ivil Appeal Nos 466 and 2375 of 1969
From the Judgment and Order dated 6 8 78 of the Kerala High Court in Appeal Suit Nos 2763 and 24563
K section Ramamurthy Miss Pushpa Nambiar and A section Nambiar for the Appellant in CA 46669 and R 1 in CA 237569
P Govindan Nair section Balakrishnan and K L Rathi for R 1 in CA 46669 and Appellant in CA 237569
N Sudhakaran section L Aneja and K L Aneja for RR 2 3 in CA 46669 and For RR 3 4 in CA 237569
The Judgment of the Court was delivered by SAKARIA J
These two appeals on certificate arise out of execution petition No 118 of 1962 on the file of the Subordinate Judge Trichur filed by P Meriappa Gounder hereinafter referred to as the plaintiff to execute the decree of the Supreme Court in CA 12956 62 passed on April 22 1958
The common facts out of which these appeals arise are as follows The plaintiff filed a suit on August 23 1950 in the District Court Trichur for specific performance of an agreement dated May 22 1950 made by Soliappa Chettiar hereinafter referred to as defendant 1 to sell a factory known as Sivakami Tiles Works for a consideration of Rs 90003 
The plaintiff made an advance payment on that very date of a sum of Rs 5003 to defendant 1
It was stipulated in the agreement that the sale deed must be executed and registered on or before July 15 1950
It was further provided that out of the balance of sale consideration Rs 50000 would be paid by the plaintiff at the time of the registration and for the remaining Rs 35000  the plaintiff was to execute a mortgage of the suit property to be redeemed on or before May 31 1951
It was further agreed that on payment of Rs 50000 at the time of registration the plaintiff would be put in possession of the suit property
The plaintiff pleaded that he was ready and willing to perform his part of the agreement but came to know that defendant 1 was trying to evade his obligation under the agreement
Accordingly the plaintiff sent a registered notice dated July 7 1950 through his lawyer to defendant 1 to which the latter replied the same day that the factory was in possession of one Neelakanta Iyer as lessee who had refused to give up possession and therefore it had become impossible to give effect to the agreement to sell the factory as giving possession to the plaintiff was a condition precedent to the execution of the sale deed
The plaintiff further pleaded that the suit property was really in possession of defendant 1 and the alleged lease
in favour of Neelakanta Iyer was a sham transaction and a device to evade payment of income tax and hence defendant 1 was bound to carry out the terms of the agreement to sell
The suit was contested by defendant 1 who originally was the sole defendant
His case was that although there was an agreement to sell the suit property it had been made clear at the time when negotiation for sale was going on that the factory was in the possession of Neelakanta Iyer as lessee and that it was a condition precedent to the sale that Neelakanta Iyer would surrender his right under the lease and give up possession and that if he refused to do so the agreement to sell would not be given effect to
The defendant urged Neelakanta Iyer to surrender the possession but he refused to do so
In the circumstances the contract for sale had become incapable of performance
He denied that the lease in favour of Neelakanta was a sham transaction
63 Pending the suit T V Kochivareed the deceased husband of the A appellant Lucy Kochivareed in CA 46669 obtained an assignment of the lease exhibit D 3 from Neelakanta Iyer on March 5 1951
Since Kochivareed was later on when the suit was pending in the Supreme Court impleaded as defendant 3 for the sake of convenience the appellant in CA 46669 will hereinafter be referred to as defendant 3 On March 8 1951 defendant 1 executed a sale deed of the suit property in favour of George Thatil who is the nephew of defendant 3 and will hereinafter be referred to as defendant 2
Like defendant 3 he also joined as defendant 2 at his own request when the appeal was pending in this Court
On December 23 1950 the Court appointed a Receiver to manage the suit property
On March 21 1951 defendant 3 obtained a lease of the suit property at a rent Or Rs 15000 for a period of one year from the Receiver
The term of the lease was extended for one more year and two years  rent amounting to Rs 30000 was collected and deposited in the Court by the Receiver
The District Court Trichur on August 28 1952 decreed the suit for specific performance and mesne profits at a reduced rate of Rs 15000 per annum instead of Rs 30000 per annum claimed by the plaintiff
Against the decree of the Trial Court two appeals were filed in the High Court one by defendant 3 and the other by defendant 2
The High Court allowed the appeals and dismissed the plaintiff s suit by a judgment dated March 31 1953
Aggrieved the plaintiff filed CA 12956 in this Court
The plaintiff  appeal was allowed by this Court as per its judgment and decree dated April 22 1958
Since a good deal of argument centers round the construction of this Court s decree dated April 22 1958 it will be pertinent to extract here the material part of that decree
a That the appellant herein do deposit within thirty days of the receipt in the decree of this Court the sum of Rs 85000 in the District Court of Trichur and that on the aforesaid amount being deposited the said District Court of Trichur do forthwith give notice thereof to the respondents abovenamed and that on the aforesaid amount of Rs 85000 being deposited respondents Nos 2 and 3 herein namely section M R Solaiyappa Chettiar and George Thatil do within 30 64 days from the date of receipt of the notice of the said deposit execute and register a sale deed in favour of the plaintiff Appellant in respect of the suit property
b    c That the respondents above named do pay to the appellant the cost incurred by him in the Court of the District Judge Trichur in Suit No 183 of 1950 and the costs incurred by him in the former High Court of   d    e 
