- Bookmark
- Share
- CaseIQ
Harry Kempson Gray And Another v. Bhagu Mian And Others
Factual and Procedural Background
The appellants, owners of an indigo factory, had leased certain lands from predecessors-in-title of the respondents and used these lands to grow indigo for their factory. After the lease expired around November 1919, the respondents became entitled to possession of most of the lands. The appellants obtained a new lease for a small portion not belonging to the respondents but refused to relinquish possession of the respondents' portion, claiming occupancy tenancy. The respondents sued to establish their title and succeeded, obtaining a decree for joint possession and mesne profits over approximately 23 bighas. Following an appeal to the High Court, the matter returned to the Subordinate Judge for mesne profits ascertainment. A commissioner held a local enquiry, and the Subordinate Judge awarded Rs. 19,869.11-11 in mesne profits by final decree dated 15 August 1922. The appellants appealed again to the High Court alleging excessiveness, but the appeal was dismissed. They then appealed to His Majesty in Council by special leave.
Legal Issues Presented
- What is the correct basis for ascertaining mesne profits in respect of wrongful possession of agricultural land?
- Whether mesne profits should be calculated based on the rental value of the land or on the profits from cultivation of the land.
- Whether the calculation of mesne profits should be based on the actual crop grown (indigo) or on more profitable crops that the land was capable of producing.
Arguments of the Parties
Appellants' Arguments
- The proper criterion for mesne profits should be the rental value of the land, which they estimated at Rs. 5 per bigha, particularly where the land was let out.
- Since the appellants themselves cultivated the land, the profits from cultivation should be considered, but only based on the actual crop grown—indigo—not on other more profitable crops.
- The appellants contended that only indigo profits should be allowed as the land was actually planted with indigo.
Respondents' Arguments
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Gurudas Rundu, v. Hemendra Kumar Roy, AIR 1929 PC 300 = 56 IA 290 (PC) | Clarification that mesne profits are measured by what the defendant has or might reasonably have made by wrongful possession, not by what the plaintiff lost. | The Court relied on this precedent to reject reasoning based on what the plaintiff would have grown and emphasized the defendant’s potential profits as the basis for mesne profits. |
Court's Reasoning and Analysis
The Court examined the statutory definition of mesne profits under Section 2(12) of the Civil Procedure Code, 1908, which defines mesne profits as profits that the person in wrongful possession actually received or might have received with ordinary diligence. The appellants argued that rental value was the appropriate measure where land was let out, and that only indigo profits should be considered since indigo was the actual crop grown. However, the Court found that because the appellants themselves cultivated the land, cultivation profits are the relevant measure rather than rental value.
Furthermore, the Court held that the calculation should be based on the profits from the crops that the land was capable of producing, not solely on the actual crop grown (indigo). The appellants’ contention that indigo profits alone should be allowed was rejected because indigo was grown for the special purposes of the appellants’ factory, and the land was capable of more profitable crops such as sugarcane, wheat, and tobacco, which were in fact grown on neighboring lands.
The Court disagreed with the High Court’s reasoning that the test should be what the plaintiffs would have grown, emphasizing instead that mesne profits are measured by what the defendant has or might with reasonable diligence have made. This interpretation aligns with the precedent set in Gurudas Rundu v. Hemendra Kumar Roy, reinforcing that the defendant’s potential profits, not the plaintiff’s loss, determine mesne profits.
Holding and Implications
The appeal is dismissed.
The Court upheld the calculation of mesne profits based on the profits from the most profitable crops the land was capable of producing rather than the actual crop grown or the rental value. The appellants are ordered to pay costs. This decision directly affects the parties by affirming the mesne profits awarded to the respondents and does not establish new precedent beyond clarifying the application of existing principles regarding mesne profits.
Sir George Lowndes -
The only question raised for determination in this appeal is as to the basis upon which mesne profits should be ascertained in respect of the wrongful possession of agricultural land.
