Appeal No 3012 of 1990
From the Judgment and Order dated 1331900 of the Calcutta High Court in Appeal No 266 of 1987 WITH Civil Appeal Nos
31173118 and 3738 of 1990 and SLP No 8081 of 1990
KK Venugopal
Dr Shankar Ghosh Kapil Sibal Ajay K Jain Pramod Dayal Vivek Gambhir Surinder Kamail and SK Gambhir for the Appellants
Aruneshwar Gupta and Ms Sushma Suri for the Respondents
The Judgment of the Court was delivered by section MGHAN J
All these matters can be dealt with under a common judgment since the question which arises for con sideration is the scope of Section 633 of the 
It is enough if we refer to the facts in Civil Appeal No 3012 of 1990
The short facts are as follows Eastern Manufacturing Company Ltd The Company in short is the owner of a jute mill in West Bengal
The appellants were appointed 343 Directors between 1041981 and 1561984
There was a lock out in the Jute Mill on 261982
By a notification dated 2610
1983 Government of West Bengal declared the said jute mill as a relief undertaking under the provisions of West Bengal Relief Undertaking Special Provisions Act 1972
However on 2411
1983 the lock out was lifted
Thereafter the mill resumed its manufacturing operation between 1611984 and 841984
There was a strike in the Jute Industry throughout West Bengal
Between 731985 and 381985 there was a lock out due to labour unrest
As a result of all these the company defaulted in the payment of the provident fund dues
On 281
1986 a petition was moved on behalf of the appellants under Section 633 of the Compa nies Act 1956 hereinafter referred to as the Act  for being relieved of liability for delayed as well as non payment of the provident fund dues and other ancillary dues
On 218
1986 a consent order was passed by the learned Single Judge allowing the outstanding provident fund dues to be paid in monthly instalments of Rs 50000 commencing from April 1986 until the entire liability is paid off
Since this course was accepted by the provident fund authorities it was not considered necessary to serve summons on the Registrar of Companies because what was sought to be recovered were the dues under the Provident Fund Act
It was further ordered concerning Prayer B that an injunction shall issue restraining the respondents from initiating any crimi nal proceedings against the appellants or any of them for non payment or delayed payment of the provident fund
Aggrieved by this order the first respondent before us namely the Regional Provident Fund Commissioner filed appeal No 286 of 1987
The Division Bench which heard the matter rendered its impugned judgment on 133
The sole point which came up for determination was whether the learned Single Judge was right in granting relief under Section 633 of the Act in respect of offences committed under the Employees Provident Fund and Miscellaneous Provi sions Act of 1952 hereinafter referred to as The Provident Fund Act
It was argued on behalf of the appellants that the relief under Section 633 of the Act could be granted only in respect of offences committed under the and not in respect of offences under any other law
It is also submitted that in respect of violations of the provisions of the Act it is the Registrar of Companies or any one autho rised on his behalf who could initiate criminal cases
On the contrary in respect of offences committed under the Provident Fund Act the appropriate authority to initiate such action would be the Regional Provident Fund Commission er
On an elaborate consideration with reference to decided cases it 344 was held that any proceeding referred to in Section 633 of the Act would mean only under the provisions of the Act
Reference was also made to Section 14A of the Provi dent Fund Act inserted by Amending Act 37 of 1953 and it was concluded If the contention that Section 633 applies in respect of liabilities arising also under the provisions of any Act other than the said Act is accepted then and in that case a peculiar situation will arise a person who is otherwise liable in view of the provisions of Section 14 A would be entitled to relief under Section 633 if he is employed by or connected with a company which is covered both by Provident Fund Act and the but a person shall not be so entitled to such relief if he is not an employee of a body corporate covered by the though he is an employee of a company within the meaning of explanation to Section 14A
Besides if that contention that all proceedings would include proceedings under other Act also all the statutory provisions made for the welfare of weaker sections of the community stand modified automatically to the extent sepecified in Section 633 for all time to come even for all future legislation
This would frustrate the object of welfare legisla tions
 Accordingly it was held that Section 633 of the Act has no application in respect of any liability under any other Act
In the result the order of the learned Single Judge was set aside and the application under Section 633 was dismissed
We do not think worthwhile to refer to certain preliminary objections raised by the Division Bench in relation to maintainability as that is not argued before us
