Mahant Narayana Dasjee Varu And Ors. vs Board Of Trustees, The Tirumalai

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 10 September, 1964

Coram: A.K. Sarkar, N. Rajagopala Ayyangar, J.R. Mudholkar

Mahant Narayana Dasjee Varu and others appealed against the Board of Trustees of the Tirumalai, and the appeal was listed on 10 September 1964 before the Supreme Court of India. The judgment was authored by Justice N. Rajagopala Ayyangar, and the bench comprised Justices A. K. Sarkar, N. Rajagopala Ayyangar, and J. R. Mudholkar. The four appeals that were before the Supreme Court were issued on certificates of fitness that had been granted by the High Court of Andhra Pradesh. These appeals originated from decrees that were issued in applications filed under Section 20 Rule 12 of the Civil Procedure Code. The applications were part of two suits that had been brought by the Tirumalai Tirupathi Devasthanam Committee, which the Court referred to as the Devasthanam Committee and identified as the predecessor of the respondents. The purpose of those suits was to determine the mesne profits that were due from the Devasthanam properties which at that time were in the possession of the Mahant of the Sri Hathiramjee Mutt. The Mahant, in his capacity as Vicharanakartha—that is, as manager—had been entrusted with the administration of the Tirumalai Tirupathi temples and had previously overseen the temple properties. The Principal Subordinate Judge of Chittoor had rendered decrees in each of the two applications; following those decrees, two separate appeals were lodged before the High Court of Andhra Pradesh. The High Court consolidated the appeals for a single hearing and delivered a common judgment. In that judgment, the High Court altered the decree that had been issued by the Subordinate Judge, and consequently the learned judges of the High Court granted a certificate of fitness under Article 133(1) of the Constitution. The Mahant filed Appeals 106 and 107, while the Devasthanam Committee filed Appeals 108 and 109.

The subject matter of the proceedings involved properties that were deemed to belong to the idol installed in the famous Tirupathi temple, which is situated in the State of Andhra Pradesh. Historically, the East India Company had been responsible for the management and administration of the properties belonging to the temple dedicated to Lord Venkatesvara, also known as Srinivasa or Balaji. This arrangement continued until roughly the middle of the nineteenth century, when the Madras Regulation 7 of 1817 transferred control of the temple’s assets to the Board of Revenue, which then administered the affairs through the District Collector. Around 1840, a movement in England arose that opposed the continued involvement of a Christian‐run entity such as the East India Company in the governance of Hindu and Muslim religious institutions. In response to this sentiment, the Board of Directors of the Company adopted a new policy, and orders issued by the Board mandated that the Company's authorities in India relinquish their managerial responsibilities over such institutions. Among the institutions affected by this policy shift was the Devasthanam of the Tirupathi‑Tirumalai group of temples. The Government, acting on the Board’s orders, transferred the management of the Devasthanam’s properties to the Mahant of the Sri Hathiramjee Mutt. For the purposes of this judgment, the Mahant was referred to simply as the Mahant. He was the head of the Mutt, and his headquarters were located in Tirupathi, from where he assumed responsibility for the management of the temple properties.

