IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:22.09.2008 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA A.S.NO.754 OF 1996 1.Kaliammal(died) 2.R.Dhatchanamoorthy ... Appellants/1st defendants Second appellant brought on record as LR of the deceased sole appellant vide order of Court dated 13.6.2008 made in C.M.P.No.449 to 451 of 2008 vs. 1.S.K.Subramanian 2.S.K.Ramasamy 3.Parvathi 4.Mariammal 5.Dhanalakshmi 6.Selvam 7.S.V.Venkidusamy 8.Mani 9.K.Rajamanickam 10.Raju Sethupillai 11.Shajahan 12.K.K.Rajagopal .. Respondents/Plaintiff and Defendants 2 to 12 Appeal preferred against the judgment and decree dated 1.7.1996 passed in O.S.No.21 of 1996 by the Subordinate Judge, Bhavani. For Appellants : Mr.M.M.Sundresh For Respondents : Mr.T.Murugamanickam for R1 https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT This appeal is focussed as against the judgment and decree dated 1.7.1996 passed by the Subordinate Judge, Bhavani in O.S.No.21 of 1996, which is a suit for partition. For convenience sake the parties are referred to here under as per their letigative status before the trial Court. 2. Niggard and bereft of details, the case of the plaintiff as stood exposited from the plaint could be portrayed thus: (a) The deceased Karuppagounder and D1-Kaliammal (since died during the pendency of the appeal) gave birth to two sons and three daughters, namely, S.K.Subramanian-the plaintiff, D2-S.K.Ramasamy, D3-Parvathi, D4-Mariammal and D5-Dhanalaxmi. The said Karuppagounder died on 17.2.1994 intestate. (b) The agricultural land measuring an extent of 1.64 acres in Jambai Village of Bhavani Taluk was allotted to the share of the deceased Karuppagounder, in the partition effected between him and his brother and mother. As such, the said agricultural property constituted the ancestral coparcenary property of the co-parcenery, comprised of Karuppagounder and his two sons, namely, the plaintiff and D2 herein. (c) From out of the income derived from it Karuppagounder purchased the house site on 6.1.1958, whereupon he raised a house and leased it out to various tenants and earned income. The plaintiff being a lorry driver, earned sufficiently and contributed for the welfare of the joint family and augmented the coparcenary income. (d) Karuppagounder was doing firewood business. On 20.10.1999, the plaintiff's father-Karuppagounder purchased the plot area in the suit property, described in the schedule of the plaint, from out of the joint family funds in the name of D1, his wife. The said property was purchased benami in the name of D1, which was intended to confer any benefit to D1. In law, the suit property happened to be the coparcenary property. (e) D1 had no financial ability to purchase any property much less the said plot, over which the joint family had put up superstructure for being used as houses and shops. (f) The ancestral agricultural properties were sold as per sale Deed dated 6.1.1958. A portion of such sale proceeds was utilised for putting up additional constructions in the suit property. The https://hcservices.ecourts.gov.in/hcservices/ plaintiff with his wife and three daughters living separately in a part of the suit property. Whereas D2 with his son and daughter living in another portion of the suit property. The parents of the plaintiff were much attached towards the second defendant's family. (g) D6 to D12 are the tenants occupying various portions in the suit properties and Karuppagounder, during his life time collected rents from them. After his death, within a period of six months, dispute erupted between the plaintiff and defendants 1 to 5 in sharing the rents accruing from part of the suit properties. Hence, the suit for partition claiming 7/18th share in the suit properties. 3. Remonstrating and denying, gainsaying and disputing the allegations/averments in the plaint, D1 filed the written statement, which was adopted by D3, the gist and kernal of them would run thus:- (i) Karuppagounder and his two sons did not constitute Hindu Co-parcenary family. Karuppagounder during his life time sold the only land belonged to him. The said agricultural land, which Karuppagounder got in the partition was not a Nanja land and no income was derived out of it. Karuppagounder had big family comprised of two sons and three daughters and he could not have saved money. As such, the averments in the plaint as though from out of the joint family income the properties were purchased and constructions were raised are all false. (ii) The plot area of the suit property was purchased by D1 as per Sale Deed dated 20.10.1959 from out of her own sources, as she was doing retail business in vegetables and wholesale business in