It is against this judgment that the appeal by special leave has been preferred
An application was moved before the Company Court claiming relief under Section 633 and the same was dismissed applying judgment of Civil Appeal No 286 of 1987
Similar application was dismissed by the learned Single Judge by order dated 2441988 in Civil Appeal Nos
3117  3118 of 1990
In Civil Appeal No 3738 of 1990 Company Petition No 312 of 1989 for relief under Section 633 too was dismissed
In Special Leave Petition No 8081 of 1990 also the Company Petition for similar relief has been dismissed
Mr Venugopal learned Counsel for the appellants urged that Section 633 is very wide in its amplitude and there is no justification to 345 restrict its application to only proceedings arising under the Act
He draws our attention to Sections 420 and 423 and submits that when proceedings are taken in relation to breach of trust for instance which is an offence under Indian Penal Code against an officer of a company it would be open to him to go before the concerned Magistrate and plead a defence that he has acted honestly and reasonably
In such a case should the Court come to a conclusion he ought fairly to be excused
the Court will relieve him
While this is the submission as far as sub section 1 is concerned under sub section 2 it is maintained to be an anticipatory action
The High Court also exercises a similar power as that Court is exercising power under sub section 1
Otherwise if it is restricted only in respect of any liability under the then the protection extended under Section 633 is lost
Under the of 1913 the corresponding provi sion was Section 281
Though certain categories of persons were catalogued under sub section 3 of the said section presently Section 633 has employed the words an officer of a company  the object is to see the Directors or a Director who rarely takes part in the affairs of the Company are not unduly harassed for offences which may arise under other acts of which these Directors may not have any knowledge at all
He also draws our attention to Section 32 of the Indus trial Disputes Act which talks of offences by Companies under the said Act
That is a sweeping provision where the burden is upon the person concerned to prove that the of fences were committed without his knowledge or consent and but for that proof the statute deems him to be guilty
If under Section 633 the protection is not so afforded against such a provision like Section 32 of the the entire purpose of Section 633 is rendered nugatory
The result of the Division Bench judgment of the Calcutta High Court referred to in the impugned judgment will be that these directors the appellants are exposed to prosecution certainly that could not have been the intention of the law maker
Mr Kapil Sibal learned counsel appearing for the appellants in Civil Appeal No 3117 refers to Section 211 of the Act and submits that the definitions of Court contemplates with respect to any matter relating to a compa ny
The Court having respective jurisdiction as provided under Section 211 is with respect to any offence under the Act the Court of a Magistrate of the First class or as the case may be a Presidency Magistrate having jurisdiction to try such offence
346 This section will show that where like the appellants they are not working directors they cannot be subject to prosecution
That is where Section 633 steps in and affords protection even if it is a liability arising under any other Act for instance like delayed payment or non payment of provident fund
In other respects he adopts the argu ments of Mr Venugopal
Learned counsel for the Regional Provident Fund Commis sioner would urge that any proceeding occurring under Sec tion 633 cannot relate to a proceeding other than one aris ing out of 
If the arguments of the appellants are accepted it would amount to treating Section 633 as a panacea for all the ills for offences committed in respect of various other enactments
It might even include not only the existing enactments but enactments which are yet to come
Insofar as each one of the other Acts not only defines penalty but also lays down the penalty therefore merely because the appellants are officers of the company it cannot mean Section 633 could be availed of
This provision is in pari materia with Section 448 of the English Companies Act 1948 However as on today Companies Act of 1985 has incor porated a similar provision under Section 727 In a leading case reported in 1981 2 All Eng
Law Reportes 697 Cus toms and Excise Commissioners vs Hedon Alpha Ltd  Ors the scone of Section 448 of the 1948 Act came up for con sideration
It was held that although Section 448 1 of the 1948 Act was expressed in wide terms in  its true construction the only proceeding for which relief under Section 448 could be claimed were proceedings against a director by on behalf of or for the benefit of his company for the breach of his duty to the company as a director or penal proceedings against a director for breach of the 1948 Act
It was this line of reasoning which found favour with the Division Bench of the Calcutta High Court which view is commended for acceptance by this Court
Otherwise the conse quences will be disastrous
