Case: Mahant Narayana Dasjee Varu &amp; Others Vs. The Board of Trustees Tirumalai Tirupathi, Devasthanam &amp; Others

profits and the interest thereon to be made for the purpose of the total carrying further interest? (2) What is the rate of interest to be charged. The learned trial Judge allowed interest at 6 per cent for the calculation of interest which is part of mesne profits. Having calculated mesne profits on this basis he aggregated the amount of mesne profits i. e. income from the several items of property plus the interest on it up to the date of the plaint i. e., January 10, 1946. On the total sum so ascertained he decreed interest at 6 per cent. till the date of his decree i. e., March 26, 1952. He passed a decree for this sum with further interest at 6 per cent till the date of realisation.11. One of the principal points raised by the Mahant in the two appeals which he filed to the High Court related to this method of computing the interest. His complaint was that two dates were specified by the trial Judge at which interest became payable on interest and that this was not justified by law and did not proceed on a correct interpretation of S. 34 of the Civil Procedure Code. The learned Judges acceded to these contentions and varied the decree in regard to the rates allowed by the learned Subordinate Judge. They observed :"The learned Judge should have awarded interest on yearly profits in respect of each item from the date the arrears accrued up to the date of the plaint, from the date of the plaint up to the passing of the decree and thereafter on the aggregate amount of the principal and interest till payment."In other words, they eliminated the aggregation which the decree of the trial Judge had invoked as on the date of the plaint. It is only necessary to add that in reaching this conclusion the learned Judges acceded to the arguments addressed to them on behalf of the appellant-Mahant. They also reduced the rate of interest on the mesne profits calculated each year from 6 per cent to 4 per cent and also the interest payable after the date of the decree from 6 to 3 per cent. The averages of this reduction in the rate is the subject of the appeals by the Devasthanam which we shall be considering in the proper place.12. The complaint of learned counsel for the Mahant is not that the reduction of the rate is insufficient but that the learned Judges erred in allowing interest at 3 per cent on the aggregate sum made up of principal and interest up to that date. His submission is that on the terms of S. 34 of the Civil Procedure Code, as it stood at the date when they disposed of the appeals, they could have allowed further interest on the principal sum alone. Learned counsel relies, for this purpose, on the amendment to S. 34 of the Civil Procedure Code effected by the Code of Civil Procedure (Amendment) Act, 1956 = Act 66 of 1956 - which came into effect on January 1, 1957. This Act amended, inter alia, S. 34 of the Code. As the section originally stood, the relevant provision ran."Order interest at such rate as the Court deems reasonable to be paid on the principal sum, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date, of payment."The section was amended so as to read :"Order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment."This point, however, was not argued before the High Court even though admittedly the amendment had been in force for over six months before the appeal was disposed of and, in fact, as we have already stated the mode of calculation adopted by the High Court was that which was submitted as the correct one by Counsel for the Mahant. Secondly, this was not an objection taken in the grounds of appeal taken to this Court when seeking a certificate, nor is it raised in the statement of case. Nor is the objection clearly without an answer. In the first place, the decree of the trial Court was passed in 1952. Without pausing to enquire whether the relevant date for determining from when the amended provision would operate might not be that on which the suit was instituted, what the High Court was called upon to enquire was the correctness of that decree. Besides, it is not suggested that the amendment is expressly made retrospective or applicable to pending proceedings. Though, no doubt, the amendment was to a provision in the Code of Civil Procedure, the question would have to be seriously considered whether it does not in reality deal with the substantive rights of parties, so that it might not have retrospective operation as a matter affecting mere procedure. In the circumstances, having regard, however, to the failure of the appellant to urge this point earlier, we decline to permit learned counsel to raise to before us.13. There were certain other points raised before the High Court that the claim for mesne profits for particular periods were barred by limitation but these, have not been repeated before us and hence they do not call for consideration. These complete the submissions made to us in appeals 106 and 107.