IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 31-10-2008 CORAM: THE HON'BLE MR.JUSTICE K.KANNAN A.S.NO.62 OF 1994 & C.M.P.No.317 of 2007 1. P.Srinivasan 2. Santhakumari ... Appellants/Defendant -Vs.- 1. P.Gopal 2. P.Balaji .. Respondents/Plaintiff First appeal filed against the judgment and decree dated 15.10.1993 made in O.S.No.776 of 1985 on the file of the Subordinate Judge, Coimbatore For Appellants : Mr. T.R.Mani, Senior Counsel, for Mr. T.M.Hariharan For Respondents: Mrs. P.T.Asha for M/s. Sarvabhauman Associates J U D G M E N T I. Subject matter of litigation The appeal has been filed by defendants 1 and 2 in O.S.No.776 of 1985 on the file of Sub Court, Coimbatore. The suit has been filed by the respondents in the appeal to declare that Ex.B-27 - purchase of suit property standing in the name of the second defendant on 14.9.1985 was done by the first defendant in his wife's name, benami for the benefit of plaintiffs 1 & 2 and the first defendant as joint owners and for partition of the plaintiff's 2/3rd share and for the relief of injunction to restrain the defendants from interfering with their joint possession. II. Disposition at the trial court 2. The trial court found the transaction to be not benami, but held that the document of purchase was fraudulent in the sense that the first defendant had instead of purchasing the property in the name of the family members, namely, the plaintiffs and the first defendant, had purchased the property in the name of his wife, the https://hcservices.ecourts.gov.in/hcservices/ second defendant. The plaintiffs, according to the trial Court, was therefore entitled to a 2/3rd share and granted the relief of partition as prayed for. The trial Court also found that the earlier partition decree which had been passed with reference to a panchayat arrangement for division of the house property and the business run at the suit property has to be decreed in terms of the panchayat arrangement. The Court however said that the decree passed by the Sub Court had not become final in the sense final decree had not been passed and therefore the suit was deemed to be still pending. III. The main grounds of challenge in appeal 3. The Trial Court's Judgment is being assailed by the defendants 1 & 2 on the ground that the suit had been filed on the basis that the document of purchase was benami for the benefit of the family but in the name of the second defendant and when that had been found against by the trial court, the decree granted was clearly erroneous. The plea of fraud attributed to the first defendant had no foundation in the pleadings, especially with no definite particulars as required to be given under O.6 r.4 C.P.C. and the decree of the trial Court suffers from a vice of granting the relief which had no basis. In other words, if the benami theory goes out of reckoning, the appellants have no case of the plaintiffs to anwer. IV. Consideration of additional evidence in appeal 4. At the appellate Court, the appellants have filed CMP.No.317 of 2007 for reception of some documents as additional evidence under Order 41 Rule 27 CPC. These documents have been originally received subject to proof and relevance and it is essential to dispose of the application before considering the appeal on its merits. These documents have been filed to prove that pursuant to a decree for partition which was passed before the in O.S.No.480/85 on the file of Sub Court, Coimbatore, the mother had originally entered into a deed of partition with her two sons and subsequently there has also been a sale of the property . In both these documents, the fact that the family house has been divided in a particular fashion pursuant to a decree in O.S.No.480/85 was specifically recited. The attempt of the appellant is to point out that the finding of the trial court that the decree in O.S.No.480 of 1985 had not been given effect or in any event the decree had not become final, cannot be true, especially in view of the conduct of the parties namely the plaintiffs themselves enjoying the property along with their mother and treating the earlier partition that had been effected as final and acting upon such a transaction. These documents although already available at the time of the trial, perhaps the defendants did not file because they did not think it could advance the case one way or the other, but having regard to the specific finding given by the Court below that the partition that had https://hcservices.ecourts.gov.in/hcservices/ been brought about with reference to the family business and the house, had not become final, the defendants seek to file to point out that the trial court's finding was clearly erroneous and it was against even the conduct of the parties. For the cause of advancing justice, I deem these documents as essential for the case. In any event, no prejudice could be occasioned by the reception of the documents, in view of the fact that the respondents are parties to the transaction and the documents are admitted. Consequently, I allow the application and ordered the reception of these documents. These documents will be received and marked at the appellate Court as Exs.B48 and 49. The petition is therefore ordered accordingly. V. Withdrawal of plea of benami as found in original pleadings cannot be sustained; averments in reply statement is to be discarded 5. The appellants contend that earlier the plaintiffs filed application I.A.No.235 of 1990 under Order 6 Rule 17 CPC to amend the plaint by withdrawing the averment as benami and the application had been originally dismissed. This was thought necessary perhaps by the fact that at that time the decision of the Supreme Court in Mithilesh Kumari v Prem Behai Khaul (1989) 2 SCC 95 held the field and the Benami Transactions Prohibition Act had a retrospective effect. Against the judgment of the trial Court in the interim application, the plaintiff/petitioner had filed CRP.No.2682/90 which was also dismissed by the High Court. The plaintiff/petitioner went to Supreme Court in SLP.1067/91 and the Supreme Court also dismissed the petition with the following observation: " The learned counsel for the petitioner however contend that in lieu of the observation in the impugned judgment, the petitioner may be seriously prejudiced at the time of final disposal of the suit. The Court while deciding the suit at the final hearing is not bound by any observation made in the order disposing of an interlocutory application, the apprehension expressed on behalf of the petitioner is not well founded." 