DECREE
The adjudications of a court of law may be divided into two classes: (i) decrees, and (ii) orders. Section 2(2) of the civil procedure code defines the term 'decree'. According to this section, decree means he formal expression of an adjudication which, so far as regards the court expressing it conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may either be preliminary or final.It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include:
(a) any adjudication from which an appeal lies as an appeal from
(b) an order (O.XLVII) an order of dismissal for default (O.IX, R.2,8)
EXPLANATION —
A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final."
ESSENTIALS OF A DECREE
The decision of a court can be regarded as a decree only in the presence of the following ingredients:-
1. There must be an adjudication, i.e., a judicial determination of the matter in dispute. Such adjudication must be formally expressed.
If there is no judicial determination of any matter in dispute, it is not a decree. [Madan Naik v. Hansubala Devi, (1983) 3 SCC 15:]
MOTILAL V. PADMABEN, AIR 1982 GUJ 254: (1982)
It was held in this case that a decision on a matter of an administrative nature, or an order dismissing a suit for default of appearance of parties or dismissing an appeal for want of prosecution cannot be termed as a decree in as much as it does not judicially deal with the matter in dispute.
Further, such judicial determination must be by a court.
Thus, an order passed by an officer who is not a court is not a decree. (Deep Chand v. Land Acquisition Officer, (1994) 4 SCC 99 at p. 102:
2. Such adjudication must have been done in a suit.
The expression "suit" is not defined in the Code. But in Hansraj Gupta v. Official Liquidators of The Dehra Dun-Mussoorie Electric Tramway Co. Ltd.10, [AIR 1933 PC 63 at p. 64: Their Lordships of the Privy Council have defined the term in the following words, "The word 'suit' ordinarily means a civil proceeding instituted by the presentation of a plaint".
Thus, every suit is instituted by the presentation of a plaint. Thus, rejection of an application for leave to sue in forma pauperis is not a decree, as there is no plaint till the application is granted.
It may, however, be noted that under certain enactments specific provisions have been made to treat applications as suits, e.g. proceedings under the Indian Succession Act, the Hindu Marriage Act, the Land Acquisition Act, the Arbitration Act, etc. They are statutory suits and the decisions given thereunder are, therefore, decrees.
Therefore, a proceeding which does not commence with a plaint and which is not treated as a suit under any other Act, cannot be said to be a "suit" under the Code also and the decision given therein cannot be said to be a "decree" under Section 2(2) of the Code.
3. It must have determined the rights of the parties with regard to all or any matters in controversy in the suit.
The rights here mean substantive rights of the parties and not merely procedural rights as relating to status, limitation, jurisdiction, frame of suit, accounts, etc. The rights in matters of procedure are not included in it. Thus, an order for dismissal of a suit for default of appearance, or an order dismissing an application for execution for non-prosecution, or an order refusing leave to sue in forma pauperis, or a mere right to sue, are not decrees as they do not determine the rights of parties.
The tern “parties” means parties to the suit, i.e, the plaintiff and the defendant. Thus, an order on an application by a third party, who is a stranger to the suit, is not a decree.
In interpleader suits, the contesting defendants will be deemed to be parties to the suit.
4. Such a determination must be of a conclusive nature.
In other words, the determination must be final and conclusive as regards the court which passes it. Thus, an interlocutory order, which does not decide the rights of the parties finally is not a decree, e.g. an order refusing an adjournment or an order striking out defence of a tenant under the relevant Rent Act, or an order passed by the appellate court deciding some issues and remitting other issues to the trial court for determination under Order 41 Rule 23 of the Code, are not decrees because they do not decide rights of parties conclusively.
On the other hand, an order may determine conclusively the rights of the parties although it may not dispose of the suit. Thus, an order dismissing an appeal summarily under Order 41 of the Code or holding it to be not maintainable or a decision dismissing a suit for want of evidence or proof are decrees in as much as they decide conclusively the rights of the parties to the suit.
5. There must be a formal expression of such adjudication.
All the requirements of form must be complied with. The formal expression must be deliberate and given in the manner provided by law. The decree follows the judgment and must be drawn up separately. Thus, if a decree is not formally drawn up in terms of the judgment, no appeal lies from that judgment. But a misdescription of a decision as an order which amounts to a decree does not make it less than a decree.
