1929 JTR(SC) 104
1930 AIR(PC) 82 ; 1929 57 LawReportsInd.App. 105 ; 1930 31 LW 425 ; 1930 32 BomLR 525 ; 1930 34 CWN 257 ; 1930 AllLJ 128 ; 1930 MWN 580
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT DUNEDIN, LORD DARLING, LORD TOMLIN, SIR GEORGE LOWNDES, AND SIR BINOD MITTER.
HARRY KEMPSON GRAY - Appellant
Versus
BHAGU MIAN - Respondents
On appeal from the High Court at Calcutta.
Decided On : Dec. 6. 1929.
Mesne profits for agricultural land cultivated by a person in wrongful possession are determined by the profits an ordinary prudent agriculturist would have made, rather than the rental value or the specific profits the plaintiff would have earned.
Act
Referred
:CIVIL PROCEDURE CODE
: S.2, S.12
(A) Code of Civil Procedure, 1908 - Section 2(12) - Mesne profits - Wrongful possession of agricultural land - Basis of calculation - Where the person in wrongful possession cultivated the land, the measure of mesne profits is not the rental value but the profits that could have been obtained by growing crops that an ordinary prudent agriculturist would have grown - The test is what the defendant might with ordinary diligence have received, not what the plaintiff would have made by possession.
Facts of the case:
The respondents obtained a decree for joint possession of agricultural land and mesne profits against the appellants who had remained in possession after the expiry of a lease. The land was used by the appellants to grow indigo for their own factory, although it was capable of producing more profitable crops such as sugar cane, wheat, and tobacco, which the appellants grew on neighboring lands. The lower courts assessed mesne profits based on these more profitable crops.
Findings of Court:
The calculation based on the crops the land was capable of producing, which an ordinary prudent agriculturist would have grown, was the correct basis for determining mesne profits.
Issues: Whether the correct basis for ascertaining mesne profits for agricultural land in wrongful possession is the rental value, the profits from the actual crop grown, or the profits from crops an ordinary prudent agriculturist would have grown.
Ratio Decidendi: Under the statutory definition, mesne profits are those which the person in wrongful possession actually received or might with ordinary diligence have received. When the wrongdoer cultivates the land, the primary consideration is the cultivation. If the actual crop grown was for the specific purposes of the wrongdoer and not what a typical farmer would grow, the true test is what an ordinary prudent agriculturist would have grown. The measure is what the defendant might have made, not what the plaintiff lost.
Result: Appeal dismissed.
Facts of the case:
The respondents obtained a decree for joint possession of agricultural land and mesne profits against the appellants who had remained in possession after the expiry of a lease. The land was used by the appellants to grow indigo for their own factory, although it was capable of producing more profitable crops such as sugar cane, wheat, and tobacco, which the appellants grew on neighboring lands. The lower courts assessed mesne profits based on these more profitable crops.
Findings of Court:
The calculation based on the crops the land was capable of producing, which an ordinary prudent agriculturist would have grown, was the correct basis for determining mesne profits.
Issues: Whether the correct basis for ascertaining mesne profits for agricultural land in wrongful possession is the rental value, the profits from the actual crop grown, or the profits from crops an ordinary prudent agriculturist would have grown.
Ratio Decidendi: Under the statutory definition, mesne profits are those which the person in wrongful possession actually received or might with ordinary diligence have received. When the wrongdoer cultivates the land, the primary consideration is the cultivation. If the actual crop grown was for the specific purposes of the wrongdoer and not what a typical farmer would grow, the true test is what an ordinary prudent agriculturist would have grown. The measure is what the defendant might have made, not what the plaintiff lost.
Result: Appeal dismissed.
Rental - The appellants argued that mesne profits should be based on the fair commercial rent obtainable for the land based on this case.
Cultivation - Cited to support the distinction between cases where the defendant let the land versus where the defendant cultivated it themselves.
Cultivation - Cited to support the distinction between cases where the defendant let the land versus where the defendant cultivated it themselves.
Cultivation - Cited to support the distinction between cases where the defendant let the land versus where the defendant cultivated it themselves.
Cultivation - Cited to support the distinction between cases where the defendant let the land versus where the defendant cultivated it themselves.
Statutory-Definition - The court followed this case to establish that the test for mesne profits is what the defendant might have reasonably made, not what the plaintiff lost.
Solicitors for appellants:Sanderson, Lee & Co. Solicitors for respondent No.14: W. W. Box & Co.
Judgement
Appeal (No. 3 of 1928) by special leave from a decree of the High Court (January 25, 1926) affirming a decree of the Subordinate Judge of Muzafferpur.
In circumstances which appear from the judgment of the Judicial Committee the respondents obtained against the appellants a decree for joint possession with them of about twenty-three bighas of land together with mesne profits.
The report of a commissioner appointed by the Subordinate Judge assessed the mesne profits at Rs.19,869, on the basis of what the land would have produced if tobacco, sugar cane, and similar productive crops had been grown.
The Subordinate Judge adopted the report, holding that the basis upon which the mesne profits had been assessed was correct; he made a decree accordingly.
The High Court (Das and Ross JJ.) affirmed the decree.
1929. Oct. 18, 21. Dunne K.C. and E. B. Raikes K.C. for the appellants. The appellants being joint owners of the land the respondents were only entitled as mesne profits to a proportion of the fair commercial rent obtainable for the land Watson & Co. v. Ramchund Dutt.(( 1890) L. R. 17 I. A. 110.) If, however, the mesne profits should be based upon the produce of the land, it is the produce from growing indigo. Under the definition of mesne profits in s.2, sub-s.12, of the Code of Civil Procedure "ordinary diligence" did not require the appellants to embark upon growing other crops. The High Court in considering the profit which would have been made by the plaintiffs applied the wrong principle. Under the definition the test is not the profit which the plaintiffs would have made, but the profit which the defendants made or reasonably might have made.
