IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.09.2008 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA A.S.NO.1069 Of 1995 1.Narayanasamy Gounder 2.Krishnan .. Appellants/Defendants vs. K.Sekar .. Respondent/Plaintiff Appeal filed u/s 96 of CPC preferred against the judgment and decree dated 27.4.1995 passed in O.S.No.182 of 1989 by the Subordinate Judge, Tiruvannamalai. For Appellants : Mr.V.Raghavachari For Respondent : Mrs.Suganya Duraichamy for Mr.N.Venkatachalapathy JUDGMENT This appeal is focussed as against the judgment and decree dated 27.4.1995 passed by the Subordinate Judge, Tiruvannamalai in O.S.No.182 of 1989, which is a suit for declaration of title and for recovery of possession of house property. For convenience sake, the parties are referred to here under according to their ligitative 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) Plaintiff is the D1's daughter's son, so to say he is the maternal grant-son of D1. D2 is the son of D1. The plaintiff and D1 were doing jointly grocery business at Santhavasal Village from August 1982 till January 1988. Consequent upon the misunderstanding, which erupted between them, in conducting the business, the plaintiff stopped attending the joint business and the accounts between them are yet to be settled relating to it. (b) the plaintiff started his own independent business and earned money sufficiently and purchased from one K.Krishnamurthy, S/o.Konda Reddy vide Sale Deed dated 6.11.1996, the vacant site, https://hcservices.ecourts.gov.in/hcservices/ which constituted the Eastern portion of the vendors larger extent of land. The Western portion was purchased by D1 from the very same Krishnamurthy. (c) The plaintiff and D1 bore the expenditure involved in making construction over the vacant site and it was constructed in such a manner that the Eastern portion of the building would constitute one Unit and the Western portion would constitute another unit. The plaintiff has been paying tax for the Eastern portion and enjoying it as full owner, in all aspects. (d) Since the plaintiff refused to marry the daughter of D2, bad blood started running in the relationship between the plaintiff and the defendants and the latter unlawfully occupied the Eastern portion also, which necessitated the plaintiff to file the suit for declaration of title over the suit property and for delivery of possession, in addition to praying for mesne profits. 3. Remonstrating and refuting, gainsaying and contradicting the allegations/averments in the plaint, D2 filed the written statement, which was adopted by D1, the pith and marrow of it would run thus:- The relationship among the parties is an admitted one. The plaintiff did not have had the financial wherewithal to purchase the suit property as claimed by him and he had no business of his own. The plaintiff never spent any money for constructing the superstructure as claimed in the plaint. Barefaced lie as it is, that the plaintiff and D1 were doing joint family business. Even though the sale deed stands in the name of the plaintiff, nonetheless, the entire sale consideration was paid by the second defendant only and the plaintiff had not contributed anything for raising the construction over the suit property. D2 stood as surety for the grant of loan by the State Bank in the name of the plaintiff, which is indicative of the fact that D2 only raised money. Accordingly, the defendants prayed for the dismissal of the suit. 4. The trial Court framed the relevant issues. During trial the plaintiff examined himself as P.W.1 apart from examining P.W.2-Ganesa Gounder and P.W.3-Gopal Mudaliar and Ex.A1 to Ex.A29 were marked on the plaintiff's side. On the side of the defendants, the second defendant was examined as D.W.1 apart from examining D.W.2 to D.W.6 and Ex.B1 to Ex.B7 were marked. 5. Ultimately, the trial Court decreed the suit. Being aggrieved by and dissatisfied with the judgment and decree of the trial Court the defendants filed this appeal on various grounds, the warp and woof of them would run thus:- (a) Ignoring the fact that the plaintiff had not proved his https://hcservices.ecourts.gov.in/hcservices/ financial ability and capability to purchase the plot and raise construction, the trial Court simply decreed the suit. (b) Absolutely there is no evidence before the trial Court to arrive at the conclusion that the plaintiff, from out of his own income, purchased the plot and raised construction thereon. (c) the trial Court should have considered the evidence of P.W.1 that he offered to receive Rs.70,000/- in full and final quit of his claim before the panchayatdars and (d) without any valid reasons, the trial Court rejected the evidence of the defendants. 6. The points for consideration are as to: (i) Whether the suit vacant site was purchased in the name of the plaintiff from out of the funds of D2 and whether the superstructure also was raised at the cost of D2? (ii) Whether Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 would operate as against the plea of the defendants? (iii) Whether there is any infirmity in the judgment and decree of the trial Court. 7.Points (i) and (ii): These two points are taken together for discussion as they are inter-woven and inter-linked with each other. 8. At the outset I would like to refer to Section 4(1) of the Benami Transactions(prohibition) Act, 1988(hereinafter referred to as the 'Act') and the same is extracted here under:- "4.