Case Note & Summary
The judgment involves cross civil revision applications filed by the tenant, Bharat Petroleum Corporation Limited (BPCL), and the landlord, M/s. Forbes Gokak Ltd. and others, arising from a dispute over mesne profits and interest after a decree for possession of a flat in Mumbai. The landlord had filed TE & R Suit No.24/24 of 2003 for possession, which was decreed on 15 October 2010 with a separate enquiry into mesne profits under Order 20 Rule 12(1)(c) CPC. The tenant appealed but the decree was upheld, and possession was eventually handed over by 31 December 2013. The landlord filed Mesne Profits Application No.747 of 2013 claiming mesne profits from 1 August 2001 to 31 December 2013 at varying rates based on a valuation report, plus interest at 18% compounded quarterly. The tenant opposed, and after evidence, the Small Causes Court partly allowed the application, fixing mesne profits totaling Rs.4,90,50,000 with simple interest at 9% per annum from 1 August 2001 to 20 January 2022, amounting to Rs.5,99,60,640, and adjusting amounts already paid. Both parties appealed to the Appellate Bench of the Small Causes Court, which dismissed both the tenant's appeal and the landlord's cross-objection, confirming the trial court's order. In the present revisions, the tenant argued that the mesne profits were excessive and that interest should be at 6% under Section 34 CPC as the transaction was not commercial. The landlord sought enhancement of both quantum and interest rate. The High Court, after hearing arguments, found no error in the concurrent findings. It held that the mesne profits were based on evidence and that the transaction was commercial, justifying 9% interest. The court also rejected the tenant's argument on methodology of interest calculation, noting that the trial court had already adjusted the deposits. Consequently, both revision applications were dismissed.
Headnote
A) Civil Procedure - Mesne Profits - Fixation of Quantum - Order 20 Rule 12 CPC - The court upheld the mesne profits fixed by the trial court ranging from Rs.2,50,000 to Rs.4,50,000 per month for the suit premises, based on evidence including valuation reports and comparable licenses, despite some infirmities in the plaintiff's valuer's report. (Paras 1-10) B) Civil Procedure - Interest on Mesne Profits - Section 34 CPC - Commercial Transaction - The court held that the transaction between landlord and tenant for use of premises for BPCL's business is commercial, justifying 9% interest rate, and rejected the tenant's argument that 6% should apply as BPCL is not in the business of renting. (Paras 9-10) C) Civil Procedure - Revision - Scope - Section 115 CPC - The court declined to interfere with concurrent findings of fact on mesne profits and interest, as no jurisdictional error or perversity was shown. (Para 11)
Issue of Consideration
Whether the quantum of mesne profits fixed by the Small Causes Court and the rate of interest at 9% per annum are correct and whether the Appellate Bench erred in confirming the same.
Final Decision
Both Civil Revision Applications are dismissed. The judgment and order dated 15 July 2023 passed by the Appellate Bench of Small Causes Court confirming the order dated 21 January 2022 of the Single Judge of Small Causes Court is upheld.
Law Points
- Mesne profits determination
- Interest rate under Section 34 CPC
- Commercial transaction test
- Appellate court's limited scope in revision