6. After this application was dismissed and the SLP was also disposed of, the plaintiff again purported to file an application for reception of a reply statement under Order 8 Rule 9 CPC. In the reply statement, the petitioner sought to introduce the very same contention which had been taken in the application for amendment whereby they sought to withdraw the averment relating to benami and when they sought to contend the transaction was not benami, but it has been fradulently made by the first defendant in the name of the second defendant. The counsel for the appellant seriously contended that the reply statement ought not have been allowed and it amounted to introducing the very same contention which had been earlier decided against by the court below in the application for https://hcservices.ecourts.gov.in/hcservices/ amendment of the plaint. The senior counsel relied on three decisions, two by the Supreme Court and one by the decision of this Court. 7. In Aayyappally Mohd. Haji and others v M.M.Abdulsalam and others (2001) 2 SCC 28, the Supreme Court had, while disposing of a civil appeal, held that where an application for amendment of plaint had been filed along with the appeal after the dismissal of the suit was ultimately dismissed by the Supreme Court and the appeal was directed to be heard on the basis of pleadings that already existed, the High Court would not be justified on relying on evidence sought to be introduced which was the basis for amendment. The Court held that the direction of the Supreme Court with regard to the proceeding had to be scrupulously adhered to. 8. Yet another decision the Supreme Court in Gurdial Singh and others v Rajkumar Aneyja and others 2002 2 SCC 445 where the Court held in Rent Control proceedings, that vague and general application for amendment of written statement accompanied by a new reply statement was not proper and should not be allowed by High Court in revision. A more apposite judgment was the decision of this Court in Simon and another v Thankammal and another 1999 2 CTC 706 where the Court dealt with the issue of applicability of Section 11 C.P.C. on the principle of res judicata. The Court was referring to a case of a defendant filing a petition for additional written statement and when the amendment sought for had been denied, subsequently a petition was filed for amending the written statement. The Court said that the order passed in the course of suit operated as res judicata in the subsequent stage of the same proceedings. The contention of the appellant counsel is therefore that when in an earlier round, the plaintiff sought for amendment of the plaint for an attempt to withdraw the averment relating to benami, and when it had been also disallowed in proceedings that went up to Supreme Court, the plaintiff could not have been permitted to file the same pleadings by means of written statement under Order 8 Rule 9 CPC. The learned counsel also pointed out that there was no provision anywhere in the Code of Civil Procedure for reception of reply statement under Order 8 Rule 9 CPC. The last portion of the contention that there is no scope for filing a reply statement is, in my view, meaningless. The additional pleadings referred to under Order 8 Rule 9 is in the nature of addition to the pleadings in any way either to the written statement or by additional pleadings to the plaint by way of a reply statement. This position has been considered in several decisions earlier and I do not feel compelled to be detained on this technical objection. 9. More substantially, the issue whether the plaintiff could have filed a reply statement bringing an averment which had been earlier sought to be done by withdrawal of the plea of benami could https://hcservices.ecourts.gov.in/hcservices/ be permitted to be done again by means of a written statement could be answered by reference to the decisions of the Supreme Court. The plaintiff cannot be permitted to bring by way of additional pleadings any contention which the plaintiff had earlier sought to do by means of an amendment of pleadings. That decision in the suit at the stage of amendment will doubtless constitute res judicata in the subsequent proceeding. I hold that the reception of the additional pleadings by means of reply statement under Order 8 Rule 9 by the trial Court, was erroneous. VI. Relationship between parties – setting the stage for discussion on the crucial issue of trust 10. It is now necessary to set out the relationship between the parties with reference to the averments in the plaint and the written statement and how the issue had been dealt with by the trial Court. The father of the plaintiffs 1 and 2, and of their elder brother viz., the first defendant, was Pandurangam Chettiar. Panduranga Chettiar's wife was Sakuntala. The father was a self-made man and he started a Jewellery business in 1950. They ran the business called Panduaranga Jewellery in the suit premises in Door 250, Big Bazasar Stree, Coimbatore a shop measuring 7' 7" and 20". It had been rented by the original owner Durairaj