Bombay High Court
Central Bank Of India vs Anil Puranmal Bansal on 7 March, 2016
Bench: R.M. Savant
judgment cra-765.15
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.765 OF 2015
Central Bank of India ]
a body corporate constituted under Banking ]
Companies (Acquisition & Transfer of ]
Undertakings Act), 1970 having their ]... Petitioner/Applicant
Central Office at Chandermukhi, Nariman ] (Original Defendant)
Point, Mumbai - 400 021 ]
versus
1] Anil Puranmal Bansal
Age 39 years, Occ. Business, residing
]
]
at Flat No.2, Sea Green 7/15, A.G. ]
Khan Road, Worli Sea Face, ]
Mumbai 400 018 ]
]
2] Vimal Puranmal Bansal ]
Age 37 years, Occ. Business, residing ]... Respondents
at D-13, Paschimi Marg, Vasant Vihar ] (Original Plaintiffs)
New Delhi - 110 057 ]
Mr. Sharan Jagtiani a/w Mr. Aditya Thakkar and Mr. M S Detty Davis & Mr.
Mantul Bajpai i/by Juris Corp for the Applicant.
Mr. G S Godbole a/w Mr. Chetan Kapadia i/by Mr. S S Kothari for the
Respondents.
CORAM : R. M. SAVANT, J.
Reserved on : 04/02/2016
Pronounced on :- 07/03/2016
JUDGMENT :
1 Admit. With the consent of the learned counsel for the parties
heard forthwith.
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judgment cra-765.15
2 The revisionary jurisdiction of this Court is invoked against the
order dated 24/10/2015 passed by the Appellate Bench of the Small Causes
Court in Appeal No.351 of 2009 and Appeal No.61 of 2009 in Misc. Notice
No.4705 of 2004 in RAE & R Suit No.1486/4851 of 1983. ("Misc. Notice
No.4705 of 2004" is herein after for brevities sake referred to as "the
Misc.Notice"). By the said order the Appellate Bench of the Small Causes
Court has held that the Application being the Misc. Notice No.4705 of 2004
filed by the Respondents herein is within limitation. The parties would be
referred to as per their nomenclature in the Suit i.e. the Respondents as
Plaintiffs and the Applicant as the Defendant.
3 The factual matrix involved in the above Civil Revision Application
can be stated thus :-
The Respondents herein i.e. the Plaintiffs are the owners and
landlords of the premises i.e. Block Nos. 7A and 7B on the 7 th floor of the
building known as Chandermukhi, Nariman Point, Mumbai. The said premises
admeasure 7000 sq.ft built up area. Prior to the present Plaintiffs becoming the
owners of the said property the predecessor in title of the Plaintiffs granted
leave and license to the Applicant herein i.e. the Defendant by the Agreement
dated 15/05/1972 on the terms and conditions mentioned in the said Leave
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judgment cra-765.15
and License Agreement. On the Plaintiffs becoming the owners of the said
property by virtue of the Agreement dated 25/08/1980 the Defendant became
the licensee of the Plaintiffs and started paying license fee or compensation at
the rate prevailing to the Plaintiffs. As the Defendant was occupying the suit
premises on 01/02/1973 under a valid and subsisting Leave and License
Agreement in terms of Section 15(A) of the Bombay Rent Control Act, 1947, it
became a deemed tenant of the Plaintiffs. The Plaintiffs by their notice dated
19/06/1982 terminated the tenancy of the Defendant and thereafter filed
eviction suit being RAE & R Suit No.1486/4851 of 1983. The said suit was
founded on the bonafide requirement of the Plaintiffs in respect of the suit
premises. The said suit of the Plaintiffs was decreed by the Trial Court by the
judgment and order dated 12/07/1991 whereby the Defendant was directed to
deliver vacant and peaceful possession of the suit premises on or before
30/09/1991.
4 Aggrieved by the said decree dated 12/07/1991, the Defendant
filed an Appeal being Appeal No.220 of 1991. The said Appeal was allowed by
the Appellate Bench of the Small Causes Court and decree dated 12/07/1991
passed by the Trial Court was set aside and the suit filed by the Plaintiffs was
dismissed.
5 Against the said order the Plaintiffs herein filed a Writ Petition
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judgment cra-765.15
being No.4053 of 1992 in this Court. The said Writ Petition came to be allowed
by a learned Single Judge of this Court by the judgment and order dated
03/09/2002, resultantly the judgment and order dated 24/09/1992 passed by
the Appellate Bench of the Small Causes Court was set aside and the decree of
the Trial Court dated 12/07/1991 was restored.
