Mesne profits and restitution principles govern liability, interest, and the recoverable period in wrongful possession disputes.

Mesne profits are ordinarily chargeable to the person in wrongful actual possession, and liability does not shift by mere pleadings of collusion; on the facts, the SC treated the third defendant as solely responsible and rejected any set-off of the plaintiff's price deposit against that liability. It further stated that the mesne profits period under Order XX Rule 12(1)(c) runs from the operative decree for possession and profits, excluding the Receiver period, and that 6 per cent interest was appropriate on the evidence. Interest on sums withdrawn and later redeposited was also recoverable in restitution under Section 144 CPC.

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Issues: (i) whether liability for mesne profits rested only on the defendant in actual possession of the suit property and whether the decree permitted a set-off against the plaintiff's deposit towards the price; (ii) whether mesne profits could be awarded for the period fixed by the courts below and at what rate of interest, including whether interest on the amount withdrawn and later redeposited was recoverable by way of restitution.

Issue (i): whether liability for mesne profits rested only on the defendant in actual possession of the suit property and whether the decree permitted a set-off against the plaintiff's deposit towards the price.

Analysis: Mesne profits are founded on wrongful possession, and as a general rule liability follows actual possession and enjoyment of the property. On the facts found, the third defendant alone was in sole and exclusive possession and control of the property during the relevant period. The earlier decree also made liability depend on which defendant or defendants were in possession. The decree did not provide for setting off the plaintiff's price deposit against the third defendant's mesne profits liability, and the plea of collusion or joint-tort liability was unsupported by the pleadings and evidence.

Conclusion: Liability for mesne profits was properly fastened on the defendant in actual possession, and no set-off of the plaintiff's deposit against that liability was warranted.

Issue (ii): whether mesne profits could be awarded for the period fixed by the courts below and at what rate of interest, including whether interest on the amount withdrawn and later redeposited was recoverable by way of restitution.

Analysis: Under Order XX Rule 12(1)(c) of the Code of Civil Procedure, 1908, the period is computed from the decree directing possession and mesne profits, and in this case the operative decree was the appellate decree of the Supreme Court. The courts below were therefore justified in assessing mesne profits for the period ending with delivery of possession, subject to exclusion of the period when the property was under the Receiver. The evidence supporting a higher annual rate was not reliable, and the rental fixed under the Receiver's lease was an appropriate basis for assessment. Interest at 6 per cent per annum was more appropriate than 4 per cent. Interest on the sum withdrawn and later redeposited was recoverable under the restitution jurisdiction recognised by Section 144 of the Code of Civil Procedure, 1908.

Conclusion: The period of mesne profits was correctly determined, the rate of 6 per cent interest was restored, and interest on the redeposited amount was allowed as restitution.

Final Conclusion: The appeals were resolved by sustaining the principal liability for mesne profits against the defendant found in possession, while granting limited relief to the defendant by way of a set-off for interest on the withdrawn deposit and restoring the plaintiff's entitlement to higher interest and restitutionary interest.

Ratio Decidendi: Liability for mesne profits ordinarily attaches to the person in wrongful actual possession of the property, and the statutory period under Order XX Rule 12(1)(c) runs from the operative decree for possession and mesne profits, while restitution under Section 144 may include interest on sums wrongly retained or withdrawn.

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