The penal provision of all other Acts would be rendered ineffective by the interpretation pressed for an acceptance
The further submision of learned counsel is if one looks at Section 14 of the that lays down the penalty for offences of companies and is dealt with in Section 14 A
The explanation to the said Section also talks of as to what a company would mean for the pur pose of this Section
Therefore where an elaborate proce dure is conternplated under those sections for recovery of these dues and the provident Fund Act being a social welfare legislation that cannot be rendered illusory by extending the benefit under Section 633 of the Companies Act
Similar ly under Employees State Insurance Act Section 86 talks of prosecution which came to be introduced by Amending Act of 1989 also deals with Companies
The explanation under that Section specifically states as 347 to what would be a company or Director lot the purpose of that section
Hence it is submitted that no mterference is called for
Having regard to the above arguments the only  point that arises for determination is as to the scope of Section 633
The Companies Act was enacted in the year 1956
As the Preamble itself says it is an Act to cossolidate and amend a law relating to companies and certain other associations
As to definition of Company it is found under Section 31which consists of the i Company ii Existing Company iii Private Cornpany iv Public Company Section 664 of this Act reads as follow s The enactments mentioned in Schedule XII are hereby repealed
Schedule XII that is referred to under the Section refers to previous Companies Act of 1913 also under certain other Acts by way of ordinance or amendments
Section 281 office old Act of 1913 which talks of power of the Court to rant relief in certain cases reads as under 281 Power of Court to grant relief in cer tain cases 1 if in any proceedings tot negligence defaul breach of duty or breach of trust against a person to whom this Section applies it appears to the Court hearing the case that that person is or may be liable in respect of the negligence defaut breach of duty or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the case including hose connected with his appoint ment he ought fairly to be excused for the negligence default breach of duty or breach of trust that Court may relieve him either wholly or partly from his liability on such terms as the Court may think fit
2 Where any person to whom this section applies has reason to apprehend that any claim will or might be made against him m respect of any negligence default breach of duty or breach 348 of trust he may apply to the Court for relief
and the Court on any such application shall have the same power to relieve him as under this Section it would have had if it had been a Court before which proceedings against that person for negligence default breach of duty or breach of trust had been brought
3 The persons to whom this section applies are the following a directors of a company b managers and managing agents of a company c officers of a company d persons employed by a company as auditors whether they are or are not officers of the company  With this background of law we will go on to Section 633 of the 
It reads thus 633 Power of Court to grant relief in certain cases 1 If any proceeding for negligence default breach of duty misfeasance or breach of trust against an officer of a companyit appears to the Court hearing the case that he is or may beliable in respect of the negli gence default breach of duty misfeasance or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the case including those connected with his appointment he ought fairly to be excused the Court may relieve him either wholly or partly from his liability on such terms as it may think fit Provided that in a criminal proceeding under this sub section the Court shall have no power to grant relief from any civil liability which may attach to an officer in re spect of such negligence default breach of duty
misfea sance of breach of trust
2 Where any such officer has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence default
breach of duty misfea sance or breach of trust he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a Court before which a proceeding against that officer for negligence default breach of duty misfeasance or breach of trust had been brought under sub section1
349 3 No Court shall grant any relief to any officer under subsection 1 or sub section 2 unless it has by notice served in the manner specified by it required the Registrar and such other person if any as it thinks necessary to show cause why such relief should not be granted
On a comparison of the two sections two important features emerge to be noticed
The Court under Section 633 has no power to grant relief from any civil liability
Under sub section 3 of Section 281 only four categories of persons were entitled to seek relief while under Section 633 it will be an officer of the Company
Under the of 1956 similarly under the Old Act of 1913 various duties and liabilities have been im posed equally offences have been created for the non per formance of such duties