tomatos and derived income. She also sold her 15 sovereign of jewels, which she got from her mother. As such, from out of her own sources she purchased the plot area of the suit property. The constructions were raised on the said plot by D1 from her own funds by raising loans from Bhavani Co-operative House Mortgage Co- operative Bank. (iii) D1's daughters namely D4 and D5 each gifted 10 sovereigns of gold jewels so as to enable D1 to raise funds with that and put up construction over the said plot. D3 had matrimonial dispute with her husband and whereupon she did business in tomato and other vegetables and earned sufficiently and living under the care of D1, by contributing her income to D1. (iv) D1 also incurred debts from 3rd parties for putting up such construction and she discharged them. She also participated in several chit transactions and earned money. D1 permitted the plaintiff to occupy a portion of the suit property out of pity https://hcservices.ecourts.gov.in/hcservices/ towards him. D1 executed a registered Will on 17.1.1994 bequeathing the suit properties in favour of her grant son Dhatchanamoorthy-the son of D2. The superstructure in the suit property stands in the name of D1 only and the water and electricity connections are in her name and she has been paying the house tax also. The tenants in the part of the suit properties were inducted only by D1 herein and she has been collecting rents from them. During the life time of Karuppagounder and D1, the plaintiff tortured and man-handed them demanding money for his nefarious activities. Accordingly D1 prayed for dismissal of the suit. 4. The warp and woof of the written statement filed by D2, which was adopted by D4 and D5, would run thus:- Karuppagounder had no firewood business of his own during the year 1959. Between 1962 and 1965 he had small firewood shop, but he could not run that shop profitably. Hence, he closed down the business. D1 purchased the plot area of the suit property from out of her own sources with the notion that she should have a property of her own. As such, D2 filed the written statement in support of the stand taken by D1 in her written statement. 5. D12 filed the written statement, which was adopted by D6 to D11, the nitty-gritty of them would run thus:- The defendants were inducted into the suit property only by D1 and they have been paying rents only to her. Karuppagounder had nothing to do with the tenancy and he did not collect rent from them during his life time. Accordingly, they prayed for the dismissal of the suit. 6. D1 filed the addition written statement, the warp and woof of it would run thus:- The agricultural land in Jambai Village referred to in the plaint constituted the separate property of Karuppagounder, as per the partition deed dated 14.7.1954, which emerged between himself and his uterine-brother and his mother, as he got the same towards his share. In fact, they were not co-parceners and consequently, the said agricultural land cannot be taken as the ancestral property, which Karuppagounder got in the partition. Karuppagounder treated the said property as his separate property only. Accordingly, she prayed for the dismissal of the suit. 7. The trial Court framed the issues. During trail, the plaintiff examined himself as P.W.1 and Ex.A1 to Ex.A33 were marked. On the side of the defendants, the first defendant examined herself as D.W.1 and Ex.B1 to Ex.B8 were marked. https://hcservices.ecourts.gov.in/hcservices/ 8. Ultimately, the trial Court decreed the suit allotting 7/24th share in favour of the plaintiff. 9. Being aggrieved by and dissatisfied with the judgment and decree of the trail Court, the first defendant filed the appeal. During pendency of the appeal, the first defendant died, consequently the legatee of her 'Will' namely, Dhatchanamoorthy came on record. Tersely and briefly the grounds of appeal would run thus:- (a) the suit filed by the plaintiff was hit by Section 4 of the Benami Transactions (Prohibition) Act 1988(Act 45 of 1988). (b) The lower Court, without considering that even if the property had been purchased in the name of the wife, still the benami nature of the transaction could be proved that at the time of purchase of the said property, it was not intended to benefit the wife, but for the benefit of the person who paid the sale price. (c) ignoring the fact that Karuppagounder had no financial capability to purchase any property or put up any construction, the trial Court held otherwise. (d) no evidence has been adduced to prove that the suit property was purchased from out of the alleged joint family funds. (e) Disregarding the fact that D1 from out of her own sources purchased the plot as well