6 Against the judgment and order dated 03/09/2002 passed in the
said Writ Petition, the Defendant filed an SLP being SLP No.21206 of 2002 in
the Apex Court which was summarily dismissed by the Apex Court by order
dated 13/09/2002, and the Defendant was directed to hand over vacant and
peaceful possession of the suit premises on or before 31/03/2003 by filing
usual undertaking.
7 Pursuant to the said undertaking given by the Defendant, the
possession of the suit premises was handed over on 31/03/2003. Since in the
interregnum the Maharashtra Rent Control Act 1999 (for short the Rent Act
1999) had come into force. The Plaintiffs herein i.e. the landlords filed TE & R
Suit No.229/274 of 2000 claiming mesne profits in respect of the suit premises
for the period mentioned in the said suit.
8 The said suit came to be decreed and the mesne profits came to be
granted for the limited period mentioned in the judgment and order dated
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judgment cra-765.15
20/01/2007 passed by the learned Judge of the Small Causes Court. After the
possession was handed over by the Defendant, the Plaintiffs filed an
Application being Misc. Notice No.4705 of 2004 in the said RAE & R Suit
No.1486/4851 of 1983 claiming mesne profits for the period from 19/06/1982
or alternatively from October 1983 till 30.09.2000. The said Misc. Notice was
in addition to the said TE & R Suit No.229/274 of 2000 which was filed by the
Plaintiffs for grant of mesne profits in respect of the suit premises though in the
said suit the mesne profits claimed were for a different period i.e. post the year
2000. The Trial Court thereafter considered the said Misc. Notice and by its
judgment and order dated 20/09/2008 directed the Defendant to pay a sum of
Rs.141/- per sq.ft. per month from 30/09/1991 till the realization of the entire
mesne profits with interest @ 6% p.a. The said figure of Rs.141/- per sq.ft. per
month was arrived at by the Trial Court on the basis of the material that was
on record.
9 The Defendant aggrieved by the said order dated 20/09/2008
filed an Appeal bearing No.351 of 2009 challenging the award of mesne
profits. The Plaintiffs also filed an Appeal bearing No.61 of 2009 against the
refusal of the Trial Court to grant mesne profits as claimed by them in the said
Misc. Notice but being granted mesne profits only from September 1991.
10 The Appellate Bench of the Small Causes Court by the judgment
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judgment cra-765.15
and order dated 19/12/2009 dismissed both the Appeals, however by its order
dated 28/01/2010 stayed its own order so as to enable the Defendant to take
appropriate recourse against the said order dated 19-12-2009.
11 The Defendant aggrieved by the said order dated 19/12/2009 of
the Appellate Bench of the Small Causes Court filed Civil Revision Application
in this Court being No.137 of 2010. The principal ground of challenge was that
the Misc. Notice filed by the Plaintiffs was not maintainable under the
provisions of Order XX Rule 12 of the Code of Civil Procedure and that
assuming that the Misc. Notice was to be treated as a plaint, then the same was
barred by the law of limitation. Having regard to the challenge raised by the
Defendant in the said Civil Revision Application, a learned Single Judge of this
Court allowed the said Civil Revision Application by order dated 20/03/2015
and remanded the matter back to the Appellate Bench of the Small Causes
Court to consider as to whether the Misc. Notice is barred by law of limitation.
12 Pursuant to the order of remand, the Defendant filed its affidavit
whereas the Plaintiffs herein filed their reply to the said affidavit on the point
of limitation. The Appellate Bench of the Small Causes Court by the order
dated 24/10/2015 has disposed of both the Appeals holding that Misc. Notice
No.4705 of 2004 was within limitation. The Appellate Bench of the Small
Causes Court has referred to the antecedent litigation between the parties viz.