These offences are offences in relation to the performance of certain duties under the Act
the various offences are mentioned under Sections 59 62 63 68 142 162 207 218272 374420423538 to 545  606
The expression any proceeding  occurring under Section 633 cannot be read out of context and treated in isolation
It must be construed in the light of the penal provisions
Otherwise what will happen is the penal clauses under the various other Acts would be rendered ineffective by applica tion of Section 633
Again if parliament intended Section 633 to have a coverage wider than the Act it would have specifically provided for it as otherwise it is a sound rule of Construction to confine the provisions of a statute to itself
We are also of the view while referring to any proceed ing under sub section 2 the Parliament intended to re strict it only to the proceeding arising out of negligence default breach of trust misfeasance or breach of duty in respect of the duties prescribed under the provisions of the 
Further examining the sub section with refer ence to the context and the placement of the sub section the only conclusion that is possible is the proceedings for which relief under this sub section could be claimed or the proceedings against the officer of a company for breach of the provisions of the 
Sub section 2 cannot apply to proceedings instituted against the officer of the company to enforce the liability arising out of violation of provisions of other statutes
Reference could also be made to sub section 3 where notice is required to be given to the Registrar of Companies
This is an indication that the powers under sub section 2 must be restricted in respect of proceedings arising out of the violation of the  350 We will now refer to the corresponding provisions in English Law
Section 448 of the Companies Act 1948 is replaced by Section 727 of the Companies Act 1985
Section 727 reads thus 727 Power of Court to grant relief in cer tian cases 1 If in any proceeding for negligence default breach of duty or breach of trust against an officer of a company or a person employed by a company as auditor whether he is or is not an officer of the company it appears to the court hearing the case that that officer or person is or may be liable in respect of the negligence default breach of duty or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the case including those connected with his appoint ment he ought fairly to be excused for the negligence default breach of duty or breach of trust that court may relieve him either wholly or partly form his liability on such terms as it thinks fit
2 If any such officer or person as above mentioned has reason to apprehend that any claim will or might be made against him in respect of any negligence default breach of duty or breach of trust he may apply to the Court for relief and the court on the appli cation has the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence default breach of duty or breach of trust Had been brought
3 Where a case to which sub section 1 applies is being tried by a Judge with a Jary the Judge after hearing the evidence may if he is satisfied that the defendant or defender ought in pursuance of that sub section to be relieved either in whole or in part from the liability sought to be enforced against him withdraw the case in whole or in part from the Jury and forthwith direct judgment to be entered for the defendant or defender on such terms as to costs or otherwise as the Judge may think proper
Halsbury s Laws of England Fourth Edition 7 1 Companies para 652 on this aspect states as follows POWER OF COURT TO GIVE RELIEF AGAINST LIABIL ITY If in any procedings for negligence default breach of duty or breach of trust against an officer of a company or a person 351 employed by the company as auditor whether or not he is an officer of the company it appears to the Court hearing the case that that officer or person is or may be liable in respect of the negilgence default breach of duty or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the cases including those connected with his appoint ment he ought fairly to be excused for the negligence default breach of duty or breach of trust that court may relieve him either wholly or partly from his liability on such terms as the court thinks fit
The power to grant relief applies to personal breaches of duty it does not extend to claims by third parties
Where a case within the above provision is being tried by a judge with a jury the judge after hearing the evidence may if he is satisfied that the defendant ought to be re lieved either in whole or in part from the liability sought to be enforced against him withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant on such terms as to costs or otherwise as the judge may think proper
If any such officer or person has reason to apprehend that any claim will or might be made against him in respect of any negligence default breach to duty or breach of trust he may apply to the court for relief and the court on any such application has the same power to relieve him as it would have had if it has been a court before which proceedings against that person for negligence default breach of duty or breach of trust had been brought
