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Structured Summary of the Opinion (Lord Phillimore)

Factual and Procedural Background

On 15 April 1907 the present respondents (as plaintiffs) sued Raja Makund Sahi to recover possession of six villages and jungle. The Raja defended, and on 21 September 1908 the Court of first instance dismissed the plaintiffs' suit. On 21 September 1909 the Raja granted a lease to the present appellant for mining mica and otherwise exploiting the jungle; the appellant contends he had no notice of the pending litigation.

The plaintiffs appealed; on 15 May 1913 the High Court reversed the first instance decision, decreed in favour of the plaintiffs, ordered the Raja to put them into possession, and remitted the case to the lower Court inter alia to ascertain mesne profits for certain periods. A Commissioner (Amin) was appointed and reported on 22 August 1914. On 2 January 1915 the Subordinate Judge accepted the Amin's report (parties recorded no objection), decreed the suit finally, incorporated the Amin's report into the decree and ordered possession with mesne profits and costs from the defendant Raja.

The Amin's enquiry into mesne profits included calculating rents received by the Raja from lessees (Rs. 42,075 plus Rs. 500 from jungle) and, unusually, attempted to quantify net profits from mica extraction by lessees, reporting net mine profits exceeding a lakh of rupees. Relying on the Amin's statements about mine profits, the plaintiffs petitioned on 4 September 1914 that the several lessees (including the present appellant) be ordered to appear and be made defendants so that their accounts and alleged misappropriation of mica could be determined; the petition did not, however, expressly claim relief against the appellant.

The appellant was summoned and filed a counter-petition raising multiple objections and defences (including that plaintiffs had known of his lease, limitation, collusion between the plaintiffs and the Raja, surrender of his lease on 1 August 1914, dispute as to title to the minerals and objection to procedure). On 13 September 1914 the Subordinate Judge rejected the plaintiffs' application under O. XXII, R.10, holding there was no assignment of interest from the Raja to the lessees warranting their being brought into the suit. The plaintiffs appealed to the High Court, which on 16 November 1916 allowed the appeal and ordered the six tenants (including the appellant) to be made parties and to have the mesne profits ascertained in their presence. The present appeal to Their Lordships (Privy Council) challenges that decree of the High Court.

Legal Issues Presented

  1. Whether, under Order XXII, Rule 10 of the Code of Civil Procedure, a lease granted by a defendant during the pendency of a suit constitutes an "assignment, creation or devolution of any interest" so as to permit the suit to be continued by or against the lessees (i.e., to add the lessees as parties to execution proceedings).
  2. Whether Section 47 of the Code of Civil Procedure permits the Court executing a decree to determine, in execution proceedings, claims against third parties (the lessees) for acts committed by those third parties (such as removal of mica) where those claims could amount to distinct trespasses sounding in damages.
  3. Whether the plaintiffs' application to add the lessees at the execution/ascertainment stage was procedurally and substantively permissible given the Amin's prior report and the Subordinate Judge's acceptance of that report.

Arguments of the Parties

Plaintiffs' (Respondents') Arguments

  • The plaintiffs applied to have the lessees (who had obtained leases from the Raja) ordered to appear at the ascertainment of mesne profits and be made defendants so that alleged misappropriation of a large quantity of mica (valued between one and two lakhs of rupees) could be determined in their presence.
  • Their position implicitly relied upon the Amin's report which set out large net profits from mines; they sought to use execution proceedings to reach and account for profits allegedly obtained by the lessees.
  • The High Court accepted the plaintiffs' view that the lessees were "entitled to have the persons in question added as parties to the proceedings, and compel them to account for any profits which they may have received from the land," construing O. XXII, R.10 broadly to include leases as assignments for this purpose.

Appellant's Arguments

  • The appellant submitted by counter-petition that the plaintiffs had been aware of his activities under the lease; he claimed the application was barred by limitation and that the application was collusive with the Raja.
  • He stated he had surrendered his lease on 1 August 1914 and disputed the plaintiffs' title to the minerals, asserting the minerals belonged to the superior lord (the zemindar).
  • He objected to the form of procedure used to attempt to make him a party in execution proceedings and denied that his liability (if any) to pay for removed mica had devolved from the Raja; any such liability, he contended, arose from his own acts and would require an independent suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Prosunno Coomar Sanyal v. Kasi Das Sanyal (1892) 19 Cal 683; 19 I A 166; 6 Sar 209 (P.C.) Advocacy of a wide construction of provisions for introducing parties by devolution and the desirability of resolving all possible points in execution proceedings without a fresh suit. The Board acknowledged the decision and the principle favouring wide construction, but held that even giving these considerations weight they did not justify treating distinct trespasses by third parties as matters properly determinable in execution proceedings; the precedent did not support introducing a separate trespass claim against the lessees via execution of the original decree.