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judgment cra-765.15
the decreeing of the suit in the year 1991, the setting aside of the decree by the
Appellate Bench of the Small Causes Court and thereafter reinstatement of the
decree by this Court by virtue of the Writ Petition being allowed on
03/09/2002. The Appellate Bench of the Small Causes Court held that in so
far as the issue of limitation is concerned, it is Article 113 of the Limitation Act
that would apply and not Article 51 of the Limitation Act (for short herein after
referred to as "the said Act"). The Appellate Bench of the Small Causes Court
rejected the submission urged on behalf of the Defendant as regards the
applicability of Article 51 of the said Act and held that in the instant case the
issue of limitation would be covered by the residuary Article i.e. Article 113 of
the said Act. However the Appellate Bench of the Small Causes Court held that
even if Article 51 was to apply, the Misc. Notice was within limitation. The
Appellate Bench held that in terms of the law laid down by the Apex Court in
the judgment reported in (2005) 1 SCC 705 in Atma Ram Properties (P) Ltd.
v/s. Federal Motors the Plaintiffs would be entitled to mesne profits from the
date of the decree passed by the Trial Court i.e. 30/09/1991. As indicated
above it is the said judgment and order dated 24/10/2015 which is taken
exception to by way of the above Civil Revision Application.
13 SUBMISSIONS OF SHRI SHARAN JAGTIANI, THE LEARNED
COUNSEL APPEARING FOR THE APPLICANT/ORIGINAL
DEFENDANT :-
A] That the Appellate Bench of the Small Causes Court has erred in
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judgment cra-765.15
holding that the instant Application (Misc. Notice No.4705 of
2004) filed for seeking mesne profits was within limitation.
B] That the Appellate Bench of the Small Causes Court has erred in
coming to a conclusion that the Misc. Notice was not only for
mesne profits but more.
C] That if the Plaintiffs are seeking mesne profits from the year 1982
i.e. from the date of the notice terminating the tenancy, the Misc.
Notice filed for mesne profits was barred by limitation having
regard to Article 51 of the said Act. Reliance is sought to be
placed on the judgment of the Division Bench of this Court
reported in (1938) Indian Law Reports 107 in the matter of
Dullabhbhai Hansji and another v/s. Gulabbhai Morarji Desai,
Receiver of the Estate of Insolvent Gulabchand Rupaji, as also
the judgment of a Learned Single Judge of this Court reported in
AIR 1964 Bom. 42 in the matter of Dwarkas Nathamal v/s.
Balkrishna Baliram.
D] Since it is Article 51 which governs the period of limitation in so
far as a claim for mesne profits is concerned and since according to
the Plaintiffs, the Defendant is in receipt of the profits since the
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judgment cra-765.15
year 1982 as per their own averments in the Misc. Notice, the
Misc. Notice filed for mesne profits in the year 2004 is barred by
limitation, as the same is required to be filed within 3 years of the
receipt of profits by the Defendant in terms of Article 51 of the
said Act.
E] Alternatively, assuming Article 113 of the said Act applies then the
Plaintiffs cannot claim mesne profits from the year 1991 i.e. from
the date when the suit was decreed by the Trial Court and could
claim it only for the preceding 3 years prior to filing of the suit.
F] That there is no merger of the judgment and decree passed by the
Trial Court with the judgment and order passed by this Court in
Writ Petition No.4053 of 1992 as the Appeal filed by the
Defendant Bank had been allowed and the decree has been set
aside and therefore the Plaintiffs cannot claim mesne profits from
the year 1991 when the suit was decreed.
14 SUBMISSIONS OF SHRI G. S. GODBOLE, THE LEARNED
COUNSEL APPEARING FOR THE RESPONDENTS/ORIGINAL
PLAINTIFFS.
i] That since the decree passed by the Trial Court was set aside by
the Appellate Bench of the Small Causes Court and since the
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judgment cra-765.15
judgment of the Appellate Bench of the Small Causes Court was
set aside by this Court in Writ Petition 4053 of 1992 by virtue of
which the suit in turn was decreed, the cause for filing the Misc.
Notice for mesne profits arose only in the year 2002 when the suit
was decreed by this Court in the Writ Petition and therefore the
Misc. Notice filed in the year 2004 was within limitation in terms
of Article 113 of the said Act.
ii]
That the claim for mesne profits in a rent suit arises only when the
tenant's possession becomes wrongful and therefore sticto senso
the claim is not for mesne profits which has been received by the
Defendant but for damages for wrongful use of the tenanted
premises. Reliance is sought to be placed on the judgment of a
learned Single Judge of this Court reported in 2009(1) ALL MR
844 in the matter of Humayun Dhanrajgir & Ors.v/s. Ezra
Aboody.