The application to the court is made by way of petition
The application is made to the court having jurisdiction to wind up the company
In cases in the High Court of Justice the pro ceedings are assigned to the Chancery Divi sion
The petition and all affidavits notices and other documents in the proceedings under it must be entitled in the matter of the company in the matter of the Companies Act 1985
Under the above provisions a director may be relieved against liability in respect of a transaction wholly ultra rites the company or against the penalties imposed by the Act where he has acted without obtaining or after ceas ing to hold his qualification shares
352 The leading decision on Section 448 is reported in Customs and Excise Comrs
vs Hedon Alpha Ltd   CA
That related to the interpretation to be placed on Section 448 of the Companies Act of 1948
In that case a Director of a company was carrying on business as a bookmaker
The liability of the Director for general betting duty was not paid by the company
The Director was acting honestly and reasonably and therefore was found not guilty of misconduct
Under these circumstances the question arose whether the Director was entitled to relief from claim for civil liability by a stranger to the company
Claim to recover betting duty would amount to default against Director within the meaning Of Section 448
Stephen son LJ stated on this aspect as follows Furthermore the language of Section 448 was apt to describe the area in which a company director might be in breach of his duties to the company and the ambit and concern the context or matrix of the section was company law and the relation of the officer or auditor of a company to the company and not to third persons
The proceedings which qualified for the statutory relief were claims made by companies or on their behalf or for their benefit by eg liquidators the Board of Trade private prosecutors including penal proceedings for the enforcement of the Compa nies Act but not proceedings for the recovery of debts or the enforcement of civil liability to strangers
 Griffiths LJ was of the following view In my judgment section 448 has no application to the present claim
Although the section is expressed in wide language it is in my view clearly intended to enable the court to give relief to a director who although he has behaved reasonably and honestly has neverthe less failed in some way in the discharge of his obligations to his company of their share holders or who has infringed one of the numer ous provisions in the Companies Acts that regulate the conduct of directors
 It requires to be stated that though Stephenson LJ referred to Palmer s Company Law he also made reference to Pennington s Company Law 4th Edn It is stated thus Under the statutory provision relief can be given against any of the criminal penalties imposed by the Companies Act 1948 and 1976 but not it would seem against civil liabili ty to 353 anyone other than the company and so apparent ly no relief may be given in the rare cases where a member or auditor of a company has a personal right to sue its directors
 We will now refer to Palmer s Company Law
23rd Edn 1982 Vol 1 page 881
It is stated thus Statutory relief S448 Section 448 which is referred to in Section 205 proviso b is a protective section for directors on lines similar to that accorded to trustees
It provides that in any proceedings against
inter alia a director for negli gence default breach of duty or breach of trust if a director who is or may be liable has in the opinion of the Court acted honestly and reasonably and if having regard to all the circumstances of the case including those connected with his appointment he ought fairly to be excused the Court may wholly or partly relieve him from his liability the court has a discretion in the matter and may impose terms Section 448 1
In spite of the wide words of the section it has been held that the section applies only to actions brought by or on behalf of the company against its directors for breach of duty and to penal proceedings for the enforcement of the Com paines Act 
 The 5th Edn of Pennigton s Company Law 1985 at page 679 and 680 contains the follow ing observations However if a director is sued for breach of any of his duties he may apply to the Court for relief from liability and if the Court is satisfied that he acted honestly and reasona bly and that in all the circtumstances he ought fairly to be excused it may relieve him from liability on such terms as it thinks fit
This provision is identically worded to the provision in the Trustees Act 1925 which enables the court to relieve defaulting trus tees and the Courts jurisdiction wilt proba bly be exercised in the same way as under that Act
The Court is reluctant to relieve remu nerated trustees and will only do so if they show that they have taken all reasonable steps and to make good their breach of trust the same criterion has been applied when a de faulting liquidator sought relief and it would no doubt also be applied in the case of a director
