IMPORTANT POINT
The court clarified that interest on mesne profits should be limited to 6% as the transaction was not commercial in nature under Section 34 of the Code of Civil Procedure.

JUDGMENT :

Sandeep V. Marne, J.

1. These are cross Civil Revision Applications filed by the tenant and landlord aggrieved by the decisions of Small Causes Court and its Appellate Bench with regard to fixation of mesne profits and rate of interest payable thereon. The Tenant-Bharat Petroleum Corporation Limited (BPCL) has filed Civil Revision Application (Stamp) No.1604 of 2024 challenging the judgment and order dated 15 July 2023 passed by the Appellate Bench of Small Causes Court rejecting its Miscellaneous Appeal No.130 of 2022 and confirming the order dated 21 January 2022 passed by the learned Single Judge of Small Causes Court in Mesne Profits Application No.747 of 2013. The landlord had filed Cross-Objections in BPCL’s Miscellaneous Appeal No.130 of 2022 aggrieved by the quantum of mesne profits fixed by the learned Single Judge of Small Causes Court as well as the rate of interest payable thereon. The Cross-Objection is also rejected by the Appellate Bench by impugned judgment and order dated 15 July 2023, which is subject matter of challenge in Civil Revision Application No.424 of 2024 filed by the landlord. In short, while the Tenant-BPCL expects reduction of quantum of mesne profits as well as the rate of interest, the landlord expects enhancement of both quantum of mesne profits as well as the rate of interest.

2. Since the scope of enquiry involved in the present Revision Applications is limited, it is not necessary to make detailed reference to the facts involved in the Revision Applications. Suffice it to record that the landlord-M/s. Forbes Gokak Limited had initiated TE & R Suit No.24/24 of 2003 against Defendant-BPCL seeking recovery of possession of the suit premises being Flat on the Ground Floor, Left Wing, Lyndewode House, 9, Bomanji Petit Road, Cumballa Hill, Mumbai – 400 026 (suit premises). The suit came to be decreed on 15 October 2010 directing Defendant-BPCL to handover possession of the suit premises to Plaintiffs-landlords. The Trial Court ordered separate enquiry as to mesne profits under Order 20, Rule 12(1)(c) of the Code of Civil Procedure, 1908 (Code). The decree was appealed by Defendant-BPCL before Appellate Bench of Small Causes Court in Appeal No.476 of 2010. The Appellate Court granted stay to the decree subject to payment of interim compensation of Rs.4,70,496/- per month by order dated 13 July 2011. It appears that Defendant-BPCL started depositing the interim compensation in the Small Causes Court since October 2010. The Appeal No.476 of 2010 came to be dismissed by the Appellate Bench vide judgment and order dated 21 January 2013.

3. Defendant-BPCL filed Civil Revision Application No.313 of 2013 in this Court. However, during pendency of the said Revision Application, Defendant-BPCL expressed willingness to handover possession of the suit premises. Accordingly, this Court disposed of the Civil Revision Application by order dated 25 March 2013. By further order dated 9 May 2013, this Court gave time upto 31 December 2013 to the Defendant-BPCL to vacate the suit premises. This Court also granted liberty to Plaintiff-landlord to withdraw the amounts deposited by Defendant-BPCL subject to the outcome mesne profit enquiry.

4. Plaintiffs-Decree Holder filed Mesne Profit Application No.747 of 2013 before Small Causes Court, Mumbai. It relied upon Valuation Report dated 25 June 2013 of M/s. Poonager Bilimoria & Company, Architects and Surveyors and claimed mesne profits at following rates :

Period Amounts of mesne profit claimed per month by the Plaintiff/Applicant

01.08.2001 to 31.12.2002 Rs.3,95,000/- plus interest

01.01.2003 to 31.12.2005 Rs.4,00,000/- plus interest

01.01.2006 to 31.12.2008 Rs.5,10,000/- plus interest

01.01.2009 to 31.12.2011 Rs.6,60,000/- plus interest

01.01.2012 to 31.12.2013 Rs.9,05,000/- plus interest

5. Plaintiff also sought interest at the rate of 18% per annum compounded quarterly from 1 August 2001 till realization of the entire amount. The Application was