by the appellant. It is the duty of all courts to take care that no act of the court in course of proceeding does an inquiry to a party.

    7. True, the appellant has a right of appeal and that an order for mesne profit may impose certain liability upon the appellant to pay an amount and that ultimately the appellant had to pay price for getting any interim order. If an order for mesne profit is passed that would impose certain extra financial burden on the appellant, on the other hand, if the appellant/opposite party is not allowed to get mesne profit from the appellant, that would also result in the dis proportionate counter mischief. If the provi sion of clause (12) of Section 2 of the Civil Procedure Code is construed strictly accord ing to its letter that would result in causing loss to the plaintiff/opposite party. It is the cardinal principle of rules of interpretation that Court seeks to avoid a construction that cures mischief the enactment was designed to remedy only at the costs of setting up a disproportionate counter mischief, unless there are overriding reasons for taking a contrary view. It is absurd to suppose that the law in this behalf intended to abolish one mischief only at the cost of establishing another which is in just, bad or even worse. In case the appellant is allowed to stay at the contractual rate which had come to end in the year 1976, it would be clear case of unjust bad or even worse. In the year 1976, it would be clear case of unjust enrichment on the part of the appellant. From the report of the Special Officer appointed by this Court who had visited the place and submitted a report, it is clearly evident that the property is situated at the heart of the city of Calcutta where it is difficult to get such as accommodation. The rate of rents has also been increased to a large extent. It is inconceivable to get an accommodation of a building or a portion of a building, even at the rate of Rs. 1/- per square feet in or around the city of Calcutta and the Court can take judicial notice of this fact. Under such circumstances, if the appellant is allowed to continue in possession at a sum of Rs. 1400/- for an area of 11,700 sq. ft., that would be a clear case of unjust at the cost of the plaintiffs/opposite parties. The Code of Civil Procedure is a body procedural law designed to facilitate justice. Laws of procedure should be so construed as to render justice wherever reasonably possible. (See Chinnammal v. Arumgham, (1990) 1 SCC 513 : (AIR 1990 SC 1828). The provision of mesne profit has to be construed in such a manner that is just and proper. The provision of mesne profit has to be construed liberally by applying the principle of purposive and literal construction, otherwise, it would result in impracticable, inconvenient and illogical result. Even legal system must seek to avoid unjustified differences and inconsistencies in the way, it deals with similar matters. Lord Devlin said "No system of law can be workable if it has not got logic at the root to it". (See Hedley Byrne and Co. v. Heller and Partners Ltd., (1964) AC 465 at 516).

    8. In our view, the Court cannot pass any order which would unjustly enrich to one party at the cost of the other and in order to unjustly enrich to one party, it would cause injustice to other, or in other words, in order to protect ones right, the others right would be destroyed. In the instant case, we are unable to hold that the appellant is entitled to occupy the premises during the pendency of the appeal on the strength of injunction on the basis of the contractual rate entered in the year 1955. The contractual period has come to an end and under the lease agreement there was no scope for increasing the rate of rent and at this stage, after the lease period expired, it would be unjust and illogical to uphold the right of the appellant to continue occupation under the contractual rate. The Court seeks to cut down technicalities attendant upon a statutory procedure where this cannot be shown to be necessary to the fulfilment of the purposes of the legislation. The possession of the appellant became unlawful after the expiry of the lease and that such unlawful occupation has been confirmed by the judgment and decree passed by the Court below and that under such circumstances, if the Court pass an order for maintaining the possession such appellant, the Court must compensate the appellant (sic) and that we cannot allow the party to content that he is entitled to enjoy premises at a rate fixed in 1955 at this stage. At this stage, the Court is only concerned about the balance of convenience and interest of the parties. We cannot pass ally order which would result in loss to the plaintiffs/opposite parties when the appellant is making profitable use of such premises just for a song and running a modern hotel.

    9. Accordingly, considering the provision of clause 12 of S. 2 read with Section 151 of the Code of Civil Procedure, we direct that the appellant is liable to pay mesne profit or damages at the rate of Rs. 11,700/- per month from 1st March, 1976 until disposal of the appeal. The appellant shall pay Rupees 5,000/- in cash and the balance amount of Rs. 6,700/- from 1st March, 1976 to June, 1991 shall be furnished by Bank Guarantee to the Registrar, Appellate Side of this Court within four weeks from today. The arrear at the rate of Rs. 5,000/- from 1-3-76 to June, 1991 shall also be paid within that period in cash and the appellant also shall pay from the month of July, 1991 till the disposal of appeal at the rate of Rs. 11,700/- in cash. On condition of payment of money of the aforesaid terms there shall be stay of opera tion of the order of the Court below during the pendency of the appeal. Such payment shall be made by the 15th of the succeeding months. The first of such deposit shall be made by 15-8-1991. In case of default on account of arrear and any current payment this interim order shall stand vacated. This payment of mesne profit shall abide by the decision in the appeal. The respondents have filed power and waived service of notice of the appellant. The appeal is made ready with regard to the service of notice. Let the record be called for by Special Massenger at the cost of the appellant. Costs shall be deposited within one week. Paper Book should be prepared out of Court and filed within four weeks from the date of service of notice of appeal. Let the appeal be placed for hearing at the top of the hearing list after one week from the date of filing of such paper book in terms of this order.

    AMAL KANTI BHATTACHARYYA, J :- I agree.

    Order accordingly.

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    Comments

    Jagat Narayan Singh v. Rabinder Mohan Bhandari And Others
    (Jul 9, 1991)