IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 10TH DECEMBER 2009 / 19TH AGRAHAYANA 1931 AS.No. 341 of 1994() -------------------- OS.17/1990 of ADDL.DISTRICT COURT-II,MAVELIKKARA .................... APPELLANT(S)/PLAINTIFF: -------------- SULAIMAN RAWTHER, MUZHANGODI THARAYIL, PEROOR KARANMA MURI, THAMARAKULAM VILLAGE. BY ADV. SRI. T.M.ABDUL LATIFF RESPONDENT(S)/DEFNDANTS: --------------- 1. KABEERKUTTY, THATTANAPPALLIL KIZHAKKETHIL, ELAPPIKULANGARA MURI, VALLIKUNNAM VILLAGE. 2. M.MUHAMMEDKUNJU, OF -DO- -DO- (DIED) (RESPONDENTS 3 AND 4 ARE IMPLEADED AS LEGAL HEIRS) 3. M.SALIM OF -DO- -DO- 4. SHAJI OF -DO- -DO- 5. KOCHAPPA SULAIMAN RAWTHER, NEDIYAVILAYIL, CHUNAKKARA THEKKUM MURI, CHUNAKKARA VILLAGE. ADV. SRI.T.GOPALAKRISHNAN FOR R1 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 10/12/2009, ALONG WITH AS NO. 243 OF 1994 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P. JOSEPH, J. -------------------------------------- A.S.Nos.243 & 341 of 1994 -------------------------------------- Dated this the 10th day of December, 2009. JUDGMENT Heard both sides. Parties are referred to as plaintiff and defendant as in O.S.No.70 of 1989 for convenience. 2. The legal wrangle concerning three items of properties is between the nephew (plaintiff) and uncle (defendant). It is not disputed that at a time when father of the nephew had deserted his mother and himself, young he was and under care and protection of the uncle he was brought up. Sometime in the year 1973, the nephew got employment abroad and in 1977 he set up a family. His family joined him abroad. Dispute between the nephew and uncle arose thereafter. Uncle had executed Ext.A9, assignment deed in respect of plaint A schedule in favour of the nephew purportedly conveying his right, title, interest and possession of the said property in favour of the nephew for valid consideration. To set off the difference in the price nephew is said to have assigned plaint D schedule belonging to him to the uncle as per assignment deed, a copy of which is marked Ext.A10. The uncle made certain purchases in the name of nephew according to the latter, utilising the funds he had sent from abroad while uncle maintained that he being a political activist thought it unwise to acquire properties in his own name and hence acquired properties (plaint B schedule items) in the name of nephew the latter being only a benamidar. So far as plaint C schedule items are concerned, it is not disputed that the said AS Nos.243 & 341/1994 2 properties originally belonged to the maternal grandfather of the nephew who executed a gift deed in favour of mother of the nephew. According to the uncle, donee died during life time of the donor without donee accepting the gift in respect of C schedule items and hence the said properties reverted to the donor and on death of donor it devolved on him (uncle), he being the legal heir. Uncle thought that it was unwise to have executed Ext.A9, assignment deed in the name of the nephew and executed Ext.A30 cancelling Ext.A9, assignment deed. Thus the uncle claimed to be in possession and enjoyment of plaint A to C schedule items. According to the nephew, he tried to patch up the differences with the uncle but did not succeed. Nephew filed O.S.No.80 of 1988 in the court of learned Sub Judge, Mavelikkara. He prayed for a declaration that plaint A to C schedule properties belonged to him, for cancellation of Ext.A30, cancellation deed, recovery of possession, injunction and other reliefs. Defendant (uncle) contended that plaintiff (nephew) has no right over plaint A to C schedule items for the reasons above stated. He claimed that Ext.A9, assignment deed in the name of the plaintiff (nephew) has not taken effect nor was it intended to take effect. He filed O.S.No.294 of 1988 in the court of learned Munsiff, Mavelikkara against the nephew and others seeking injunction in respect of plaint B schedule items. That suit was resisted by the nephew contending that plaint B schedule properties were acquired by him through the uncle utilising his funds and hence the uncle has no right or interest over the said properties. The suits were AS Nos.243 & 341/1994 3 withdrawn to the court of learned Additional District Judge, Mavelikkara and renumbered as O.S.No.70 of 1989 and 17 of 1990, respectively. After considering the evidence adduced by the parties, learned Additional District Judge concluded that Ext.A9 is a valid assignment in respect of plaint A schedule items in favour of the plaintiff (nephew) and that its cancellation as per Ext.A30 is