:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 2574 OF 1993 Date of Decision : September 27, 2006. For Approval and Signature : The Honourable Mr. Justice S.K. Shah : 1. Whether Reporters of Local Papers may be allowed to see the Judgment? 2. To be referred to the Reporters or not? 3. Whether Their Lordships wish to see the fair copy of the Judgment? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950, or any Order made thereunder? 5. Whether it is to be circulated to the Civil Judges ? 6. Whether the case involves an important question of law and whether a copy of the Judgment should be sent to Nagpur, Goa and Aurangabad office? ***** :2: IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 2574 OF 1993 RAM SWARUP TAK ] BUNGALOW NO. B1, ] SHREE DATTAGURU SOCIETY] DEONAR VILLAGE ROAD, ] DEONAR, BOMBAY -88 ] ... PLAINTIFF. VS. MAHENDRA R. SINGH ] ALIAS TAK, BUNGALFOW ] NO.B-1, SHREE DATTA ] GURU SOCIETY, DEONAR ] VILLAGE ROAD, ] DEONAR, BOMBAY - 88 ] ... DEFENDANT. MR. R.S.TAK THE PLAINTIFF IN PERSON. MR. JOSE GEORGE FOR THE DEFENDANT. CORAM : S.K.SHAH, J. DATE OF RESERVING THE JUDGMENT : 18/09/2006. DATE OF PRONOUNCEMENT OF JUDGMENT : 27/09/2006. - : JUDGMENT : - 1. The father has filed this Suit against the son for declaration that he is the absolute beneficial owner of the suit property and that the defendant has no beneficial right, title or interest of whatsoever nature in the suit property and for permanent injunction, restraining the defendant from dealing or disposing of :3: or alienating or creating third party rights in the suit property. 2. The suit property consist of Bungalow No. B-1 together with plot No. B-1, admeasuring 180 square metres, situated at Shri Dattaguru Society, Deonar village road, Deonar, Bombay - 88. 3. Earlier, the plaintiff and his two sons, defendant, who is the elder one and Narendra (since deceased) the younger one, were residing in flat No. 8 of Suprilina building at Chembur. In 1984, considering the growing need of the family and possibility of the two sons getting married, the plaintiff alleges, he planned for acquiring the additional premises elsewhere and as such, plaintiff caused the defendant to apply to CIDCO for allotment of ownership premises at Vashi. Accordingly, the defendant applied on 13th February, 1984, whereupon the CIDCO allotted to the defendant, an apartment of BS-4 (ii) type, then under construction, in Sector No. 9/10 at Vashi. The plaintiff alleges that alongwith the application form, it was necessary to pay Rs. 10,000/-. He, therefore, obtained the demand draft on 9.1.1984 for Rs. 10,000/- from his self acquired funds, drawn on Dena Bank, Vashi Branch and made the payment to CIDCO, against receipt. The remaining consideration of CIDCO flat was paid by him in the similar manner, by obtaining two demand drafts from his account, drawn on Dena Bank, vashi, one on 16.3.1984 and another on 26.4.1984, both for Rs. 63,000/- and paid the amount to CIDCO against the receipts. Thus, the plaintiff alleges that he acquired the CIDCO flat from his own funds but in the name of the defendant and that he himself paid the entire consideration of Rs. 1,36,000/-. All the three demand drafts were drawn on :4: his Dena Bank Account No. 5251. He, therefore, became absolute and exclusive beneficial owner of the said CIDCO flat. 4. He further alleges that since both of his sons, defendant and deceased Narendra had become of marriageable age,, he himself was desirous of shifting from Suprilina Flat. In the meantime, his second son Narendra died on 24.8.1986, in a car accident. Therefore also, it became impossible for him and his wife to continue to reside in Suprilina flat, after the death of younger son Narendra. He himself and his wife were totally dependent upon the defendant. It is under these circumstances, he decided to acquire the suit property, nominally in the name of the defendant. By agreement for sale, dated 17th September, 1986, made between Smt. Gulabdevi J. Sharma, the defendant agreed to purchase the suit property. 