The appellants, who were the owners of an indigo factory, had for a number of years leased certain lands from the predecessors-in-title of the principal respondents, and had utilized the lands in growing indigo for the purposes of their factory. The lease having expired in or about November 1919, the respondents became entitled to possession of the major portion of the lands. The appellants subsequently obtained a new lease of a small portion, which did not belong to the respondents, and refused to give up possession of the respondents' portion, alleging themselves to be occupancy tenants. The respondents sued to establish their title and were successful, a decree being passed in their favour for joint possession with the appellants and for mesne profits of an area of some 23 bighas. After proceedings in appeal to the High Court the matter came again before the Subordinate Judge for the ascertainment of the mesne profits awarded by the High Court's decree. A local enquiry was held by a commissioner, and the Subordinate Judge eventually found a sum of Rs. 19,869.11-11 to be due to the respondents, for which he passed a final decree in the respondents' favour on 15th August 1922. The appellants again appealed to the High Court alleging this amount to be excessive, but their appeal was dismissed, and they have now by special leave appealed to His Majesty in Council.
The calculation by the Courts in India was made upon the basis of the crops which the land was capable of producing. It was, in fact, planted with indigo, but the Courts found and it is not disputed before this Board, that it was capable of producing more profitable crops, such as sugarcane, wheat, tobacco, etc., crops which were in fact grown by the appellants on other neighbouring lands.
The question in their appeal is whether this was the correct basis of calculation. Their Lordships have no doubt that it was, though they are not altogether in agreement with the reasoning by which the learned Judges in India have reached this conclusion.
Mesne profits are defined by S. 2 (12), Civil PC of 1908, as :
those profits which the person in wrongful possession [of the property in question] actually received or might with ordinary diligence have received therefrom."
The appellants' first contention was that the rental value of the land, which they put at Rs. 5 per bigha, was the proper criterion. This would no doubt ordinarily be so where the person charged had merely let the land out to others. In such a case the rent that he received, if there was no evidence that a higher rent could with ordinary diligence have been obtained, would be the measure of the profits for which he would be liable. But when (as in the present case) the wrong-doers cultivated the land themselves, the definition above cited clearly makes the cultivation profits the primary consideration.
Alternatively, the appellants contended that the actual cultivation having been in indigo, the indigo profits only should have been allowed. But it is, in their Lordships' opinion, clear that in this case the growing of indigo was for the special purposes of the appellants, who were the owners of the adjacent factory. Apart from this there seems to be no reasonable doubt that the ordinary farmer would have grown the other more profitable crops, for which the land was admittedly adapted, and upon which the calculation of the Courts in India was founded. Their Lordships think that in all such cases the true test must be what the ordinary prudent agriculturist would hare grown.
The learned Judges of the High Court came to the same conclusion, but by a different process. They say in their judgment that the rental test is inappropriate because the plaintiffs (the respondents in this appeal) are themselves cultivators, and if they had been let into possession would undoubtedly have cultivated the land and would not have let it out on rent. Again, as to the crops, they say that the true test is what the plaintiffs would have grown if they had possession. Their Lordships are unable to accept thus line of reasoning though it has been pointed out to them that it has the sanction of previous decisions in India, which have been cited in the argument. The test set by the statutory definition of mesne profits is clearly not what the plaintiff has lost by his exclusion, but what the defendant has or might reasonably have made by his wrongful possession. What the plaintiff in such a case might or would have made can only be relevant as evidence of what the defendant might with reasonable diligence have received. Their Lordships are in effect only repeating what was said by Lord Dunedin in delivering the judgment of their Board in a recent case, in which the same argument was used : see Gurudas Rundu, v. Hemendra Kumar Roy, AIR 1929 PC 300=56 IA 290 (PC).
For the reasons above stated their Lordships will humbly advise His Majesty that this appeal should be dismissed. The appellants must pay the costs.
Appeal dismissed.
Alert