as put up construction, the lower Court decreed the suit in favour of the plaintiff. (f) Karuppagounder during his life time never treated the suit property as his own property; but the documentary evidence on the side of the defendants established that the suit property was treated as an exclusive property. Accordingly, D1 prayed for setting aside of the judgment and decree of the trial Court and consequently for the dismissal of the original suit. 10. The points for consideration are as to: (i) Whether the plot area of the suit property was purchased and constructions were made thereon from out of the joint family income of the co-parcenary, which comprised of Karuppagounder and his two sons? or whether the suit property is the absolute property of D1? (ii) Whether the embargo as envisaged under the provisions of the Benami Transactions (Prohibition) Act 1988 would operate as against the plaintiff's case? (iii) Whether there is any infirmity in the judgment and decree of the trial Court. Point Nos.1 and 2: These points are taken together as they are inter-linked and inter-woven with each other. https://hcservices.ecourts.gov.in/hcservices/ 11. The warp and woof of the argument of the learned counsel for the plaintiff is that during the life time of Karuppa Gounder, absolutely there was no dispute relating to the property being the co-parcenary property; consequently there had been no necessity for the plaintiff to get any partition effected among the co-parceners, namely Karuppa Gounder, the plaintiff and D2 the co- parceners; within a short time after the death of Karuppa Gounder, bad blood started running in the relationship between the plaintiff on the one side and the defendants 1 and 2 on the other side which necessitated the plaintiff to file the suit for partition; D1 the mother of the plaintiff had no financial wherewithal to purchase either the plot area of the suit property or put up construction thereon and the suit property is out and out the co-parcenary property which was acquired from out of the co-parcenary income in the name of the first defendant not to benefit her, but to benefit the entire co-parcenary family. 12. Animadverting upon the argument as put forth on the side of the plaintiff, the learned counsel for the appellant put across his argument which is pithily and precisely to the effect that Karuppa Gounder had no financial wherewithal to purchase any property, much less the plot area of the suit property and put up construction thereon; the alleged agricultural property cannot be treated as ancestral property; furthermore it was not fetching any income and it was also sold by all the three namely, Karuppa Gounder, the plaintiff and his two sons; the plaintiff had no sufficient income at all to contribute anything so as to augment the alleged joint family income; the records relating to the suit property are all speaking in the name of the plaintiff and the provisions as contemplated under the Benami Transaction (Prohibition) Act, 1988 would squarely applicable as against the very case of the plaintiff for the reason that there is no iota or shred of evidence available on the plaintiff side to prove that the suit property was acquired in the name of the first defendant not to benefit her, but for the benefit of the entire family. 13. At this juncture, it is just and necessary to refer to the legal position relating to benami transactions. Indubitably and indisputably, the suit was filed during the year 1995, so to say long after the commencement of Benami Transaction (Prohibition) Act, 1988. As such, for the purpose of this case, Sections 3 and 4 of the Act are required to be considered in depth. In fact, both sides are not at variance relating to the current legal view governing the concept benami and its prohibition as envisaged under the Benami Transaction (Prohibition) Act, 1988. The following are the relevant precedents: https://hcservices.ecourts.gov.in/hcservices/ (i) An excerpt from the decision reported in 1995 (4) SCC 572 [Nand Kishore Mehra v. Sushila Mehra] would run thus: 6. Sub-section (1) of Section 3, as seen, prohibits a person from entering into any benami transaction. Sub- section (3) of Section 3, as seen, makes a person who enters into a benami transaction liable for punishment. Section 5 makes properties held benami liable for acquisition without payment of any amount. But, when sub- section (2) of Section 3 permits a person to enter into a benami transaction of purchase of property in the name of his wife or unmarried daughter by declaring that the prohibition contained against a person in entering into a benami transaction in sub-section (1) of Section 3, does not apply to