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We see no substance in this argument. In the first place, we do not have the Judgment of the High Court on the former occasion to ascertain the exact scope of the observation they then made. Next, the learned Judges of the High Court have themselves referred to this observation and have proceeded to state that the fact that the Devasthanam would have the benefit of the walls and other constructions put up by the Mahant would be a factor which they would take into account in ascertaining the amount of mesne profits payable on this item. We have no basis before us for saying that the learned Judges in the judgment now under appeal have not understood the earlier judgment of the High Courtis no substance in this argument either, because, in a sense, any allocation would be arbitrary and the suggestion that we should reverse the proportion and allow 1/3rd to the Devasthanam and 2/3rds to the Mahant is about as arbitrary as the order now challenged. We must take it that in fixing this proportion, the learned Judges took into account the income that could have been derived from the stable, if let, as it was, for shops and that which the constructions put up could yield. We consider that both the approach of the learned Judges as well as the result they have reached is fair and just to both parties and does not call for any interference.10. The case as to itemStand for elephants and the points urged in regard there to are exactly similar. There also we have the same observations of the High Court in the previous suit 51 of 1937 and the learned Judges on the present occasion have taken those observations into account and granted a decree for 2/ 3rds of what they ascertained on a detailed consideration of the evidence to be the income derivable from the properly. For the reasons already stated, there is no substance in this submission which weargument addressed to us on this point, we consider, is wholly without merit. As we have stated already, the Mahant did not produce his accounts and therefore the Court had to do its best in ascertaining the profits from such evidence as was placed before it and this they have done as best as theyother words, they eliminated the aggregation which the decree of the trial Judge had invoked as on the date of the plaint. It is only necessary to add that in reaching this conclusion the learned Judges acceded to the arguments addressed to them on behalf of theThey also reduced the rate of interest on the mesne profits calculated each year from 6 per cent to 4 per cent and also the interest payable after the date of the decree from 6 to 3 per cent. The averages of this reduction in the rate is the subject of the appeals by the Devasthanam which we shall be considering in the properpoint, however, was not argued before the High Court even though admittedly the amendment had been in force for over six months before the appeal was disposed of and, in fact, as we have already stated the mode of calculation adopted by the High Court was that which was submitted as the correct one by Counsel for the Mahant. Secondly, this was not an objection taken in the grounds of appeal taken to this Court when seeking a certificate, nor is it raised in the statement of case. Nor is the objection clearly without an answer. In the first place, the decree of the trial Court was passed in 1952. Without pausing to enquire whether the relevant date for determining from when the amended provision would operate might not be that on which the suit was instituted, what the High Court was called upon to enquire was the correctness of that decree. Besides, it is not suggested that the amendment is expressly made retrospective or applicable to pending proceedings. Though, no doubt, the amendment was to a provision in the Code of Civil Procedure, the question would have to be seriously considered whether it does not in reality deal with the substantive rights of parties, so that it might not have retrospective operation as a matter affecting mere procedure. In the circumstances, having regard, however, to the failure of the appellant to urge this point earlier, we decline to permit learned counsel to raise to before us.13. There were certain other points raised before the High Court that the claim for mesne profits for particular periods were barred by limitation but these, have not been repeated before us and hence they do not call for consideration. These complete the submissions made to us in appeals 106 and 107.Civil Appeals 108 and 109 ofpoint common to both these appeals is the reduction in the rate of interest which we have already indicated. As pointed out earlier, the learned Judges of the High Court have reduced the interest payable on the mesne profits up to the date of the decreeMarch 28, 1952 from 6 to 3 per cent.is, no doubt, true that the rate of interest to be allowed in regard to mesne profits or under S. 34 in such cases is discretionary, seeing there is, in them no question of any contractual rate or any particular rate fixed by statute. The only limitation which is prescribed by S. 34, as it stands now, is that the rate shall not exceed 6 per cent p. a.a limitation which did not figure in the section before its amendment though Courts as a general rule seldom awarded any rate in excess of 6 percent p. a. Learned counsel is, therefore, right in saying that the rate of 6 per cent granted by the learned trial Judge is not per se unreasonable. The amended S. 34, Civil Procedure Code is, in fact, a statutory recognition that 6 per cent is not by itself an unconscionable or an unreasonably high rate. Besides, this rate was not considered unreasonable or improper by the Mahant himself is also clear from the proceedings. The Commissioner in the report that he made to the Court on May 14, 1951 in which he ascertained the mesne profits payable by the Mahant, computed the interest from June, 1933 onwards at 6 per cent. Elaborate objections were filed by the Mahant to this report, but so far as the interest allowed was concerned the objection was formulated in groundrate of interest at 6 per cent was not challenged at all. The Subordinate Judge before whom no point was made as regards the rate of 6 per cent being too high passed a decree computing interest at that rate. Even when this decree was