TEST
Whether or not an order of the court is a decree, the Court should take into account pleadings of the parties and the proceedings leading up to the passing of an order.
The following decisions are held to be decrees:
1. Order of abatement of suit;
2. Dismissal of appeal as time barred;
3. Dismissal of suit or appeal for want of evidence or proof;
4. Rejection of plaint for non-payment of court fees;
5. Granting or refusing to grant costs or instalment;
6. Modification of scheme under Section 92 of the Code;
7. Order holding appeal not maintainable;
8. Order holding that the right to sue does not survive;
9. Order holding that there is no cause of action;
10. Order refusing one of several reliefs.
The following decisions are held not to be decrees:
1. Dismissal of appeal for default;
2. Appointment of Commissioner to take accounts;
3. Order of remand;
4. Order granting or refusing interim relief;
5. Return of plaint for presentation to proper court;
6. Dismissal of suit under Order 23 Rule 1;
7. Rejection of application for condonation of delay;
8. Order holding an application to be maintainable;
9. Order refusing to set aside sale;
10. Order directing assessment of mesne profits.
Note: Questions are asked in Prelims exam as to which of the following decisions are decree? Therefore, student must learn above list thoroughly.
CLASSES OF DECREE
According to the code, the following classes of decree are recognized:
1. Preliminary decree;
2. Final decree and
3. Partly preliminary and partly final decree.
PRELIMINARY DECREE
According to explanation to section 2(2), a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of.
In other words where an adjudication decides the rights of the parties with regard to all or any of the matters in controversy in the suit, but does not completely dispose of the suit, it is a preliminary decree.
HASHAM ABBAS V. USMAN ABBAS, AIR 2007 SC 1077.]
A preliminary decree is only a stage in working out the rights of the parties which are to be finally adjudicated by a final decree. Till then the suit continues.
SHANKAR V. CHANDRAKANT [AIR1995 SC1211.]
The Supreme Court stated: "A preliminary decree is one which declares the rights and liabilities of the parties leaving the actual result to be worked out in further proceedings. Then, as a result of the further inquiries, conducted pursuant to the preliminary decree, the rights of the parties are fully determined and a decree is passed in accordance with such determination which is final. Both the decrees are in the same suit.
Under the code, the preliminary decree can be passed in the following suits:-
1. Suits for possession and mesne profits. (O.XX, R.12).
2. Administration suits (O.XX, R.13)
3. Suits for pre-emption (O.XX, R.14)
4. Suits for dissolution if partnership. (O.XX.R.15)
5. Suits for accounts between principal and agent (O.XX, R.16)
6. Suits for partition and separate possession (O.XX, R.18)
7. Suits for foreclosure of a mortgage (O.XXXIV, R.2-3)
8. Suits for sale of mortgaged property (O .XXXIV, R 4-5)
9. Suits for redemption of a mortgage (O.XXXIV, R7-8)
The above list is, however, not exhaustive. The court is free to pass a preliminary decree in cases not expressly provided for in the code.
Note: Questions are asked in Prelims exam as to in which of the following suits preliminary decree can be passed? Therefore, students must learn above list thoroughly.
WHETHER THERE CAN BE MORE THAN ONE PRELIMINARY DECREE IN THE SAME SUIT:
There has been a conflict of opinion. Some High Courts have taken the view that there can be only one preliminary decree in a suit, while other High Courts have held that there can be more than one preliminary decree.
PHOOLCHAND V. GOPAL LAL [AIR 1967 SC 1470:]
As regards partition suits, the debate is concluded by the pronouncement of the Supreme Court in Phoolchand v. Gopal Lal [AIR 1967 SC 1470:] wherein it has been observed that there is nothing in the Code of Civil Procedure which prohibits passing of more than one preliminary decree, if circumstances justify the same and it may be necessary to do so.
SIGNIFICANCE OF PRELIMINARY DECREE
The question whether a decision amounts to a preliminary decree or not is one of great significance in view of the provisions of Section 97 of the Code which provides that,
"Where any party aggrieved by a preliminary decree, does not appeal from such decree, he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree."
Since the passing of a preliminary decree is only a stage prior to the passing of a final decree,if an appeal preferred against a preliminary decree succeeds, the final decree automatically falls to the ground for there is no preliminary decree thereafter in support of it.
