Decree-holders can recover mesne profits for subsequent years in execution proceedings

With all due respect, we are entirely in agreement with the observations made and we are of opinion that the present case of the decree-holders is supported by authority. That the decree-holders could recover the mesne profits for the subsequent years in the execution proceedings is well established by these rulings. The only question is whether the decree-holders have followed the correct procedure. The Second Additional District Judge, Akola, is of the opinion that there ought to have been a separate application. This view is exceedingly technical, inasmuch as the claim to these mesne profits was sufficiently indicated not only in the application for execution but also in a supplementary statement which was filed and no question of limitation arose in the case. If there was any need for correction, it lay in the absence of a stamp of Re. 1/- which such petitions ought to have borne in those days. That was a matter which could be easily rectified without the necessity of driving the decree-holders to a separate application or suit as no conceivable advantage to the judgment-debtors was thereby indicated. In our opinion, the orders of the learned Additional District Judge and confirmed on appeal by the learned single Judge proceed upon a very strict and narrow interpretation of S. 47, Civil P. C, and are quite contrary to the two pronouncements of their Lordships of the Judicial Committee to which we have referred earlier. These orders cannot therefore be sustained. It may also be pointed out that the doctrine of estoppels to which their Lordships refer in - 'Sadasiva Pillai v. Ramalinga Pillai (L) (cit. sup.)' might well be used in the present case, particularly as the judgment-debtors themselves had made payments towards the mesne profits of subsequent years. Since it is not necessary to take that point into consideration, we do not refer to it in detail.1

Citation;AIR1955Nag29

IN THE HIGH COURT OF NAGPUR

Letters Patent Appeal No. 40 of 1953

Decided On: 22.01.1954

Appellants: Ratansi Agariya Bhate and Another
Vs.
Respondent: Jaysingh Dinkarrao Rajurkar and Others

Hon'ble Judges/Coram:
Sinha, C.J. and Hidayatullah, J.

1. This is a Letters Patent appeal against the judgment of a learned single Judge in Miscellaneous (First) Appeal No. 240 of 1952.

2. The following are the facts. In partition suit in the family of the respondents (Civil Suit No. 26 of 1909) a final decree was passed by the First Additional District Judge, Akola. and the decree-holder Rao Bahadur D. Y. Rajurkar executed the decree and took possession of the property. The appellants Ratansi and Premsi filed an application under O. 21, R. 100, Civil P. C., which was dismissed. Later they filed a civil suit (Civil Suit No. 36-A of 1937) and obtained a decree on 29-4-1940 which set aside the summary order. R.B. Rajurkar then appealed (First Appeal No. 54 of 1940) against the decree but the appeal was dismissed on 10-12-1946. The present matter arises in execution and the application therefore was filed on 8-4-1947.

3. Premji and Ratansi applied for execution for costs of the suit and appeal together with the costs of the execution by attachment and sale of the moveable property of the judgment-debtors, delivery of the property which was the subject-matter of the suit and mesne promts by way of rent collected by the judgment-debtors from 29-4-1940 to the date of delivery of possession.

4. The decree-holders also appended a note to the following effect:

The decree-holders are prepared to give security to the satisfaction of this Court for such mesne profits as are likely to accrue during the pendency of the appeal (if any taken) to His Majesty in Council as ordered by the High Court by its order dated 21-2-1947. The decree-holders are also prepared to give security to the satisfaction of this Court if and when they withdraw any amounts realised from the J. D. by way of mesne profits, as ordered by the High Court on 21-2-1947.

5. When the appeal was filed in High Court, to which reference has been made, an application for stay was also made. On 23-6-1940 the High Court had passed the following order:

Messrs. W. R. Puranik and M. D. Khandekar counsel for the appellants heard on the application for stay D/- 24-6-40. The execution of the decree in so far as it relates to costs will be stayed pending disposal of this appeal. Further, restitution of the property in suit in execution proceedings of C. S. No. 26/1909 will not be made pending disposal of the appeal, provided that the appellants furnish adequate security for the costs as well as the mesne profits accruing from the property from the date of the decree to the delivery of the property in case the appeal fails.

Sd.'- M.B. Niyogi, J.

