Suit For Possession And Suit For Claiming Damages For Use And Occupation Of The Property Are Two Different Causes Of Action: Supreme Court

The Supreme Court observed that suit for possession and suit for claiming damages for use and occupation of the property are two different causes of action.

The Court dismissed an appeal filed by M/S Bharat Petroleum Corporation Ltd, which argued that the a subsequent suit for mesne profits was not maintainable.

The Court noted that the cause of action for mesne profits is ongoing.

“In view of the enunciation of law, as referred to above, suit for possession and suit for claiming damages for use and occupation of the property are two different causes of action. There being different consideration for adjudication, in our opinion, second suit filed by the respondent claiming damages for use and occupation of the premises was maintainable”, the Bench comprising Justice Vikram Nath and Justice Rajesh Bindal observed.

Senior Advocate V. Giri appeared for the Appellant (Defendant in original suit) and Senior Advocate S. Nagamuthu appeared for the Respondent (Plaintiff in original suit).

The Plaintiff filed the first suit for posession in the year 2006. During the pendency of the said suit, another suit was filed claiming liquidated damages for a period from January 1, 1998, till December 31, 2019, along with interest and future damages of ₹30,50,000/- per month. In this second suit, the defendants applied for Order VII Rule 11(d) Code Of Civil Procedure, 1908 (CPC) seeking rejection of plaint. The High Court had dismissed the said application.  The defendants, therefore, approached the Supreme Court.

The Court noted that the Appellants-Defendants applied for Order VII Rule 11(d) CPC for rejection of the plaint.

The Bench framed the issue: “whether a subsequent suit for mesne profits is barred by Order II Rule 2 of the Code of Civil Procedure, 1908, when a claim for those accrued mesne profits was not included in an earlier suit for possession of the property”.

The Court reiterated that a subsequent suit for claiming mesne profits is maintainable, even if an earlier suit for possession and mesne profits has already been decided. This is because the cause of action for mesne profits is a continuing one, and arises out of the continued misappropriation of the profits to which the concerned party is entitled.

The Court noted that a suit for possession and a suit for damages for use and occupation of property are two different causes of action. Because there are different considerations for adjudication, the Bench observed that the Respondent's second suit for damages for use and occupation of the premises was maintainable. The Court also observed that the Appellants were well within their rights to raise the issue of whether any part of the claim in the suit is time-barred, but that the entire claim cannot be said to be so.

“The application filed by the appellants for rejection of the plaint was rightly dismissed by the Courts below. However, the appellants are well within their right to raise the issue, if any part of the claim in the suit is time-barred but the entire claim cannot be said to be so”, the Bench noted.

Furthermore, the Bench noted that the cause of action for the damages suit did not arise until after the possession suit was filed. Therefore, the damages suit is not barred under Order II Rule 2 CPC.

Accordingly, the Court dismissed the Appeal.

Cause Title: M/S Bharat Petroleum Corporation Ltd. v ATM Constructions Pvt. Ltd. (2023 INSC 1042)

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