5. The plaintiff further alleges that the entire consideration of Rs. 6,50,000/- was paid by him. Rs. one thousand was paid in cash, as earnest money. For paying the stamp duty of Rs. 65,000/-, he had withdrawn from his own Saving Bank Account NO. 4573, maintained with Veerseva Urban Co-op. Bank Ltd., Chembur Branch (Rs. 14,000/- on 9.9.1986 and Rs. 50,000/- on 16.9.1986). As regards the balance consideration of Rs. 6,28,400/-, it was to be paid on 15th October,1986. For that purpose, on 2nd December, 1986, he paid to the defendant a sum of Rs. 3 lac, by cheque drawn on Canara Bank. On 4th February, 1987,he entered into an agreement for Sale executed between the defendant and one Mr. Merchand, sold CIDCO flat for a consideration of Rs. 1,50,000/-. On 4.2.1987 he paid the said amount to the defendant. He further alleges that he also paid :5: to the defendant Rs. 2 lac by cheque drawn on Canara Bank. Thus, he paid to the defendant totally Rs. 6,50,000/- from his own earnings and from his own bank account. Accordingly, the defendant paid to Mrs. Sharma, a sum of Rs. 6,28,400/-. He alleges that after the entire consideration was paid, he himself took vacant peaceful possession of the suit property. The balance sum of Rs. 20,600/- was utilised towards the payment to be made to the society, on behalf of Mrs. Sharma. . He further alleges that on 3.9.1987 he paid to the defendant Rs. 45,000/- by cheque, drawn on North Kanara Bank GSB Ltd. and from that account, defendant paid to the Society, a sum of Rs. 20,000/- by way of transfer fee and Rs. 251/- as share capital and membership fee and Rs. 20,600/- on behalf of Mrs. Sharma as deposit in respect of re-grant lease of the land. . He further alleges that for paying the price of the suit property, he had raised friendly loan from his friend and for the purpose of repayment thereof, he was constraint to sell the Suprilina flat on 23.10.1988 for the consideration of Rs. 3,75,000/-. He further alleges that he was working as a Chief Accountant and Financial Advisor of two reputed companies, in succession and was having extensive income of his own. He was also paying the maintenance charges to the society, electricity bills and all other charges in respect of the suit property. He further alleges that defendant fell in bad company and gradually it became clear that defendant would not mend his ways. In May, 1993, the defendant threatened the plaintiff with physical assault and claimed to be the absolute :6: exclusive beneficial owner and, therefore, he was forced to file this Suit for declaration and other reliefs. 6. The defendant resisted the suit by his written statement, dated 8th December, 2000. While denying all the allegations made in the plaint, he contends that the plaintiff himself admitted that the suit property has been purchased in the name of the defendant by registered agreement and the membership of the co-operative housing society also stand in his name, therefore, the plaintiff has no claim of whatsoever nature in respect of the suit property as beneficial owner. He contends that the plaintiff’s claim in the suit is hit by the provisions of Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988 and the suit is therefore liable to be dismissed with costs on that count alone. . By specific pleadings, he contends that he alongwith his deceased brother Narendra were doing business of buying and selling electronic items, both Indian make and of imported brands, since 1981 and were earning handsome profits out of it. He contends that he himself and his brother were entrusting all their earnings with their parents, from time to time and the plaintiff was depositing the said money in his personal account and/or in his joint account with the mother. They never enquired with the plaintiff what he was doing with the said money. However, they were informed by their parents that the amounts were either deposited in the bank or were invested in shares and/or securities at the choice of the plaintiff. He further contends that he or his late brother never kept any account of the monies that were entrusted to the plaintiff and it was also the practice that as and when they required the :7: money, they were getting the same from their parents. He contends that CIDCO flat was purchased by plaintiff from the money so deposited by him and his brother in plaintiff’s account, from time to time. He further contends that he himself and his deceased brother were also doing some business of marketing of household appliances and its spare parts, in partnership with one N.K.Pillai. He further contends that during his self employment, he came in contact with one J.P. Gandhi, through one of his chartered accountant friend and developed cordial relations with him. He was quite elder than him and had no children. . He further contends that during 1984 to 1990, said J.P.Gandhi helped him and his late brother Narendra by advancing money, directly to them and/or on their behalf or their instructions to the third parties. In the year 1984-85, said J.P.Gandhi paid a sum of Rs. 1,00,000/- to the defendant, which was repaid by him to J.P.Gandhi. In 1985-86, he and his late brother had received Rs. 3,00,000/- as a loan