6. When the respondents applied for leave to appeal to the Privy Council they again applied for stay of execution. Their application was considered on 21-2-1947 and the following order was passed:

Mr. T.L. Sheode counsel for applicant; Mr. M. N. Fhadke, counsel for the non-applicant. They are heard on application for stay dated 24-12-1940. We see no reason to stay execution in view of the fact that the respondents before His Majesty in Council undertake to furnish security to the satisfaction of the lower Court for such mesne profits as are likely to accrue during the pendency of the appeal before His Majesty in Council and also to furnish security for such moneys as he withdraws from Court for the mesne profits which have accrued from 29-4-40, as provided in this Court's order dated 28-6-40 and" 24-12-46, the date of the application for leave to appeal to His Majesty in Council.

Sd/- Vivian Bose,
Judge

Sd/- R. N. Padhye.
Judge

7. The application for execution was thus coupled with an application for mesne profits and the decree-holders offered to furnish security in terms of the second order. The executing Court held that the order of the High Court passed in 1940 did not make the mesne profits a part of the decree, that it only provided for security in case the profits were allowed and that the recovery of the mesne profits could not be asked for in the execution of the decree by the same application. The learned Judge also observed that perhaps the remedy of the decree-holders was to file another application for the mesne profits which the executing Judge held were perhaps recoverable. He, however, did not give a final decision, as he said that could only be decided when the application was filed. The executing Court, therefore, stated the result as follows:

The result then is this: The amount of costs have been recovered and possession has been delivered. The question of mesne profits is a question foreign to the decree which is being sought to be executed. The mesne profits, if granted by the orders of the High Court, could be recovered by separate proceedings according to law. The decree as it stands has thus been satisfied. The execution case shall now be dismissed as partly satisfied.

8. The decree-holders filed an appeal which was heard by the learned single Judge. The learned Judge observed that the application was for execution under O, 21, R. 11(2), Civil P. C. and as there was no direction for payment of mesne profits in the decree, and there could be none since there was no claim for mesne profits, and as the appellate Court did not make any direction about mesne profits in its decree nor did it incorporate the conditions mentioned in the order-sheet dated 28-6-1940 therein, the decree-holders were not entitled to recover mesne profits in execution of the decree. He accordingly dismissed the appeal expressing no opinion whether the decree-holders' remedy was a suit or another application to recover the mesne profits.

9. The decree-holders have now filed this appeal under the Letters Patent. The learned counsel for the appellants contends that the decisions given by the two Courts below are erroneous and proceed upon a very narrow interpretation of the law and that if any technical flaw exists (which it is contended does not it can be righted by asking for the court-fee of Re. l/- on the application for execution filed on 11-10-1947 which was also within time and in view of the pendency of the appeal before the Supreme Court is still within time. He however, contends that he is entitled to the relief in 'those' proceedings and 'as' they stand.

10. It appears from the above that while the first Court felt that the "decree-holders were entitled to mesne profits from the date of the decree till realization, they had not followed the correct remedy inasmuch as they had not made a separate application but had asked for the mesne profits in the execution case, the learned single Judge, on the other hand, did not wish to express himself as to whether the proper remedy was a suit or a separate application: but. finding that the decree was silent about mesne profits as required by O. 20. R. 12, Civil P. C, held that the mesne profits could not be recovered in execution of the decree.

11. With all due respect, we find ourselves in disagreement with either of the views propounded above. For this purpose it is necessary to see what was the position when the stay order was passed in June 1940. By reason of the decree the decree-holders were entitled to obtain possession of the property and but for the fact that the Court interposed its order of stay, the decree-holders would undoubtedly have obtained possession of the property. The judgment-debtors agreed also to furnish security for the satisfaction of any claim to mesne profits between the date of the decree and the delivery of possession if the appeal failed. It was stated a long time ago by Cairns, L.C. that the Court owes a duty in such cases to the party who was placed at a dis-advantage as a result of the orders of the Court. This rule was reiterated and quoted with approval by Lord Carson in - 'Jai Berham v. Kedar Nath',AIR 1922 PC 269 at p. 271 (A) in the following words:

It is the duty of the Court, under S. 144, Civil P. C, to place the parties in the position which they would have occupied, but for such decree or such part thereof as has been varied or reversed.' Nor indeed does this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved. As was said by Cairns, L. C. in - 'Rodger v. Comptoir d' Escompte de Paris', (1871) 3 PC 465 at p. 475 (B): "One of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors and when the expression 'the act of the Court' is used, it does not mean merely the act of the primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case.