The East India Company had issued a sanad that transferred the right of management of the temple institution to the Mahant, and this right was subsequently exercised by successive Mahants. Over time, complaints of mismanagement began to surface, and at the beginning of the twentieth century a suit was filed under Section 92 of the Civil Procedure Code seeking the framing of a scheme for better management of the institution. The District Court responded by framing such a scheme; the scheme was later modified by the High Court and ultimately affirmed by the Privy Council in the case of Prayag Das Ji v. Tirumala Srirangacharla, ILR 30 Mad 138 (PC). Despite the existence of this scheme, the administration remained unsatisfactory, and serious allegations of mismanagement were levelled against the Mahant concerning the temple’s affairs. In response, the Madras Legislature enacted Act 19 of 1933, known as the Tirumalai Tirupathi Devasthanam Act, which came into force on 6 June 1933. Section 2 of the Act provided that, upon its coming into force, the arrangement made by the Local Government in 1843 for the management of the Tirumalai Tirupathi Devasthanams and the scheme settled by the Privy Council in appeal 6 of 1906, together with the Rules framed thereunder, would cease to operate. Section 5 then transferred the administration of the Devasthanams—defined to include the temples listed in Schedule I of the Act and their endowments—to a newly created body corporate called the Tirumalai Tirupathi Devasthanams Committee. The Committee was given perpetual succession, a common seal, and the capacity to sue and be sued in its own name. Consequently, the Mahant of Tirupathi, who appears as the appellant in Civil Appeals 106 and 107 of 1962 and as the respondent in two other appeals, lost any statutory right to retain possession of the Devasthanam properties. This loss of possession was expressly reinforced by Section 45 of the same Act, which declared that the Committee was entitled to take into its possession all institutions, properties, jewels, records and documents belonging to the Devasthanams. The Act also anticipated a possible refusal to surrender possession voluntarily. Accordingly, Section 45(2) authorised the Committee, if it faced resistance or obstruction, to apply to the Court for relief. The Court was required, unless it was satisfied that the obstruction arose from a person who honestly claimed possession on his own account or on the basis of a right independent of the Devasthanams, to issue an order placing the Committee in possession. Such an order would be final, subject only to the outcome of any suit filed to establish the right to possession.

Section 45 of the Act empowered the Committee to take possession of all institutions, property, jewels, records and documents belonging to the Devasthanams, and it also contained a safeguard in clause 2 for situations where possession could not be obtained voluntarily. That safeguard provided that if any person resisted or obstructed the Committee in obtaining possession, the Committee could make an application to the Court reporting such resistance or obstruction. The Court was then required, unless it was satisfied that the resistance was made by a person who claimed possession in good faith on the basis of a right independent of that of the Devasthanams, to issue an order placing the property in the possession of the Committee and to declare that any suit subsequently filed to establish the right to possession would be final. The Committee, which had been constituted on 7 June 1933—immediately after the Act came into force—made a demand that the Mahant surrender possession of the Devasthanams’ property. The Mahant did not comply with that demand, and consequently the Devasthanams Committee filed an original petition in 1934 under Section 45(2) before the District Court, seeking a directive that the Mahant be ordered to place the property in the Committee’s possession. Because the Mahant raised complex questions concerning the title to the several pieces of property claimed by the Devasthanams, the learned District Judge referred the matter to a regular suit, by order dated 18 April 1930.

In compliance with that order, the Devasthanams instituted two suits, numbered O.S. 51 and O.S. 52 of 1937, on 9 April 1937. The first suit, O.S. 51, was filed to recover possession of ten items of property situated at Tirupathi and Tirumalai, while the second suit, O.S. 52, sought recovery of a single item of property located at Tirumalai. Both suits named the Mahant as the defendant and specifically claimed possession of the properties described in the plaints, together with a claim for mesne profits. The learned Subordinate Judge heard the suits and, on 15 June 1942, decreed both cases in favour of the plaintiff, granting the Devasthanams possession of the properties and ordering an enquiry to determine mesne profits payable by the Mahant from 7 June 1933 onward. The Mahant appealed the decrees, but the appeal was dismissed by the learned Judges on 19 February 1945, who affirmed the trial court’s decree with only minor variations. Despite the appellate decision, the Mahant did not immediately relinquish possession, and it became necessary to move for execution of the decree. Within a few days of that application, possession of the immovable properties was formally delivered to the Devasthanams Committee on 10 January 1946.

The present appeals arise out of the orders that determined the mesne profits of the properties awarded to the Devasthanams in O.S. 51 and O.S. 52 of 1937, pursuant to Order 20 Rule 12 of the Civil Procedure Code and the decrees issued thereon. Specifically, two applications were filed under Order 20 Rule 12, identified as Applications Nos. 19 and 20 of 1946, each seeking the ascertainment of mesne profits and a decree for those profits in the respective suits. The learned Subordinate Judge appointed a Commissioner to collect evidence and to prepare a report on the question of mesne profits, and an elaborate enquiry was conducted during which substantial evidence was produced by both parties concerning the quantum of mesne profits payable. It is noteworthy that the Mahant failed to produce several of his accounts, a circumstance that formed a salient feature of the case and required reference in light of arguments presented to the Court.