invalid. In respect of plaint B schedule, contention raised by the defendant (uncle) that it is a purchase made by him, benami, in the name of nephew was held to be not entertainable in view of Section 4 (2) of the Benami Transactions (Prohibition) Act, 1988 (for short, “the Act”). Learned Additional District Judge also found on evidence that plea of benami cannot be sustained. So far as plaint C schedule is concerned, finding is that gift in favour of the mother of plaintiff was accepted and had taken effect before she died and hence that property devolved on the plaintiff. Accordingly learned Additional District Judge granted reliefs as prayed for in O.S.No.70 of 1989 and dismissed O.S.No.17 of 1990. Common judgment and decree are under challenge in these regular first appeals. 3. Following points arise for a decision: i. Whether Ext.A9 conveyed right, title and interest in respect of plaint A schedule in favour of plaintff or is a sham document as contended by the defendant and its cancellation as per Ext.A30 is valid? ii. Whether plea of benami in respect of plaint B schedule is available AS Nos.243 & 341/1994 4 to the defendant? iii. Whether on facts and evidence learned Additional District Judge was justified in holding that plea of benami in respect of plaint B schedule cannot be sustained? iv. Whether finding of the learned Additional District Judge that plaint C schedule belongs to the plaintiff is correct? v. Whether defendant is entitled to value of improvements in respect of plaint A to C schedules. 4. Point No.i.. Ext.A9 is the assignment deed dated 22.2.1983 admittedly executed by the defendant in favour of the plaintiff. That purports to convey right, title, interest and possession of plaint A schedule properties in favour of the plaintiff for consideration mentioned therein. According to the plaintiff, agreement was that in consideration of assignment of plaint A schedule items to him as per Ext.A9 and to equalise the value, he would assign plaint D schedule belonging to him to the defendant and accordingly he executed assignment deed dated 23.2.1983 in respect of plaint D schedule in favour of the defendant, certified copy of which is marked Ext.A10. It is argued by learned counsel for defendant that Ext.A9, assignment was not intended to take effect. According to the learned counsel intention of the defendant was to ensure that AS Nos.243 & 341/1994 5 plaintiff, his nephew sets up residence near to his own house and it was with that sole object without intending to convey right and title over plaint A schedule that Ext.A9, assignment deed was executed in favour of plaintiff. Later plaintiff changed his mind and refused to reside in plaint A schedule. Residence in plaint A schedule was a condition for execution of Ext.A9, that condition was violated and hence defendant cancelled Ext.A9 as per Ext.A30. On the other hand learned counsel for plaintiff would contend that there was no such condition attached to Ext.A9 and in consideration of assignment of plaint A schedule in his favour, he executed Ext.A10, assignment deed in favour of the defendant regarding plaint D schedule and that defendant had no right, title or interest over plaint A schedule after Ext.A9 and hence he could not have cancelled Ext.A9 as per Ext.A30. Learned counsel for plaintiff maintains that Ext.A30 is invalid and though plaintiff could have ignored Ext.A30, he thought it fit to seek a declaration of right and title under Ext.A9 since Ext.A30 might appear to be a cloud on his right, title and interest. 5. I have gone through Ext.A9 and find that no condition is attached to the sale as per that document. Instead, Ext.A9 is an outright sale. In paragraph No.11 of the written statement filed by defendant in O.S.No.70 of 1989 it is stated that in the year 1989 when plaintiff came to his native place, unwell, and due to his love and affection towards the plaintiff he wanted plaintiff to set up residence near his house, intended to execute a settlement deed in AS Nos.243 & 341/1994 6 favour of the plaintiff without transferring possession and reserving a life interest for himself but he was advised that under the Mohammedan Law such a settlement would be invalid and hence he executed Ext.A9 in favour of the plaintiff. It is stated that when plaintiff acted against his wishes he was constrained to cancel Ext.A9 as per Ext.30. But it is not pleaded in the written statement that the sale as per Ext.A9 was subject to any condition and that on failure to comply with the condition defendant was entitled to cancel