him, question of punishing the person concerned in the transaction under sub-section (3) thereof or the question of acquiring the property concerned in the transaction under Section 5, can never arise, as otherwise the exemption granted under Section 3(2) would become redundant. What we have said of the person and the property concerned in sub-section (2) of Section 3 in relation to non-applicability of Section 3(3) and Section 5 shall equally hold good for non-applicability of the provisions of sub-sections (1) and (2) of Section 4 in the matter of filing of the suit or taking up the defence for the selfsame reason. Further, we find it difficult to hold that a person permitted to purchase a property in the name of his wife or unmarried daughter under sub-section (2) of Section 3 notwithstanding the prohibition to enter into a benami transaction contained in sub-section (1) of Section 3 cannot enforce his rights arising therefrom, for to hold so would amount to holding that the statute which allows creation of rights by a benami transaction also prohibits the enforcement of such rights, a contradiction which can never be attributed to a statute. If that be so, there can be no valid reason to deny to a person, enforcement of his rights validly acquired even in the past by purchase of property in the name of his wife or unmarried daughter, by making applicable the prohibition contained in respect of filing of suits or taking up of defences imposed in respect of benami transactions in general by sub-sections (1) and (2) of Section 4 of the Act. But, it has to be made clear that when a suit is filed or defence is taken in respect of such benami transaction involving purchase of property by any person in the name of his wife or unmarried daughter, he cannot succeed in such suit or defence unless he proves that the property although purchased in the name of his wife or unmarried daughter, the same had not been purchased for the benefit of either https://hcservices.ecourts.gov.in/hcservices/ the wife or the unmarried daughter, as the case may be, because of the statutory presumption contained in sub- section (2) of Section 3 that unless a contrary is proved that the purchase of property by the person in the name of his wife or his unmarried daughter, as the case may be, was for her benefit. 7. Therefore, our answer to the question under consideration is that neither the filing of a suit nor taking of a defence in respect of either the present or past benami transaction involving the purchase of property by a person in the name of his wife or unmarried daughter is prohibited under sub-sections (1) and (2) of Section 4 of the Act. (ii) An extract from the decision of the Hon'ble Apex Court reported in 1998(1) LW 346 [Rebti Devi v. Ram Dutt and another] would run thus: 9. This Court referred to R. Rajagopal Reddy's case (1995 (2) SCC 630 = 1995-1-L.W.427). The plaint being subsequent to 17-5-1988, the principle that the Act was not retrospective as stated in R. Rajagopal Reddy's case was no doubt initially not attracted to that case. That would mean that Section 4(1) applied unless of course the case fell within the exceptions stated either in Section 3 (2) or in Section 4(3) of the Act. In that case, this Court permitted the plea of benami in a post-19-5-1988 suit, because the Court was concerned with the exception in Section 3(2). The Court also incidentally referred to the other exceptions falling under Section 4(3). This Court in that case noticed that the purchase was on 24-4- 1964 and was in the name of the wife. That was why this Court proceeded to refer to the exception in Section 3(2) which concerns benami purchases in the name of a wife or unmarried daughters. This Court also referred to the presumption contained under the same exception in Section 3(2) to the effect that unless the contrary was proved, in the cases of purchases in the name of a wife or unmarried daughters, it shall be presumed that the property had been purchased for the benefit of the wife or the unmarried daughters. In view of the exception in Section 3(2), the prohibition under Section 3(1) was held not to apply. It was held that even though the plaint was filed after 19-5- 1988 such a plea of benami was not shut out. This Court directed that the suit be disposed of, of course, by applying the statutory presumption contained in Section 3 (2) which is to be mandatorily drawn but which is rebuttable. The plaintiff in a suit filed after 19-5-1988 could still prove that the property had not been purchased by him for the benefit of his wife and he could rebut the https://hcservices.ecourts.gov.in/hcservices/ presumption and claim that he was the real owner. 