AND THIS COURT DOTH FURTHER DE CLARE that appellant shall be entitled to a mesne profits against such of the respondents Is may have been in possession of the property except during the period that the property was in the custody and management of the receiver appointed by the trial court b the net sum collected by the Receiver during his management and c credit for all such sums as he may have advanced to the receiver under the direction of the Court for the management of property AND THIS COURT DOTH ACCORDINGLY DIRECT that the trial Court do hold an enquiry about the mesne pro fits and such sums as may be found to be due on inquiry against the second and third respondents in respect of the mesne profits be deducted from the amount to be deposited in cash in the Court by the appellant aforesaid in accordance with clause a supra and do direct the payment of the remaining amount if any to the third respondent defendant 2 who is the assignee of the second respondent defendant 1 pendent lite Emphasis supplied On September 12 1958 the plaintiff filed an application in the District Court for execution of the said decree dated April 22 1958 in respect of all the reliefs allowed thereunder
After the decree holder had deposited a sum of Rs 85000  as directed in the decree the execution application was eventually made over to the Subordinate Judge Trichur
As per the decree the sale deed was executed on March 16 1959 by the Court on behalf of defendants 1 and 2 in favour of 65 the plaintiff and the possession of the property in consequence thereof was delivered to him on March 29 1959
Thereafter the plaintiff filed Miscellaneous Petition No 22960 in the Trial Court
Before the Court defendant 3 on November 11 1958 filed objections that he was not iliability for mesne profits as he was never in possession and occupation of the suit property
He further contended that his liability for mesne profits if any
was limited to the period commencing from the date of notice of the deposit in Court of the amount of Rs 85000 till the date of delivery of possession and that the plaintiff was not entitled to interest on mesne profits or on costs by way of restitution
Defendant 2 contended that he was not liable for mesne profits as he had never been in possession and management of the suit property and that the entire liability if at all any for mesne profits was that of defendant 3 who had been in exclusive possession of the property
On December 22 1962 the court of first instance passed orders in respect of mesne profits costs etc
It found that defendant 1 2 and 3 were jointly and severally liable to the plaintiff for a sum of Rs 1016267 on account of costs of the Trial Court and the Supreme Court
The Court further found that defendant 2 was separately liable to pay to the plaintiff a sum of Rs 1194163 consisting of three items namely Rs l 23902 on account of costs recovered by defendant 2 from decree holder and payable by former with interest by way of restitution Rs 257701 on account of costs in the High Court and Rs 8125 on account of mesne profits from the factory from the date of suit till date of exhibit D 3
The aggregate amount under these two heads came to Rs 2310370 which was allowed to be set off against Rs 85000 deposited in Court by the plaintiff and the balance was directed to be paid to the second defendant s mother his assignee
Apart from the sum of Rs 1016267 jointly and severally payable by the third and second respondents the District Court found that the third defendant was separately liable to pay the plaintiff a sum of Rs l 5708681 consisting of these items a Rs 7298l0 by way of restitution on account of costs recovered from the decree holder including interest thereon b Rs 3997500 Rent deposited and withdrawn by him together with interest thereon c Rs 117700 costs payable by him for the appeal in the High Court and 66 d Rs 10863671 net mesne profits payable by him from April 1 1963 to the date of delivery of possession during which period he was found to be in possession and management
After giving credit of a sum of Rs 48321 deposited by the third defendant in Court on March 9 1959 a net sum of Rs 10876581 was directed to be realised by the plaintiff from the estate of defendant 3 in the hands of his legal representative appellant in CA 46669
By the same order the Court dismissed Misc
Petition No 22960 that had been filed by the plaintiff for determination of the extent of waste committed upon the property by defendant 3
Aggrieved by that Judgment and Order Lucy Kochivareed wife of defendant 3 as well as the plaintiff and the second defendant preferred appeals in the High Court of Kerala
By a common judgment dated August 6 1968 the High Court partly allowed the appeals filed respectively by the plaintiff and the legal representatives of defendant 3 but dismissed the appeal AS 24863 filed by defendant 2
The High Court inter alia affirmed the finding of the Trial Court that the third defendant was in sole and exclusive possession of the suit property during the period in question
The Trial Court s findings with regard to the quantum of mesne profits per year were not found satis factory
The High Court assessed the mesne profits at a flat rate of Rs 15000 per year and determined the obligations of the parties accordingly
The High Court further found that the second and third defendants were jointly and severally liable to pay Rs 10200 by way of costs and the second defendant alone was liable to pay Rs i 1000 by way of restitution costs in the High Court and mesne profits to the plaintiff and that the aggregate of Rs 21200 be set off against the sum of Rs 85000 deposited by the plaintiff and the balance be paid to the mother of defendant 2
Aggrieved by the judgment dated August 8 1968 of the High Court Lucy Kochivareed wife of the deceased defendant 3 has filed Civil Appeal 466 of 1969 while the plaintiff has preferred Civil Appeal No 2375 of 1969
Both the appeals will be disposed of by this common judgment
We will first take up Civil Appeal 466 of 1969 filed by the widow of defendant 3
The main contention of Mr K section Ramamurthy learned counsel for the appellant Luci Kochivareed is that if the decree dated April 22 1958 passed by this Court in CA 12956 is properly construed in the 67 light of the material on record and the law on the subject then three consequences inevitably follow i Both defendant 2 and defendant 3 would be deemed to be in possession of the suit property during the period in question
