Mesne profits after mortgage expiry were not a breach of trust debt, preserving protection under the Kerala Debt Relief Act.

Liability for mesne profits after extinction of a mortgage was not treated as a liability arising out of breach of trust under Section 2(3)(c) of the Kerala Debt Relief Act, 1977. The exclusion applies only to breach of trust in the legal sense, not to every fiduciary or confidence-based obligation, and a mortgagee in possession is not a trustee for all purposes. Because the mesne profits claim arose from continued occupation after the mortgage ended, and the pleadings did not establish breach of trust as its foundation, the liability was not excluded from the Act's definition of debt and the petitioner was not disqualified from seeking protection.

---

---

Issues: Whether the liability to pay mesne profits after extinction of the mortgage was a liability arising out of breach of trust and therefore excluded from the definition of debt under Section 2(3)(c) of the Kerala Debt Relief Act, 1977.

Analysis: The exclusion in Section 2(3)(c) applies to liabilities arising out of breach of trust in the legal sense, not to every liability involving confidence or a fiduciary element. A mortgagee in possession may have obligations resembling those of a trustee in limited situations, but he is not a trustee for all purposes. The earlier finding that the possessor held the property in trust was made only in the context of adverse possession and did not decide the character of the mesne profits liability. The claim for mesne profits arose from continued occupation after the mortgage had been extinguished, and the pleadings did not establish a breach of trust as the foundation of that liability.

Conclusion: The liability for mesne profits was not excluded by Section 2(3)(c) of the Kerala Debt Relief Act, 1977, and the petitioner was not disqualified on that ground from seeking the Act's protection.

---