### Mesne profits must be determined by the actual wrongful gain derived rather than unrelated private lease benchmarks.

The Appellant (a Public Sector Bank) leased a 1,963 sq. ft. property in Punjabi Bagh Extension from the Respondents’ predecessor-in-interest in 2005.

After the lease expired on 30.08.2015, the Appellant failed to vacate despite legal notices, leading to a suit for possession and mesne profits.

Possession was eventually handed over on 11.01.2017.

The Trial Court decreed mesne profits at ₹200 per sq. ft. based on a lease deed of a private bank (Yes Bank) in the vicinity and awarded 12% interest from 20.01.2016.

The Appellant challenged this, arguing the rate was exorbitant and the interest calculation was flawed.

Whether the Trial Court correctly assessed the market rate for mesne profits at ₹200 per sq. ft. based on leases to private entities.

Whether the interest on mesne profits can be granted for a period prior to the actual accrual of the monthly debt.

The court applied Section 2(12) of the Code of Civil Procedure (CPC), which defines "mesne profits" as those profits which a person in wrongful possession actually received or might with ordinary diligence have received, including interest.

It relied on Bureau of Indian Standards v. Goodwill Theatres Pvt. Ltd., establishing that mesne profits represent the value of usage to the person in wrongful possession and exclude improvements made by them.

It further considered Section 34 of the CPC regarding interest in commercial transactions.

The Court found the Trial Court erred by benchmarking the rent against private entities (Yes Bank and Bata) because those leases involved different commercial dynamics and post-vacation structural renovations.

Under Section 2(12) CPC, the focus is on the "wrongful gain" derived by the specific occupant.

The Appellant proved that it had leased a comparable nearby premises at ₹138 per sq. ft. during the same period.

Since this reflected the actual benefit derived by the Bank by staying in the suit premises, ₹138 per sq. ft. was deemed the appropriate market rate.

Regarding interest, the Court held that since mesne profits accrue monthly, granting interest on the entire future sum from a backdated point (20.01.2016) was legally unsustainable; interest must apply only as each monthly installment becomes due.

It held that the Respondents are entitled to mesne profits at the reduced rate of ₹138 per sq. ft. (instead of ₹200) for the period of 01.11.2015 to 11.01.2017.

Interest at 12% per annum is payable on the monthly rent as it fell due every month, rather than a lump-sum commencement date for future dues.

The appeal was partly allowed.