in the year 1957 and after the life time of the owner, his wife Ranganayaki renewed the lease in favour of the family under a Document dated 28.2.1975 in Ex.A9. The father Pandurangan was able to save up enough money from the income from the business which was carried with the assistance of his sons, especially the 1st defendant. He purchased a property that was to become their residential house in Door No.146, Coimbatore. The family had been residing in the said property, while renting out the rear portion to 4 to 6 tenants. The first defendant had married the second defendant of his own choice. While the father consented, the mother did not and according to the first defendant, there was a little misunderstanding between the mother-in-law and the daughter- in-law on that account. The father Panduranga Chettiar passed away leaving the house and the jewellery business to be succeeded by the wife and the three sons viz. first defendant and the plaintiffs 1 and 2. There had also three daughters. But they have been married and living elsewhere . The three sons alone continued the business after the life time of the father in partnership. The first defendant took a leading part because of his experience in the trade and the plaintiffs, who were juniors in age to the first defendant, were led at all times in the conduct of the business and the family affairs only by the first defendant. Disputes arose between the members of the family when they sought for solution by convening a panchayat. The panchayat suggested a mode of division of the business as well as the residential house. The intervention of panchayatars yielded to a mode of division which was acceptable to all the parties. A larger share in the residential house of an extent of 3087 sq.ft. had been https://hcservices.ecourts.gov.in/hcservices/ given to the first defendant, while the plaintiffs 1 and 2 had been awarded with 1418 sq.ft. of plinth each. The mother had got 336 sq.ft. of property and some deposits in the Indian Overseas Bank. The jewellery business with the bank account, assets and liability were given to the plaintiff in lieu of the larger share that the first defendant had been given in the house. The first defendant had no objection to the plaintiffs 1 and 2 in carrying on the business as partners and the first defendant had contemplated setting up his own business. VII. The conduct of the 1st defendant at the negotiation stage for purchase of suit property – Reasoning of the trial court 11. The point of dispute comes only subsequently to the negotiation for purchase of the suit property which is the shop where the family business was being run. The contention of the plaintiffs was that the original owner Ranganayaki was prepared to sell the property to the family of the plaintiffs and the first defendant and she had herself come to the house in June 1985. The first defendant negotiated for purchase and had contracted to the purchase for the property for a lakh of rupees and on that date namely 18.6.1985, an agreement had been written when Rs.10,000/- was paid as advance and the balance of Rs.90,000/- was payable in three instalments. According to the plaintiffs, they were under the impression that the agreement to purchase will yield ultimately to a purchase of the property in the names of the plaintiffs and the first defendant jointly. They felt betrayed by the fact that ultimately the first defendant purchased the property on 14.9.1985 under Ex.B.27 in the name of the second defendant. This, according to the plaintiffs was a benami purchase and they were entitled to treat the property as the property belonging to the plaintiffs 1 and 2 as well as the first defendant in which they had 2/3rd share. They issued a notice after the purchase on 22.10.1985 calling upon the defendants to concede that the purchase was for the benefit of all the persons viz. the plaintiffs and the first defendant and asking the second defendant to sell 2/3 share to plaintiffs 1 and 2. A reply had been given on 5.11.1985 under Ex.B.45 by defendants 1 and 2 refuting the contention of the plaintiffs that there had been originally an agreement in respect of the property for purchase of the property by the plaintiffs and the first defendant on 18.6.1985 as contended by the plaintiffs and said that the attempt of the plaintiffs was really to bolster their claims by fraudulent and deceitful means. The defendant has set forth in the reply that even after the panchayat was concluded, the panchayat wanted the document relating to suit property to be also made in favour of the plaintiffs 1 and 2 to which the first defendant was not willing. They vowed that they would do everything to ensure that the property was ultimately given to the plaintiffs also. The reply notice conjectured that it was at their instance that the suit notice had been given. https://hcservices.ecourts.gov.in/hcservices/ 12. The plaintiffs filed the suit under such circumstances reiterating the claim that the document of purchase which had been made by the first defendant in the name of the second defendant was really made for the benefit of the family of all the three persons viz. the plaintiff and the first defendant and therefore the document in the name of the second defendant ought to be found to secure the benefit for all the parties viz. Plaintiffs and the first defendant. The relevant portion that the contentions relating to the plea of benami has been set forth in paragraphs 10 to 14 of the plaint. 