Court's Reasoning and Analysis

The Board's analysis proceeded in sequential steps that track statutory provisions and the facts as they appeared from the record:

  1. Recitation of facts and the procedural posture: the High Court's decree in favour of the plaintiffs, the Amin's enquiry and report (which included unusual inquiries into net mine profits by lessees), the Subordinate Judge's acceptance of the Amin's report and final decree, and the subsequent plaintiffs' petition to add lessees to execution proceedings.
  2. Examination of the statutory provisions relied upon: Section 47 of the Code of Civil Procedure (which vests in the executing Court power to determine questions arising in execution relating to the decree) and Order XXII, Rule 10 (permitting continuation of suit by or against persons to whom an interest has come by assignment, creation or devolution during the pendency of the suit).
  3. Analysis of the nature of the interest required by O. XXII, R.10: the Board emphasised that the rule contemplates cases of devolution of interest (e.g., death, marriage, insolvency) and other situations of devolution; it noted a textual change from the earlier Code where the phrase "in addition to" had been removed, though the Board did not rest its conclusion solely on the textual change.
  4. Application to the present case: the Board found the lessees' alleged liability for removal of mica to be a distinct liability arising from their own acts (trespass), not a liability that had "devolved" from the Raja. Therefore, the matter which could form the basis of an independent suit against the lessees could not be shoehorned into execution proceedings of the original suit under O. XXII, R.10 or S.47.
  5. Practical and substantive objections: the Board observed that adding a party by devolution forces the incoming party to take the suit as it stands; the appellant would be bound by judgments already rendered and could not, for example, contest plaintiffs' title to the minerals though he had a serious contention that the minerals belonged to the zemindar. Further, there had been a prior preliminary assessment by the Amin (in the appellant's absence) of over a lakh of rupees, which the appellant would face in execution proceedings and would have difficulty overturning.
  6. Consideration of precedent: while recognising the Board's earlier decision (Prosunno Coomar Sanyal) that endorsed a broad approach to introducing parties by devolution and resolving issues in execution, the Board concluded that the principle could not be stretched to permit the introduction of a distinct trespass claim against third parties in execution proceedings.
  7. Conclusion of analysis: there was no assignment, creation or devolution of interest within the meaning of O. XXII, R.10 which would permit the lessees to be added in execution; S.47 did not authorize converting what were distinct trespasses by third parties into matters to be determined in execution of the original decree.

Holding and Implications

Core Ruling: The appeal was allowed. Their Lordships recommended that the decree of the High Court (which had ordered that the tenants be made parties and that mesne profits be ascertained in their presence) be discharged, the decree of the Subordinate Judge be restored, and that the appellant be awarded his costs before the Privy Council and in the two Courts below.

Direct consequences for the parties:

  • The High Court's order adding the lessees as parties to execution and directing ascertainment of mesne profits in their presence is set aside.
  • The Subordinate Judge's earlier order rejecting the plaintiffs' application (i.e., refusing to add the lessees under O. XXII, R.10) is restored.
  • The appellant is entitled to his costs in this Board and in the two lower Courts.

Broader implications: The opinion confines itself to the statutory interpretation and the facts of this case. The Court declined to extend execution proceedings to determine distinct trespasses by third parties. The opinion does not articulate a broader rule beyond the decision's application to these statutes and facts.

    Manindra Chandra Nandi v. Ram Kumar Lal Bhagat And Others

    Lord Phillimore :-

    The present respondents brought as plaintiffs on the 15th April, 1907, a suit against Raja Makund Sahi to recover possession of six villages and jungle which they chimed. The Raja defended the action, which in due course came on for trial, and on the 21st September, 1908, the Court of first instance decided against the plaintiffs, and dismissed the suit. Just one year afterwards, on the 21st September, 1909, the Raja gave a lease for a term of years of the right of mining for mica, and otherwise exploiting the jungle, to the present appellant, whose case is that he had no notice of the pending litigation.

