Nikhilesh Kesharichand Jhaveri & Ors. v. M/s. New Era Fabrics Ltd. & Ors.

11. Per contra, Mr. Thorat, learned counsel appearing for the defendant no.1 submits that the decisions relied upon by the plaintiff are not applicable in view of the Bombay Amendment. He submits that the decisions interpret the provisions of Order XX Rule 12 of the Central Act and by the Bombay Amendment in its application sa_mandawgad 10 8wp7607-21 to the State of Maharashtra, the provisions of Order XX Rule 12 have been substituted as sub-clause (ba) of clause (1) introduced by the 1977 amendment does not find place in the Bombay Amendment. Pointing out to the relevant dates, he would submit that the termination notice was dated 11th February, 2009 and was to take effect after 30 days of the receipt of notice by the defendant no.1. He submits that the notice was received on 14th February, 2009 and the period of 30 days expired on 16th March, 2009. Pointing out to the date of filing of the suit which is 17th March, 2009, he submits that the possession itself could not be said to be unlawful prior to 16th March, 2009 and as such, there is no question of past mesne profits being claimed. He would submit that for the purpose of claiming past mesne profits, the amount of mesne profits have to be crystallized, there has to be necessary pleadings as regards the period for which the past mesne profits has been claimed as well as a specific prayer in this regard which is missing in the present case.

12. He would further submit that a specific relief has been claimed seeking enquiry into mesne profits by virtue of prayer clause (h). Pointing out to the valuation clause of the plaint, he submits that the undertaking was given to pay additional court fees on the mesne sa_mandawgad 11 8wp7607-21 profits being determined by this Court and in event of the past mesne profits being claimed the amount is crystallized and as such, the court fees have to be paid as on the date of institution of the suit. He would submit that taking over all consideration of the pleadings in the plaint the claim was not for the past mesne profits but for future mesne profits which requires an enquiry and as such, the evidence of PW-2 is irrelevant.

13. He has further pointed out the evidence affidavit of PW-1 and would submit that the PW-1 has deposed that an enquiry be conducted into the mesne profits. He has drawn attention of this Court to the observations of the trial Court while rejecting the application for recasting the issues that the absence of the word “enquiry” into mesne profits while framing the relevant issue does not itself render any direction to either party to lead evidence in the suit itself and in event such enquiry is to be made the same has to be directed while passing of the decree as per Order XX Rule 12 of CPC only, as it is the procedural aspect. He submits that it is in view of this finding of the trial Court the revision application came to be dismissed. He submits that the cross-examination of the three witnesses of the defendant has already been completed. sa_mandawgad 12 8wp7607-21

14. In rejoinder, Mr.Narichania, learned counsel for the Petitioner submits that even if it is taken that the other decisions are not applicable the judgment of the Calcutta High Court considers provisions pari materia with the provisions of the Bombay Amendment. He would further submit that the mesne profits have been quantified in paragraph 9 of the plaint and prayer clause “e” of the plaint seeks relief in respect of past as well as future mesne profits being the compensation which the defendant no.1 was receiving from the third party.

15. Considered the submissions and perused the record.

16. The provisions of Order II Rule 4 of CPC permits the joinder of cause of action for recovery of immovable property and claim for mesne profits or arrears of rent in respect of the property claimed or any part thereof. Order XX of CPC contains provisions governing “Judgment and Decree” and the provisions of Rule 12 of Order XX pertains to decree for possession and mesne profits.

17. The provisions of Order XX Rule 12 indicates two distinct periods for seeking rent or mesne profits i.e. period prior to the institution of the suit and period post institution of the suit, until the delivery of possession by the decree-holder or relinquishment of possession by the judgment-debtor. In exercise of its rule making sa_mandawgad 13 8wp7607-21 power under Section 122 of CPC in its application to the State of Maharashtra, the High Court has substituted Rule 12 of Order XX under the Central Act with the Rule framed by the High Court. The Central Act was amended by the Amendment Act 104 of 1976. Mr.Thorat, learned counsel for the Defendant has sought to distinguish the judgments cited by Mr.Narichanai on the ground that the position of Order XX Rule 12 vis-a-vis the Central Act and Bombay amendment differs pre and post the 1976 amendment and the decisions are therefore inapplicable.