Objections were lodged against the Receiver’s report, and after evaluating those objections the learned Subordinate Judge issued an order on 28 March 1952. In that order the Judge determined the amount of mesne profits due on the properties that were the subject of the two suits, and he granted a decree in favour of the Devasthanam Committee. The decree also specified that interest would accrue at the rate of six per cent from the date of the decree until the profits were actually realised.

The Mahant, dissatisfied with that decree, filed appeals before the High Court. The High Court, in its judgment, substantially reduced the quantum of mesne profits and also lowered the interest rate that the Subordinate Judge had allowed. The Mahant challenged that High Court decision on different grounds in Civil Appeals 106 and 107, while the Devasthanam Committee challenged it in Appeals 108 and 109. For the purpose of disposing of these four appeals the Court indicated that it would not revisit the full factual background, the nature of the evidence, or the method by which the mesne profits had been calculated. Instead, the Court said it would limit its consideration to the specific points raised before it and would set out only those facts that were necessary to address those points.

Turning first to Civil Appeals 106 and 107, the learned counsel for the Mahant, who was the appellant in both matters, raised three substantive points. Appeal 106, decided in 1962, concerned the mesne profits due on ten distinct parcels of property. The Mahant’s grievance centred mainly on the amounts fixed for items 4 and 6. Item 4 was originally a stable for horses; item 6 was an elephant stand. The horse stable had been altered around 1912 by a previous Mahant, who erected partitions and other walls, converting the space into shops that were subsequently let out. The Mahant received rent from those shop‑tenants. The Commissioner had initially estimated the annual rent from this converted stable at twelve hundred rupees, and the learned trial Judge accepted that figure.

The Mahant contested that estimate in his appeal to the High Court, arguing that it was erroneous. The High Court judges accepted his contention, re‑examined the evidence in detail, and fixed the rent for the property at sixty‑five rupees per month. The appellant’s counsel did not dispute this newly fixed rent, but he argued that the High Court had made certain observations in the earlier appeal concerning the decree in O. S. 51 of 1937. Those observations suggested that, because the Mahant had not claimed the right to dismantle the shops and because the Devasthanam would benefit from the structures erected by the Mahant, no separate decree for the income from this item should be made. The counsel asserted that, on that basis, the claim for mesne profits on this item was not properly maintainable.

The Court observed that the contention that the claim should be made by the Devasthanam Committee at the stage of the enquiry under Order 20 Rule 12 of the Civil Procedure Code lacked any substance. It noted first that the judgment of the High Court on the earlier occasion was not before it, and therefore the exact scope of the observation made in that case could not be ascertained. Nonetheless, the Court pointed out that the learned judges of the High Court had themselves referred to that observation and had expressly stated that the fact that the Devasthanam would enjoy the benefit of the walls and other constructions erected by the Mahant would be a factor to be considered in fixing the amount of mesne profits payable on the item. Consequently, the Court found no basis to conclude that the judges whose decision was now under appeal had failed to understand the earlier High Court judgment properly.

Regarding the allowance made for this factor, the Court explained that the learned judges had held that because the Mahant was not claiming the right to demolish the walls and other structures he had built to convert the stables into a shopping space, one‑third of the rental value should be deducted. After making that deduction, the judges passed a decree in favour of the Devasthanam for the remaining two‑thirds of the rental. Counsel for the appellant argued that the division of the rental into one‑third and two‑thirds was arbitrary. The Court rejected this argument, observing that any allocation of this nature would inevitably involve some degree of arbitrariness, and that the suggestion to reverse the proportions—granting one‑third to the Devasthanam and two‑thirds to the Mahant—was as arbitrary as the order presently challenged. The Court affirmed that, in fixing the proportion, the learned judges had taken into account the income that could have been derived from the stable if it were let out as shops, as well as the income that could be generated from the constructions. The Court held that both the methodology adopted by the judges and the result they reached were fair and just to the parties and therefore did not warrant interference.

The Court then addressed the issue relating to item 6, the stand for elephants, noting that the points raised were materially identical to those previously considered. The Court observed that the same observations of the High Court in the earlier suit of 1937 had been taken into account by the learned judges on this occasion, and that a decree was granted for two‑thirds of the amount they had determined, after a detailed examination of the evidence, to be the income derivable from the property. For the reasons already set out, the Court found no merit in the submission and rejected it.

