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M/s Bharat Petroleum Corporation Ltd. & Anr. vs. ATM Constructions Pvt. Ltd.

Civil Appeal · 2023 INSC 1042Decided 30 Nov 2023
Civil Appeal No. 7890 of 2023

Background

Bharat Petroleum's predecessor had leased a plot of land in 1958 to run a petrol pump; the lease expired in 1997 and was not renewed. The property's owner (respondent) filed a first suit in 2006 seeking only possession, which was decreed in 2010, but did not claim damages for the years BPCL continued occupying the property after the lease expired. In 2020, the owner filed a second suit specifically claiming liquidated and future damages for "use and occupation" from 1998 onwards (possession was finally handed over only in June 2022). BPCL argued this second suit was barred because the owner should have claimed such damages in the first suit itself, and applied to have the second suit's plaint rejected.

Decision Breakdown

The Supreme Court held that a claim for possession and a claim for damages/mesne profits for wrongful occupation are two distinct causes of action, so a plaintiff who obtained a decree for possession without claiming past damages is not barred from later filing a separate suit specifically for those damages: this follows a long line of precedent (including a Full Bench of the Allahabad High Court and this Court's own earlier rulings) holding that mesne profits/use-and-occupation damages accrue on a continuing, day-to-day basis and thus give rise to their own cause of action. It distinguished an earlier precedent (Virgo Industries) relied on by BPCL, since in that case the cause of action for the second claim already existed and could have been joined in the first suit, unlike here. The Court, however, left open BPCL's right to argue in the trial that part of the damages claim is time-barred. The appeal challenging the second suit's maintainability was accordingly dismissed.

Lesson Learnt

Winning (or losing) a suit for possession of a property does not automatically bar a later, separate suit for damages arising from wrongful occupation during the same period: occupation-based damages are treated as a continuing cause of action distinct from the right to possession itself.

Official source (sci.gov.in)View Judgment (PDF)

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