The possession of defendant 2 was juridical or legal possession of an owner he being the purchaser of the property from defendant l while that of defendant 3 was on actual permissive possession with the consent of defendant 2
Defendant 2 and defendant 3 being in the position of joint tort feasors would be jointly and severally liable for mesne profits or compensation
This being the case the plaintiff was bound to suffer a set off to the purchase price Rs 85000  deposited by him against his claim for mesne profits against defendant 3
But after the decree of this Court the plaintiff in pursuance of a collusion between him and defendant 2 allowed the High Court to cancel the security given by defendant 2 for withdrawal of Rs 62900 out of the purchase price deposited by the plaintiff
The plaintiff was thus precluded by his conduct from claim in that much amount from defendant 3
After setting off the entire deposit of Rs 85000  defendant 3 will be liable only for the balance of the mesne profit jointly with defendant 2
ii The plaintiff s right to possession of the property under the decree accrued when he deposited the price in Court and thereafter obtained the conveyance in his favour on March 16 1959
The possession of defendants 2 and 3 as against the plaintiff became wrongful only from the date on which the conveyance was executed in his favour at any rate on the date September 12 1958 on which he fully deposited the price in Court
iii The period for which the mesne profits have been awarded is to be restricted to the one permissible under Order XX Rule 121 c of the Code of Civil Procedure
Such period in the light of this provision would be the one commencing from the date the institution of the suit and ending on the expiration of three years from the date of the decree of the Trial Court
The expression the decree occurring in the aforesaid clause according to the counsel means the decree of the Trial Court
In other words the maximum period for which mesne profits can be awarded and would be deemed to have been awarded is three years from the date of the decree of the Trial Court and the Courts below were wrong in awarding mesne profits for a period of more than six years commencing from the date of the institution of the suit till the delivery of possession in accordance with the decree of this Court to the plaintiff
68 Upon the above premises Mr Ramamurthy maintains that the plain tiff will not be entitled to any mesne profits because his right to possession did not accrue within three years of the date of the decree of the Trial Court
Such a right according to the counsel accrued to the plaintiff only on April 22 1958 when his amended suit for specific performance and possession and future mesne profits was decreed
In the alternative as already noticed counsel submits that mesne profits could not be awarded for any period prior to the date September 12 1958 on which the plaintiff deposited the price because his right to possession accrued on that date and not earlier In support of his contentions Shri Ramamurthy has cited a decision of this Court in Chitturi Subbanna vs Kudapa Subbanna  Orsl He has also referred to some other rulings wherein some general principles have been enunciated as to who can be made liable for mesne profits
On the other hand Mr Govindan Nair learned counsel for the plaintiff submits that the decree dated April 22 1958 of this Court is crystal clear
There is no ambiguity in it
Read in the light of this Court s judgment it unmistakably shows that whosoever out of the defendants waswere in actual possession would be liable for the mesne profits from the date of the suit till the delivery of possession
It is pointed out that in the courts below the positive stand taken by defendant 3 was that he was never in possession of the Suit property and therefore was not liable for mesne profits
It was never the case of defendant 3 that he was in derivative possession under defendant 2
Counsel submits that defendant 3 should not be allowed to take a stand diametrically opposed to the one taken by him in the courts below
It is further submitted that the decree of this Court was final decree so far as it laid down that the liability for the mesne profits shall be fixed on the basis of the defendant found in actual possession of the suit property
Before dealing with the contentions canvassed on both sides it will be profitable to notice the general principles relating to the liability formesne profits
Mesne profits being in the natural of damages no invariable rule governing their award and assessment in every case can be laid down and the Court may mould it according to the justice of the case
Even so one broad basic principle governing the liability for mesne profits is discernible from Section 212 of the Code of Civil Procedure which defines mesne profits  to mean those profits which the person in wrongfil possession of property actually received or might with ordinary 1  69 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
From a plain reading of this definition it is clear that wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defendant s liability therefor
As a rule therefore liability to pay mesne profits 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 for mesne profits
But where the plaintiff s dispossession or his being kept out of possession can be regarded as a joint or concerted act of several persons each of them who participates in the commission of that act would be liable for mesne profits even though he was not in actual possession and the profits were received not by him but by some of his confederates
ln such a case where the claim for mesne profits is against several trespassers who combined to keep the plaintiff out of possession it is open to the Court to adopt either of the two courses
It may by its decree hold all such trespassers jointly and severally liable for mesne profits leaving them to have their respective rights adjusted in a separate suit for contribution or it may if there is proper material before it ascertain and apportion the liability of each of them on a proper application made by the defendant during the same proceedings