It is not necessary in such a case for the defendant to go to the Court passing the final decree and ask it to set aside the final decree. [Sital Parshad Saxena V. Kishori Lai, Air 1967 Sc 1236 At P. 1240:]
(ii) FINAL DECREE
A final decree is one which completely disposes of a suit and finally settles all questions in controversy between parties and nothing further remains to be decided thereafter.
HARSHAM ABBAS V/S. USMAN ABBAS, AIR 2007 S.C. 1077,
A decree may be said to be final in two ways:
1. when within the prescribed period no appeal is filed against the decree, or the matter has been decided by the decree of the highest court; and
2. when the decree, so far as regards the court passing it, completely disposes of the suit.
It is in the latter sense that the words "final decree" is used here.
Thus, in a suit for recovery of money if the amount found due to the decree-holder is declared and the manner in which the amount is to be paid has also been laid down, the decree is a final decree.
Similarly, a decree passed for a sum representing past mesne profits and future mesne profits at a particular rate, without directing any further enquiry, is a final decree.
Thus, where a decree passed by a special court did not contemplate any further proceedings, the decree, even though described as a preliminary decree, in substance was a final decree.
Ordinarily, there will be one preliminary decree and one final decree in one suit.
WHETHER THERE COULD BE MORE THAN ONE PRELIMINARY DECREE AS ALSO MORE THAN ONE FINAL DECREE IN A SUIT?
GULUSAM BIVI V. AHAMADASA ROZVTHER, [AIR 1919 Mad 998 at p. 1000:]
The High Court of Madras, referring to Rules 12 and 18 of Order 20 of the Code, stated: "Neither rule contemplates more than one preliminary decree and one final decree in one suit. In fact, the Code no where contemplates more than one final decree in one suit. To have two final decree and to call the first one a final decree will be really a misnomer as it will not be final.
KASI V. RAMANATHAN CHETTIAR, [(1947) 2 MLJ 523.
In the above case, the same court considered the question at considerable length. The Court observed that there could be more than one preliminary decree and more than one final decree in a suit.
Patanjali Sastri, J. (as he then was) rightly concluded the matter thus: "The question is not whether the Code allows more than one preliminary decree or one final decree to be made, but whether the Code contains a prohibition against the Court in a proper case passing more than one such decree."
SHANKAR V. CHANDRAKANT [ AIR 1995 SC 1211 AT P. 1214; AND HASHAM ABBAS V. USMAN ABBAS, AIR 2007 SC 1077.
Finally, the Supreme Court said: in above case that "It is settled law that more than one final decree can be passed".
PARTLY PRELIMINARY AND PARTLY FINAL DECREE.
A decree may be partly preliminary and partly final. For example: in a suit for possession of land, and mesne profits, the court orders possession of the land in suit in favour of the plaintiff, and directs an enquiry into profits.
The first part of the decree is final as it directs delivery of possession to plaintiff while the second part is preliminary in as much as it directs an inquiry to mesne profits. because the final decree for mesne profits can be drawn only after enquiry, and the amount due is ascertained. In such a case, even though the decree is only one, it is partly preliminary and partly final.
WHAT IS DEEMED TO BE INCLUDED IN THE DEFINITION OF DECREE: - (DEEMED DECREE)
The term “deemed” is used in the definition of decree to create a statutory fiction for the purpose of extending the meaning which it does not expressly cover.
Whenever the legislature uses the word 'deemed”, it implies that the legislature, after due consideration, conferred a particular status in a particular person or thing.
LALJI HARIDAS V/S. STATE OF MAHARASHTRA, AIR 1971 SC 47,
The Hon'ble Supreme Court held that once statutory, fiction has been created by the legislature, it cannot be ignored.
DEEMED DECREES UNDER CPC—
Under section 2(2) of the CPC, the rejection of a plaint and the determination of questions under section 144 (Restitution) are deemed decrees.
Similarly, adjudications under Order 21 Rule 58, and adjudications under Order 21 Rule 98 or 100 are deemed decrees.
REJECTION OF PLAINT -- A DEEMED DECREE:-
Section 2(2) of the Code specifically provides that rejection of a plaint shall be deemed to be a decree. The rejection of a plaint must be one authorised by the Code. If it is not under the Code, the rejection will not amount to a decree.