On the other hand the court can give relief even though the director has used the company s money for ultra vires purposes and even though the members oppose relief being given 354 Under the statutory provision relief can be given against any of the criminal penalties imposed by the Companies Act 1985 but not against criminal liability under any other statute or against civil liability to anyone other than the company whether the liability arises by stat ute or otherwise and so apparently no relief may be given in the rare cases when a member or creditor of a company has a personal right to sue its directors
Reference was made to the Court of Appeal decision emphasis supplied Thus we are clearly of the view that under Section 633 of the Act relief cannot be extended in respect of any liability under any Act other than the Act
May be the under Section 32 contains a stringent provision but that is no answer to hold that Section 633 of the companies Act could be invoked for offences under Section 32 of the 
We are dealing with a case arising under Employees Provident Fund Act
The total arrears dues for the Company are Rs 17722000
Section 14 of the Employees Provident Fund Act specifically provides for penalties with reference to con travention of the provisions of the Act
Section 14A speaks of offences by the companies
We will now extract that section 14 A 1 If the person committing an offence under this Act the Scheme or the Family Pension Scheme or the Insurance Scheme is a company every person who at the time the offence was committed was in charge of and was responsible to the company for the con duct of the business of the company
as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to any punishment if he proves that the offence was commited without his knowledge or that he exercised all due diligence to prevent the commission of such offence
355 2 Notwithstanding anything contained in sub section 1 where an offence under this Act the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that that the oiffence has been committed with the consent or connivance of or is attributable to any neglect on the part of any director or manag er secretary or other officer of the company such director manager secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly 
 The authority to take action trader Provident Fund Act as seen from Section 14 is a Commissioner while the proce dure so far as the Companies Act is concerned under Section 621 is on a complaint in writing of the Registrar or of a shareholder of a company or of an officer authorised by the Central Government in this behalf action can be taken
As already noted under sub section 3 of Section 633 the Court has to give notice to the Registrar of Companies or on such other person if any as it thinks necessary There fore giving of notice is mandatory
That being so if Section 633 is interpreted as to include proceedings under Acts other than the Companies Act it will be open to the Court to give such relief under Section 633 without giving notice to the authority competent to prosecute in respect of liabilites under the other laws or upon giving notice to other concerned and not the Registrar
Thus the mandatory requirement of subsection 3 of Section 633 can easily be bye passed
Then again under Section 14A of the Provident Fund Act
officers who are talked of under this section would be deemed to have cormmitted the offence because subsection 1 states that every person who was responsible to the company as well as the company shall be deemed to be guilty of the offence
If therefore the relief under Sec tion 633 is extended
such officers or persons who are otherwise liable for such offence would get the benefit of Section 633 and escape the rigour of Section 14A
The expla nation arise makes it abundantly clear that all compaines covered by the Companies Act would be companies within the meaning of explanation
On the contrary those companies falling under the explanation to Section 14A would not be companies under the Companies Act
To put it in other words a company failing under the explanation to Section 14A of the Provident Fund Act which does not come within the pur view of the Companies Act the liability of the persons would be governed only by Section 14A 1 and 2 of the Provident Fund Act
They will not be entitled to any relief under Section 633
The benefit available under a social welfare legislation namely the Employees Provident Fund Act cannot be defeated in this manner
We may also add if the interpretation suggested by the appellants 356 is accepted it would cover not only the existing
laws but all legislations to be enacted in future
In the result we find no merit in this appeal and it is dismissed
In view of the dismissal of appear No 3012 of 1990 the other appeals and the special leave petition where the same question arose are so dismissed
However looking to the facts and circumstances of the case there will be no order as to costs
Appeals dismissed


Summary:
The defendant appellant No 1 and plaintiff respondent were brothers and defendant appellant No 2 was the wife of appellant No 1
The appellant No 1 was in Government service ever since 1953