13. In the trial Court, the plaintiff examined himself and also a witness who was said to be a witness for the so called agreement. On the side of the defendants, the first defendant examined himself, DW2 was the counsel who filed Vakalathnama and brought about compromise decree in O.S.No.480 of 1985. DW3 was one of the vendors Chandrasekaran under Ex.B.27. Adverting to all the evidence tendered before it, the trial Court found that the vendor Ranganayaki and her two sons had came to the house of the plaintiffs and the first defendant on 18.6.1985, there had been a a talk for selling the property for Rs.1 lakh, and an advance of Rs.10,000/- had been paid and balance of Rs.90,000/- was agreed to be paid within three instalments. The Court found that the plaintiffs had also been there at the time when the negotiation took place and when the first defendant made the payment of Rs.10,000/-. The trial Court found also that the document Ex.B.26 which had been filed on the defendants' side, as an instrument of receipt by the vendors had been brought up for the purpose of the case to support the case of the second defendant and it was not a true document. On the question as to why the panchayat had not made any specific reference to the right to purchase the suit property in the name of the plaintiffs, where essentially the business which had been run at the property had been allotted to the plaintiffs, the Court found that the earlier plaint had been filed by the first defendant securing the signature of the plaintiffs 1 and 2 also and they had not really known what the recitals were. It said that the decree will not decide finally the rights of parties, for the said suit itself had not become final and the general stamps which had been directed to be deposited was reported to have been deposited but lost or misplaced at the Court registry and hence, the final decree had also not been passed. The court reasoned that the earlier suit was still deemed to be pending and therefore the plaintiffs could not be estopped from contending that the suit item was also intended to be taken for all their benefit. The trial court found that the entire sale consideration of Rs.1 lakh has been paid by the first defendant only out of the funds of the family and therefore the plaintiffs were entitled to secure that the declaration that the suit property had been purchased only for the benefit of the plaintiffs and the first defendant and accordingly went on to decree the suit as prayed for. While granting https://hcservices.ecourts.gov.in/hcservices/ the decree it found that the plea of benami professed by the plaintiffs was not true but since the first defendant had brought about the purchase acting only on behalf of all the family members when they were all living together, it was bound to be treated as belonging to the family and second defendant was not true owner of the property. VIII. If the plea of benami fails, does the whole edifice of the plaintiffs crumble? 14. Learned Senior counsel Mr.T.R.Mani stoutly contends that if the suit had been filed on the basis that the document of purchase under Ex.B.27 was benami and if that finding relating to benami was against the plaintiffs, the defendant had no need for any other defence and plaintiffs' action ought fail. The decree granted by the trial Court under such circumstances, was clearly erroneous. He would point out to the other important aspect that the plea of fraud itself comes only in the penultimate paragraphs already referred to above that the first defendant had brought about the transaction in his wife's name by practice of fraud. No details of fraud has been made and the Court could not have granted a decree on such a flimsy averment in the plaint. The plaintiffs' contention regarding the so called fraud which was introduced by means of amendment to the plaint and an attempt to withdraw the case of benami could also not be countenanced by referring to the legal authorities already cited above. Even at the outset, I have no difficulty in accepting the first leg of the arguments of the appellants that the plea of benami cannot succeed at all. It will be one thing to contend that the plaintiffs wanted themselves as beneficiaries but however it was taken in the name of the second defendant (the ostensible owner), but quite another to contend that the first defendant, by virtue of his position that he held in the family had brought about the sale in the name of his wife by deceit and fraud and the transaction was intended to benefit only the plaintiffs and the defendant. The contentions of benami and the so called breach of trust cannot go together and therefore the trial Court's finding that the plea of benami was not well laid is perfectly justified. 15. If a case could be disposed of on such an elementary issue probably there is nothing else for consideration before me. However, the point is not as it is sought to be made by the senor counsel for the appellant and I am afraid, it would be an over-simplification of the effect of pleadings and to trash the grains of truth underlying the plaintiffs' claim. A thorough attempt to examine the entire pleadings in the suit and evidence that had been let in before the trial court and how the parties went to trial would obtain enormous significance. It is the contention of the plaintiffs that it was the first defendant who had been taking care of interest of all of them and it was he, who was running the business even during the life time https://hcservices.ecourts.gov.in/hcservices/ of the father. The plaintiffs 1 and 2 did not even pass out of their school final and they had very modest education, one having passed up to 9th standard and another up to 7th standard; the mother herself had studied only up to 2nd standard. On the other hand, it was the contention of the plaintiffs which was not refuted that the first defendant was more adeat in business and he was literally running the family business and was taking care of all their interest. The family was not a very affluent one and there are documents to show that even after in the year 1982-83, when the father was alive, the