iii] That in the instant case, the cause of action for filing the claim of
mesne profits assumes importance. In the instant case the decree
passed by the Trial Court was set aside by the Appellate Bench of
the Small Causes Court, this Court in the Writ Petition had set
aside the judgment of the Appellate Bench of the Small Causes
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judgment cra-765.15
Court, and in turn had decreed the suit in the year 2002 and
hence the cause of action for filing the Misc. Notice for mesne
profits arose in the year 2002 and therefore the Misc. Notice filed
in the year 2004 was within limitation. Reliance is sought to be
placed on the judgment of the Apex Court reported in (2004) 2
SCC 747 in the matter of Union of India and others v/s. West
Coast Paper Mills Ltd. and another as also the judgment of a
Division Bench of this Court reported in 1986 BCI 108 in the
matter of Kumudini Ramdas Shah v/s. K.M.Mody (Dead) by
L.Rs.
iv] That the judgment of the learned Judge of the Small Causes Court
has merged in the judgment of this Court in Writ Petition No.4053
of 1992 and therefore the Plaintiffs are entitled to make a claim
for mesne profits from the year 1991 when the suit was decreed.
Reliance is sought to be placed on the judgment of the Apex Court
reported in (2000) 6 SCC 359 in the matter of Kunhayammed
and others v/s. State of Kerala and another.
CONSIDERATION :-
15 Having heard the learned counsel for the parties, I have
considered the rival contentions. The issue that arises for consideration is
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judgment cra-765.15
whether the Application being Misc. Notice for mesne profits being Notice
No.4705 of 2004 as filed is within limitation.
16 In so far as a suit under the Rent Act is concerned, there can be no
gainsaying of the fact that the defining aspect in so far as a claim for mesne
profit is when the possession of the tenant becomes wrongful. The possession
becomes wrongful when the tenancy actually stands terminated on the passing
of the order or decree for eviction and the building falls vacant by his actual
eviction. (See Dhanapal Chettiar v/s. Yesodai Ammal reported in (1979) 4
SCC 214). There can be no dispute about the fact that a claim for mesne
profits can be made both for pre-suit period as well as the post decree period.
In the instant case, the claim is made from the year 1982 to the year 2000. In
so far as the post 2000 period is concerned, a separate application has been
filed with which this Court is not concerned with the above Civil Revision
Application.
17 In the context of the issue that arises for consideration it would be
gainful to refer to the judgment of a learned Single Judge of this Court in
Humayun Dhanrajgir's case (supra). The concept of mesne profits vis-a-vis
rent proceedings had come up before a learned Single Judge of this Court, and
which was sought to be explained. The learned Single Judge of this Court in
the said judgment has observed that the liability to pay rent flows by virtue of
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judgment cra-765.15
the contract express or implied between the parties and after the contract of
tenancy stands terminated, it will be damages or compensation that is payable
for continued possession of the premises. It is observed that though the tenant
had a rightful possession when he entered the immovable property but it is the
decree of possession which makes his possession wrongful. It is held that
wrongful possession of the person is the very essence for the claim for mesne
profits. The learned Judge thereafter in paragraph 31 after referring to the
conspectus of judgments cited before him concluded as under :-
"31. Having taken survey of the various cases and
methods of valuation, it can be broadly summarised as
under:-
i) The claim for 'Mesne Profit' remains floating till
the decree of possession is passed in favour of the
plaintiff, which can also be termed as royalty;
ii) The measure of Mesne Profits is the value for the
use of the premises and not necessarily the value
of the property;
iii) Value for use will be determined by:-
a. What that value will be in the hands of the
person in wrongful possession;
b. comparables, if available and applicable in real
sense;
c. finding out the prevailing rate of rental at which
the wrongful person ought to have found
equivalent accommodation."