18. Before adverting further it will be profitable to juxtaposition Order XX Rule 12 of CPC and the Bombay Amendment substituting Rule 12 pre and post amendment of 1976.

PRIOR TO 1976 AMENDMENT Order XX Rule 12 (1) Where the suit is for recovery of possession of immoveable property and for rent or mesne profits, the Court may pass a decree- (a) for possession of the property (b) for the rent or mesne profits which have accrued on the property during a period prior to the institution of the suit or directing an inquiry as to such rent or mesne profits:

(c) directing an inquiry as to rent or mesne profits from the institution of suit until-

(i) the delivery of possession to the decree holder

(ii) the relinquishment of possession by the sa_mandawgad 14 8wp7607-21

(iii) the expiration of three years from the date of the decree, whichever event first occurs.

2) Where an inquiry is directed under clause (b) or (c), a final decree shall be passed in accordance with the result of such inquiry.

BOMBAY AMENDMENT Order XX Rule 12 (1) Where a suit is for recovery of possession of immoveable property and for rent or mesne profits, the (b) for the rent or mesne profits which have accrued on the property during a period prior to the institution of the suit or directing an inquiry as to such rent or mesne profits:

(c) directing an inquiry as to rent or mesne profits from the institution of suit until-

(ii) the relinquishment of possession by the judgment debtor with notice to the decree holder through the Court

2) Where an inquiry is directed under clause (b) or (c) of sub rule (1) above, a final decree shall be passed in accordance with the result of such inquiry. POST – 1976 AMENDMENT ACT 104 OF 1976: Order XX Rule 12 12(1) Where the suit is for recovery of possession of immoveable property and for rent or mesne profits, the (b) for the rent which have accrued on the property during a period prior to the institution of the suit or directing an inquiry as to such rent: sa_mandawgad 15 8wp7607-21 (ba) for the mesne profits or directing an inquiry as to such mesne profits

(c) directing an inquiry as to rent or mesne profits from the institution of suit until-

(ii) the relinquishment of possession by the judgment debtor with notice to the decree holder through the Court or

(iii) the expiration of three years from the date of the decree, whichever event first occurs.

2) Where an inquiry is directed under clause (b) or (c), a final decree shall be passed in accordance with the result of such inquiry.

BOMBAY AMENDMENT POST 1976: Order XX Rule 12 (1) Where a suit is for recovery of possession of immoveable property and for rent or mesne profits, the (b) for the rent or mesne profits which have accrued on the property during a period prior to the institution of the suit or directing an inquiry as to such rent or mesne profits:

(c) directing an inquiry as to rent or mesne profits from the institution of suit until-

(ii) the relinquishment of possession by the judgment debtor with notice to the decree holder through the Court

2) Where an inquiry is directed under clause (b) or (c) of sub rule (1) above, a final decree shall be passed in accordance with the result of such inquiry.

19. The provisions of Order XX Rule 12 of the Central Act when juxtaposed with the Bombay amendment, indicates that till the sa_mandawgad 16 8wp7607-21 amendment of 1976 which took effect from 1st February, 1977, except sub-clause (c) (iii) of Clause (1) of Rule 12 which was absent from the Bombay amendment, the provisions are pari materia. Post the amendment in the year 1977, sub clause (ba) of clause (1) was introduced by Amendment Act 104 of 1976 in Rule 12 of Order XX which does not find place in the Bombay amendment.

20. Having summarised the statutory provisions pre and post the amendment vide Amendment Act 104 of 1976, the plaint will have to be scrutinised to ascertain the relief sought by the Plaintiff. The plaintiff has come with a case that by notice dated 11th February, 2009, tenancy has been terminated, which notice was received by the Defendant no.1 on 14th February, 2009. In paragraph 9 of the plaint, it is pleaded that the defendant no.1 is liable to pay the plaintiff’s mesne profits @ market rate of Rs 100/ per square foot per month amounting to Rs.1,16,10,000/ per month from the date of termination of his tenancy in respect of the suit property till defendant no.1 hands over the possession of the suit property to the plaintiff. In paragraph No.10 of the plaint, the plaintiff has pleaded that the defendant No.1 is liable to handover to the plaintiff the amount which they may recover from any third party whom the defendant no.1 has permitted to occupy the portion of the suit sa_mandawgad 17 8wp7607-21 property on account of mesne profits to be finally adjusted against the claim of mesne profits made by the Plaintiff. Paragraph 14 of the plaint, values the claim at the annual rack rent of Rs.6,500/- p.m. and undertaking is given to pay additional court fees on the mesne profits being determined. Prayer clause (h) prays for an enquiry into mesne profits under Order XX Rule 12 of the CPC and prayer clause (e) which is an interim relief seeks direction to the defendant no.1 to pay over money that they received from third party on account of mesne profits.