Another principle recognised by this Court in Chitturi Subbanna vs Kudapa Subbanna ibid is that a decree under Order XX Rule 12 of the Code directing enquiry into mesne profits howsoever expressed must be construed to be a decree directing the enquiry in conformity with the requirements of Rule 121c so that the decree holder is not entitled to mesne profits for a period commencing from the date F of the institution of the suit extending beyond three years from the date of the preliminary decree
Again possession through another such as a tenant may be sufficient to create liability for mesne profits if such possession is wrongful
We will now deal with the contentions advanced by Mr Ramamurthy in the light of these principles
The first argument as already noticed is that both defendants 2 and 3 were in possession of the suit property during the period in question
It is contended that the possession of defendant 2 was the legal possession of an owner while that of defendant 3 derivative possession of a lessee or licensee under the former
70 A perusal of the decree dated April 22 1958 of this Court extracted in a foregoing part of this judgment show s that it was a composite decree partly final partly preliminary
It was final in so far as it granted the reliefs of specific performance and possession on deposit of the price by the plaintiff
It was preliminary inasmuch it directed an inquiry with regard to the assessment of mesne profits and as to who out of the defendants waswere liable for payment of those mesne profits
But it laid down in no uncertain terms that only such of the defendants would be liable for mesne profits as may have been in possession of the property
Construed in conformity with the legal principles enunciated above this direction in the decree means that only the defendant or defendants found in actual possession and enjoyment of the property would be liable for mesne profits
In the courts below at no stage defendant 3 took up the position that he was in derivative possession of the property under defendant 2
On the contrary in his objection petition filed before the District Court on November 11 1958 defendant 3 emphatically asserted that he is not liable for mesne profits for the suit property as he was never in pos session and occupation of the same
Defendant 3 further vehemently pleaded that it was never intended at any time that he defendant 3 should be a lessee of the property nor was he a lessee at any time
In para 3 of his petition defendant 3 further pleaded that the purchase of the factory was made in favour Of defendant 2 with money advanced by him defendant 3 and the intention then was that the suit property should be worked by defendant 2 with funds advanced by defendant 3 who should be recouped from the profits accrued from the proper y or otherwise in respect of the purchase money advanced by him as also the advances for the working expenses
In paragraph 5 he further pleaded that in any event he cannot be held liable for any amount more than what is stipulated in the lease deed EX
I in favour of Neelakantha Iyer
There is not even a whisper in the pleadings that defendant 2 and defendant 3 were joint tort feasors and therefore jointly and severally liable for mesne profits
The plea now pressed into argument by Mr Ramamurthy is thus a complete somersault of the position that had been taken in the courts below
The Court of first instance after an exhaustive
consideration of the overwhelming evidence oral and documentary on record reached the finding that ever since March 5 1951 defendant 3 was while defendant 71 2 was not in actual control management and possession of the suit property and therefore in terms of the decree dated April 22 1958 of this Court defendant 3 alone would be liable for mesne profits of the property
In appeal the High Court found that the Court below was perfectly right in holding that the 3rd defendant was in sole and exclusive possession during the period in question and it is idle for him 3 to pretend otherwise
Indeed the third defendant himself had repeatedly admitted in various documents that he was in possession
In his application Ex 77a made in the Court of first instance on March 7 1951 the defendant admitted that he was in possession in pursuance of assignment of lease made
in his favour by Neelakantha Iyer on March 5 1951
This lease has been found by this Court to be a sham transaction
Further defendant 3 on March 21 1951 executed a lease in favour of the Receiver appointed by the Court
In this cease also he admitted that he had been in possession of the property since March 5 1951
The lease executed by defendant 3 in favour of the Receiver ensured for a period of two years on a yearly rental of Rs 15000 and he deposited Rs 30000  therefor as rental in Court
Then the Bank accounts of the factory except for a short period from March 25 1953 to November 11 1954 were throughout in the name of the third defendant as lessee thereof
We have absolutely no reason to differ from this concurrent finding of the courts below that the third defendant was in sole actual possession and control of the suit property from March 3 1951 when he obtained the alleged assignment of the lease in his favour from Neelakantha Iyer
In terms of the aforesaid decree of this Court therefore defendant 3 alone is liable for mesne profits in respect of the period he was in pexcepting excepting the period during which the property was under he management of the Court Receiver
As regards the appellant s contention that the amount deposited by the plaintiff towards the price should have been set off against the liability of defendant 3 for mesne profits it may be observed that there is nothing in the decree dated April 22 1958 of this Court which say s that such a set off should be allowed