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." 9. By way of interpreting the said provision, the Honourable Apex Court in the judgment reported in (1995) 2 Supreme Court Cases 630 – R.RAJAGOPAL REDDY(DEAD) BY LRs. AND OTHERS VS. PADMINI CHANDRASEKHARAN(DEAD) BY LRs, held that Section 4(1) is not retrospective but it is retroactive in operation. 10. The learned counsel for the defendants would try to interpret Section 4(1) as though it will not operate as against past benami transactions which emerged anterior to the coming into vogue of the said Act. Such an argument is found torpedoed and bore down by the verdict in the cited decision itself. Certain excerpts from it would run thus:- https://hcservices.ecourts.gov.in/hcservices/ "5. Learned counsel appearing for the plaintiffs concerned submitted before us that Section 3,5 and 8 of the Act came into force on 5.9.1988 when the Act received the President's assent and the remaining sections were deemed to have come into force on 19.5.1988 and that prior to the coming into force of the Act and the relevant provisions thereof, litigations were already filed by the parties and they had to be governed by the then existing law which held the field at the time of initiation of these proceedings and that there is nothing in the Act to indicate that any of the provisions of the Act including Section 4(1) has any retrospective effect. They further contended that even the Division Bench of this Court in Mithilesh Kumari case has taken the view that Section 3(1) of the Act is prospective in operation. Under these circumstances, they submitted that it would be inconsistent to hold that though the Act is not retrospective it would apply to all pending proceedings at whatever stage they might be and such proceedings would incur dismissal under Section 4(1). They submitted that there was a substantive right in the plaintiff under the existing laws which had sanction of more than a century, under which consistently such benami transactions were recognised and could be enforced by courts of law. That this substantive right is sought to be taken away by Section 4(1) and unless there is anything to suggest that it is retrospective in operation, it could not be treated to be retrospective. 6. Learned counsel appearing for the respondents/defendants on the other hand submitted that even though the Act may not be retrospective, at least to properties and when rights arising therefrom are sought to be put to an end by Section 4(1) which covers any or every property held benami, there is no reason why the said section cannot apply to such proceedings at any stage till they get finally decided by the highest court in the hierarchy. If there is any change in law by which any pending litigation becomes incompetent, such change in law can be applied to such pending proceedings at whatever stage they might be pending before higher courts. In short they submitted that the decision rendered by Saikia, J. in Mithilesh Kumari case lays down correct law and requires no reconsideration. 7. Having given our anxious consideration to these rival contentions, we have reached the conclusion that the question has to be answered in the negative and it must be held that the decision of the Division Bench taking a contrary view does not lay down correct law. https://hcservices.ecourts.gov.in/hcservices/ 13. According to us this difficulty in inbuilt in Section 4(2) and does not provide the rationable to hold that this section applies retrospectively. The legislature itself thought it fit to do so and there is no challenge to the vires on the ground of violation of Article 14 of the Constitution. It is not open to us to rewrite the section also. Even otherwise, in the operation of Section 4(1) and (2), no discrimination can be said to have been made amongst different real owners of property, as tried to be pointed out i the written objections. In fact, those cases in which suits are filed by real owners or defences are allowed prior to coming into operation of Section 4(2), would form a separate class as compared to those cases where a stage for filing such suits or defences has still not reached by the time Section 4(1) and (2) starts operating. Consequently, latter type of cases would form a distinct category of cases. There is no question of discrimination being meted out while dealing with these two classes of cases differently. A real owner who has already been allowed defence on that ground prior to coming into operation of Section 4(2) cannot be said to have been given a better treatment as compared to the real owner who has still to take up such a defence and in the meantime he is hit by the prohibition of Section 4(2). Equally, there cannot be any comparison between a real owner who has filed such suit earlier and one who does not file such suit till Section 4 (1) comes into operation. All real owners who stake their claims regarding benami transactions after Section 4(1) and (2) came into operation are given uniform treatment by these provisions, whether they come as plaintiffs or as defendants. Consequently, the grievances raised in this connection cannot be sustained." 