Whether mesne profits include profits due to improvements made by person in wrongful possession?

In the case of unlawful possession of a tenant at sufferance, the liability arises ex delicto and he will be liable for damages in the form of mesne profits. Therefore, in ultimate analysis, whether the position of the appellant is that of a trespasser or a tenant at sufferance, it hardly makes any difference as far as the liability of the defendant to compensate. The appellant is liable not for payment of the rent but for damages or mesne profits. In Girish Chander Lahiri v. Soshi Roy, ILR 27 Cal. 951 (PC), the Privy Council observed that mesne profits were in the nature of damages which the Court may mould according to the justice of the case. The award of mesne profits is meant to compensate a person who was deprived of rightful posession. According to Section 2(12) CPC, the term 'mesne profits' include not only the profits which a person in wrongful possession actually received but also those which he might have received with ordinary diligence but does not include profits due to improvements made by person in wrongful possession. 

Andhra High Court

The Hindustan Petroleum ... vs Khwaja Asadullah Baig And Ors. on 15 March, 1996

Equivalent citations: 1996 (2) ALT 198

Bench: P V Reddy, G Bikshapathy

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Whether person in wrongful possession can say that he has made no profits?

The measure of 'Mesne profits' is not what the landlord had lost by not being able to get possession, but what the user of the property meant to the defendant who was in wrongful possession. In other words, the basis for determining the quantum of mesne profit is: what the defendant might with ordinary diligence have received from the property. The person in wrongful possession cannot be heard to say that he has not utilized the property, made no profits, no rent is being derived from the property in dispute as such not liable to pay mesne profit. At the same time person in wrongful possession is not liable to realize highest possible rates of rent or profit. A plain reading of the definition of mesne profit would leave no manner of doubt that the real test to be applied is, not what the plaintiff decree holder had lost or would have earned by letting out or using the property himself, but what the person in wrongful possession, namely, with ordinary diligence would have received from it. The wrongful possession of defendant is the very essence of a claim for mesne profits. The very foundation of the defendant's liability to pay the mesne profit goes with actual possession of the land. That is to say, generally the person in wrongful possession and enjoyment of the. immovable property is liable to pay mesne profits. Thus the claim for mesne profits is virtually the claim for damages and has to be assessed by proper exercise of judicial discretion.

IN THE HIGH COURT OF BOMBAY

Chamber Summons Nos. 1539 of 2006 and 1820 of 2007 in Suit No. 1996 of 2006

Decided On: 23.04.2008

 Humayun Dhanrajgir and Ors.Vs. Ezra Aboody

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When contractor is not entitled to get profit under the head 'loss of profit' in case of breach of work contract?

Here when claim for escalation of wages bills and price for materials compensation has been paid and compensation for delay in the payment of the amount payable under the contract or for other extra works is to be paid with interest thereon, it is rather difficult for us to accept the proposition that in addition 15% of the total profit should be computed under the heading 'Loss of Profit'. It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilised the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have awarded the same. This aspect was very well settled in Sunleyn (B) & Co. Ltd. vs. Cunard White Star Ltd., [1940] 1 K.B. 740, by the Court of Appeal in England. Therefore, we have no hesitation in deleting a sum of Rs. 6,00,000/- awarded to the claimant.

Supreme Court of India

Bharat Coking Coal Ltd vs L.K. Ahuja on 12 April, 2004

Bench: S. Rajendra Babu, Bhan.

Citation; (2004)5SCC109, [2004]3SCR1105

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