On the contrary it allowed deduction of the amounts found due against defendant 1 and defendant 2 from the deposit of Rs 85000 to be made by the plaintiff towards the price and further directed that after such deduction the balance of such deposit made by the plaintiff if any shall be paid to the third 1 respondent defendant 2 who is the assignee of the second respondent defendant l  pendente lite 72 Assuming arguendo that both defendants 2 and 3 were liable for mesne profits jointly and severally then also the plaintiff could at his option recover the whole of the amount of mesne profits from either of them and how such inter se liability of the defendants was to be adjusted or apportioned was a matter between the defendants only
The plaintiff was not bound to suffer a set off in favour of defendant 3 merely because defendant 2 or his assignee withdrew the price deposited by the plaintiff without furnishing any security for its refund or adjustment towards the liability of defendant 3 there being no evidence whatever on record to show that such withdrawal was the result of any collusion or conspiracy between the plaintiff and defendant 2 against defendant 3
Assuming further for the sake of argument that defendant 2 and defendant 3 were  both acting in concert to keep the plaintiff out of pos session it was not necessary for the courts below to decide the issue with regard to apportionment of liability and its adjustment between defendants 2 and 3
Indeed the adoption of such a course would have militated against the finding that defendant 3 alone was in exclusive possession and control of the suit property ever since March 5 1951
We therefore negative the first contention of the appellant
This takes us to the second and third points pressed into argument by Mr Ramamurthy
It is to be noted that defendant 3 entered into possession of the suit property under an assignment of sham lease from Neelkantha Iyer on March 5 1951 during the pendency of the plaintiff s suit which was instituted on August 25 1950
The plaintiff had deposited Rs 50000 some time after the presentation of the plaint Under the agreement for sale dated May 22 1950 made by defendant 1 in favour of the plaintiff the total sale consideration was fixed at Rs 90003 
Out of it Rs 5003 had been paid to defendants on the very date of the agreement
It was further stipulated that out of the balance Rs 55000 would be paid by the plaintiff purchaser at the time of the registration of the sale deed which was to be executed and registered on or before July 15 1950
It was further stipulated that on payment of the further sum of Rs 50000  the plaintiff would be entitled to be put in possession of the suit property
Thus when defendant 3 entered into possession first under the garb of an assignee of a sham lease from Neelakantha Iyer and then further purchased the property with his own funds in favour of defendant 2 pendente lite he was fully conscious that he was purchasing a litigation
His possession was therefore wrongful qua the plaintiff from its very inception 73 The material part of Rule 121 of Order XX of the Code of Civil procedure provides Where a suit is for the recovery of possession of immoveable property and for rent or mesne profits the Court may pass a decree a for the possession of the property b     ba    c directing an inquiry as to rent or mesne profits from the institution of the suit until i the delivery of possession to the decree holder ii the expiration of possession by the judgment debtor with notice to the decree holder through the Court or iiithe expiration of three years from the date of the decree whichever event first occurs
 D Mr Ramamurthy argued if we may say so with respect somewhat inconsistently that the word decree in sub clause iii of clause c of the aforesaid rule 121 means the decree for possession and mesne profits which the trial court ought to have passed and that in this view of the matter the period of three years mentioned in sub clause iii will be counted from August 28 1952 the date of the trial court s decree whereby mesne profits at the reduced rate of Rs 15000 instead of Rs 30000 per annum claimed by the plaintiff were awarded
In that view of the matter according to the counsel the plaintiff was not entitled under the law to get a decree for mesne profits beyond August 27 1955
It is pointed out that since the plaintiff had as a result of the acceptance of the defendants  appeal and dismissal of his suit by the High Court withdrawn the deposit of Rs 50000 on August 19 1953 and he had not redeposited the amount until February g 1959 he was not then entitled to possession and in consequence to any mesne profits during this period
The argument is certainly ingenious but untenable being founded on fallacious premises
The period of three years mentioned in sub clause iii of clause c of Rule 121 is to be computed from the date of the decree of this Court ie from April 22 1958 and it will expire on the date on which possession was delivered or relinquished by the defendant in favour of the decree holder pursuant to that decree
In other words the decree mentioned in sub clause 6 196SCI79 74 iii of the aforesaid clause c would be the appellate decree dated April 22 1958 of this Court
The period of three years mentioned in the said sub clause is therefore to be reckoned from April 227 1958
The words whichever event first occurs in sub c1ause iii imply that the maximum period for which future mesne profits can be awarded is three years from the date of the decree for possession and mesne profits finally passed
The courts below therefore while holding that defendant 3 was liable to pay mesne profits for a period of about 6 years commencing from March 5 1951March 21 195l till the delivery of possession in September 1958 less the period during which the property was under the management of the Receiver were acting in conformity with the law and the terms of the decree dated April 22 1958 of this Court
We therefore reject these contentions also
Another contention canvassed by Mr Ramamurthy was that the courts below have wrongly disallowed deduction for interest on the deposit of Rs 50000  which the plaintiff had withdrawn on August 19 1953 and had redeposited on February 9 1959
It appears to us that in all fairness the defendant is entitled to deduction for interest for the period from August 19 1953 to February 9 1959 on the sum of Rs 50000  which at 6 per cent per annum after deducting the interest for the period during which the property was under the management of the Receiver