Ext.A9. So far as the deed of assignment is concerned, it is not disputed that unless the sale is conditional on the happening or not happening of some event the sale cannot be cancelled. It is only in Ext.A26, letter dated 6.7.1987 that the defendant for the first time told plaintiff about his cancelling Ext.A9. In none of the letters intervening (produced and marked in the case) there is reference to the condition so called and now urged by the defendant which according to him was violated by the plaintiff and which gave him right and authority to cancel Ext.A9. Ext.A24, letter dated 17.1.1983 sent by the defendant to the plaintiff would show that defendant wanted to purchase some land on behalf of plaintiff for residence of the latter. In Ext.A24 defendant says that though he had searched for a convenient plot for putting up residence for plaintiff, either on account of location or price he was not able to locate a suitable plot and hence he suggested that “we have” a convenient land at Thadathuvila which could be used for construction of residence to the plaintiff ( It is not disputed that the land AS Nos.243 & 341/1994 7 at Thadathuvila referred to in Ext.A24 is plaint A schedule property). Going by Ext.A24 it would appear that whatever be his object, defendant wanted plaintiff to purchase a convenient plot of land for construction of a residential building and it is thereafter that Ext.A9, assignment deed was executed on 22.2.1983. Apart from what defendant said as DW1, there is nothing on record to show that the sale as per Ext.A9 was subject to any condition as now set up. It is true that plaintiff has not mounted the witness box to adduce contra evidence but his power of attorney has given evidence as PW1. Plaintiff was working abroad at the time of trial. Mere fact that plaintiff has not entered witness box is not sufficient to draw any adverse inference if evidence adduced by the defendant is not acceptable. I must also bear in mind that the power of attorney who gave evidence as PW1 is a defendant along with plaintiff in O.S.No.17 of 1990. Hence he was aware of facts and capable of giving evidence on behalf of plaintiff. Going through the evidence I do not find any material to conclude that the sale as per Ext.A9 was subject to the condition now urged by the defendant so that on failure to comply the condition defendant had the power to cancel Ext.A9. 6. Now I shall refer to the contention that Ext.A9 is a sham transaction as pleaded in paragraph No.11 of the written statement in O.S.No.70 of 1999. It is not disputed that 'possession' of plaint A schedule still remain with the defendant. It is also not disputed that the original of Ext.A9, AS Nos.243 & 341/1994 8 assignment deed is with the defendant. But, from these circumstances it is not possible to infer that the transaction is sham. In considering whether the transaction is sham all the attending circumstances are also to be looked into. During the time of purchase of plaint A schedule property as per Ext.A9, before and thereafter it is not disputed, plaintiff was working abroad. Exts.A16 to A26, letters sent by the defendant to the plaintiff would reveal that the former was looking after the properties of the latter. I must bear in mind the close relationship between the parties, being the uncle and nephew. There was no occasion or necessity for plaintiff to take the documents with him abroad. In such circumstances if the original of Ext.A9 happened to be with the defendant that is no indication that the transaction is sham. So also in the matter of 'possession'. In Narayan v. Trimbakrao Gopalrao Bagde and others (AIR 1988 Bombay 94) it has been held that delivery of possession is not an integral part of a sale ofcourse, depending on the facts and circumstances of the case. As per Ext.A9 legal possession of plaint A schedule was transferred to the plaintiff. Physical possession could have remained with the defendant for the purpose of its management. Yet another circumstance that would go against the defendant regarding plea of sham transaction is the assignment deed executed by the plaintiff in favour of defendant on 23.2.1983, a copy of which is marked as Ext.A10 in respect of plaint D schedule which originally belonged to the plaintiff and which according to the plaintiff was AS Nos.243 & 341/1994 9 assigned to the defendant to equalise the price of plaint A schedule property. I stated that Ext.A9 was executed on 22.2.1983 while Ext.A10 was executed on 23.2.1983. But it is seen that though in different offices of the Sub