Hence the test is as to when the possession of the Defendant has become
wrongful. For the said purpose the facts of the instant case would have to be
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judgment cra-765.15
re-visited. The RAE & R Suit No.1486/4851 of 1983 was decreed on
12/07/1991. However, in the said suit, the Plaintiffs did not claim any post or
future mesne profits. Hence there was no decree in respect of any post mesne
profits or enquiry into future mesne profits. The decree passed by the Trial
Court was stayed by the Appellate Bench of the Small Causes Court in Appeal
No.220 of 1991 filed by the Defendant Bank vide its interim order dated
16/11/1991. The said interim stay granted to the decree by the order dated
16/11/1991 continued till final disposal of the Appeal. The Appeal in question
was allowed by the Appellate Bench of the Small Causes Court by the judgment
and order dated 24/09/1992 as a result of which the decree passed by the Trial
Court was set aside. The Plaintiffs thereafter filed Writ Petition No.4053 of
1992 in this Court. The said Writ Petition came to be allowed by a learned
Single Judge of this Court by the judgment and order dated 03/09/2002
whereby the judgment and order passed by the Appellate Bench of the Small
Causes Court was set aside and the decree passed by the Trial Court was
restored. The judgment in the said Writ Petition was stayed for a period of 6
weeks to enable the Defendant/Bank i.e. the Defendant herein to approach the
Apex Court. The Defendant i.e. the Judgment Debtor filed an SLP in the Apex
Court which came to be dismissed by the Apex Court by order dated
13/11/2002 and the Apex Court granted time till 31/03/2003 to the
Defendant/Judgment Debtor to hand over the possession on or before
31/03/2003. The Defendant accordingly has handed over the possession on
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judgment cra-765.15
31/03/2003. Hence the possession of the Defendant can be said to have
become wrongful on and from 03/09/2002 when Writ Petition No.4053 of
1992 was allowed by a learned Single Judge of this Court. It is thereafter that
the instant Misc. Notice No.4705 of 2004 has been filed by the Plaintiffs for
claiming mesne profits from the year 1982 to the year 2000. Since the issue is
as to whether the said Misc. Notice for mesne profits in the year 2004 was
within limitation, is to be considered, the applicability of the relevant
provisions of the Limitation Act would be in contention.
18 In the light of the proposition laid down by the Apex Court in V.
Dhanapal Chettiar's case (supra) that the tenancy is actually terminated on
the passing of the order of eviction, the possession of the Defendant in the
instant case had become wrongful when the decree of eviction was passed
against it in RAE & R Suit No.1486/4851 of 1983. The said decree was stayed
by the Trial Court itself. The Defendant challenged the decree by way of an
Appeal before the Appellate Bench of the Small Causes Court. The Appellate
Bench of the Small Causes Court by an interim order dated 16/11/1991 had
stayed the decree which stay had continued till the disposal of the Appeal. The
Appeal, as indicated above, was allowed by the Appellate Bench of the Small
Causes Court and the decree was set aside by the Appellate Bench of the Small
Causes Court by the judgment and order dated 24/09/1992. Against the
judgment and order of the Appellate Bench of the Small Causes Court, the
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judgment cra-765.15
Plaintiffs had filed a Writ Petition in this Court being Writ Petition No.4053 of
1992 which Writ Petition was allowed by a learned Single Judge of this Court
by the judgment and order dated 03/09/2002 and the decree passed by the
Trial Court was restored. The judgment of the learned Single Judge was stayed
by him to enable the Defendant to approach the Apex Court. The Defendant
accordingly approached the Apex Court by way of an SLP. The said SLP filed by
the Defendant came to be summarily dismissed by the Apex Court. Hence the
cause of action to claim mesne profits in the instant case arose only after this
Court had allowed the said Writ Petition filed by the Plaintiffs by the judgment
and order dated 03/09/2002. The ancillary question that arises for
consideration is as to when the time has begun to run in so far as limitation is
concerned. The two Articles of the Limitation Act which are in contention are
Article 51 and Article 113. The said Articles are reproduced herein under for
the sake of ready reference :-
Description of suit Period of Limitation Time from which period
begins to run
51. For the profits of
immovable property Three years When the profits are
belonging to the plaintiff received.
which have been
wrongfully received by the
defendant.
113. Any suit for which no
period of limitation is Three years When the right to sue
provided elsewhere in this accrues.
Schedule.
Hence under Article 51 the limitation is for three years and the time begins to
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judgment cra-765.15
run when profits are received by the Defendant. In so far as Article 113 is
concerned, it is in the nature of a residuary provision and applies when no
period of limitation is prescribed elsewhere in the Schedule and the period of
limitation is three years from the date when the right to sue accrues. Hence
Article 51 governs the cases where the profits have actually been received by
the Defendant or might with ordinary diligence would have received by a
person in wrongful possession of the property. But as held in Humayun
Dhanrajgir's case (supra), the claim for mesne profits as a consequence of a
decree passed in a rent suit is a claim for damages or compensation for the
continued possession of the premises after the decree of possession is passed.
The claim therefore stands on a slightly different footing than may be a suit for
simplicitor possession of immovable property. The claim for mesne profits in a
rent suit cannot be connected to the fact that when the Defendant has
wrongfully received the profits but has a causal connection as to when the
possession of the Defendant has become wrongful and hence when the cause of
action has arisen to claim mesne profits assumes importance.
