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KEY TAKEAWAY 

  • The meaning of ownership first rooted with the very start of human civilisation, as the civilisation expanded the meaning of ownership did too. 
  • The transition from a pastoral to an agricultural economy held the development of the idea of ownership.
  • Mesne Profit is the monetary compensation which is to be recovered from a trespasser who is in an unlawful possession of the land. 
  • The Civil Procedure Code doesn't specify any standards by which the mesne profits should be evaluated
  • The courts must adhere to a few guidelines while determining the amount to be granted as mesne profit.
  • Today mesne profit works in  accordance with Section 60 of the Code of Civil Procedure, safeguarding the rights of many citizens around the country. 

INTRODUCTION

Wrongful possession has now become way more usual than the earlier times. Many lands today can’t be sold can’t be used because its in litigation by two parties one on a wrongful possession and the other on with the rightful ownership. In this Article, we will be discussing the meaning of ownership and the idea of Mesne profit, which is based on damages awarded because of wrongful possession of a property. 

ORIGIN 

The concept of mesne profit can’t be understood without trailing the concept of ownership. The meaning of ownership first rooted with the very start of human civilisation, as the civilisation expanded the meaning of ownership did too. 

As residence at that time didn’t make any sense to us for the longest time we humans were wandering from place to place with no to site to settle down.  Slowing the idea was ingrained to us when we started to plant trees, cultivate a piece of land and build a house.  
The transition from a pastoral to an agricultural economy held the development of the idea of ownership. People began to think in terms of ‘mine & thine’ The concept of ownership is easy to understand but difficult to define with exactitude. 

The Concept of Mesne profits

The mediaeval era is where the idea of mesne profits first emerged. During the time King controlled all territory under the feudal system. The King would provide his barons access to a portion of these territories in exchange for their assistance whenever he needed to assemble an army. 

Soon, charging rent for the land became a wonderful method to raise money. The tenant farmers would then lease a portion of the land from the barons in exchange for payment of rent, which was often made in the form of cattle or crops in exchange for the right to keep a portion of the harvest for themselves. Thus the concept of chains of tenancies was born.

The term "mesne landlord" developed to refer to the individual who received the rent payments. In ancient French, the word denoted "middle." All the rent or profit from the land that may be obtained by the intermediary landlord was meant by the original expression, "mesne rents and profits." 

MEANING 

Today he meaning of mesne profit, is the monetary compensation which is to be recovered from a trespasser who is in an unlawful possession of the land. 

It is established legal principle that wrongful possession is the very essence of a claim for mesne profits. It’s after the real possession that the liability of Mesne Profits typically follows. 

In a landmark judgement of  Phiraya Lal Alias Piara Lal vs Jia Rani And Anr (1973), mesne profits were described by the court as : 

The amount of money that a party seeks in damages in order to recoup a loss brought on by a trespasser's illegal use of immovable property that belonged to that party in the first place.

CALCULATION OF MENSE PROFIT 

The Civil Procedure Code doesn't specify any standards by which the mesne profits should be evaluated . The law just stipulates that any profits gained from renovations or upgrade of the property are disregarded however the interest on such profits is included. Mesne profits must be in net profits as well, under the equity rule. 

Mesne Profits are a type of damage, hence the government cannot set a set standard on how to measure them. 

The amount of mesne profits will thus be decided by the court at its discretion based on the following factors:

  • Nature and Condition of the property;
  • Location of the property;
  • Value of the property;
  • The actual profit gained by the possessor or reasonably might have received with the use of the said property.

Additionally, rather than considering what the plaintiff has lost as a result of being deprived of possession, the court calculates the mesne profits based on what the defendant has acquired or reasonably could have gained with ordinary effort by unlawfully having the property.

However, as we are unable to specify a specific range for mesne profit, the courts must adhere to a few guidelines when determining the amount to be granted.

  • The profit taken the account is made by the person in wrongful possession;
  • The restoration of status before the dispossession of the Decree-holder;
  • The uses to which the decree-holder could have put the property in if he was the possessor.

The landmark judgement based on Mesne profit are described below: 

M/s Skyland Builders P. Ltd v. Income Tax Officer (2020)

The Delhi High Court made a significant decision on mesne profits, holding that any mesne profits obtained by the rightful owner as a result of unlawful possession of his immovable property will be regarded as revenue receipts and, as a result, will be taxable items under Section 21 (1) of the Income Tax Act.

Smt.Subashini vs S.Sankaramma Died (2018)

The Telangana High Court emphasised the rationale for granting mesne profits when making its decision in this case. It was discovered that mesne profits serve as compensation for the original owner of a property who has experienced loss and damages as a result of another person's unlawful ownership of the same property. The word "compensation" is used to highlight the fact that a person has been denied the ability to enjoy his property and the loss a legitimate owner has endured. Granting of mesne profit is intended to right a wrong that has already occurred.

CONCLUSION 

Mesne Profits was established with the goal of maintaining the legitimate owner's rights while also holding the wrongdoer accountable by paying the owner compensation . Today it works in  accordance with Section 60 of the Code of Civil Procedure, safeguarding the rights of many citizens around the country. 


 


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