Registrars both documents were registered on 23.2.1983. Ext.A9 was registered at 11.45 a.m. while Ext.A10 was registered at 2.30 p.m. in the respective offices of the Sub Registrars. According to the learned counsel for defendant the very fact that Exts.A9 and A10 are registered in different Sub Registrar's offices would indicate fraudulent intention of plaintiff in executing Ext.A10. Learned counsel for plaintiff submitted that the documents were registered at different Sub Registrar's offices since the properties fell in different villages and registration was effected before the Sub Registrar having jurisdiction over the respective villages. I do not find reason to think that registration of Exts.A9 and A10 in different offices of Sub Registrars indicated any fraud on the part of plaintiff. I find that though not all on the same days, on the same day also stamp papers for preparation of Exts.A9 and A10 were purchased. A further fact revealed is that the stamp papers for preparation of both the documents were purchased in the name of defendant. There is no reason, in these circumstances to think that Ext.A10 was fraudulently created by the plaintiff. 7. Indication that the transaction as per Ext.A9 is not sham comes from Ext.A24 itself. There, defendant has expressed his desire to accommodate the plaintiff in a convenient plot of land and states that since no AS Nos.243 & 341/1994 10 convenient plot is available it is appropriate to convey the property at Thadathuvila (plaint A schedule). It is to be noted that a month after Ext.A24, Ext.A9 assignment deed was executed. Ext.A24 gives indication that defendant wanted plaintiff to be benefited by the sale (as per Ext.A9) so that he could construct a residential building in it. 8. It is then contended by learned counsel for defendant that to prove that the sale has taken effect, plaintiff has not produced any receipt for payment of revenue. But Ext.A9 is dated 22.2.1983 while Ext.A30, cancellation deed comes immediately thereafter on 17.8.1983. Yet another argument advanced by learned counsel for defendant is that there was no agreement between the parties regarding passing of consideration referred to in Ext.A9 and much less any evidence. I must refer to Ext.A9 with reference to passing of consideration. I have referred to the circumstances in which Ext.A10, assignment deed was executed in favour of defendant concerning plaint D schedule. The recital in Ext.A9 executed by the defendant is prima facie evidence of passing of consideration. It is for defendant to prove that the recital is not correct. Also in the light of Ext.A10, contention that Ext.A9 is not supported by consideration cannot be sustained. 9. Yet another contention learned counsel advanced is that though as per Ext.A26, letter dated 6.7.1987 plaintiff was informed about cancellation of Ext.A9, the suit seeking declaration that Ext.A30 is not valid was instituted only in AS Nos.243 & 341/1994 11 July, 1988. Reply of learned counsel for plaintiff is that at the time of Ext.A30 plaintiff was working abroad, he came down to his native place only in July, 1988, obtained a copy of Ext.A30 and filed the suit. I do not find any inordinate delay to conclude that there was acquiescence on the part of the plaintiff with respect to Ext.A30. For the reasons stated, case of defendant that transaction as per Ext.A9 has either not taken effect or is sham cannot be accepted. I do not find reason to interfere with the finding of learned Additional District Judge in that regard. 10. Point Nos.ii and iii. These points can be considered together for convenience. Question is whether purchase of plaint B schedule as per Exts.A2 to A8 in the name of the plaintiff is benami and assuming so, whether in view of Section 4(2) of the Act such a plea could be raised. Learned counsel for plaintiff placed reliance on the decisions in R.Rajagopal Reddy (dead) by L.Rs. and others v. Padmini Chandrasekharan (dead) by L.Rs.(AIR 1996 SC 238) and Smt. Rebti Devi v. Ram Dutt and another(AIR 1998 SC 310). According to the learned counsel the suits are instituted after 19.5.1988 and hence Section 4(1) and (2) of the Act would squarely apply. Counsel for defendant per contra placed reliance on the decision in G.Mahalingappa v. G.M.Savitha ((2005) 6 SCC 441) and V.Shankaranarayana Rao AS Nos.243 & 341/1994 12 (dead) by L.Rs. and others v. Leelavathi (dead) by L.Rs. and others ((2007) 10 SCC 732) to contend that at any rate the defence taken up though subsequent to the relevant day is permissible and has to be looked into. Learned counsel has grievance that no issue regarding benami was raised by the learned Additional District Judge and that the question was not properly considered. 