An order returning a plaint or memorandum of appeal to be presented to the proper court is also not a decree. The reason is that such an order does not negate any rights of a plaintiff or appellant and is not a decision on the rights of parties. An order returning a plaint to be presented to the proper court is an appealable order. --- [Or. 43 R. 1(a).]
WHETHER QUESTIONS WITHIN SETION 144 ARE DECREE?
MAHIJIBHAI MOHAN BHAI V/S PATEL MANIBHAI, AIR 1965 SC 1477.
Section 144 of the CPC deals with the restitution and determination of a question under that section, is included in the definition of “decree” for the purpose of giving a right of appeal.
WHAT IS EXCLUDED FROM THE DEFINITION OF DECREE:-
1. Under the definition of decree, Dismissal for default is excluded from the purview of decree because dismissal may be for want of prosecution of suit or appeal, default for non- appearance or for other reasons.
2. The term decree expressly excludes an adjudication from which an appeal lies as an appeal from an order. Such orders are specified in section 104 and Order XLIII, Rule 1 of the Code.
Q. 'A' filed a suit against 'B', 'B' raised plea of limitation and suit being barred by principle of res-judicata, court framed an issue and decided against defendant. Is said decision a decree or order.? Discuss.
The facts of the given case do not fall in the definition of a decree because there is no conclusive determination of the rights of the parties as the court has decided issue regarding non-maintainability of the suit being barred by limitation and principle of res-judicata, against the defendant. Further proceedings of the suit have to take place. Hence, the facts of the case fall under the definition of order under Section 2(14) which says that an order is the formal expression of any decision of the civil court which is not a decree.
Q. A files a suit against B for breach of contract by B. The suit dismissed on default of appearance. Decide if the decision of the court dismissing the suit qualifies as a decree? Give reasons for your answer. (H.C.S (J), 2013)
The decision of the Court dismissing the suit does not qualify as a decree because as per section 2(2) of CPC, the term decree expressly excludes an order of dismissal for default. Such a default may be for want of prosecution of the suit or appeal, default of appearance or other defaults.
Q. Is an order rejecting a memorandum of appeal as barred by limitation, a decree?
In the given case, it is clear that the court has only ordered the rejection of the appeal as barred by limitation and such an order cannot be termed as a decree because the essentials of a decree are not contained in the above case.
In Commissioner, hubli-dharwad municipal corporation v/s. Sri shail, AIR 2004 Kant 75 the full bench of karnataka High Court has decided that where an order is passed rejecting a memorandum of appeal as barred by limitation, it is not a decree but merely an order.
Q. What is a judgment? When it is pronounced and what is its value? (RJS, 2001)
Section 2(9) of the civil procedure code define the term 'judgment'. According to this section, judgment means the statement given by the judge of the grounds of a decree or order.
In Balraj Taneja v/s. Sunil Madaan (AIR 1999 SC 3381), the SC has held that in a judgment a statement for the grounds of decision must be present. A judge cannot merely say “suit decreed” or “suit dismissed.” The whole process of reasoning has to be set out for deciding the case one way or the other.
Every judgment other than that of a Court of small causes should contain:-
1. A concise statement of the case;
2. the points for determination;
3. the decision thereon; and
4. the reasons for such decision.
As per section 33, order XX, Rule 1, a judgment is pronounced in open Court, once the hearing has been completed. Such judgment maybe pronounced either at once or on some future day after giving due notice to the parties or their pleaders. (Anil Rai v/s. State of Bihar AIR 2001 SC 3173).
SEC. 2(9) & 2(14) -- JUDGMENT AND ORDER
SECTION 2 (9) – JUDGMENT
“Judgment” means the statement given by a judge of the grounds of a decree or order.
ESSENTIALS
The essential element of a judgment is that there should be a statement for the grounds of the decision. Every judgment other than that of a Court of Small Causes should contain:
I. a concise statement of the case;
II. the points for determination;
III. the decision thereon; and
IV. the reasons for such decision.
A judgment of a Court of Small Causes may contain only points (ii) and (iii).
BALRAJ TANEJA V. SUNIL MADAN, [AIR 1999 SC 3381 at p. 3391.]
It was held by the Supreme Court that a judge cannot merely say "Suit decreed" or "Suit dismissed". The whole process of reasoning has to be set out for deciding the case one way or the other.