According to the agreed calculations made the counsel for the parties it works out to Rs 14000 approximately
We see no reason why deduction of this amount be not allowed from the mesne profits assessed against defendant 3
We will now take up Civil Appeal No 2375 of 1969 filed by the plaintiff Mr Govindan Nair learned counsel for the plaintiff appellant
has contended i that mesne profits ought to have been awarded at the Rate of Rs 25000 per annum
The High Court was in error in awarding the same at the rate of Rs 15000  ii that the High Court was not justified in reducing the rate on interest from 6 per cent per annum awarded by the Trial Court to 4 per cent per annum iii that interest at 6 per cent per annum was rightly awarded by the court of first instance on the sum of Rs 30000  which was two years rental paid by defendant 3 under the lease taken from the Receiver for the period from August 19 1953 to March 9 1959 and the High Court was in error in disallowing that interest and 75 iv that the Courts below were not justified in denying costs to the plaintiff in the inquiry as to mesne profits or in appeal arising therefrom
We will deal with these contentions ad seriatim
Contention i In this connection Mr Nair drew our attention to Exhibits D 8 to D 15 which are Balance Sheets and Profit  Loss Accounts of the Sivakami Tile Works relating to the period from March 31 l953 to November S 1958
These documents were prepared at the instance of the third defendant for the purposes of his Income tax returns
The High Court found that these Balance Sheets and Profit  Loss Accounts prepared for Income tax puropses were suspicious documents and by themselves were not proof of the profits derived
Mr Nair has no quarrel with this finding
He however contended That the High Court ought to have worked out the real profits by taking into account the quantity of clay purchased according to these documents
In this connection it is submitted that according to the evidence produced on the side of the plaintiff about five candies of clay are required for producing 1000 small tiles and even according to the evidence of the second defendant as CPW 2 51 to 6 candies are required for 1000 small tiles
We are not impressed by this argument
The High Court has fully considered the evidence produced on the side of the plaintiff
It noted that the plaintiff also had not produced any cogent evidence to show what were the profits earned by him by working the factory in dispute for the period of one year preceding the date of his examination
By the time plaintiff appeared in the witness box he had been working this factory for about one year
In the alternative Mr Nair submitted that even during the period of two years when the Receiver was there and defendant 3 worked the factory as a lessee under the former he had made a profit of Rs 22000 
Our attention has also been drawn to the document exhibit D 8 that the income for the first year ending 1952 was Rs 20000 
The point pressed into argument is that the highest profit made by him according to these Balance Sheets and Profit  Loss Accounts during any year by defendant 3 should be taken as the rate for calculating the mesne profits
The contention does not appear to tenable
Once it was found that these Balance Sheets and Profit  loss Accounts were not reliable nor the evidence produced by the plaintiff the only reliable evidence left on the file was the rate at which the factory was leased out 76 by the Receiver to defendant 3
When the lease for the second year was granted to defendant 2 by the Receiver on a rental of Rs 15000  the plaintiff should have objected that the rent was less or he could himself take the lease on paying higher rent
The High Court was therefore not wrong in holding that this rent fixed under the lease granted by the Receiver represented the real rental value of the factory during the year in question and in the absence of any other reliable evidence for assessing the profits actually earned or which with due diligence could have been earned the mesne profits may reasonably be fixed at Rs 15000 per annum
We therefore negative the first contention of Mr Nair Contention ii The Trial Court had awarded interest at the rate of 6 per cent per annum on the mesne profits assessed by it
The High Court reduced that rate to 4 per cent with the observation that having regard to all the circumstances of the case including that the plaintiff had the use of the sum of Rs 85000 which he was to pay towards the price of the property a rate of 4 per cent per annum would be reasonable and just
Even Mr Ramamurthy has not been able to support this reduction in the rate of interest
It was after a long drawn out litigation that the plaintiff got possession of the property
The Trial Court therefore rightly awarded the interest at the rate of 6 per cent per annum
We therefore accept this contention and direct that interest as part of the mesne profits assessed in this case shall be payable at the rate of 6 per cent per annum upto March 29 1959 when possession was delivered in pursuance of the decree of this Court to the plain tiff and further interest at 6 per cent per annum on the outstanding amount shall be payable till the date of payment
Contention iii A sum of Rs 30000  being the rent collected by the Receiver from the third defendant was deposited in Court
This amount was withdrawn by the third defendant on August 19 1953 following the dismissal of the plaintiff s suit by the High Court
When the plaintiff s appeal succeeded in this Court and a decree was passed in his favour by this Court then defendant 3 redeposited the sum of Rs 30000  only on March 9 1959
The Trial Court had awarded interest at 6 per cent per annum on this amount of Rs 30000 for the period from August 19 1953 the date on which the defendant withdrew that deposit until March 9 1959 the date when he redeposited the sum
The High Court has disallowed interest on this account 77 for the aforesaid period on the ground that the Supreme Court does not award that
We are unable to agree with this reasoning
