What Are Mesne Profits?
In Indian law, mesne profits refer to the profits a person wrongfully earns by possessing immovable property without legal authority. When someone unlawfully occupies another’s property, they deprive the rightful owner of potential income. The law requires such a person to compensate the lawful owner. The Code of Civil Procedure, 1908, addresses this under Section 2(12).
Legal Definition of Mesne Profits under CPC
Section 2(12) of the Civil Procedure Code defines mesne profits as:
“Those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession.”
This means the law includes:
- Actual income earned through unlawful possession
- Potential income that could reasonably have been earned
- Interest on those profits
However, it excludes any gain made from improvements by the unlawful possessor.
When Do Courts Award Mesne Profits?
Mesne profits arise in these common situations:
- A tenant overstays after the lease expires or is terminated.
- A trespasser illegally occupies a property.
- A person retains possession even after an eviction decree.
- In partition suits, where one co-owner excludes another.
In all these cases, the rightful owner loses the opportunity to enjoy or earn from the property.
What Is the Purpose of Awarding Mesne Profits?
The law awards mesne profits to:
- Compensate the lawful owner for lost income or use of property
- Deter people from unlawfully possessing someone else’s property
- Ensure that no one profits through illegality
This legal tool restores the financial position of the owner and upholds property rights.
Who Can Claim Mesne Profits?
The following parties can claim mesne profits:
- A landlord whose tenant remains in possession without right
- A co-owner who has been excluded from jointly owned property
- A decree-holder who receives a judgment for possession
- A purchaser deprived of possession after sale
Such persons must file a claim in a civil suit or pursue execution proceedings.
How Do Courts Calculate Mesne Profits?
Courts consider multiple factors when calculating mesne profits:
- Fair market rental value of the property
- Income potential of the property
- Duration of the unlawful possession
- Property location and condition
- Actual or expected yield from the property
The burden lies on the claimant to prove these factors. Courts then determine a fair monetary amount.
How to Claim Mesne Profits in a Lawsuit?
To claim mesne profits, the rightful owner must follow these steps:
- File a civil suit for possession, including a specific claim for mesne profits.
- Request the court to conduct an inquiry under Order 20 Rule 12 CPC.
- Secure a preliminary decree for possession.
- Participate in a court-led inquiry into the value of mesne profits.
- Obtain a final decree determining the exact amount.
- Execute the decree for recovery of the awarded sum.
Courts may grant future mesne profits until the defendant vacates the property.
Judicial Precedents on Mesne Profits
1. Fateh Chand v. Balkishan Das (AIR 1963 SC 1405)
The Supreme Court ruled that mesne profits must reflect either actual gains or what a person could have reasonably earned.
2. Achal Misra v. Rama Shanker Singh (2005)
The Court clarified that mesne profits accrue from the date when possession becomes unlawful.
3. Union of India v. Banwari Lal and Sons (1971)
In this case, the Court allowed interest to be awarded on mesne profits as part of the compensation.
Limitation Period for Mesne Profits
Under the Limitation Act, 1963, a person must file a suit for mesne profits within:
- Three years from the date the cause of action arises
If the claim forms part of a suit for possession, the timeline aligns with that of the primary suit.
Can Courts Refuse Mesne Profits?
Yes, courts may deny or reduce mesne profits in the following circumstances:
- The defendant held possession lawfully
- The plaintiff fails to provide evidence of loss or profit
- The property generated no income
- The defendant acted in good faith
The decision depends on facts and judicial discretion.
Key Differences: Mesne Profits vs Damages
| Factor | Mesne Profits | Damages |
|---|---|---|
| Nature | Compensation for unlawful possession | Compensation for injury or loss |
| Basis | Actual or potential income from property | Harm suffered by the claimant |
| Legal Source | Section 2(12), CPC | Law of Torts, Contract Law, etc. |
Can You Claim Mesne Profits Retrospectively?
Yes. Courts allow retrospective claims if:
- The plaintiff includes such a claim in the original plaint
- The plaintiff proves the period and nature of unlawful possession
- The claim falls within the limitation period
Courts do not allow retrospective claims without proper pleading and evidence.