from J.P.Gandhi for doing business and the same has been also lateron repaid. He contends that on 13th November, 1986, on his request J.P.Gandhi advanced Rs. 5,00,000/- as a loan to the defendant for acquiring accommodation and the said loan was advanced by pay order, issued in favour of the plaintiff, on his instructions, without any security or guarantee. Defendant further contends that the entire consideration of the suit property was paid by him directly from his account and that if at all it had been the intention of the plaintiff to purchase property, he could have purchased it in his own name and he could have purchased it either in the name of plaintiff himself or in the name of mother (wife of the plaintiff) or in their joint name. He further contends that the :8: plaintiff never had repaid any amount towards the said loan of Rs. 5,00,000/- taken by him from J.P.Gandhi. He , therefore, contends that the suit property was purchased by him in his own name by his own money and, therefore, the plaintiff purchasing the suit property in his name, did not arise at all. He further contends that the entire consideration of the suit property has been paid by him alone. . He denies that the plaintiff was working as chief accountant and financial advisor of two reputed companies, in succession and had extensive income of his own. He further contends that he has been in continuous possession, use and occupation of the suit premises since he started residing there. With regard to the allegations of filing the complaint, he states that the said complaint was filed by the plaintiff with mala fide intention and ulterior motives. On these contentions, he claimed dismissal of the suit. 7. In view of the rival pleadings of the parties, the following issues are framed and I record my findings, against each of them, for the reasons given below :- ISSUES FINDINGS (1) Whether the Plaintiff ’s (1) Yes. claim in Suit is barred by limitation? (2) Whether the Plaintiff’s (2) Yes. claim in Suit is barred by the provisions of the Benami Transactions ( Prohibition of the Right to Recover Property) Act, 1988 ? (3) Does the Plaintiff prove (3) In the negative. that from his own separate f and self acquired funds, paid the entire purchase price of the CIDCO Apartment ? :9: (4) Does the Plaintiff prove (4) In the negative. that the Defendant contributed nothing towards the purchase price of the CIDCO Apartment? (5) Does Plaintiff prove that (5) In the negative. the Plaintiff was the absolute and exclusive beneficial owner of the CIDCO apartment? (6) Does the Plaintiff prove (6) In the negative. that the Defendant had no beneficial right, title, interest in the CIDCO Apartment? (7) Does the Plaintiff prove (7) In the negative. that he purchased the suit property nominally in the name of the defendant? (8) Does the Plaintiff prove (8) In the negative. that the entire price of the suit property was paid by the plaintiff out of his own self acquired funds, including by raising friendly loan? (9) Does the plaintiff prove (9) In the negative. that the defendant contributed nothing towards the purchase price of the suit property? (10) Does the Plaintiff prove (10) In the negative. that friendly loan of Rs. 5 lac advanced by Mr. J.P.Gandhi at his instance ad his own benefit only ? (11) Does the Plaintiff prove (11) In the negative. that the plaintiff is the real and beneficial owner of the suit property? (12) Does the Plaintiff prove (12) In the negative. that the Defendant has no beneficial right, title or interest in the suit property? (13) Does the Plaintiff prove (13) In the affirmative. that the plaintiff alone has been paying the monthly bills of the Society as also electricity bills in respect of the Suit property? (14) Whether the Plaintiff is (14) In the negative. entitled to a declaration :10: that the plaintiff is the sole absolute beneficial owner of the suit property and of the suit shares? (15) Whether the Plaintiff is (15) In the negative. entitled to a declaration that the defendant has no beneficial right, title, interest of whatsoever nature in the suit property? (16) What Order and decree? (16) Suit is dismissed as per Final Order. R E A S O N S R E A S O N S R E A S O N S AS TO ISSUE NOS. 3 TO 6.: AS TO ISSUE NOS. 3 TO 6.: AS TO ISSUE NOS. 3 TO 6.: 8. Before proceeding to consider these issues, it is necessary to take into consideration the background as to the earning capacity & the Plaintiff as also of the defendant. . It is undisputed that Plaintiff was serving as a Chief Accountant with Morarjee Spinning and Weaving Mills. He retired from that Company in May, 1979, as a Chief Accountant. I August, 1979, he joined Airfreight Pvt. Ltd., as a Financial Advisor. He resigned that post with Airfreight in September, 1984. Thereafter he rejoined Airfreight Pvt. Ltd. in August, 1987., as a Financial Advisor, only on retainers basis and gave up that assignment i September, 1993. 