It overlooked the fact that interest on the sum of Rs 30000 was being claimed under Section 144 of the Code of Civil Procedure by way of restitution
Section 144 in terms says that for the purpose of the restitution the Court may make any orders including orders for the payment of interest damages compensation and mesne profits which are properly consequential on variation or reversal of the decree
There is nothing in the decree dated April 22 1958 of this Court which expressly or by implication prohibited the payment of interest on this sum by way of restitution
The Trial Court had rightly allowed interest on amount for this period at 6 per cent per annum and we restore the same direction
Contention iv The argument is that costs have been unfairly denied to the plaintiff by the Courts below
We do not agree
The Courts below could not have been oblivious of  the fact that defendant 3 has since died and the respondent is his widow
We therefore do not want to interfere with the discretion of the Courts below in the matter of costs
For the foregoing reasons we partly allow the plaintiff s appeal Civil Appeal No 2375 of 1969 to the extent indicated above with proportionate costs
We will dismiss the defedant s appeal Civil Appeal No 466 of 1969 except to the extent that the defendant shall be allowed a set off in the sum of Rs 14000  being the interest on the sum Or Rs 50000 for the period from August 19 1953 the date of the withdrawal of the deposit by the plaintiff to the date when he redeposited it
Interest on the outstanding amount at 6 per cent per annum shall be payable till the date of payment
In Civil Appeal 466 of 1969 however the parties will bear their own costs in this Court
CA 237569 allowed in part
CA 46669 SR dismissed with modifications


Summary:
Meriappa Gounder respondent No 1 in CA 46669 and appellant 1 in CA 237569 filed a suit on August 23 1950 in the District Court Trichur for specific performance of an agreement dated May 22 1950 made by one Soliappa Chettiar
The said Soliappa Chettiar pleaded inability to perform the contract in view of the refusal of one Neelakanta Iyer a lessee of the factory to give up possession
Pending the suit Late Kochivareed husband of the appellant in CA 46669 obtained an assignment of the lease from Neelakanta Iyer on March 5 1951
On March 8 1951 Soliappa Chettiar executed a sale deed of the suit property in favour of one George Thatil a nephew of Kochivareed
In the course of the proceedings the trial court appointed a Receiver to manage the suit property
On March 21 1951 Late Kochivareed obtained a lease of the suit property at a rent of Rs 15000 for a period of one year which was renewed for another year from the Receiver and a sum of Rs 30000 SO collected as rent for two years was deposited in the Court by the Receiver
The District Court on August 28 1952 decreed the suit for specific performance and mesne profits at a reduced rate of Rs 15000 per annum instead of at Rs 30000 per annum as claimed
Against the decree two appeals were filed in the High Court by Kochivareed and George Thatil
The High Court allowed the appeals and dismissed the suit by its judgment dated March 21 1953
The appeal filed by Meriappa Gounder CA 12956 was allowed by this Court as per its judgment and decree dated April 22 1958
On the question of the liability of the mesne profits the present appeals arose out of interpretation of the direction e of this Court s decree dated April 22 1958
Allowing the appeals by certificate in part the Court  HELD 1
Mesne profits being in the nature of damages no invariable rule governing their award and assessment in every case can be laid down and the Court may mould it according to the justice of the case
Even so one broad basic principle governing the liability for mesne profits is discernible 59 from section 212 of the Code of Civil Procedure which defines mesne profits  to mean those profits which the person in wrongful possession of property actually received or might with ordinary deligence have received therefrom together with interest on such profits but shall not include profits due to improvements made by the person in wrongful possession 68G H 69A Wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defandant s liability therefor Generally the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits
But where the plaintiff s dispossession or his being kept out of possession can be regarded as a joint or concreted act of several persons each of them who participants in the Commission of that act would be liable for mesne profits even though he was not in actual possession and the profits were received not by him but by some of his confederates
Possession through another such as a tenant may be sufficient to create liability for mesne profits if such possession is wrongful
69A C and G 2
In such a case where the claim for mesne profits is against several tresoassers who had combined to Keep the plaintiff out of possession it Is open to the Court to adopt either of the two courses
It may by its decree hold all such trespassers jointly and severally liable for mesne profits leaving them to have their respective rights adjusted in a separate suit for contribution or it may if there is proper material before it ascertain and apportion the liability of each of them on a proper application made by the defendant during the same proceedings
69C D 3
A decree under Order XX Rule 12 of CPC directing enquiry into mesne profits howsoever expressed must be construed to be a decree directing the enquiry in conformity with the requirements of Rule 121c 80 that the decreeholder is not entitled to mesne profits for a period commencing from the date of the institution of the suit extending beyond three years from the date of the preliminary decree
69E Fl Chitturi Subhanna vs Kudappa Subbanna   referred to
The words whichever event first occurs in sub clause ciii of clause I of Rule 12 of Order XX Civil Procedure Code imply that the maximum period for which future mesne profits can be awarded is three years from the date of the decree for possession and mesne profits finally passed