21. Perusal of the averments in the plaint would indicate that the mesne profits quantified at Rs.1,16,10,000/- per month @ Rs.100/ per square foot is sought from the date of termination of the tenancy till the handing over of the possession i.e. past and future mesne profits. However in the prayer clause (h) the relief sought is inquiry into mesne profits under Order XX Rule 12 of CPC. The submission of learned counsel for Plaintiff that prayer clause (e) of the plaint seeks past mesne profits is misconceived as firstly the prayer is for interim relief and secondly the amount has not been crystallised. Mr. Thorat, is therefore right in his contention when he points out the notice of termination which calls upon the defendant sa_mandawgad 18 8wp7607-21 no.1 to handover the possession after a period of 30 days from the receipt of the notice which expired on 16th March 2009 and the suit was filed on 17th March, 2009. The dates mentioned by Mr. Thorat is not disputed by Mr. Narichania.

22. What can be inferred is that the possession became unlawful on 16th March, 2009 and as such, the suit having been filed immediately on 17th March, 2009, there is no question of past mesne profits. Prayer clause (h) sought an inquiry into future mesne profits. The submission of Mr. Thorat is also supported by the decision in the case Gopalakrishna Pillai and Others, (supra) which has been relied by the learned counsel for the Plaintiff, where the Apex Court, in an appeal from the decision of Madras High Court, in the context of a decree declaring that the plaintiffs therein were entitled to past mesne profits and inquiry into the future mesne profits under Order XX Rule 12 was considering the issue whether in the absence of the specific prayer, Court has a jurisdiction to pass a decree for such mesne profits.

23. The Apex Court held that with regard to past mesne profits the plaintiff has an existing cause of action on the date of institution of suit and the plaintiff must plead this cause of action, specifically sa_mandawgad 19 8wp7607-21 claim a decree for past mesne profits, value the claim approximately and pay court fees thereon. The Apex Court in that case held that the Court has discretionary power to pass a decree directing an enquiry in future mesne profits and the Court may grant this general relief though it is not specifically asked for in the plaint.

24. Considering the decision of the Apex Court if the plaint is perused, although there are pleadings as regards the claim from the date of termination of the tenancy and a specific amount has been claimed per month considering that the suit has been filed on the very next day of the expiry of the date by which the defendant no.1 was directed to hand over the vacant possession, the claim could not be said to be a claim for past mesne profits and the undisputed position is that the prayer clause does not seek any relief that the said amount be ordered to be paid to the Plaintiff. Neither the claim for past mesne profits have been valued nor Court fees have been paid thereon. It can therefore be inferred that the claim of the Plaintiff in the plaint was for an enquiry under Order XX Rule 12 of CPC for future mesne profits.

25. The question therefore arises whether the Trial Court has the discretion to pass a decree for future mesne profits alongwith the sa_mandawgad 20 8wp7607-21 decree for possession or the Trial Court has to pass a preliminary decree and direct an inquiry into the mesne profits post institution of the suit under Order XX Rule 12. As indicated above, it is only after the amendment of the year 1977 that clause (ba) was introduced which does not find place in the Bombay amendment which applies in the instant case.

26. Mr. Narichania by relying on various decisions noted above would contend that the position has been settled that the Trial Court has the discretion to pass the decree for future mesne profits alongwith the decree for possession, which has been sought to be distinguished by Mr. Thorat.

27. Coming to the decisions relied upon by Mr. Narichania, as regards the decision in the case of Faredoon Maneckji Dalal (supra), in facts of that case there was specific prayer for past mesne profits and future mesne profits quantifying both past and future mesne profits which came to be decreed. The learned Single Judge of this Court was considering the dispute raised by the Plaintiff as regards the payment of the additional fees on the aggregate amount of mesne profits till the date of judgment. The Court held that under the old Code of Civil Procedure, the Court could determine the amount of sa_mandawgad 21 8wp7607-21 mesne profits pendente lite upto the institution of the suit and pass a decree for it alongwith a decree for possession and the Court could not under the old Act determine the future mesne profits in the suit and pass a decree, whereas under the present Code, the Court can determine past and future mesne profits in the suit itself and make a decree called final decree for mesne profits capable for execution.