10. Therefore, to the six principles hereinbefore culled out from R. Rajagopal Reddy's case, the following further principles decided in Nand Kishore Mehra's case can be added: “(7) Seventhly, if in a suit, claim or action, a plea or defence based on benami is raised even after 19-5-1988 and the purchase is in the name of a wife or unmarried daughter, such a plea of benami is permissible and R. Rajagopal Reddy's case will not come in the way merely because the plea is raised after 19-5-1988. Such a plea if raised, will however have to be decided taking into account the statutory presumption laid down in Section 3 (2). This is because the Act says that if the purchase is in the name of the wife or unmarried daughter, the prohibition in Section 3(1) will not apply. Section 3(2) is enacted as an exception to the provisions in the Act and does not depend for its interpretation on the question as to what extent Sections 4(1) and 4(2) are retrospective. (8) Eighthly, if the case falls within the exception in Section 4(3)(a) i.e. where the person in whose name the property is held is a coparcener in a Hindu Undivided Family and the property is held for the benefit of the coparceners in the family, or where as stated in Section 4 (3)(b) the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity, then in both situations if such a plea or defence is raised in a suit filed after 19-5-1988, the same can be decided by the Court notwithstanding Section 4 (1) or 4(2) and notwithstanding what is decided in R. Rajagopal Reddy's case.” 11. For the above reasons, we are unable to find how Nand Kishore Mehra's case can be said to have doubted R. Rajagopal Reddy's case. In fact, far from doubting it, it proceeds to accept the said judgment and then considers the case of exceptions provided in Section 3(2). It holds incidentally that there is another exception contained in Section 4(3) of the Act. These exceptions apply even to suits filed after 19-5-1988 and are not affected by what is decided in R. Rajagopal Reddy's case. 12. In order to complete the discussion, we shall also refer to two subsequent cases. The case in Heirs of Vrajlal J. Ganatre v. Heirs of Parshottam S. Shah 1996(4) SCC 490 was one where the suit was filed in 1981 claiming https://hcservices.ecourts.gov.in/hcservices/ that the defendant in whose name the deed dated 16-12-1963 stood was benami. The plaintiff’s heirs filed appeal in the Gujarat High Court in 1990 against the judgment of the trial court. No contention based on the Act of 1988 was raised in the High Court. For the first time it was argued in this Court that the plea was prohibited by the Act. This Court followed R. Rajagopal Reddy's case and held that the plea was raised in a suit filed before 19-5-1988, and it was not barred under the Act. This Court then proceeded to decide the case on merits, dismissing the plaintiff’s appeal." 14. From the above it is crystal clear that as per Section 3 (2) of the Benami Transaction (Prohibition) Act, there is a presumption that if a property stands in the name of the wife, it is presumed that it was so purchased in her name for the benefit of the wife and such a presumption is a rebuttable one which means that the person who pleads benami should prove that the intention of such purchase in the name of the wife was not for her benefit, but for the benefit of the person who paid the money for such purchase. 15. Keeping in mind the aforesaid settled proposition of law, I would like to analyse the evidence on record. 16. Ex.B1, the sale deed dated 20.10.1959 speaks of the fact that the first defendant purchased the plot area in the suit property for a valuable consideration of Rs.1,500/-. According to the first defendant, in her written statement as well as in her deposition D.W.1, she purchased the said plot as per Ex.B1 from out of her own earnings as a vegetable vendor and also by selling her 15 sovereigns gold jewels which was given to her at the time of her marriage by her parents. As such, her deposition is in support of the recitals in Ex.B1 the sale deed, whereas, it is the contention of the plaintiff as P.W.1 that the first defendant had no financial capability at all to purchase such property and that the said co- parcenary family alone had necessary income and it was purchased. It is a trite proposition of law that the plaintiff who pleads benami should prove it and onus of proof is not on the defendants. 17. On the side of the plaintiff, the learned counsel would submit that the first defendant has not produced any evidence so as to fortify and buttress her plea. At this juncture, I recollect fruitfully the common or garden principle governing the adjudication in civil cases that the