The period of three years is to be computed from the date of decree of this Court ie from April 22 1958 and it will expire on the date on which possession was delivered or relinquished by the defendant in favour of the decreeholder pursuant to that decree
In other words the decree mentioned in sub clause iii of clause c would be the appellate decree dated April 22 1958 of this Court
The period of three years mentioned in the said subclause is therefore to be reckoned from April 22 1958
73G H 74A B 5
Section 144 of the Code of Civil Procedure in terms says that for the purpose of the restitution the Court may make any orders including orders for the payment of interest damages compensation and mesne profits which are properly consequential on variation or reversal of the decree
77A B There is nothing in the decree dated April 22 1958 of this Court which expressly or by implication prohibits the payment of interest on the sum of 60 Rs 30000 withdrawn by defendant 3 by way of restitution
The trial court had rightly allowed interest
77B C 6
The decree dated April 22 1958 of this Court was a composite decree partly final and party preliminary
It was final in so far as it granted the reliefs of specific performance and possession on deposit of the price by the Plaintiff
It was preliminary in as much as it directed an inquiry with regard to the assessment of mesne profits and as to who out of the defendants waswere liable for payment of those mesne profits
But it laid down in no uncertain terms that only such of the defendants would be liable for mesne profits as may have been in possession of the property
This direction in the decree means that only the defendant or defendants found in actual possession and enjoyment of the property would be liable for mesne profits
70A C In the instant case a The third defendant was in sole actual possession and control of the suit property from March 3 1951 when he obtained the alleged assignment of lease in his favour from Neelakanta Iyer
In terms of the decree of this Court therefore defendant 3 alone is liable for mesne profits in respect of the period he was in possession excepting the period during which the property was under the management of the Court Receiver
71E F b The contention that the possession of defendant 2 was the legal possession of an owner while that of defendant 3 was derivative possession of a lessee or licensee under the former is not correct since at no stage in the Courts below defendant 3 took up the position that he was in derivative possession of the property under defendant 2
Nor was there even a whisper in the pleadings that defendant 2 and defendant 3 were joint tortfeasors and therefore jointly and severally liable for mesne profits
69H 70C G c There is nothing in the decree of this Court dated April 22 1958 indicating that the amount deposited by the plaintiff towards the price should have been sel off against the liability of defendant 3 for mesne profits
On the contrary it allowed deduction of the amounts found due against defendant 1 and defendant 2 from the deposit of Rs 85000 to be made by the plaintiff towards the price and further directed that after such deduction the balance of such deposit made by the plaintiff if any shall be paid to the third respondent defendant 2 who is the assignee of the second respondent defendant 1 pendente lite
71F H d The plaintiff was not bound to suffer a set off in favour of defendant 3 merely because defendant 2 or his assignee withdrew the price deposited by the plaintiff without furnishing any security for its refund or adjustment towards the liability of defendant 3 there being no evidence whatever on record to show that such withdrawal was the result of any collusion or conspiracy between the plaintiff and defendant 2 and defendant 3
Even assuming that both defendants 2 and 3 were liable for mesne profits jointly and severally then also the plaintiff could at his option
recover the whole of the amount of mesne profits from either of them and how such inter se liability of the defendants was to be adjusted or apportioned was a matter between the defendants only
72A C e Defendant 3 entered into possession of suit property under a l assignment of sham lease from Neelakanta Iyer on March 5 1951 during the 61 pendency of the plaintiffs suit which was instituted on August 25 1950
The A plaintiff had deposited Rs 50000 sometimes after the presentation of the plaint
Under the agreement of the sale dated May 22 1950 made by defendant 1 in favour of the plaintiff the total sale considerations was fixed  Rs 90003 
Out of it Rs 5003 had been paid to defendant I on the very date of the agreement
It was further stipulated that out of the balance Rs 50000 would be paid by the plaintiff purchaser at the time of the registration of the sale deed which was to be executed and registered on or before July 15 1950
It was further stipulated that on payment of the further sum of Rs 50000 the plaintiff would be entitled to be put in possession of the suit property
Thus when defendant 3 entered into possession first under the garb of an assignee of sham lease from Neelkanta Iyer and then further purchased the property with his on funds in favour of defendant 2 pendente lite he was fully conscious that he was purchasing a litigation
His possession was therefore wrongful qua the plaintiff from its inception 72E H f Disallowance of the claim for deduction for interest on the deposit of Rs 50000 which the plaintiff had withdrawn on August 19 1953 and had redeposited on 9 2 1959 is incorrect
The defendant is entitled to interest  6 per annum for the said period after deduction the interest for the period during which the property was under the management of the Receiver
74D E g The plaintiffs claim for mesne profits  the rate of Rs 25000 has correctly been negatived
Since the plaintiff did not object to the lease granted by the Receiver to defendant 3 on an annual rental of Rs 15000 and since he did not produce any other reliable evidence the High Court was not wrong in holding that the mesne profits should be on the basis of this rental value of Rs 15000 76A C h The plaintiff in view of the long drawn out litigation is entitled to interest  6 per annum upto March 29 1959
76E F