Finally, the Court turned to the next contention raised by counsel for the appellant, which concerned the quantum of mesne profits ascertained by the learned judges for items 7, 8 and 9 in appeal 106 and for the single item in appeal 107. The Court declared this argument wholly without merit. It reiterated that the Mahant had failed to produce his accounts, and consequently the Court could not accept the allegation that the quantum of mesne profits determined by the learned judges was erroneous.

The Court observed that it had been required to estimate the profits by relying on the evidence that had been placed before it, and that it had performed this task to the best of its ability. The final issue raised by the appellant was that the learned Judges had erred in allowing interest up to the date of realisation on the whole amount comprising both the principal and the interest that had accrued up to the date of the decree, rather than permitting interest only on the principal sum that had been fixed as mesne profits. To understand this objection, the Court explained the manner in which interest had been computed by the learned Judges. Under Section 2(12) of the Civil Procedure Code, the term “mesne profits” includes interest as an integral component; consequently, interest must be taken into account in the calculation of mesne profits themselves. This principle rests on the notion that a person who wrongfully occupies property and draws income from it also enjoys the benefit of interest on that income. In the present matter, the Devasthanam acquired the right to possession on 7 June 1933, when the relevant Act came into force and the Devasthanam Committee was constituted. The Mahant, having resisted the Devasthanam’s claim to possession without surrendering the property, was unquestionably liable to pay mesne profits, an assertion that was not contested. The questions that remained were two‑fold: first, at what stage should the principal amount of mesne profits be aggregated with the interest accrued thereon for the purpose of computing further interest; and second, what rate of interest should be applied. The trial Judge had allowed interest at six per cent as part of the mesne profits calculation. After determining mesne profits on that basis, the Judge added together the income from the various items of property and the interest on that income up to the date the plaint was filed, 10 January 1946. On the resulting total, the Judge decreed interest at six per cent until the date of his decree, 28 March 1952, and ordered further interest at six per cent to continue until the sum was actually realised. The Mahant, in two appeals to the High Court, contested this method of interest computation, arguing that the trial Judge had specified two distinct dates at which interest on interest became payable, a procedure that he claimed lacked legal authority and misinterpreted Section 34 of the Code. The appellate Judges accepted the Mahant’s contentions and modified the decree accordingly, holding that interest on yearly profits for each item should be awarded from the date the arrears accrued up to the date of the plaint, then from the date of the plaint up to the date of the decree, and thereafter on the aggregate amount of principal and interest until payment. In effect, the High Court eliminated the aggregation that the trial Judge had applied as of the plaint date.

The High Court observed that interest should be payable on the aggregate amount of the principal and interest from the date the decree was passed until the date of payment. In effect, this ruling removed the aggregation method that the trial Judge had applied as of the filing date of the plaint. The learned Judges reached this conclusion by accepting the arguments presented on behalf of the appellant Mahant in the proceedings. They also reduced the annual rate of interest on the mesne profits from six per cent to four per cent. Additionally, they lowered the interest rate applicable after the decree from six per cent to three per cent. The average effect of these reductions constitutes the subject matter of the Devasthanam’s appeals, which will be examined at the appropriate stage. Counsel for the Mahant does not contend that the reduced rates are insufficient; rather, he argues that the Court erred by permitting three per cent interest on the total of principal and accrued interest. His submission relies on Section 34 of the Civil Procedure Code as it existed at the time the appeals were decided, asserting that further interest could have been allowed only on the principal sum. He bases this argument on the amendment to Section 34 effected by the Code of Civil Procedure (Amendment) Act, 1950, Act 66 of 1956, which became operative on 1 January 1957. That amendment altered Section 34, among other changes, to the effect that interest may be ordered at a reasonable rate on the principal sum adjudged from the suit’s commencement to the decree date. The original provision, before amendment, read as follows, setting out the Court’s power to order interest on both principal and the aggregate sum: “Order interest at such rate as the Court deems reasonable to be paid on the principal sum, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment.” The amendment changed the provision to read: “Order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment.” However, this argument was never raised before the High Court, even though the amendment had been in force for more than six months at the time the appeal was decided.