9. So far Plaintiff denies the case of the defendant that he was doing business. According to the Plaintiff, the business was only of his younger son Narendra, who expired in a car accident on 24.8.1986. In this regard, however, the case of the defendant, as stated by him in his evidence, is that he completed his graduation in Science in 1979. Thereafter, he signed Articleship for the C.A. Course. He states that he passed Intermediate :11: C.A. Group II Examiation in November, 1980. In the last quarter of 1981, he almost stopped doing CA course. Somewhere in the year 1980, his younger brother Narendra completed his graduation and he started working with one Mr. Alok Kumar Tholiya, who was running a business in electric goods and general items. Narendra obtained certificate of registration under the Bombay Sales Tax Act in the name of M/s. Narendra Enterprises for doing business of resale of electrical goods, That certificate is produced at Exhibit 63. At the same time, Narendra also joined business with one Mr. Alok Kumar Tholiya and started Luxury Travels and Tours in the middle of 1981. Thereafter Narendra purchased Ambassador Car, bearing registration No. RSI 476 (later MGI 252) by taking loan of Rs. 50000/- from UCO Bank. However, that business of Luxury Travels and Tours was not successful and Narendra left that business. It is, thereafter, the defendant started his own business in the name of Grand Auto Services and Narendra started business in the name of M/s. Narendra Enterprises. In support of this , the defendant has produced at Exhibit D-20, the visiting card of M/s. Grand Auto Services. The defendant further states that by the end of the year 1981, he noticed that there was huge demand of electronic calculators and imported quartz wrist watches. Therefore, he started dealing in customs duty paid electronic goods, specially, calculators. As Narendra failed in his own business, he joined him in dealing with the customs duty paid imported electronic goods. During that period they established good contacts with number of customers. The defendant further states that in 1982, India hoisted Asian Games in New Delhi and as a result, the Government had liberalised the import of Colour TVs and Colour transmission was introduced in Bombay, in 1982. :12: Consequently, there was huge demand of Colour TVs and VCRs. Therefore, he himself and his brother Narendra extended their business in buying and selling the Colour TVs and VCRs and in that business, the defendant states, he also obtained license to use sharp double cassette recorder on 27th August, 1982, which is produced by him at Exhibit D-19. Thereafter, he obtained a telephone connection in his own name by making payment out of the income earned from his business. The telephone connection was installed in Suprilina Apartment. During this business of electronic items, he came in contact with J.P.Gandhi, who became very much fond of him (defendant) and became his regular customer. As his contacts with J.P.Gandhi improved, the latter assured to help the defendant in establishing and promoting his business. Likewise, by 1983, his business was established and he became self-sufficient. In the middle of 1983, he decided to establish another business of his own as J.P.Gandhi assured his moral and financial support. In the meantime, he learnt of manufacturing of Mould/ dies/ tools and came in contact with Mr. M.K.Pillai, who was the owner of Plastic Dies Company and was very reputed and established person in manufacturing business. There is no material cross-examination to this evidence of the defendant and, therefore, that evidence establishes that right from the year 1980, the defendant was doing different businesses, mainly of selling electric and electronic goods, calculators, imported quartz writ watches, Colour TVs ad VCRs etc. According to the Plaintiff the entire business was on cash basis and that he used to make purchases on cash basis and also sell the gods o cash basis. 