28. The learned Single Judge relied upon the decision of Madras High Court in the case of Vella Veeran Chetti (supra). The Madras High Court held that there is nothing to preclude the Court from passing the decree without directing an inquiry if the parties agree or do not object….. In cases where an inquiry is unnecessary, it seems to us that it would be an idle formality to pass such a decree. (Emphasis supplied).

29. Pertinently, the Madras High Court relied upon the decision in A.P. Bagchi vs Mrs. F. Morgan (supra), where the Allahabad High Court held that when the plaintiff made it clear that she confined her relief to the recovery of fixed rents which had been agreed upon by the parties, the amount was definitely ascertained and there was no occasion for framing a preliminary decree so that there may be another ascertainment of the amount due to the plaintiff. The sa_mandawgad 22 8wp7607-21 principle of law laid down by the Madras High Court is that the Courts are not precluded from passing the decree for future mesne profits if the parties agree or do not dispute in which case an inquiry becomes unnecessary as in case where the relief is confined to the fixed rent in which case an inquiry into the amount claimed becomes unnecessary.

30. The decision in Faredoon Maneckji Dalal (supra)was not considering the issue as to the power of Trial Court to pass a decree for future mesne profits alongwith decree for possession. In that case there was no challenge as in the present case that clause (ba) of Order XX Rule 12 is conspicuous by its absence in Bombay amendment and as such the decree for future mesne profits could not be passed.

31. In the case of Salgaonkar Engineers Private Ltd. (supra), the relief sought was for past and future mesne profits @ Rs.2,500/whereas the lease rent was Rs.2,000/- p.m. The suit was decreed granting Rs.2,000/- as rent/mesne profits compensation from October, 1992 i.e. post institution of the suit till handing over possession. Learned Single Judge of this Court held that the use of the word “may” confers discretion on the Court either to direct or not sa_mandawgad 23 8wp7607-21 to direct an enquiry into future mesne profits and in case there is already sufficient material on record, it may not be necessary to direct enquiry.

32. The decisions of the Delhi High Court in case of Hindustan Petroleum Corporation Ltd. vs. Mohanjit Singh (supra), Sewa International Fashions vs. Meenakshi Anand (supra) and Consep India Pvt Ltd vs. Cepco Industries Ltd. (supra) considered Rule 12(1) (ba) of Order XX of the Central Act which does not find place in the Bombay amendment.

33. As regards the decision of the Calcutta High Court in the case of Ganeshi Lal Sharma vs Sneha Lata Dasi (supra) Mr.Narichania would submit that the decision of the Calcutta High Court was a pre-1977 decision which is pari materia with the Bombay Amendment, which was disputed by the learned counsel appearing for the defendant no.1, who placed on record pre-1977 Bombay Amendment to Rule 12 of Order XX, which reads thus:

(c) directing an enguiry as to rent or mesne profits from the institution of the suit until –

(i) the delivery of possession to the decree-holder, or

(ii) the relinquishment of possession by the judgmentdebtor with notice to the decree-holder through the Court. (2) Where an inquiry is directed under clause (b) or clause (c) of sub-rule (1) above, a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such enquiry.” (1-11-1966)

34. The provisions quoted above will indicate that the Calcutta High Court was considering the provisions of Order XX Rule 12(1) of CPC, which is reproduced in the decision and reads thus: “Where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree – (a) for the possession of the property; (b) for the rent or mesne profits which have accrued on the property during a period prior to the institution of the suit or directing an enquiry as to such rent or mesne profits;

(c) directing an enquiry as to rent or mesne profits from the institution of the suit until –

(i) the delivery of possession to the decree-holder,

(ii) the relinquishment of possession by the judgment-debtor with notice to the decree-holder through the Court, or

(iii) the expiration of three years from the date of the decree, sa_mandawgad 25 8wp7607-21 whichever event first occurs.”