11. At this juncture I am of the opinion that the other decisions of the Honourable Apex Court also could be recollected fruitfully: (i) AIR 1974 SC 171 (Jaydayal Poddar (deceased through Lrs and another vs. Bibi Hazra and others) (ii) MLJ (11) 1976 470 (Kistappa Naicker and others vs. Elumalai Naicker) It is therefore clear that production of original document relating to the property concerned is also one of the factors to be considered in respect of Benami pleas. Here the original sale deed-Ex.A.3 has been produced by the plaintiff and not by the D2 and that also would go to show that D1 and D2 treated the plaintiff as the owner of the plot purchased by him. https://hcservices.ecourts.gov.in/hcservices/ 12. Decisions relating to Benami transaction: An excerpt from (1974) 1 SCC 3(Jaydayal Poddar (deceased) through L.Rs.and another vs. Mst.Bibi Hazra and others) would run thus:- "6. It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned; and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation, and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid test, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering the relevant indicia, the Courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, it any, between the claimant and the alleged benamidar; (5) the custody of the title-deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale. 7. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless No. 1 viz. the source, whence the purchase money came, is by far the most important test for determining whether the sale standing in the name of one person, is in reality for the benefit of another." https://hcservices.ecourts.gov.in/hcservices/ (i) 1980 (2) SCC 327 (Gapadibai vs. State of Madhya Pradesh) "3. .......In order to prove the benami nature of the transaction the State could have led evidence to show (1) that Defendant 5 paid the consideration, (2) that he had the custody of the sale deed, (3) that he was in possession of the property and (4) the motive for the transaction. None of these factors has been proved by the State.........." (ii) 2004 (7) SCC 233 (Valliammal (D) by LRs. vs. Subramaniam and others) "13. This Court in a number of judgments has held that it is well established that burden of proving that a particular sale is benami lies on the person who alleges the transaction to be a benami. The essence of a benami transaction is the intention of the party or parties concerned and often, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him, nor justify the acceptance of mere conjectures or surmises, as a substitute for proof. Refer to Jaydayal Poddar v. Bibi Hazra, Krishnanand Agnihotri v. State of M.P., Thakur Bhim Singh v. Thakur Kan Singh, Pratap Singh v. Sarojini Devi and Heirs of Vrajlal J. Ganatra v. Heirs of Parshottam S. Shah. It has been held in the judgments referred to above that the question whether a particular sale is a benami or not, is largely one of fact, and for determining the question no absolute formulas or acid test, uniformly applicable in all situations can be laid. After saying so, this Court spelt out the following six circumstances which can be taken as a guide to determine the nature of the transaction: “(1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; https://hcservices.ecourts.gov.in/hcservices/ (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties concerned in dealing with the property after the sale.” (Jaydayal Poddar v. Bibi Hazra1, SCC p. 7, para 6) (iii) (2007) 6 SCC 100 (Binapani Paul vs. Pratima Ghosh and others) In this judgment, the earlier judgment reported in 2004 (7) SCC 233 has been referred to. 13. As such, the Hon'ble Apex Court consistently held that the burden of proof is on the person, who put forth the plea on benami to prove the benami transaction by clearly pointing out that the money was not paid by the person, who purported to have purchased it but by the person who pleads benami. Here there is no reliable evidence adduced by the defendants to prove benami transaction also. 14. As such it is quite obvious that the suit has been filed in the year 1989 long after the coming into vogue of the provisions of the said Act and accordingly, the defendants' plea cannot be countenanced and upheld as sustainable in the eye of the Act. On this basis itself the appeal could be dismissed. 15. However, for the purpose of comprehensively deciding the appeal, I would like to discuss the evidence available on record, on merits. 16. Indubitably and indisputably the suit property stands in the name of the plaintiff as per the sale deed-Ex.A3 dated 6.11.1986. In such a case, the onus of proof is on the defendants to prove that from out of the funds of D2, the suit property was purchased as per Ex.A3. At this juncture I would also like to highlight that there could be no coparcenary or joint family in this factual matrix among the plaintiff, D1 and D2, as the plaintiff happened to be the maternal grand son of D1 and there is also nothing to indicate that there was joint family nucleus and from out of the income generated from it, the suit property was purchased and that the construction was put up. As such, the onus probandi is on the defendants to prove that from out of the income of the defendants the suit plot was purchased as per Ex.A3, in the name of the plaintiff, and over and above that they should also prove that the construction was put up from out of the defendants' income. Absolutely there is no convincing or clinching evidence in support of the plea of the https://hcservices.ecourts.gov.in/hcservices/ defendants. Whereas the documentary evidence available on the plaintiff's side would conclusively demonstrate and establish that it was the plaintiff, who purchased the suit plot and raised construction. 