Even the Small Causes Court's judgments must be intelligible and must show that the judge has applied his mind.
The judgment need not, however, be a decision on all the issues in a case. Thus, an order deciding a preliminary issue in a case, e.g. constitutional validity of a statute, is a judgment.
The members of the Administrative Tribunal cannot be considered to be judges and their statement cannot be treated to be a decree. It may be construed to be only order for the purposes of decision arrived at by the Tribunal.
JUDGMENT AND DECREE: DISTINCTION
DECREE
Decree is the formal expression of the adjudication of the court in a suit which conclusively determines the rights of the parties with regard to all or an of the mattes in controversy in the suit.
A decree contemplates a stage after the pronouncement of the judgment. According to section 33, after judgement, a decree shall follow
It is not necessary for a judge to give a statement in a decree though it is necessary in a judgment.
Decree is the formal expression of the adjudication of the court.
JUDGMENT
Judgement is the statement given by a judge on the grounds of decree or order.
A judgment contemplates a stage prior to the passing of a decree.
It is necessary for a judge to give a statement in a judgment.
It is not necessary that there should be a formal expression of the order in the judgment, though it is desirable to do so.
Objective Questions
1. A judgement contains—
a. Concise statement of the case
b. The decision on the point of determination and the reason thereof
c. The point for determination
d. All the above Ans. (d) [APJS 2011]
2. Judgement under Section 2(9) of the Code of Civil Procedure, 1908 means
a. a decree
b. dismissal of appeal summarily
c. statement of grounds of an order or decree
d. All the above Ans. (c) [UP PCS CJ 2012]
3. "Judgment" means
a. Part of the decree
b. Statement of the Judges on the grounds of decree or order
c. Adjudication of right
d. None of the above Ans. (b) [MPJS 2012]
SECTION 2 (10) - JUDGMENT-DEBTOR
"Judgment-debtor" means any person against whom a decree has been passed, or an order capable of execution has been made. [S. 2(10)]
Where a decree is passed against a surety, he is a judgment-debtor within the meaning of this section.
On the other hand, a person who is a party to a suit, but no decree has been passed against him, is not a judgment-debtor.
Objective Questions
1. Judgment - debtor means?
a. Borrower of a bank.
b. Defendant
c. Person against whom a decree is passed.
d. None of the above. Ans. (c) [MJS 2010]
SECTION 2 (14) ORDER
The adjudication of a court of law may either be (i) a decree or (ii) an order. Orders, in turn, are of two types, appealable orders and non-appealable orders.
MEANING
"Order" means the formal expression of any decision of a civil court which is not a decree.
Thus, the adjudication of a court which is not a decree is an order.
Judicial order must contain a discussion of the question at issue and the reasons which prevailed with the court which led to the passing of the order.
ORDER AND DECREE: SIMILARITIES
1. both relate to matters in controversy;
2. both are decisions given by a court;
3. both are adjudications of a court of law; and
4. both are "formal expressions" of a decision.
ORDER AND DECREE: DISTINCTION
In spite of the above common elements, there are fundamental distinctions between the two expressions:
1. A decree can only be passed in a suit which commenced by presentation of a plaint. An order may originate from a suit by presentation of a plaint or may arise from a proceeding commenced by a petition or an application.
2. A decree is an adjudication conclusively determining the rights of the parties with regard to all or any of the matters in controversy; an order, on the other hand, may or may not finally determine such rights.
3. A decree may be preliminary or final, or partly preliminary and partly final, but there cannot be a preliminary order.
4. Except in certain suits, where two decrees, one preliminary and the other final are passed, in every suit there can be only one decree; but in the case of a suit or proceeding, a number of orders may be passed.
5. Every decree is appealable, unless otherwise expressly provided,[ S. 96.] but every order is not appealable. Only those orders are appealable as specified in the Code.[ S. 104, Or. 43 R. 1.
6. A Second Appeal lies to the High Court on certain grounds from the decree passed in First Appeal.[S. 100.] Thus, there may be two appeals; while no Second Appeal lies in case of appealable orders. [ S. 104(2).]
The Madras High Court has held that it is immaterial that a judgment is called an “order”, if in fact it fulfils the requirements of S. 2(2). In such a case, it will be a decree, and an appeal will lie against it. (Adinarayan v. Narasimha, A.I.R. 1931 Mad. 471).