In the matter concerning the Mahant, the Court observed that the objection raised was not part of the grounds of appeal presented to this Court when a certificate was sought, nor was it included in the statement of case. The objection was also not evidently without a possible answer. The trial Court had issued its decree in 1952, and the High Court’s duty was to examine the correctness of that decree rather than to determine from which date the amended provision should apply, even though it might be argued that the relevant date could be the date of institution of the suit. The record did not indicate that the amendment to the Code of Civil Procedure was intended to operate retrospectively or to apply to pending proceedings. Nevertheless, the amendment altered a procedural provision, and the Court considered whether, in effect, it affected substantive rights of the parties, which might preclude a purely procedural, non‑retrospective operation. Because the appellant had failed to raise this issue earlier, the Court declined to allow counsel to introduce it at this stage. The Court also noted that other points previously raised before the High Court, specifically the argument that claims for mesne profits for certain periods were barred by limitation, were not reiterated before this Court and therefore did not require examination. Those points completed the submissions made in appeals numbered 106 and 107. Finding that none of the arguments presented in those appeals possessed merit, the Court dismissed the appeals and ordered that they be discharged with costs, limited to the payment of one hearing fee.

The Court then turned to Civil Appeals numbered 108 and 109 of 1962, both filed by the Devasthanam Committee. The common issue in these appeals was the reduction of the rate of interest, a matter the Court had already highlighted. The High Court judges had lowered the interest payable on mesne profits up to the date of the decree, which was 28 March 1952, from six per cent to four per cent, and they had reduced the post‑decree interest from an unspecified rate to three per cent. Counsel for the Devasthanam Committee contended that the High Court judges had no authority to interfere with the trial judge’s discretion in setting the interest at six per cent, asserting that six per cent was a normal court rate and not unreasonable, and that the reasons provided for the reduction were unsound. The Court acknowledged that the rate of interest applicable to mesne profits under Section 34 is indeed discretionary because there is no contractual or statutory rate fixed for such cases. The only statutory limitation currently imposed by Section 34 is that the interest rate may not exceed six per cent per annum, a ceiling that was not present in the provision before its amendment, although courts as a general rule seldom awarded rates higher than that.

In this case the Court observed that Section 34 of the Civil Procedure Code permits an interest rate of up to six per cent per annum and that the trial judge’s award of six per cent therefore could not be described as unreasonable. The amendment to Section 34 expressly recognised that a six per cent rate was not, by itself, unconscionable or excessively high. Moreover, the record showed that the Mahant himself did not consider the six per cent rate to be improper. The Commissioner, in a report submitted to the Court on 14 May 1951, had calculated the mesne profits due from the Mahant and applied an interest rate of six per cent beginning in June 1933. The Mahant filed detailed objections to the Commissioner’s report, but his grievance concerning the interest rate was articulated only in ground 40, which stated that the Commissioner had erred in awarding interest on the income purportedly derived from the properties because the Mahant was not in wrongful possession. The Mahant argued that he held the properties in his capacity as Vicharanakarta of the Devasthanam, that he was merely required to account for profits, and that treating those amounts as mesne profits and charging interest for more than three years was a mistake. Notably, the Mahant’s objection did not question the six per cent rate itself.

The Court further noted that the Subordinate Judge, faced with no allegation that the six per cent rate was excessive, issued a decree that calculated interest at that rate. When the Mahant appealed this decree to the High Court, he again raised no objection to the six per cent interest. Although the memorandum of appeal in application 19 of 1946 listed 141 grounds and the other appeal listed 37 grounds, none of those grounds contested the reasonableness of the six per cent rate nor complained about the award of that rate either before or after the decree date. The only grounds concerning interest in application 19 of 1946 (O.S. 51 of 1937) were grounds 14 to 16. Ground 14 criticized the lower court’s method of compounding interest in three separate stages—up to the date of delivery of possession, up to the date of determination, and up to the date of payment. Ground 16 argued that the plaintiff should be entitled to mesne profits only for the actual or ascertained income of each year and the interest thereon from the date of realization until payment, and it urged that the lower court was not justified in awarding interest on past profits where no demand had been made prior to the suit.