17. Ex.A5, Ex.A6, Ex.A21, Ex.A22 and Ex.A.23 are all tax receipts in the name of the plaintiff relating to the suit house and Ex.A5 which emerged anterior to the filing of the suit would speak volumes that the suit property was allowed to be in the name of the plaintiff even in the Property Tax Register. 18. Ex.A7 to Ex.A16 are all electricity fee receipts evidencing that the electricity connection available in the suit property stands in the name of the plaintiff only. This is an additional factor to show that the plaintiff is the real owner of the suit property and enjoying the electricity connection in his own name. 19. Ex.A24 to Ex.A26 are the electricity cards, which would also stand in the name of the plaintiff and thereby buttress the plaintiff's plea that he is the owner of the suit property. 20. Ex.A.28 is the statement of accounts issued by the State Bank of India to the plaintiff relating to his Bank account and Ex.A.29 is the pass-book concerned showing that the plaintiff had financial dealings with the Bank. 21. It is an admitted fact that the loan, for raising construction of the superstructure in the suit property, was raised by the plaintiff, for which D2 stood as surety. 22. The learned counsel for the defendants would try to expound and explain away by his argument that since Ex.A3-the sale deed stood in the name of the plaintiff, naturally for constructing superstructure, loan was borrowed in the name of the plaintiff. 23. Such an explanation fails to carry conviction with this Court for the reason that the subsequent conduct of the defendants in allowing the plaintiff to have the superstructure in his own name in the register of civic body, namely, the Municipality concerned, and the electricity connection also in his name would speak volumes that the defendants never intended that the said property should be their property and not the property of the plaintiff. There is also no indication that the loan was re-paid by the defendants. 24. Ex.A19 is the patta relating to various items of properties standing in the name of Kanna Gounder-the father of the plaintiff, which is relied on to demonstrate that the plaintiff also had the financial background and that he contributed money for the construction of the superstructure. https://hcservices.ecourts.gov.in/hcservices/ 25. Ex.A18 dated 21.6.1991- is the certificate of registration issued by the Deputy Commercial Tax Officer, North Arcot District, in the name of the plaintiff relating to his shop, namely, 'Sekar Store'. However, this emerged during the pendency of the suit. 26. Ex.A27 is the certificate dated 19.9.1994 issued by the Regulated Market, Arni, North Arcot, to the effect that for conducting business the plaintiff got licence from the Regulated Market. This also emerged during the pendency of the suit. However, the documents filed on the plaintiff's side would demonstrate that the plaintiff started business independently and he was having financial background. 27. Ex.B1-the Pass Book issued by the State Bank of India was relied on by the defendants to prove that even though the Savings Bank Account was in the name of the plaintiff, yet D2 alone was having control over the financial dealings. D2 is the close relative of D1 and in such a case merely by producing the Pass Book of the plaintiff, no adverse inference could be drawn as against the plaintiff that the money contemplated in the Pass-Book all belonged to D2. 28. Ex.B2 is the Sale Deed in favour of D1 relating to the Western portion as already referred to supra, which is having no probative force in the facts and circumstances of this case. 29. Ex.B3 is the patta in the name of D2, which was issued on 30.11.1992 during the pendency of the suit relating to the suit property. 30. It is a common or garden principle that patta alone would not constitute title and the fact remains that for the house in the suit property, the plaintiff has been paying tax as held supra, based on the house tax receipts filed by him, ever sine 1988. There is no direct evidence to indicate that D2 gave financial assistance to the plaintiff so as to purchase the plot and also for raising the superstructure. 31. The deposition of P.W.2 and P.W.3 are in support of the case of the plaintiff. P.W.3 would speak about the Panchayat held in connection with the apple of discard, which emerged between the plaintiff and the defendants. Whereas on the side of the defendants D.W.2-Kandasamy-the mason was examined to speak about the fact that it was D2, who gave money for purchase of building materials etc. In a case of this nature, such sort of evidence is far from satisfactory and it is quite obvious that a building mastry cannot speak about the ownership of the building and even for argument sake it is taken that D2 gave money to the plaintiff for the purchase of building materials, there is no presumption that D2 is the owner of the building. https://hcservices.ecourts.gov.in/hcservices/ 32. D.W.3 Arumugam would speak about the dispute that erupted between the plaintiff and D2 relating to the business and there is no specificity about it and no head