12. In dealing with bargains which take place in Court between one side and the other, their Lordships observed that these matters are decided upon in execution proceedings and need not be left over for decision in a separate suit. Their Lordships observed (Oudh Commercial Bank, Ltd. v. Thakurain Bind Basni Kuer', MANU/PR/0003/1939 : AIR 1939 PC 80 at p. 86 (C) as follows:

Such bargains may take different forms and it is not possible to pre-judge the individual case. If it appears to the Court, acting under S. 47, that the true effect of the agreement was to discharge the decree forthwith in consideration of certain promises, by the debtor, then no doubt the Court will not have occasion to enforce the agreement in execution proceedings, but will leave the creditor to bring a separate suit upon the contract. If, on the other hand, the agreement is intended to govern the liability of the debtor under the decree and to have effect upon the time or manner of its enforcement, it is a matter to be dealt with under S. 47.

In such a case to say that the creditor may perhaps have a separate suit is to misread the Code, which by requiring all such matters to be dealt with in execution discloses a broader view of the scope and functions of an executing Court. Their Lordships are in agreement with the statement in the case of - 'Gooardhan Das v. Dau Dayal', MANU/UP/0271/1931: AIR 1932 All 273 at p. 279 (FB) (D) that 'in numerous cases a compromise between the decree-holder and the judgment-debtor entered into in the course of execution proceedings, which was duly recorded, has been enforced' and they are not of opinion that the practice, which is both wide-spread and inveterate, is contrary to the Code. They are of opinion that 'in the present case the compromise can and should be enforced in these execution proceedings.

13. The Court has ample powers under S. 144, Civil P. C, to make restitution to the party which has been deprived of the fruits of its decree by an order of the Court at the instance of the judgment-debtor. This power, as has been held on authority, is not derived merely from S. 144 of the Code, but is inherent in the nature of things. The execution Court can, acting under S. 151 read with S. 47, make restitution to the party who has thus been deprived of the fruits of his decree by an order of the Court. It is not necessary in such cases that the order passed should be incorporated into, and made a part of, the original decree. This has been held in a large number of cases and the following merely illustrate the principle:

In - 'Allah Din v. Chiragh Din', 63 Ind Cas 43 (E)-Lahore-it was held that the Courts have inherent power under S. 151, Civil P. C, to apply the principle of S. 144 of the Code to cases which are not strictly within its terms and to order such restitution as may become necessary as the result of their own orders. The date of the order of stay was treated the material date from which restitution ought to begin.

In - 'Mt. Radha v. Mt. Sakhu', AIR 1921 Nag 112 (F) -Nagpur-Sir Henry Drake-Brockman observed that there was ample authority for the view that the Court has inherent power to order restitution in cases not covered by S. 144. The learned Judicial Commissioner observed further that the obvious reason was that the Court, "having by its temporary injunction deprived the respondent Sakhu of what she was legally entitled to, should 'ex debito justitiae' restore her to the possession which she had thus lost and also compensate her for the profits which she had been precluded from earning."

Similar views were also expressed in - 'Jwala Singh v. Sundar Singh', AIR 1927 Lah 346 (G); -'Muthayya Kone v. Rakappan Ambalam', MANU/TN/0154/1935 : AIR 1936 Mad 137 (H) and - 'Venkatarama Ayyar v. South India Bank, Tinnevelli'.MANU/TN/0446/1926 : AIR 1927 Mad 927 (2) (I). In two unreported cases of this Court, namely. - 'Shri Ramchandra Swami Deosthan v. Madanlal', First Appeal No. 105 of 1944, D/-12-1-1951 (Nag) (J), Bose C. J. (as he then was) and in - 'Digambar v. Himmat, Second Appeal No. 57 of 1951, D'- 17-3-1953 (Nag) (K), decided by one of us (Hidayatullah J.) and Rao J. a similar view was expressed of orders which ran substantially as the order we are considering.

14. But the strongest case to which reference can be made is a decision of their Lordships of the Privy Council reported in - 'Sadasiva Pillat v. Ramalinga Pillai', 2 Ind App 219 (L). In that case the decree included a direction for mesne profits for the year 1858 which was all that was claimed by the plaintiff in his plaint. Subsequently, as a result of a stay, applications were made by the decree-holder and the judgment-debtor was ordered to give security for mesne pronts for the subsequent years 1859, 1860 and 1861. This was pending an appeal to His Majesty in Council. After the defendant's appeal to the Privy Council was rejected, execution was commenced in 1864. The executing Court awarded subsequent mesne profits but without interest. The High Court on appeal reversed the order and held that as the mesne profits were neither asked for in the plaint nor awarded by the decree, the claim to mesne profits could not be entertained.

