1952 (4) TMI 41 - SC - Indian Laws

Supreme Court Upholds High Court Decision on Equitable Set-Off and Mesne Profits

Raja Bhupendra Narain Singha Bahadur Versus Maharaj Bahadur Singh and Ors.

The Supreme Court upheld the High Court's decision disallowing the claim for equitable set-off from mesne profits, emphasizing that cross-demands must ... - Issues Involved:1. Equitable set-off from mesne profits.2. Interest on mesne profits.3. Calculation of rent (munafa).Detailed Analysis:1. Equitable Set-off from Mesne Profits:The primary question was whether the appellant could deduct amounts due to him on account of rent, revenue, and cesses for the period subsequent to the dates of delivery of possession by way of equitable set-off from the mesne profits. The court held that 'a plea in the nature of equitable set-off is not available when the cross-demands do not arise out of the same transaction.' Mesne profits relate to the period when the appellant was wrongfully in possession, while the amounts claimed by the defendant relate to a period post-possession. The court emphasized that 'the right of the appellant to recover additional rents from the plaintiff arises out of a different cause of action and independently of the claim for mesne profits.' The court concluded that 'a wrongdoer who has wrongfully withheld moneys belonging to another cannot invoke any principles of equity in his favour and seek to deduct therefrom the amounts that during this period have fallen due to him.' Thus, the High Court's decision disallowing the claim for equitable set-off was upheld.2. Interest on Mesne Profits:Regarding the interest on the mesne profits, the District Judge initially allowed interest at 6% per annum due to the claim for equitable set-off. However, the High Court disallowed the equitable set-off but maintained the 6% interest rate. The Supreme Court found no justification for allowing future interest at more than 4% for such a prolonged period, especially since the plaintiff delayed the enquiry into mesne profits for about twelve years. The court concluded that 'future interest should not have been allowed to the plaintiff in the several suits at a higher rate than four per cent, on the amount decreed in the various suits by way of mesne profits.'3. Calculation of Rent (Munafa):The appellant contended that the munafa (rent) should not be calculated based on the principles laid down in Radhacharan v. Maharaja Ranjit Singh (1918) 27 C.L.J. 532 but should be assessed on a fair share of the profits from the land. The court dismissed this contention, noting that 'the claim was not made in the grounds of appeal to the Privy Council and was not even mentioned in the additional grounds of appeal.' The court further stated that 'the claim has no substance in the absence of any evidence about the proportion the original patni rent bore to the revenue and cesses.'Conclusion:The Supreme Court dismissed the appeals except for modifying the interest rate on mesne profits from 6% to 4%. The parties were directed to bear their own costs in all these appeals. The final judgment stated, 'For the reasons given above all these appeals fail except to the extent that the decree of the High Court is modified in that the amounts decreed by way of mesne profits in the various suits will bear interest at the rate of four per cent, instead of six per cent.'