The plaintiff respondent was looking after the entire agricultural property in the village
Partition was effected during consolidation proceedings and entered in the revenue records and chaks were carved out in accordance with the share of the parties in the consolidation proceedings
During the consolidation operation the plaintiff respondent did not raise any dispute that he was owner of the entire property and the names of defendants appellants were wrongly mentioned as benami
Later the plaintiff respondent filed a suit on the ground that the suit land was purchased by him alone through 4 sale deeds dated 1061968 21619681711976 and 2361977 wherein the names of the defendants appellants were included only as benamidar and he was the real owner of the land
The defendants appellants contended that they had paid their part 16 of the sale consideration and the land was jointly purchased in the name of both the parties
The trial court dismissed the suit holding that the names of the defendants appellants in the sale deeds were not mentioned as benamidars and that the plaintiff respondent did not take any objection in the consolidation proceedings
When the plaintiff respondent filed an appeal before the first appellate court it reversed the judgment and decree of the trial court and decreed the suit in favour of the plaintiff respondent
The second appeal filed by the defendants appellants was dismissed by the High Court
The defendants filed a special leave petition before this Court on 15th March 1988
During the pendency of the special leave petition the Benami Transactions Prohibition of the Right to Recover Property Ordinance1988 was promulgated on 1951988
The ordinance was replaced by the Benami Transactions Prohibition Act 1988 which received the President s assent on 591988
The defendants filed an application on 151989 for allowing them to take additional grounds made available on the basis of the aforesaid Benami Act 
Thereafter special leave was granted by order dated 2181989 and the parties were given liberty to file additional documents if any within four weeks
The defendants appellants contended that the suit filed by the plaintiff respondent was not maintainable and barred under Section 49 of the UP Consolidation of Holdings Act 1954 as the point regarding the land in question being benami was never raised by the plaintiff respondent during consolidation proceedings and the chaks were allowed to be recorded in the name of the defendant appellants
The plaintiff respondent contended that if the ratio of Mithilesh Kumari s case JT
19891 SC 275 was applied it could be made available only in a case where appeal was pending before the higher Court and that no advantage could be taken by the defendants appellants of Section 4 of the Benami Act as no appeal was pending on the date when the Benami Act came into force
17 On the question whether any suit relating to benami transactions can be decreed after the coming into force of the Benami Act this Court allowing the appeal of the defendants HELD  101
In a suit for recovery of benami property if any appeal is pending on the date of coming into force of Section 4 the appellate court can take into account the subsequent legislative changes
20C 102
The Law Commission s view was that the legislation replacing the ordinance should be retrospective in operation and that no locus penitentia need be given to the persons who had entered in the benami transaction in the past
20G 103
In the present case the defendants having lost in High Court could have approached this Court only through a special leave petition under article 136 of the Constitution and it is only after the grant of such special leave that the appeal could be heard
Though the special leave might have been granted subsequently on 21889 but it is a fact that the Judgment and decree of the High Court had already been challenged by the defendant appellants and it cannot be said that no appeal was pending before this Court simply on the ground that only special leave petition was pending when the Benami Act came into force
21C E 104
An appeal is a continuation of suit and in the present case the appeal was pending before this Court
The suit had been filed by the plaintiff respondent claiming that he was the real owner of the property and the names of the defendants appellants were mentioned in the saledeeds as benami
21E F 105
Section 4 of the Benami Act is a total prohibition against any suit based on benami transaction and the plaintiff respondent is not entitled to get any decree in such suit or in appeal
21F Mithilesh Kumari and Anr
v Prem behari Khare JT  referred to  201
The expression shall lie in Section 41 and shall allow in Section 42 of the Benami Act are prospective and shall apply to present future stages and future suits claims or actions only
20B 202
The expression any property held benami is not limited to any particular time date or duration
20C 18 3
No foundations were laid in the written statement nor any issue was raised by the defendants appellants on the question of applicability of Section 49 or th UP Consolidation of Holdings Act
The defendants appellants cannot be allowed to take such plea
19H 20A