Their Lordships reversed the decision of the High Court and restored that of the executing Court. They held that this was a matter under S. 11 of the Code of 1861 (Act 23 of 1861) and the defendants in any event were stopped from.saying that the mesne profits were not payable under the decree. As to the second point, their Lordships based themselves upon the decision of the Privy Council in - 'Pisani v. Attorney-General of Gibraltar', (1874) 5 PC 513 (M), in which it was held that an agreement of the parties, quite contrary to the ordinary 'cursus curiae', was capable of being enforced between them. On the first point their Lordships were of opinion that the matter could be enquired into in execution proceedings. Their Lordships observed as follows:

Upon the whole, their Lordships are of opinion that the respondent, by the proceedings in question, did come under an obligation to account in this suit for the subsequent mesne profits of the appellant's land, which was capable of being enforced by proceedings in execution, notwithstanding the construction of the 11th section of the Act of 18G1, which now prevails in Madras. They conceive that this liability made the accounting 'a question relating to the execution of the decree,' within the meaning of the latter clause of the section. But even if it did not, they think that upon the ordinary principles of estoppels the respondent cannot now be heard to say that the mesne profits in question are not payable under the decree.

Their Lordships also observed in an earlier portion of their judgment as follows: "The decree of 11-6-1859, conclusively established the right of the plaintiff as against the defendant to a share in the lands forming part of the joint estate, and to the mesne profits attributable to that share for the Fusli year 1267, being the year next preceding the institution of the suit. His title, therefore, to the lands of which he has obtained possession, and to mesne profits on those lands from a certain date, cannot be impugned. Had there been no appeal, and the decree had been followed by immediate execution, the plaintiff would have been put into possession of his lands, and would ever since have received the rents and profits of them.

The only mesne profits touching which any question could have arisen, would have been those for the year which elapsed between the date of the institution of the suit and that of the decree. Execution was suspended, but not necessarily suspended, by the appeals, and the defendant could only remain in possession on the terms of giving security for the execution of the decree should it be affirmed against him.

Their Lordships concluded from these facts that the decision of the High Court was erroneous and their Lordships observed further that they would have felt great regret in coming to the contrary conclusion. They observed:

That proceedings begun in 1861, and for several years carried on without objection, should in 1875 be pronounced in fructuous on the ground of irregularity, and the party relegated to a fresh suit in order to assert an indisputable right, would be a result discreditable to the administration of justice.

15. With all due respect, we are entirely in agreement with the observations made and we are of opinion that the present case of the decree-holders is supported by authority. That the decree-holders could recover the mesne profits for the subsequent years in the execution proceedings is well established by these rulings. The only question is whether the decree-holders have followed the correct procedure. The Second Additional District Judge, Akola, is of the opinion that there ought to have been a separate application. This view is exceedingly technical, inasmuch as the claim to these mesne profits was sufficiently indicated not only in the application for execution but also in a supplementary statement which was filed and no question of limitation arose in the case. If there was any need for correction, it lay in the absence of a stamp of Re. 1/- which such petitions ought to have borne in those days. That was a matter which could be easily rectified without the necessity of driving the decree-holders to a separate application or suit as no conceivable advantage to the judgment-debtors was thereby indicated. In our opinion, the orders of the learned Additional District Judge and confirmed on appeal by the learned single Judge proceed upon a very strict and narrow interpretation of S. 47, Civil P. C, and are quite contrary to the two pronouncements of their Lordships of the Judicial Committee to which we have referred earlier. These orders cannot therefore be sustained. It may also be pointed out that the doctrine of estoppels to which their Lordships refer in - 'Sadasiva Pillai v. Ramalinga Pillai (L) (cit. sup.)' might well be used in the present case, particularly as the judgment-debtors themselves had made payments towards the mesne profits of subsequent years. Since it is not necessary to take that point into consideration, we do not refer to it in detail.

16. The appeal is, therefore, allowed. The decision of the learned single Judge as well as the Second Additional District Judge, Akola, is set aside and the case is sent back to the executing Court for determination of the mesne profits and for awarding them to the decree-holders. Costs of this appeal as well as those in the two Courts below shall be borne by the judgments debtors. Counsel's fee Rs. 100/-.

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