Dube for respondent No. 14. Under the definition in the Code the test was not the rental value, but the profit which the appellants with ordinary diligence might have made, and that is a question of fact upon which the findings are conclusive. The authorities as to mesne profits have always drawn a distinction between the cases where the defendant has let the land and where he has cultivated it himself Soudaminee Dabee v. Anund Chunder Haldar (( 1870) 13 Suth. W. R. 37.); Laljee Shahay Singh v. Walker (( 1902) 6 Cal. W. N. 732.); Pundit Lachmi Narayan v. Mazhar Hassan (( 1908) 12 Cal. W.
N. 660.); Rookumee Kooer v. Ram Tuhul Roy .(( 1872) 17 Suth. W. R. 166.) Watson & Co. v. Ramchund Dutt (1) was not a case of mesne profits against a person in wrongful possession. The profit which could have been made by the plaintiffs who grew on their neighbouring land the more profitable crops was evidence of the profit the defendants might have made.
[Reference was made also to Gurudas Kundu Choudhury v.
Hemendra Kumar Roy.(( 1929) L. R. 66 I. A. 290.)]
E. B. Raikes K.C. replied.
Dec. 6. The judgment of their Lordships was delivered by
SIR GEORGE LOWNDES The only question raised for determination in this appeal is as to the basis upon which mesne profits should be ascertained in respect of the wrongful possession of agricultural land.
The appellants, who were the owners of an indigo factory, had for a number of years leased certain lands from the predecessors in title of the principal respondents, and had utilized the lands in growing indigo for the purposes of their factory. The lease having expired in or about November, 1919, the respondents became entitled to possession of the major portion of the lands. The appellants subsequently obtained a new lease of a small portion, which did not belong to the respondents, and refused to give up possession of the respondents portion, alleging themselves to be occupancy tenants.
The respondents sued to establish their title and were successful, a decree being passed in their favour for joint possession with the appellants and for mesne profits of an area of some twenty-three bighas. After proceedings in appeal to the High Court the matter came again before the Subordinate Judge for the ascertainment of the mesne profits awarded by the High Courts decree. A local inquiry was held by a commissioner, and the Subordinate Judge eventually found a sum of Rs.19,869, a.10 to be due to the respondents, for which he passed a final decree in the respondents favour on August 15, 1922. The appellants again appealed to the High Court, alleging this amount to be excessive, but their appeal was dismissed, and they have now by special leave appealed to His Majesty in Council.
The calculation by the Courts in India was made upon the basis of the crops which the land was capable of producing. It was, in fact, planted with indigo, but the Courts found, and it is not disputed before this Board, that it was capable of producing more profitable crops, such as sugar cane, wheat, tobacco, etc., crops which were in fact grown by the appellants on other neighbouring lands.
The question in their appeal is weather this was the correct basis of calculation. Their Lordships have no doubt that it was, though they are not altogether in agreement with the reasoning by which the learned judge in India have reached this conclusion.
"Mesne profits" are defined by s.2, sub-s.12 of the Code of Civil Procedure, 1008, as “those profit which the person in wrongful possession [of the property in question] actually received or might with ordinary diligence have received therefrom."
The appellants first contention was that the rental value of the land, which they put at Rs.5 per bigha, was the proper criterion. This would no doubt ordinarily be so where the person charged had merely let the land out to others. In such a case the rent that he received if there was no evidence that a higher rent could "with ordinarily diligence " have been obtained, would be the measure of the profit for which he would be liable. But when (as in the present case) the wrongdoers cultivated the land themselves the definition above cited clearly makes the cultivation he primary consideration.
Alternatively, the appellants contended that the actual cultivation having been in indigo, the indigo profits only should have been allowed. But it is in their Lordships’ opinion, clear that in this case the growing of indigo was for the special purposes of the appellants, who were the owners of the adjacent factory. Apart from this there seems to be no reasonable doubt that the ordinal farmer would have grown the other more profitable crop for which the land was admittedly adapted, and upon which the calculation of the Courts in India was founded. Their Lordships think that in all such cases the true test must be what the ordinary prudent agriculturist would have grown.
The learned judges of the High Court came to the same conclusion, but by a different process. They say in their judgment that the rental test is inappropriate because the plaintiffs (the respondents in this appeal) are themselves cultivators, and if they had been let into possession would undoubtedly have cultivated the land and would not have let it out on rent. Again, as to the crops, they say that the true test is what the plaintiffs would have grown if they had had possession. Their Lordships are unable to accept this line of reasoning, though it has been pointed out to them that it has the sanction of previous decisions in India, which have been cited in the argument. The test set by the statutory definition of mesne profits is clearly not what the plaintiff has lost by his exclusion, but what the defendant has or might reasonably have made by his wrongful possession. What the plaintiff in such a case might or would have made can only be relevant as evidence of what the defendant might with reasonable diligence have received. Their Lordships are in effect only repeating what was said by Lord Dunedin in delivering the judgment of their Board in a recent case, in which the same argument was used see Gurudas Kundu Choudhury v. Hemendra Kumar Roy .(L. R. 56 I. A. 290.)
For the reasons above stated their Lordships will humbly advise His Majesty that this appeal should be dismissed. The appellants must pay the costs.