Mesne profits and post-decree interest were confined to yearly accrual and 6% per annum under the unamended CPC.

Mesne profits under Section 2(12) CPC were treated as profits accruing from wrongful possession, and interest on them had to be calculated year by year as the entitlement arose, while the assessed quantum was upheld. For a suit filed before the amendment of Section 34 CPC, post-decree interest remained capped at 6% per annum, and a later amendment to the plaint could not justify a higher rate or make bank-rate interest on mesne profits sustainable. The admitted liability adjustment, the treatment of goodwill as a divisible partnership asset, and rejection of the gratuity reimbursement claim were maintained.

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Issues: (i) determination of mesne profits and the method of calculating interest thereon; (ii) rate of interest payable on the decretal amount under the preliminary and final decrees; (iii) adjustment of the admitted liability of the deceased partner and entitlement to share in goodwill, and the cross-claim for gratuity reimbursement.

Issue (i): Determination of mesne profits and the method of calculating interest thereon.

Analysis: Mesne profits under Section 2(12) of the Code of Civil Procedure are profits received or that could with ordinary diligence have been received by a person in wrongful possession, together with interest. The amount was assessed on the basis of the record, the commission report, and surrounding circumstances. The Court held that the quantum fixed by the High Court did not call for interference, but the interest on mesne profits had to be worked out on a yearly basis, because the entitlement accrued year by year and not as one lump sum from the outset.

Conclusion: The quantum of mesne profits was upheld, but the method of calculating interest was modified so that interest would be computed yearly on the amounts becoming due from year to year.

Issue (ii): Rate of interest payable on the decretal amount under the preliminary and final decrees.

Analysis: The suit had been instituted before the amendment of Section 34 of the Code of Civil Procedure, so the unamended provision governed the decree. Under that regime, post-decree interest could not exceed 6% per annum. The attempted enlargement of the interest claim by amendment of the plaint could not justify grant of a higher rate, and the award of bank-rate interest on mesne profits was held to be unsustainable. The dismissal of an earlier special leave petition did not amount to affirmation of the High Court's view or create res judicata on this issue.

Conclusion: Interest on both the decree for accounts and the decree for mesne profits was restricted to 6% per annum.

Issue (iii): Adjustment of the admitted liability of the deceased partner and entitlement to share in goodwill, and the cross-claim for gratuity reimbursement.

Analysis: The Court accepted the concurrent findings that the loan liability had already been adjusted and that the goodwill of the partnership was a real and divisible asset for purposes of taking accounts. The quantification of goodwill based on the firm's established business and profits was upheld. In the cross-appeals, the claim for reimbursement of gratuity paid to workers who went with the plaintiff's share was rejected, as was the challenge to the rate of interest, which stood concluded by the main judgment.

Conclusion: The adjustment of liability and award towards goodwill were upheld, while the gratuity reimbursement claim was rejected.

Final Conclusion: The appeals succeeded only to the limited extent of reducing interest to 6% per annum and correcting the mode of calculation on mesne profits, while the remaining findings on accounts, goodwill, and adjustment of liability were maintained.

Ratio Decidendi: In suits instituted before the amendment of Section 34 of the Code of Civil Procedure, post-decree interest is governed by the unamended provision, and a plaintiff cannot obtain a higher rate through an amendment that enlarges the original claim without due opportunity to the opposite party; mesne profit interest must also be computed on the basis of accrual from year to year.

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