    The unsuccessful plaintiffs appealed to the High Court, which on the 15th May, 1913, reversed the decision of the first Court and made a decree in favour of the plaintiffs ordering the Raja to put them into possession of the six villages and jungle and it was further ordered :-

    "That the case be sent back to the lower Court inter alia to take an account of the mesne profits to which the plaintiffs-appellants are entitled for the three years prior to the institution of the suit and also for the period thereafter till the delivery of possession or the expiration. of three years from this date, whichever event happens earner."

    When the case was accordingly remitted to the Court of first instance, a Commissioner or Amin was appointed to make the necessary enquiry, and on the 22nd August, 1914, he made his report.

    On the 2nd January, 1915, the Subordinate Judge recorded that the parties did not object to the report of the Amin and that it might therefore be accepted, and he ordered " that the suit be decreed finally; that the Amin's report be considered to be a part of the decree; and that the plaintiffs do recover possession with mesna profits, as deter, mined by the Amin, and the costs of this suit from the defendant with interest at 6 per cent, per annum.'' In this way the suit came to its natural termination.

    It happened however, that the Amin took a somewhat unusual course in conducting the enquiry which led to his report. When enquiring into mesne profits he first of all ascertained the rents which the Raja had received from the present appellant and other tenants totalling Rs. 42,075, with a further profit of Rs. 500 from the jungle. Not content with this, he proceeded further to enquire what were the profits which the various lessees might be taken to have made from the mica which they had extracted during the terms of their leases pending the somewhat protracted litigation. What exactly was his object in doing this or who set him in motion to do it, is not quite clear. The law as to mesne profits is thus expressed in S. 2, Sub-S. 12 of the Code of Civil Procedure :-

    " '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."

    It might be said that in ascertaining such profits the successful plaintiffs would not be limited to the actual rents which the trespassing defendant had received. And apart from, the question of mesne profits a claim might have been preferred for damages for the mica actually removed. Again, it would be conceivable that in a suit properly framed the lessees from the Raja, who had though ignorant of the plaintiffs' title, carried away what was the plaintiffs' mica, could be rendered liable for damages in respect of what they had so taken away. But these lessees were not included in the suit."

    The Amin with some naivete stated twice in the course of his report that he had had little assistance from the plaintiffs or their agents, who had, in fact, taken very little interest in the execution of the enquiry, and that he obtained his information largely by the help of the defendant Raja and his servants.

    However, he reported under both heads, bringing what he described as the net profit obtained from the mines up to a sum considerably exceeding a lakh of rupees.

    The report was in narrative form and finished without any definite recommendation. Whether the conclusion from it was intended to be that the defendant Raja was to pay as mesne profits the rents which he had received or whether he was to pay as mesne profits the net profits of the mines - it could not be both - does not clearly appear; though from what subsequently happened it can almost certainly be inferred that it was only the smaller figure, that is, the sura of the rents. This report having been made and filed, but before it was confirmed, the plaintiffs - the present respondents - relying apon the statements with regard to the profits obtained from the mines, made an application by a petition dated the 4th September, 1914.

    This petition stated that the several lessees had in collusion with the Raja obtained a settlement of the disputed property in an illegal manner, and had misappropriated a large quantity of mica worth between one and two lakhs of rupees, and prayed that they should be ordered to appear at the time of the ascertainment of the mesne profits so as to have the matter determined and decided in their presence, and that to avoid future objections they should be made defendants.

    It will be observed that, unless it be inferentially, no relief was claimed against the appellant and the other lessees.

    The appellant was summoned and put in a counter petition in which he raised various objections or defences. He stated that the plaintiffs had been aware all along of what he was doing under his lease : he claimed that the application was barred by limitation; he said that the application was made in collusion with the defendant Raja; and that since he knew of the plaintiff's claim to the property he had surrendered his lease, namely, on the 1st August, 1914; and he disputed the plaintiffs' title to the minerals even on the footing that they were entitled to the land, averring that the minerals belonged to the superior lord, the zemindar. He also took objection to the form of procedure.

    On these statements the matter came before the Subordinate Judge, who on the 13th September, 1914, rejected the plaintiffs' application, holding that under the construction of O. XXII, R. 10 of the Code of Civil Procedure there was no such assignment of interest by the defendant Raja to the present appellant and the other lessees as to warrant their being brought into the suit.

    From this order the plaintiffs appealed to the High Court. There is no date upon their memorandum of appeal and nothing to show whether it was lodged before or after the order of the 2nd January, 1915. It rather looks as if it was later, but it is not material. Their appeal came on before the High Court, which, on the 16th November, 1916, allowed the appeal and ordered the Subordinate Judge to make the six tenants, including the present appellant, parties to the suit, and to ascertain the mesne profits in their presence.