Objective Questions
1. Which of the following Sections of Civil Procedure Code defines an Order?
a. Section 2(2)
b. Section 2(9)
c. Section 2(14)
d. Section 2(15) Ans. (c) [MP APPO 2009]
SECTION 2(11) - LEGAL REPRESENTATIVE
MEANING
"Legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or issued in a representative character the person on whom the estate devolves on the death of the party so suing or sued;
The following persons are held to be legal representatives
- executors,
- administrators,
- residuary legatees,
- reversioners,
- Hindu coparceners,
- etc.
EXECUTORS:-
According to Section 2(c) of the Indian Succession Act, 1925, an executor is a person to whom the last will of a deceased person is confided by the testator for the execution of such last will. The executor in will is a legal representative of the deceased person and acts in accordance to the wishes of a testator as mentioned in the will, after the testator’s death.
ADMINISTRATORS:-
Section 2(a) of the of the Indian Succession Act, 1925, defines administrator as a person appointed by a competent authority to manage the estate of a deceased person where there is no will or where there is a will but no executor.
He is a legal representative who administers the estate of the deceased and oversees the settlement of his assets if he dies intestate (without a will) or where the executor of a will is incapable of performing or has refused to perform as an executor.
RESIDUARY LEGATEE
A residuary legatee is the one who receives the property not been assigned to anyone.
Let us assume that X owns a house in Mumbai, some cash in his bank accounts, some jewellery and investments in equities. Now, in his will, he has stated that he wished to give his house to his wife, the cash to his son and jewellery to his daughter. He also mentioned in a separate clause that the remainder of his property should go to his brother.
So, upon his death, his family will receive the property as he has stated, and his brother will receive the equities as they were not passed onto anybody
Moreover, if any of the legacies lapse, it will go to his brother.
Thus, if X’s wife dies before X, then the house will go to X’s brother, who in this example, is the residuary legatee.
"It is advisable to have a residuary legatee. In the absence of one, the remaining property will go to the legal heir of the testator.
A residuary legatee is defined in Section 102 of the Indian Succession Act, 1925. It says that a person who will take the surplus or the residue of the property is a residuary legatee.
A residuary legatee may be constituted by any words that show an intention on the part of the testator that the person designated shall take the surplus or residue of his property.
A makes her will, consisting of several testamentary papers, in one of which are contained the following words:—‘‘I think there will be something left, after all funeral expenses, etc., to give to B, now at school, towards equipping him to any profession he may hereafter be appointed to”. B is constituted residuary legatee.
THE UNIVERSAL LEGATEE:-
He receives all the property, rights and actions that the testator leaves to his death.
BANCO NATIONAL ULTRAMARINO V. NALINI BAI NAIQUE, AIR 1989 SC 1589];
[CHIRANJILAL V. JASJIT SINGH, (1993) 2 SCC 507.]
The expression "legal representative" is inclusive in character, its scope is very wide and, thus, over and above a person who in law represents the estate of a deceased.
An executor de son Tort, a succeeding trustee, official assignee or receiver is not a legal representative.
EXECUTOR DE SON TORT:
An executor de son tort is a person who wrongfully interferes with the distribution of a deceased person’s estate. This person may be a stranger or he simply might be someone who was not given proper authority to do so by the deceased’s will or a court.
For example, if a person unlawfully asserts ownership over the deceased’s real property or distributes some of their personal belongings, then they will become an executor de son tort.
OFFICIAL ASSIGNEE:-
The provisions of the Presidency Towns Insolvency Act, 1909 and the Provincial Insolvency Act, 1920 states that if an order of insolvency is passed against a debtor by the concerned court, the property of the debtor will be vested with a person appointed by the court, known as an Official Assignee.
The Insolvency Acts mentioned above only entitles the Assignee to manage the property of the debtor for the benefit of the creditors.
RECEIVER:-
Under order 40 of CPC, the Receiver is an independent and impartial person who is appointed by the court to administer/manage, that is, to protect and preserve a disputed property involved in a suit.
For example, in a dispute between A and B for an immovable property, if the court thinks that it is in the best interest of both the parties that possession should be taken from B and given to an independent person, the court may appoint a receiver who can manage the property till the time the suit is being decided.