19 In the said context a reference could be made to the judgment of
the Apex Court in West Coast Paper Mills Ltd's case (supra). In the said case
the Railway Tribunal had decided that the levy of freight on the goods
transported on a particular basis as unreasonable. The judgment of the Railway
Tribunal was delivered on 18/04/1966. The Appellant i.e. the Union of India
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judgment cra-765.15
approached the Apex Court by way of an SLP. The SLP of the Union of India
was dismissed by the Apex Court 14/10/1970. The Respondent i.e. the West
Coast Paper Mills Ltd. had filed Writ Petitions in the High Court for recovery of
excess freight charged. The said Writ Petitions were not entertained and the
Petitioner i.e. the West Coast Paper Mills Ltd. was directed to adopt the
ordinary remedy of filing a suit for appropriate relief. Two suits were
accordingly filed by the West Coast Paper Mills Ltd. An objection was raised
that the suits were barred by limitation on the ground that the cause of action
for filing the same arose immediately after the judgment was passed by the
Tribunal on 18/04/1966 and since in terms of Article 58 of the Limitation Act,
1963 they were required to be filed within a period of three years, the suits
filed in the year 1972 were time barred. The Apex Court held that even in
relation to a civil dispute, an appeal is considered to be a continuation of the
suit and a decree becomes executable only when the same is finally disposed of
by the Court of Appeal. The Apex Court further held that once an Appeal is
filed before it and the same is entertained, the judgment of the High Court or
the Tribunal is in jeopardy. The subject matter of the lis unless determined by
the last Court cannot be said to have attained finality. Hence the Apex Court in
the said judgment held that the cause of action for filing the suit arises only
when the SLP filed by the Union of India was dismissed in the year 1970 and
therefore the suits filed in the year 1972 were within limitation.
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judgment cra-765.15
20 It would also be relevant to refer to the judgment of the Division
Bench of this Court in Kumudini Ramdas Shah's case (supra). In the said
case, the auction purchaser i.e. Kumudini Shah had filed Original Special Civil
Suit No.224 of 1969 and had applied for mesne profits of the business and the
income which had accrued from out of the property for the period from
06/08/1957 to 31/10/1968. A contention was raised that the suit is barred by
limitation on the touchstone of Article 51. The Division Bench of this Court
having regard to the decisions which were cited before it held that an
aggrieved party can found his action for consequential relief on the date of
decision of a Court which declares his rights and enables him to bring in such
action rather than rush to the Court periodically treating it as a fortuitous
gamble. The Division Bench further held in the said case that the suit in
question can never be called a suit simplicitor for mesne profits as is envisaged
by Article 51 of the Limitation Act. The Division Bench further held that in
allied fields, the Supreme Court has expanded the concept of accrual of cause
of action so as to make it co-ordinate with and concomitant upon the final
determination of the lis by a Competent Court. In the said case since the suit
filed by the Mortgagee of the property for declaration of his tenancy ultimately
concluded in the SLP filed by the said Mortgagee being dismissed on
30/10/1967, the suit filed in the year 1969 by the auction purchaser was
therefore within time. Hence the Apex Court has held that the accrual of the
cause of action for filing of a claim for mesne profits in the facts of the said
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judgment cra-765.15
case was the defining aspect. The aforesaid judgments (supra) would apply in
the facts of the present case.
21 In my view, the judgment relied upon on behalf of the Defendant
in Dullabhbhai Hansji's case (Supra) would not aid the Defendant in so far as
applicability of Article 51 (old Article 109) is concerned. In the said case the
mesne profits were sought to be recovered on the basis of the receipt of profits
by the Defendant between the period 1925 to 1928. In the said case the
Division Bench held that part of the profits which have been recovered within 3
years the Suit was maintainable under Article 51. The Division Bench held that
the accrual cause of action which was sought to be urged on behalf of the
Plaintiffs had no relevance. Since the starting point of limitation in the said
case is the point when the profits were received, it therefore can be said to be
different than the starting point of limitation in the instant case which is the
accrual of the cause of action for claiming mesne profits. The said judgment
would therefore have no application similarly the judgment of a learned Single
Judge of this Court in Dwarkas Nathamal's case (supra) would also not
further the case of the Defendant. In fact in the said case the learned Single
Judge has observed thus :-
"The cause of action is what gives occasion for and
forms the foundation of the suit; the cause of action is
something different from the starting point of
limitation; and the cause of action in a suit for mesne
profits is not the actual receipt of the profits by the
person in wrongful possession as held by Badkas, J. but
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judgment cra-765.15
the cause of action is the wrongful possession of the
defendant."