11. Section 4 of the Act reads: “Prohibition of the right to recover property held benami.- (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. (3) Nothing in this section shall apply,- (a) 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 AS Nos.243 & 341/1994 13 (b) where 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.” It has been held by the authoritative pronouncements of the Supreme Court that Section 4 is prospective. Learned counsel for defendant has a contention that Section 4 of the Act came into force on 5.9.1988 and in support of that, learned counsel relied on the observations in paragraph No.17 of the decision in G.Mahalingappa's case (supra) . But I am afraid that contention cannot be sustained. There, reference was to the date on which Sections 3, 5 and 8 of the Act came into force (5.9.1988) while Section 1(3) of the Act specifically say that Sections other than Sections 3, 5 and 8 “shall be deemed to have come into force on 19th May, 1988”. Therefore, there is no escape for the conclusion that Section 4 of the Act came into force on 19.5.1988. It is not disputed that both the suits were instituted after 19.5.1988. Hence according to the plaintiff bar under Section 4(2) of the Act straight away applied so far as O.S.No.70 of 1989 is concerned. 12. Contention raised by learned counsel for defendant is that so far as defence that could be taken in Sub-section (2) of Section 4 of the Act is concerned, the date (19.5.1988) has no application since defence can be taken AS Nos.243 & 341/1994 14 in cases already instituted. It is in that connection that learned counsel for defendant has placed reliance on the decisions above referred. Learned counsel has invited my attention to paragraph No.21 of the decision in G.Mahalingappa's case (supra). But that decision does not say that so far as the defence of benami is concerned it could be raised after the date of commencement of Section 4 referred to in Section 1(3) of the Act. Moreover it is made clear in the decision in R.Rajagopal Reddy's case (supra) (see paragraph Nos.12, 14 and 22) and Smt. Rebti Devi's case (supra) that no defence based on benami is available after 19.5.1988. In these cases that issue does not assume importance since the suit itself is instituted after 19.5.1988. Hence learned Additional District Judge is justified in holding that the plea of benami is not available to the defendant either as defendant in O.S.No.70 of 1989 or as plaintiff in O.S.No.17 of 1990. 13. Learned counsel for defendant has invited my attention to Exts.A16 to A26, letters sent by the defendant to the plaintiff. Learned counsel would contend from Exts.A16 to A26 show that intention was not to acquire any property in the name of plaintiff. Learned counsel submits that there is no evidence to show that source of purchase money as per Exts.A2 to A8 came from the plaintiff. According to the learned counsel, plaintiff was not financially sound enough to acquire plaint B schedule items as per Exts.A2 to A8. Reference is made to the letter (Ext.B2) sent by plaintiff to the defendant. AS Nos.243 & 341/1994 15 There, plaintiff states that the total emoluments he gets from his employment (abroad) when converted to Indian currency is only Rs.8,568/- per month during the relevant time out of which he has to spend Rs.7,850/- for himself and family. This according to the learned counsel is sufficient to show that respondent was not having enough money to acquire plaint B schedule items as per Exts.A2 to A8. Exts.A2 to A8 show that total consideration mentioned is only Rs.10,750/- (Rupees ten thousand seven hundred and fifty only). To support the contention that plaintiff has been sending money to the defendant from abroad, plaintiff has produced Exts.A27 to A29, passbooks of his accounts and the counter foil of the cheque book. Learned counsel for defendant has a contention that though PW1 proved Exts.A27 to A29, defendant when examined as DW1 was not confronted with the said documents and hence the same cannot be relied on. It is however seen from the evidence of PW1 that it is after his statement that the funds for purchase of plaint B schedule came from the plaintiff that Exts.A27 to A29 were exhibited in evidence. Defendant had the opportunity to cross examine PW1 with reference to Exts.A27 to A29 . If on the other hand defendant thought that clarification is required from