10. As to the purchase of CIDCO flat, the Plaintiff’s :13: case is that it is he who made an application to CIDCO, on behalf of the defendant to get the flat. At his instance that the defendant made application to CIDCO for getting the flat. That application is produced at Exhibit P-2. It is dated 13th February, 1984. According to him, alongwith the application, he had paid the sum of Rs. 10000/- by way of demand draft, dated 9.1.1984, drawn in favour of the CIDCO and CIDCO issued the receipt, dated 10th January, 1984 and further according to him, he made the payment of Rs. 63,000/- on 16.3.1984 and another amount of Rs. 63,000/- on 24th May, 1984 by purchasing the demand draft from Dena Bank, in favour of CIDCO and likewise, he paid the total consideration of Rs. 1,36,000/- He states that these amounts were paid by him from his self acquired funds. 11. There is no dispute as to the fact that these three demand drafts were taken out from the Plaintiff’s account with Dena Bank, drawn in favour of CIDCO. The question further is whether the funds lying with Dena Bank in account of the Plaintiff were his self acquired funds or they were of the defendant. In this connection, the case of the defendant is that these demand drafts were taken out from the money, deposited by him and his brother Narendra in the account of the plaintiff, from time to time, from the income of their business. 12. Under these circumstances, that the capacity of the Plaintiff to earn these amounts, will have to be looked into. . In this connection, the plaintiff has admitted that during August, 1979 to September, 1984, the Plaintiff was employed with Airfreight Private Ltd. He :14: joined that company after he retired from the services of Morarjee Gokuldas Spinning and Weaving Mills, in May, 1979. Plaintiff admits that during the period from 1979 to 19084, his main income was from salary and he was receiving the salary by cheque from Airfreight Company, which was being deposited in Dena Bank Account No. 5251, the account from which the demand drafts were taken in favour of CIDCO, for making payment of the price of the CIDCO flat. The Plaintiff has produced the pass book of Dena Bank Account at Exhibit P-9. It is for the period from February, 1983 to March, 1985. The first payment of Rs. 1000/- was made on 9.1.1984 to CIDCO. By the end of December, 1983, the closing balance standing in this account of the Plaintiff was only Rs. 3221.50 Ps. Then on 9.1.1984, there is deposit of Rs. 5,000/- and there is again deposit of Rs. 20,000/-. The Plaintiff is unable to explain as to how these deposits, particularly of Rs. 25,000/- came to be made. It is admitted by the Plaintiff, that he retired from Airfreight - in September, 1984 and he was getting his salary by cheque. However he has not stated as to what was his monthly salary. 13. As against this, the defendant has stated that he himself and his brother Narendra used to make cash deposits in the account of the Plaintiff with Banks, from time to time. They were getting money from their parents i.e. the plaintiff and his wife, as and when they required. That was so because, at the relevant time, there was cordial relations between the plaintiff, defendant, Narendra and the plaintiff’s wife i.e. their mother. It is from these deposits, that the expenses used to be incurred. A perusal of the Dena Bank Passbook of the plaintiff, shows that there are deposits of large sums like 20,000/-, 16,000/-, 40,000/-, :15: 50,000/-, 3000/-, 5000/-, 20,000/-, at different times to which there is no explanation from the Plaintiff. It, therefore, appears that the evidence of the defendant probable and most reliable when he states that he was depositing his income from business in the plaintiff’s bank account. 14. As to the next two payments of Rs. 63,000/-, one on 16.3.1984 and another on 24.5.1984, the defence of the defendant is that, even these two amounts were also deposited by him in the account of the Plaintiff and that is fortified by the entries in the passbook. There is entry of deposit of Rs. 63,000/- on 8.3.1984 against which the demand draft of Rs. 63,000/- was taken out on 16.3.1984. Similarly, there is entry of Rs. 60,000/- on 22.5.1984 against which the demand draft of Rs. 63,000/- was taken out on 24.5.1984. The defendant has further stated that he himself and his brother Narendra had entrusted almost entire income generated from their business, with the Plaintiff and those amounts were deposited in plaintiff’s account in banks and he was holding such huge amounts on their behalf. He further states that he himself and his brother were not in a position to make the payments to CIDCO from their account due to the nature of their business, which was exclusively on cash basis. The Plaintiff, at the instance of the defendant, agreed to obtain demand draft for an aggregate amount of Rs. 1,36,000/-, in favour of CIDCO on his (defendant’s) behalf, from his bank account. 15.