22 In the instant case since the accrual of cause of action is the
defining aspect, hence it is Article 113 of the Limitation Act which is the
residuary Article, which would apply in the facts of the present case. In terms
of Article 113 of the said Act, the application is to be filed within three years of
the cause of action having arisen. In the instant case, there was no decree till
this Court allowed the Writ Petition and hence the cause of action for filing the
Misc. Notice for mesne profits has arisen when this Court had allowed the Writ
Petition No.4053 of 1992 by the judgment and order dated 03/09/2002. The
Application being Misc. Notice No.4705 of 2004 filed on 06/09/2004 is
therefore within time.
Since the Appellate Bench of the Small Causes Court after coming
to a conclusion that it is Article 113 that would apply, has alternatively held
that even in terms of Article 51, the Misc. Notice is within time, this Court does
not deem it necessary to go into the said aspect.
23 Since the applicability of Article 113 is determined, the incidental
issue that arises for consideration is for what period the Plaintiffs/Plaintiffs are
entitled to claim mesne profits. The Appellate Bench of the Small Causes Court
has held that the Plaintiffs are entitled to the mesne profits from the year 1991.
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judgment cra-765.15
This is on the basis that in terms of the judgment of the Apex Court in Atma
Ram Properties' case (supra) on the decree being passed by the Trial Court on
30/09/1991, the possession of the Defendant has become wrongful from the
said day.
The said finding recorded by the Appellate Bench of the Small
Causes Court is sought to be supported on behalf of the Defendant i.e. the
Applicant herein by placing reliance on the judgment of the Apex Court in
Kunhayammed's case (supra). The said judgment is an exposition of the Apex
Court on the doctrine of merger. The Apex Court has held that the said
doctrine of merger postulates merger of the subordinate forum's decision in the
decision of the appellate or revisional forum modifying, reversing or affirming
such decision. The Apex Court has held that thereafter only the latter and not
the former exists in the eye of law. The Apex Court has further observed that
the said doctrine is not of universal or unlimited application but its
applicability has to be determined keeping in view the nature of jurisdiction
exercised by the superior forum and the content or subject matter of the
challenge. The Apex Court has summed up its conclusion in paragraph 44 of
the said judgment which for the sake of ready reference is reproduced herein
under :-
"To sum up our conclusions are :-
(i) Where an appeal or revision is provided against an
order passed by a court, tribunal or any other authority
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judgment cra-765.15
before superior forum and such superior forum
modifies, reverses or affirms the decision put in issue
before it, the decision by the subordinate forum merges
in the decision by the superior forum and it is the latter
which subsists, remains operative and is capable of
enforcement in the eye of law.
ii) The jurisdiction conferred by Article 136 of the
Constitution is divisible into two stages. First stage is
upto the disposal of prayer for special leave to file an
appeal. The second stage commences if and when the
leave to appeal is granted and special leave petition is
converted into an appeal.
(iii) The doctrine of merger is not a doctrine of
universal or unlimited application. It will depend on
the nature of jurisdiction exercised by the superior
forum and the content or subject-matter of challenge
laid or capable of being laid shall be determinative of
the applicability of merger. The superior jurisdiction
should be capable of reversing, modifying or affirming
the order put in issue before it. Under Article 136 of
the Constitution the Supreme Court may reverse,
modify or affirm the judgment-decree or order
appealed against while exercising its appellate
jurisdiction and not while exercising the discretionary
jurisdiction disposing of petition for special leave to
appeal. The doctrine of merger can therefore be
applied to the former and not to the latter.
iv) An order refusing special leave to appeal may be a
non- speaking order or a speaking one. In either case it
does not attract the doctrine of merger. An order
refusing special leave to appeal does not stand
substituted in place of the order under challenge. All
that it means is that the Court was not inclined to
exercise its discretion so as to allow the appeal being
filed.
v) If the order refusing leave to appeal is a speaking
order, i.e. gives reasons for refusing the grant of leave,
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judgment cra-765.15
then the order has two implications. Firstly, the
statement of law contained in the order is a declaration
of law by the Supreme Court within the meaning of
Article 141 of the Constitution. Secondly, other than
the declaration of law, whatever is stated in the order
are the findings recorded by the Supreme Court which
would bind the parties thereto and also the court,
tribunal or authority in any proceedings subsequent
thereto by way of judicial discipline, the Supreme
Court being the apex court of the country. But, this
does not amount to saying that the order of the court,
tribunal or authority below has stood merged in the
order of the Supreme Court rejecting special leave
petition or that the order of the Supreme Court is the
only order binding as res judicata in subsequent
proceedings between the parties.