The Court noted that the decree directed the plaintiff to receive the actual or ascertained income of each year together with interest calculated from the date of realisation until the date of payment. The Court then quoted ground seventeen of the appeal, which contended that the lower Court had no authority to award interest on profits that accrued before the suit because no demand for such profits had been made prior to the institution of the suit, and that any such award of interest was therefore illegal. In the same vein, ground twelve of the appeal filed against the decree in application 20 of 1946 (O. S. 52 of 1937) made an identical submission, stating that the lower Court could not justifiably award interest on past profits where no pre‑suit demand existed and that doing so violated the law. During the oral arguments, the issue of the appropriate rate of interest was explicitly raised before the High Court. The learned judges, after examining a series of precedents, observed that in most reported cases the courts had permitted a simple interest rate of six per cent on mesne profits, while in one reported case a rate of four per cent had been applied. They summarized the prevailing position by explaining that, as a general rule, six per cent simple interest is awarded on mesne profits unless special circumstances exist which justify a higher or lower rate. The same six per cent rate is ordinarily applied to profits that accrue each year from the date such profits arise up to the date of the decree, and also to the aggregate amount from the date of the decree until the date of actual payment. The Court further expressed the view that the learned trial judge should have awarded interest on the yearly profits for each item either at a uniform rate or at different rates, beginning from the date of arrears up to the filing of the plaint, then from the filing date to the passing of the decree, and finally on the aggregate sum of principal and interest from the decree date to the date of payment.

Up to that point, counsel for the Devasthanam Committee accepted the reasoning of the learned judges and agreed that the judges were correct in reiterating the standard six‑per‑cent rule. However, counsel objected to the reduction of the interest rate that the trial judge had originally awarded. The counsel asserted that the reasons supplied by the learned judges for lowering the rate were both incorrect and irrelevant. The judgment identified three specific reasons advanced by the learned judges to justify a reduction in the rate of interest. The first reason taken by the judges was the question of whether any special circumstances existed that warranted a rate lower than six per cent. The judges then described the factual backdrop: the Matathipathi had been managing the trust properties together with his personal properties for approximately one hundred years, resulting in the intermixing and joint management of the assets of both institutions. Moreover, there were conflicting claims regarding the ownership of certain properties between the two institutions. The judges argued that the present suit was not a typical mesne‑profits action against a trespasser but rather an action against a former trustee who had continued to manage the property in the same manner as his predecessor had done for a century. Consequently, the decree for mesne profits, according to the judges, involved a large sum, and they suggested that these factual circumstances warranted a reduction of the interest rate from six per cent to a lower figure.

In this case the Court noted that the lower court had directed the defendant to pay simple interest at a rate of four per cent per annum on the yearly profits from the date those profits accrued until the date of the decree, and to pay interest at a rate of three per cent per annum on the aggregate amount from the date of the decree until the date of actual payment. Counsel for the Devasthanam Committee contended that none of the three reasons given by the trial Judge justified reducing the rate of interest. The Committee first addressed the reason that the decree amount was large. Even counsel for the Mahant did not rely on this reason; the Court observed that the sum became large because (i) the properties that the Mahant possessed were numerous, and (ii) the Mahant had been appropriating the income of those properties, which rightfully belonged to the Devasthanam, for a long period beginning in 1933. The Court further rejected the suggestion that the Devasthanam Committee had deliberately delayed the litigation through unnecessary postponements.

The Court then considered the second reason, namely that the Mahant was a trustee who had been removed from office and therefore occupied a position different from that of a trespasser. Counsel for the Devasthanam Committee argued that the Mahant’s possession was admittedly wrongful, and that the entire basis of the mesne‑profits decree rested upon that wrongful possession. Consequently, a removed trustee who continued to hold the property possessed no equitable claim to support his possession. The Court found this submission persuasive. It noted that the title of the Devasthanam to the property had been contested and that suits for recovery of possession had been instituted, with litigation extending from 1933 to 1945. During that twelve‑year period the Mahant had appropriated the income from the property, and the Court saw no justification for denying liability for interest at the normal rate. Moreover, even if the trial court, exercising its discretion, had awarded interest at six per cent, that rate was not per se unreasonable, and there was no compelling equitable ground to interfere with that discretion.