35. As held by the Calcutta High Court in Ganeshi Lal Sharma (supra), usually the Courts would pass preliminary decree for future mesne profits, however, the Courts have the discretion to pass decree for future mesne profits if in circumstances of the case the enquiry is unnecessary or waived by the parties. The Allahabad High Court in A.P. Bagchi vs. Mrs. F. Morgan (supra) held that the preliminary decree becomes necessary only where the exact amount has to be ascertained after an examination of fresh evidence and if the plaintiff claims mesne profits on the basis of rent, which is fixed and agreed upon between the parties or if the Court decided that the mesne profits ought to be allowed on that basis, the amount being definitely ascertained, there would be no occasion for passing a preliminary decree so that there may be another ascertainment of the amount due to the plaintiff. Although not binding on this Court, the decision of Calcutta and Allahabad High Court have persuasive value.

36. In the present case, in the plaint it is pleaded that the defendant no.1 is liable to mesne profit at the market rate of Rs.100/- per sq.feet. amounting to Rs.1,16,10,000/- p.m. from the date of termination of his tenancy till handing over the possession. As sa_mandawgad 26 8wp7607-21 such, the mesne profits is not an ascertained amount which was fixed and agreed between the parties. In this eventuality, it cannot be said that an enquiry into the mesne profits is unnecessary. The evidence of PW-2 would indicate that the valuation has been done by taking into account the comparable instances as well as the ready recknor value. As such, the exact amount will have to be determined after examination of the valuer. Mr. Thorat is right in pointing out the order of the trial Court dated 6th March, 2020 rejecting the Application for recasting of issue No.8 that the trial Court itself has held that the question of directing an inquiry would arise in event of decree of possession of immovable property is passed and if it is proved that such parties are entitled to mesne profits and that the same is to be directable by passing of the decree. It cannot thus be said that by virtue of issue No.8 the plaintiffs are entitled to lead evidence as to the future mesne profits in the suit itself.

37. The trial Court while rejecting the application of defendant no.1 to reject the evidence of PW-2 has held that in view of the issue No.8 being framed, the affidavit of PW-2 cannot be said to be irrelevant. While doing so, the trial Court had taken into consideration Clause (ba) of the Order XX Rule 12, whereas it was sa_mandawgad 27 8wp7607-21 the Bombay Amendment which was applicable in the instant case. Further the trial Court failed to notice its earlier finding while rejecting the Application for recasting of the issue. The trial Court held that the decree for mesne profits till the institution of the suit may be passed with the decree for possession of immovable property.

38. It appears that the trial Court considered the evidence of PW-2 as regards past mesne profits. The trial Court failed to notice that the relief sought in the plaint was in respect of future mesne profits, as the suit was filed on the next date of determination of tenancy and that the valuation report was also for the period from March, 2009 to February, 2020, whereas the plaint filed in the month of March 2009. The finding of the trial Court was clearly unsustainable.

39. The Appellate Court held that mesne profits has to be drawn after direction of the trial Court through a preliminary or final decree and if the issue of termination goes negative, there is no use of the evidence of mesne profits. Upon perusal of the Bombay Amendment of Rule 12 of Order XX, the Appellate Court held that only upon the final decree, the evidence of mesne profits will follow and no other fact situation. The Appellate Court considered the prayer clause (h) which sought an enquiry into the mesne profits. sa_mandawgad 28 8wp7607-21

40. In my view, reading of the Bombay Amendment would indicate that the use of the word, “may” vests discretion in the Court to direct an enquiry into future mesne profits. I am respectfully bound by the decision of Goa Bench of this Court in Salgaonkar Engineers Private Ltd. (supra), which holds that in case there is already sufficient material on record it will not be necessary to direct an enquiry into the future mesne profits. In my opinion, where the claim for future mesne profits is an agreed ascertained sum of money directing an enquiry into the future mesne profits, would be an exercise in futility. There is no rationale for reading the Bombay amendment as placing an embargo on the power of the Court in all cases to direct an enquiry into future mesne profits. In cases where the enquiry is unnecessary, the Court has the power to pass a decree for future mesne profits alongwith a decree for eviction. It is also well-known that even after the preliminary decree for enquiry into the mesne profits is passed, the determination of the future mesne profits takes a substantial time.

41. In the instant case, considering the pleadings in the plaint, an enquiry into future mesne profits is necessary.

42. In light of the above, the order of Appellate Court expunging the affidavit of evidence of PW-2 cannot be faulted. Petition fails and is dismissed. (Sharmila U. Deshmukh, J.) Designation: PA To Honourable Judge