(vi) Once leave to appeal has been granted and
appellate jurisdiction of Supreme Court has been
invoked the order passed in appeal would attract the
doctrine of merger; the order may be of reversal,
modification or merely affirmation.
(vii) On an appeal having been preferred or a petition
seeking leave to appeal having been converted into an
appeal before Supreme Court the jurisdiction of High
Court to entertain a review petition is lost thereafter as
provided by sub-rule (1) of Rule (1) of Order 47 of the
CPC."
The Apex Court has therefore held that the decision of the subordinate forum
merges in the decision of the superior forum and it is the latter which subsists,
remains, operative and is capable of enforcement in the eye of law. The Apex
Court in the said case was principally concerned with the jurisdiction exercised
by it under Article 136 of the Constitution of India. It is in the said context
that the Apex Court has made observations on the aspect of doctrine of merger
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judgment cra-765.15
vis-a-vis the order passed by it. The Apex Court has held that once leave to
appeal has been granted and appellate jurisdiction of Supreme Court has been
invoked the order passed in appeal would attract the doctrine of merger, the
order may be of reversal, modification or merely affirmation. It is in the
context of what the Apex Court has held amounts to merger, that the facts in
the instant case would have to be seen.
24 As indicated above, in the instant case the decree passed by the
Trial Court was set aside by the Appellate Bench of the Small Causes Court and
was re-instated by virtue of the order passed in the Writ Petition. Hence the
decree passed by the Trial Court had merged in the decree of dismissal passed
by the Appellate Bench of the Small Causes Court and hence there was no
decree till this Court allowed the Writ Petition No.4053 of 1992 by the
judgment and order dated 03/09/2002. The doctrine of merger has no
application in so far as merger of the decree of the Trial Court in the judgment
and order passed by this Court is concerned. Hence it is only on 03/09/2002
that there was a decree in favour of the Plaintiffs so as to entitle them to lay a
claim for mesne profits. Once it is held that Article 113 of the Limitation Act is
to apply, then the logical corollary of the same would be that the Plaintiffs
would be entitled to mesne profits for the preceding three years i.e. up to
1999. The Appellate Bench of the Small Causes Court held that the judgment
of the Trial Court does not merge in the judgment of the highest forum.
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judgment cra-765.15
However, the Appellate Bench by applying the law laid down by the Apex
Court in Atma Ram Properties' case (supra) held that the Plaintiffs i.e. the
Decree Holders would be entitled to mesne profits from 30/09/1991 i.e. when
the decree was passed by the Trial Court. In my view, the Appellate Bench has
erred in applying the judgment in Atma Ram Properties' case (supra) to a
claim for mesne profits as the said judgment concerns the conditions that can
be imposed at the time of granting stay to the decree passed by the Trial Court
and therefore cannot be invoked to fix the date from which the Plaintiffs i.e.
Decree Holders would be entitled for mesne profits. That apart, applying
Atma Ram Properties' case (supra) would also militate against the provisions
of the Limitation Act which specifically provide that a money claim can be
made only for the preceding three years. Hence in so far as the impugned
order holds that it is Article 113 that would apply no exception could be taken
to the same however in so far as it holds that the Plaintiffs are entitled to
mesne profits from the year 1991 is concerned the same is unsustainable and is
accordingly required to be set aside to the said extent, and it is required to be
declared that the Plaintiffs would be entitled to the mesne profits for the three
years preceding 03/09/2002 i.e. from 03/09/1999.
25 Hence to conclude the finding of the Appellate Bench as regards
applicability of Article 113 of the Limitation Act is upheld, however, the
Plaintiffs i.e. the Decree Holders would be entitled to mesne profits only for the
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judgment cra-765.15
three years preceding the said Misc. Notice i.e. from 03/09/1999 and not from
the year 1991. The above Civil Revision Application is allowed to the aforesaid
extent and disposed of.
[R.M.SAVANT, J]
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