Finally, the Court examined the first reason advanced by the trial Judge. It acknowledged that the properties of the Mutt and the Devasthanam had become intermixed in the Mahant’s hands, but emphasized that the Mahant held those properties in two distinct capacities. He acted as the head of the Mutt, where he might have a beneficial interest, and as the Vicharanakartha of the Devasthanam, where he served purely as manager without any beneficial interest. Given this separation, the Court saw no basis for allowing the Mahant to benefit from a reduced rate of interest on the mesne profits payable for the Devasthanam’s properties, which he possessed wrongfully because he had mixed them with other assets to create a claim over the Devasthanam property.

In this case the Court observed that the Mahant could not claim a reduced rate of interest on the mesne profits payable for the Devasthanam properties that he possessed wrongly, because he had deliberately mixed those properties with other assets, thereby creating a false basis for his claim. Accordingly, the Court held that the High Court’s decision to lower the interest rate from six per cent per annum to four per cent per annum for the period up to 23 March 1952, and subsequently to three per cent per annum on the aggregate sum, was not justified. While the Court accepted the method suggested by the learned Judges for computing the interest on mesne profits for each year, it directed that interest should be calculated at the full rate of six per cent per annum both before and after the decree, and that the decree be modified to reflect this correction.

The next point raised by counsel concerned the amount of mesne profits allowed for items numbered 4, 6, 7, 8 and 9 in appeal 108. Regarding items 4 and 6, the Court reiterated its earlier explanation of the nature of those items and the basis on which the High Court had computed the mesne profits. Counsel argued that the one‑third portion that the High Court had permitted as representing the value of the improvements should not have been allowed. The Court disagreed with this submission. It noted that the High Court had already observed, in the appeals from the original suits, that the Mahant had not demolished or removed any of the improvements he had made in respect of items 4 and 6, and that both parties accepted this fact. Although counsel contended that the improvements, having been made around 1912, had already generated sufficient income for the Mahant to recover his costs and thus no allowance should be made for them, the Court held that the law permitted the Mahant to demolish those improvements before surrendering possession. In view of that possibility, the Court found that the High Court had not erred in allowing a modest reduction of one‑third, taking this circumstance into account.

Counsel further submitted that the quantum of mesne profits for items 7, 8 and 9 had been improperly calculated, and raised a similar complaint concerning the matter of Pathapushkarni in appeal 109. After a careful review of the High Court’s judgment, the Court concluded that the objection lacked any foundation. The learned Judges had undertaken a detailed examination of the evidence and had allowed the Devasthanam profits from all sources of income that were proved to exist on the relevant dates. Consequently, the Court found the submission untenable and affirmed the High Court’s calculation of mesne profits for those items.

In this appeal, counsel for the appellant argued that the learned judges had erred by deducting collection charges on house‑property income at a rate of ten percent. Counsel pointed out that while the judges had earlier indicated that ten percent of the estimated income could be permitted as collection charges for several items, the concluding part of the judgment stated that, with respect to house‑property, only one‑twelfth of the income should be allowed for that purpose. Accordingly, counsel contended that the decree which applied a ten‑percent rate for collection charges was inconsistent with the operative portion of the judgment and therefore was wrong. The Court indicated that it would not spend time considering this objection because it regarded the objection as unfounded. The Court observed that the judgment itself recorded that, after the High Court’s decision, the parties had been directed to submit, by mutual consent, a joint memorandum calculating the mesne profits for which a decree could be issued after incorporating the allowances that had been granted. That joint statement had indeed been filed, and the High Court’s decree was based on it. Both parties had implemented the High Court’s decision in the manner they each understood, and consequently the Court saw no reason to revisit the issue. The Court therefore concluded that the appeals would be allowed only on the question of the rate of interest that the High Court had varied. Because the appellant succeeded only in part, the Court ordered that the appeals be allowed with costs, but that only half of the hearing fee, that is one set, should be awarded.