Summary: Mesne profits are profits that a person in wrongful possession of immovable property has actually received or could have received with ordinary diligence. Wrongful possession is the essential foundation of a claim for mesne profits. The Bombay High Court in Humayun Dhanrajgir & Ors. v. Ezra Aboody held that the measure of mesne profits is not the loss suffered by the owner but the benefit that the person in wrongful possession derived or could have derived from the property. A person in wrongful possession cannot avoid liability by claiming that no profit was earned, though such person is also not liable based on the highest possible rent or profit. Mesne profits are distinct from compensation for loss or damage and penalties. While compensation and penalties arise from breach of contract and are governed by the Indian Contract Act, mesne profits arise from wrongful possession and are governed by the Code of Civil Procedure. A decree for possession may include determination of past and future mesne profits, and a finding of wrongful possession is a prerequisite for such a claim.
Meaning
Mesne profits refer to profits which a person in wrongful possession of a property has actually received or could have received.[1] Wrongful possession is the essence for a claim for mesne profits.
Measure of Mesne Profits
In the case of Humayun Dhanrajgir & Ors. vs. Ezra Aboody,[2] the Bombay High Court held as under.
“23. The measure of ‘Mesne profits’ is not what the landlord had lost by not being able to get possession, but what the user of the property meant to the defendant who was in wrongful possession. In other words, the basis for determining the quantum of mesne profit is: what the defendant might with ordinary diligence have received from the property. The person in wrongful possession cannot be heard to say that he has not utilized the property, made no profits, no rent is being derived from the property in dispute as such not liable to pay mesne profit. At the same time person in wrongful possession is not liable to realize highest possible rates of rent or profit. A plain reading of the definition of mesne profit would leave no manner of doubt that the real test to be applied is, not what the plaintiff decree holder had lost or would have earned by letting out or using the property himself, but what the person in wrongful possession, namely, with ordinary diligence would have received from it. The wrongful possession of defendant is the very essence of a claim for mesne profits. The very foundation of the defendant’s liability to pay the mesne profit goes with actual possession of the land. That is to say, generally the person in wrongful possession and enjoyment of the immovable property is liable to pay mesne profits…”
Distinguishing between Top of FormDamages, Penalty and Mesne Profits
It is pertinent to note that ‘compensation for loss or damage’, ‘penalty’, and ‘mesne profits’ are different concepts in their origin, legal nature and purpose, though in a given case or under peculiar set of facts, their paths may cross each-other.[3] Compensation for loss or damage is an outcome of breach of contract, being entitlement of a party suffering breach. Penalty is an entitlement of a party complaining breach, whether or not actual damage or loss is proved. Penalty includes stipulation of increased interest. Mesne profits necessarily arise from ‘wrongful possession’ and it has no essential connection with breach of contract.[4]
‘Compensation for loss or damage’ and ‘penalty’ are governed by the Indian Contract Act, 1872, while ‘mesne profits’ are governed by the Code of Civil Procedure, 1908 (“CPC”).
Decree for Delivery of Possession of Property and Mesne Profits
The provisions of Order XX, Rule 12 of the CPC deal with decrees for possession and mesne profits. While explaining the scope of Order XX Rule 12, the Bombay High Court[5] held as under:
20. In the context of the controversy at hand, a correct reading of Rule 12 of Order XX would imply that where a Court passes a decree for possession of immovable property, the decree may provide for, firstly, the delivery of possession of the property, secondly, for the rent or mesne profits which have accrued on the property during the period from the institution of the Suit or an enquiry as to such past rent or mesne profits and, thirdly, an enquiry as to future rent or mesne profits till the delivery of possession to the decree holder or relinquishment of possession by the judgment debtor.
21. A decree for delivery of possession of immovable property is, in a sense, a composite decree for possession of the property as well as the past and future mesne profits from the time the possession of the Judgment Debtor becomes wrongful. A direction for determination of the mesne profits stems from the very decree for delivery of possession of the Suit property. A determination that the possession of the judgment debtor has become wrongful is a sine qua non for a claim for mesne profits. To put it in other words, a claim for mesne profits is a necessary adjunct of a decree for possession upon a declaration that the possession of the judgment debtor became wrongful.
Enquiry/Ascertainment of Mesne Profits
A direction for determination of the mesne profits stems from the decree for delivery of possession of the suit property. The right to apply for ascertainment of mesne profits arises when a preliminary decree directs an enquiry as to mesne profits from the institution of the suit under Order XX Rule 12 (1)(c) of the CPC.
Notes:
[1] Section 2(12) of the Code of Civil Procedure
[2] [(2008) SCC OnLine Bom 420]
[3] 2025:BHC-AS:58211
[4] Ibid
[5] State Bank of India & Anr. v. Amum Builders [2025:BHC–AS:40632]
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