Such a receiver appointed by the court would be responsible for the maintenance of the property. He can collect the income accruing like rent or any other profits and utilize it to maintain the property.
After deducting the expenses incurred in maintenance from the income received from the property, the receiver will have to submit the remaining income, if any, in the court.
He is not representative of either of the parties in the action, is uniformly regarded as an officer of the court working in the interest of neither plaintiff nor defendant but for the common benefit of all the parties.
PERSON WHO INTERMEDDLES WITH THE ESTATE OF THE DECEASED:
Section 303 in The Indian Succession Act, 1925 describes such person as a person who intermeddles with the estate of the deceased or does any other act which belongs to the office of executor, while there is no rightful executor or administrator in existence, thereby makes himself an executor of his own wrong.
Illustration: A sues as executor of the deceased, not being such. He is an executor of his own wrong.
LEGAL REPRESENTATIVE:-
The definition of legal representative as defined under S.2(11) CPC is inclusive and broad in nature, not limited to legal heirs, but rather defines a person who may or may not be the heir, who is eligible to inherit the deceased’s estate but who must represent the deceased’s estate.
This includes all heirs and individuals holding the assets either without ownership, even as executors even administrators of the deceased’s estate. All such persons are covered by the expression “legal representative.”
It stipulates that a person, who may or may not be legal heir competent to inherit the deceased’s property, can represent the estate of the deceased person.
A TENANT HOLDING OVER AT WILL AND TENANT BY SUFFERANCE.
The expression 'holding over' means retaining possession. There is a distinction between a tenant continuing in possession of a property after the determination of lease without the consent of the landlord, and a tenant doing so with the consent of the landlord.
The former is called a tenant by sufferance in common law. On the other hand, the latter is called a tenant holding over a tenancy at will.
Section 116 of the Transfer of Property Act 1882, deals with above.
Although in its strictest sense, the term legal representative is limited to the executors and administrators only, its meaning has been extended in the Civil Procedure Code.
Thus, a universal legatee under a will executed by the deceased is his legal representative.
Likewise, a person on whom the estate of the deceased devolves would be his legal representative, even if he does not have any actual possession of the estate. The Supreme Court has held that even legatees of portions of an estate are legal representatives. (Andhra Banks v. Shrinivasan, AIR. 192 S.C. 232)
One who intermeddles with the estate of a deceased person, or even with a part of his estate, would be a legal representative within the meaning of this definition, and would be liable to the extent of the property taken possession of by him. But, he cannot be considered to be a legal representative as regards the property not in his possession.
However, a mere trespasser is not a legal representative, as he does not intermeddle with the estate with the intention of representing the estate. (Nagendra v. Haran, (1933) 37 C.W.N. 758).
SECTION 2(12) - MESNE PROFITS
MEANING
"Mesne profits" of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession.
OBJECT
Every person has a right to possess his property. And when he is deprived of such right by another person, he is not only entitled to restoration of possession of his property, but also damages for wrongful possession from that person. The mesne profits are thus a compensation paid to the real owner.
LUCY KOCHUVAREED V. P. MARIAPPA GOUNDER, AIR 1979 SC 1214 at p. 1219.]
The object of awarding a decree for mesne profits is to compensate the personwho has been kept out of possession and deprived of enjoyment of his property even though he was entitled to possession thereof.
AGAINST WHOM MESNE PROFITS CAN BE CLAIMED
Wrongful possession of the defendant is the essence of a claim for mesne profits and the very foundation of the defendant's liability therefore. As a rule, therefore, generally, a person in wrongful possession and enjoyment of immovable property is liable for mesne profits. [Lucy Kochuvareed case (supra)]
It is very clear that mesne profits can be claimed with regard to immovable property only. Thus, a' decree for mesne profits can be passed
- against a trespasser, or
- against a person against whom a decree for possession is passed, or
- against a mortgagor in possession of mortgaged property after a decree for foreclosure has been passed against him, or
- against a mortgagee in possession of property even after a decree for redemption is passed, or
- against a tenant holding over at will after a notice to quit has been served upon him.
Where the plaintiff is dispossessed by several persons, every one of them would be liable to pay mesne profits to the plaintiff even though he might not be in actual possession or the profits might not have been received by him.