    It is from this decree that the present appeal is brought.

    From a perusal of the order in its bare form it is not easy to see what could be its object. What advantage could it be to the plaintiffs or the defendant Raja that the mesne profits which the defendant Raja was to pay should be assessed in the presence of the lessees ? Moreover, they had been already assessed, and that, finally, the report of the Amin had been accepted, and the mesne profits,whatever they were found by it, had been decreed, and the decree had not been appealed from.

    But light is thrown by the language of the learned Chief Justice. He says : In my opinion the appellants are entitled to have the persons in question added as parties to the proceedings, and compel them to account for any profits which they may have received from the land."

    This opinion appears to be founded on the language of O. XXII, R. 10, and it is desirable to examine the Code of Civil Procedure with a view to seeing whether it lends support to this opinion. By S. 47.

    "(1). All questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.

    "(2). The Court may, subject to any objection as to limitation or jurisdiction, treat a proceeding under this section as a suit or a suit as a proceeding.

    O. XXII, R. 10, states :-

    " (1). In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved."

    The High Court appear to consider that in an action to recover possession of land where the defendant, while he is in possession, has granted leases, proceedings in execution may involve removal of the tenants, and that for such a purpose a lease may be considered an assignment within the meaning of R. 10.

    It is unnecessary for their Lordships to express any opinion as to whether this view is right or not, because the appellant is not setting up his lease or claiming to remain in occupation as tenant - on the contrary, he states that he has surrendered his lease - and because the application was not to remove him. The order contemplates cases of devolution of interest from some original party to the suit, whether plaintiff or defendant, upon someone else.

    The more ordinary cases are death, marriage, insolvency, and then come the general provisions of R. 10 for all other cases. But they are all cases of devolution. There is, it should be noted in this rule, a significant change of language from that used in the earlier Code, where it is stated in S. 372 as follows :-

    " In other cases of assignment, creation or devolution of any interest pending the suit, the suit may, with the leave of the Court, given either with the consent of all parties or after service of notice in writing upon them, and hearing their objections, if any, be continued by or against the person to whom such interest has come either in addition to or in substitution for the person from whom it has passed, as the case may require."

    The words " in addition to" in the earlier Code have disappeared. But the matter does not rest upon this change. The liability, if any, of the appellant to pay damages for removal of the mica is not a liability which has devolved to him From the defendant Raja. They were both liable, if liable at all, as trespassers, and a case, if any, against the appellant must rest upon his action and the direct relation established thereby between him and the plaintiffs.

    Serious injustice would be done if any other view was taken. A party added by devolution during the pendency must lake the suit as he finds it. Judgment already rendered would be binding upon him. He would not, in the present case, be able; to question the title of the plaintiffs to the mica, though he has a serious contention that the title to the minerals rests with the zemindar.

    Again it is all very well to say that the mesne profits, by which is meant the value of the lost mica, are to be ascertained in his presence. There has been at least a preliminary assessment by the Amin which he would have considerable difficulty in setting altogether aside, and this assessment has been made in his absence. He would come before the Subordinate Judge with a preliminary finding against him for over a lakh of rupees, O. XXII, R. 10, does not apply. There has been no assignment, creation or devolution of any interest within the meaning of that rule.

    Their Lordships have been reminded of the decision of this Board in the case of Prosunno Coomar Sanyal v. Kasi Das Sanyal (1892) 19 Cal 683 :19 I A 166 : 6 Sar 209 (P. C) and of the general principle therein expressed, that a wide construction should be put upon the provisions of the Act with regard to introducing parties by devolution and of the desirability of ascertaining all possible points in execution proceedings without a fresh suit.

    But giving all force to these considerations they cannot see how that which should in reality form the basis of an independent suit against a separate party, for some act done by himself, can be introduced as a question to be tried in execution proceedings in another suit. S. 47 of the Act does not apply. If the added persons did commit trespasses these wete distinct ones, and not committed by them as representatives of the original defendant. To hold otherwise would be to confuse the rights.

    Considerations both of form and of substance are opposed to the order from which this appeal is brought.

    Their Lordships will therefore humbly recommend His Majesty that this appeal should be allowed, and the decree of the High Court discharged and the decree of the Subordinate Judge restored, and that the appellant should have his costs before this Board and in the two Courts below.

    Appeal allowed.

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    Manindra Chandra Nandi v. Ram Kumar Lal Bhagat And Others
    (Apr 3, 1922)