challenged by the Mahant by an appeal to the High Court no objection was taken to this rate. Though as many as 141 grounds were taken in the memor andum of appeal against the decree of the Subordinate Judge in the appeal in application 19 of 1946 and 37 grounds in the other appeal, there was not any ground which either (1) objected to the rate of 6 per cent as being unreasonably high or (2) complained against the award by the learned Subordinate Judge of the same rate of interest after as before the date of thetactics.16. We consider that the second of the grounds viz., that the Mahant was a trustee who had been removed from office and therefore stood in a position different from that of a trespasser is note see considerable force in this submission. The title of the Devasthanam to the property was disputed and suits had to be filed for the recovery of their possession, and litigation conducted which took 12 years to finish from 1933 to 1945. If during this period the Mahant appropriated to himself the income from the property we do not see any justification for his not being made liable for interest at the normal rate. In any event, if the trial court in its discretion awarded interest at 6 per cent, and that is admittedly not per se an unreasonable rate, there was no compelling equity in the Mahant to justify interference with that discretion.17. The first of the reasons given by the learned Judges does not also appeal to us. It is, no doubt, true that the properties of the Mutt and of the Devasthanam were mixed up in the hands of the Mahant but these two were being held by the Mahant in two distinct capacitiesthe first as the head of the Mutt and the other as the Vicharanakartha of the Devasthanams i.e., purely as manager. The fact was that in the first set of properties he might have a beneficial interest but admittedly not so in the second. In the circumstances, we do not see how he becomes entitled to the benefit of a lower rate of interest on mesne profits payable for the properties belonging to the Devasthanam of which he was wrongfully in possession because he chose to mix them up with other property which mixing enabled him to make a claim to the Devasthanam property as well.18. We, therefore, consider that the learned Judges of the High Court were not justified in reducing the rate of interest from 6 per cent to 4 per cent p.a. for the period up to March 28, 1952 and to 8 per cent p.a. on the aggregate sum thereafter. The method suggested by the learned Judges for the calculation of interest on mesne profits each year is, however, correct and interest at 6 per cent p.a. would have to be calculated on that basis before and after the decree. The decree will be modified accordingly.19.The next submission of learned counsel was in relation to the quantum of mesne profits allowed for items 4, 6, 7, 8 and 9 in appeal108. As regards items 4 and 6, we have already explained the nature of these items and the basis upon which the learned Judges of the High Court have computed the mesne profits payable. Itwas the submission of learned counsel that the 1/3rd which the learned Judges had allowed as representing the value of the improvements should not have been allowed.We do not agree. In the first place, there was the observation of the High Court in the appeals from the original suits to which we have already adverted and, secondly, it was common ground that the Mahant was not demolishing or removing any of the improvements which he had affected in items 4 and 6. It was further suggested that as these improvements had been effected in 1912 or there abouts the Mahant had derived sufficient income from the property to cover the cost of the improvements and that therefore no allowance should have been given on the basis that he had effected improvements which he was leaving on the property. It cannot, however, be disputed that it was open to the Mahant, under the law, to have demolished the improvements which he had effected before surrendering possession and, in the circumstances, we do not consider that the learned Judge erred in allowing a small reduction of 1/3rd, taking into account this feature of thehave closely examined the judgment of the High Court and are satisfied that this complaint is without foundation. The learned Judges have made a detailed examination of the evidence and have allowed to the Devasthanam profits on whatever sources of income which were proved to have existed at the relevant dates. In the circumstances, we do not consider this submissionargument was that though while considering several of these items the learned Judges had expressed the view that 10 per cent of the estimated income could be allowed as the collection charges, in the concluding portion of the judgment they had stated that as regards House property they would allow only 1/ 12th for that purpose. For this reason it was submitted that the decree drawn up which allowed 10 per cent as collection charges was wrong and not in accordance with the operative portion of thejudgment. We do not propose to pause to consider this objection which, in our opinion, is groundless, because it is admitted, and this is stated in the judgment itself, that after the judgment of the High Court, the parties were directed to file by consent a joint memo working out the mesne profits for which a decree could be passed after making the allowances which were granted. Such a statement was filed and it is on that basis that the decree passed by the High Court proceeds. The parties carried out the decision of the High Court in the manner in which both of them understood it and we see, therefore, no reason to examine the question any further.