The Court in such cases may hold all the trespassers jointly and severally liable, leaving them to have their respective rights adjusted in a separate suit for contribution; or, may ascertain and apportion the liability of each of them.[ Fateh Chand v. Balkishan Vass, AIR 1963 SC 1405 at pp. 1412-13] [Marshall Sons & Co. Ltd. v. Sahi Oretrans (P) Ltd., AIR 1999 SC 882.]
ASSESSMENT OF MESNE PROFIT
Mesne profits being in the nature of damages, no invariable rule governing their award and assessment in every case can be laid down and "the Court may mould it according to the justice of the case".
As a claim for mesne profits is in reality a claim for damages, there is no rigid rule for determining the amount of such profits, and this amount should be assessed in every case by a proper exercise of judicial discretion.
HARRY KEMPSON GRAY V. BHAGU MIAN, AIR 1930 PC 82.
In assessing the mesne profits, usually the court will take into account what the defendant has gained or reasonably might have gained by his wrongful possession of the property.
Mesne profits are in the nature of damages, and therefore, the right to sue for mesne profits is actually a right to sue for damages. Therefore, such a right cannot be attached and sold in execution of a decree against the person who is entitled to such a right
Thus, for instance, if A is entitled to claim mesne profits from B for wrongful possession of his lands, this right of A cannot be attached and sold in execution of a decree against A. Therefore, even if this right is attached and sold to X, X will not be entitled to sue B for mesne profits.
TEST
R.P. DAVID V. M. THIAGARAJAN, 1996 AIHC1194; MARSHALL SONS & CO. (I) LTD. V. SAHI ORETRANS (P) LTD., AIR 1999 SC 882.
The test to ascertain mesne profits is not what the plaintiff has lost by being out of possession but what the defendant gained or might reasonably and with ordinary prudence have gained by such wrongful possession.
PRINCIPLES
The following principles would ordinarily guide a court in determining the amount of mesne profits:
no profit by a person in wrongful possession; restoration of status before dispossession of decree-holder; and use to which a decree-holder would have put the property if he himself was in possession.
ILLUSTRATION
HARRY KEMPSON GRAY V. BHAGU MIAN, AIR 1930 PC 82.
But when a person in wrongful possession plants indigo on the land and it is proved that a prudent agriculturist would have planted sugarcane, wheat or tobacco, the mesne profits should be assessed on the basis of those more profitable crops.
INTEREST
Since interest is an integral part of mesne profits, it has to be allowed in the computation of mesne profits itself. [Mahant Narayana Dasjee v. Tirumalai Tirupathi Devasthanam, AIR 1965 SC 1231 at p. 1235];[ Lucy Kochuvareed case (supra), paras 45, at pp. 54-58.]
The rate of interest is at the discretion of the court, subject to the limitation that the said rate shall not exceed six per cent per annum. [Mahant Naraijan Dasjee case, supra, at p. 1236 (AIR).]
Such interest can be allowed till the date of payment. [Lucy v. Mariappa, supra, paras 45, at pp. 54-58]; [Mahant Narayana Dasjee v. Tirumalai Tirupathi Devasthanam, AIR 1965 SC 1231 at p. 1235.]
DEDUCTIONS
While awarding mesne profits, the court may allow deductions to be made from the gross profits of the defendant in wrongful possession of the property, such as land revenue, rent, cesses, cost of cultivationand reaping, the charges incurred for collection of rent, etc. In other words, mesne profits should be net profits. [Dakshina v. Saroda, (1892-93) (1894) 21 Cal 142 (PC).]
In one case, when the person in wrongful possession planted indigo on the land, and it was proved that a prudent agriculturist would have grown sugarcane, wheat or tobacco on such land, the Privy Council held that mesne profits should be ascertained on the basis of these more profitable crops. (Gray v. Bhagumian, AIR 1930 P.C. 82).
It may be noted that the possession of one co-sharer is, in law, possession of other co-sharers also, and therefore, there can be no suit for mesne profits amongst co-sharers. Of course, if a co-harer is excluded from the share to which he is entitled, he can claim an amount of the profits.
RAM KRISHNALAL V. ABU BDULLA,1942 21 PATNA, 735
It has been held that the burden of proving the amount of mesne profits actually received is on the person who has received them, While the burden of proving the amount of profits which might have been received is on the person claiming them.
