Res judicata and mesne profits: prior registration findings barred fresh lease challenges, and limitation ran from registration.

A prior proceeding under Section 77 of the Indian Registration Act was treated as barring a fresh challenge to the genuineness and contractual conformity of the leases on res judicata, because those matters had already been determined and could not be reopened by an inconsistent plea. The claim for mesne profits was treated as within limitation under Article 109 of the First Schedule to the Indian Limitation Act, since time ran only from the date the registered leases became operative against the property. The second defendant was regarded as liable for mesne profits during his possession, but that liability ended when a receiver was appointed, as the receiver's possession became that of the Court.

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Issues: (i) Whether the prior decision under Section 77 of the Indian Registration Act barred the defendants from disputing the genuineness and contractual conformity of the leases by res judicata; (ii) whether the claim for mesne profits was barred by limitation under Article 109 of the First Schedule to the Indian Limitation Act; (iii) whether the second defendant was liable for mesne profits and whether the decree for possession and mesne profits required modification in view of the receiver's possession.

Issue (i): Whether the prior decision under Section 77 of the Indian Registration Act barred the defendants from disputing the genuineness and contractual conformity of the leases by res judicata.

Analysis: A decision in a proceeding under Section 77 is confined to genuineness in the sense of execution by the alleged executant, but the doctrine of res judicata still applies to findings that were essential to the earlier decree. The earlier litigation had determined that the leases, as presented, were genuine, had not been tampered with after execution, and conformed to the contract between the parties. The defendant could not reopen those matters or shift to an inconsistent plea that new terms had been fraudulently inserted before execution, because such a plea contradicted the basis of the former adjudication and was barred by the principle against approbating and reprobating.

Conclusion: The plea of res judicata succeeded in barring the re-agitation of the genuineness and contractual conformity of the leases, and the defendant was not permitted to set up an inconsistent case.

Issue (ii): Whether the claim for mesne profits was barred by limitation under Article 109 of the First Schedule to the Indian Limitation Act.

Analysis: Although Article 109 prescribes a three-year period for profits of immovable property wrongfully received, limitation could not begin to run against the plaintiff until he was in a position to enforce his rights. By virtue of Sections 47 and 49 of the Indian Registration Act, the leases, though executed earlier, became operative against the property only upon registration, yet when registered they related back to the date of execution. The plaintiff's right remained in suspense until registration was completed, because he could not sue effectively for possession or for mesne profits before then. The earliest date from which limitation could run was therefore the date of registration, and the suit was brought within three years from that date.

Conclusion: The claim for mesne profits was not barred by limitation.

Issue (iii): Whether the second defendant was liable for mesne profits and whether the decree for possession and mesne profits required modification in view of the receiver's possession.

Analysis: The second defendant entered into possession under the later leases and never relinquished possession, while the two defendants acted together to keep the plaintiff out of possession, making him liable for mesne profits for the period of his possession. However, once a receiver was appointed, the receiver's possession became the possession of the Court, and the defendants' liability for mesne profits could not continue beyond that date. The decree therefore required a limited correction to confine mesne profits to the period ending the day before the receiver took charge.

Conclusion: The second defendant was liable for mesne profits up to the receiver's appointment, and the decree was liable to be modified only to that limited extent.

Final Conclusion: The appeals failed in substance, the decree for possession and mesne profits was substantially affirmed, and only the terminal date for mesne profits was corrected to reflect the receiver's possession.

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