The division judge bench of Justice Uday Umesh Lalit, Justice S. Ravindra Bhatt, and Justice Sudhanshu Dhulia of the supreme court of India in the case of Pushpalata vs Vijay Kumar (dead) thr. Lrs and Ors held that as a matter of law, the principle that one who alleges that a property is Benami and is held, nominally, on behalf of the real owner - in cases which form the exception, under Section 4 (3) – has to displace the initial burden of proving that fact. Such proof can be through evidence, or cumulatively through circumstances.
BRIEF FACTS
The factual matrix of the case is that the first plaintiff purchased the property in the name of Vijay Kumar (i.e., his son and first defendant) and another land was purchased in the name of his two sons - Vijay Kumar and Rajendra Kumar. Thereafter, the first plaintiff stated these properties were bought by him for the proper maintenance and education of his children; he was involved in the construction business.
Laxmi Prasad filed a suit on behalf of himself, his wife, and two daughters against his two sons (first and second defendants) and the purchasers of the property (third and fourth defendants), seeking the sale deed to be set aside and a declaration of title relief. The plaintiffs contended that they, as well as the first and second defendants, were members of a HUF and that the original first defendant (Vijay Kumar) was a Benami owner who could not have alienated the suit property. The properties were allegedly paid for or purchased by the first plaintiff, Laxmi Prasad, and the first two defendants, both minors, had no source of income. Rajendra Kumar provided written testimony.
Further, the trial court dismissed the suit on the ground that the original plaintiff had failed to prove by cogent evidence that the suit property was purchased for the welfare of the co-parceners of the HUF and declared that the first defendant had the right to sell the disputed properties in his name. The appellate court declined the plaintiffs’ appeal holding that the first plaintiff himself intended for the first defendant to be the absolute owner, and it was not a Benami transaction.
The learned counsel appearing on behalf of the petitioner contended that the defendants at that time were minors and they didn't have their own source of income. It was urged that the plaintiffs were joint owners of the property, and being coparceners, out of love and affection, the properties were registered in the names of the defendants. The learned counsel further relied upon the judgment titled Valliammal v. Subramaniam to contend that it is not only the documentary evidence but the surrounding circumstances, such as who funded the transaction, relationship of the parties, nature of possession after the sale, etc., that had to be considered. It was urged that the material on records, such as the pleadings and evidence, established the plaintiffs’ claim. Counsel stressed the fact that the first plaintiff’s deposition about having paid for the property, and that the first two defendants were his sons, went unrebutted. Furthermore, the first defendant did not produce any material to support that he had the funds or the means of livelihood to purchase the properties. Likewise, the second defendant supported the plaintiffs, and admitted to the suit averments; he also deposed in favor of the plaintiffs. Counsel urged that in these circumstances, the findings of the two courts below were contrary to the evidence. The High Court, in declining to hold that the questions of law were to be answered in favor of the plaintiffs, erred in law.
The learned counsel appearing on behalf of the respondent contended that the high court has correctly dismissed the suit as being barred by section 4 (1) of the act. It was also argued by the learned counsel that the first appellant court is the last arbiter on facts and evidence, and that it ought not to be interfered with, given the absence of any substantial question of law, and if the present court interferes with the concurrent findings. Then the discretion under Article 136 of the Constitution, should not be invoked to upset the findings of the courts below.
COURT’S OBSERVATION
The hon’ble court stated that as a matter of law, the principle that one who alleges that a property is Benami and is held, nominally, on behalf of the real owner - in cases which form the exception, under Section 4 (3) – has to displace the initial burden of proving that fact. Such proof can be through evidence, or cumulatively through circumstances. This fact was brought home, by this court, in Marcel Martins v. M. Printer. In that case, the issue was whether the transfer of rights in favor of one of the siblings, in the absence of a will, by the person having interest (as a tenant in the property), after her death, operated to exclude the other heirs. The court held that the transfer was made to fulfill a municipality’s requirement, and the property was held by the one in whose name it was mutated, in a fiduciary capacity, under Section 4(3)(a) of the Act, on behalf of the siblings.
In the present case, the analysis of evidence and pleadings, on the record would show that the first plaintiff, Laxmi Prasad, had averred that the properties were purchased for the maintenance and education of his children; that he had constructed a two-storied building at a cost of Rs 7,00,000/- from his earnings as a contractor, and that he was in possession of the property. He also positively averred that the two sons (i.e., ostensible owners) were minors, with no source of income at the time of purchase. The first defendant (Vijay Kumar) no doubt generally denied these allegations. However, he did not deny that he was a minor at the time of purchase of the properties; he set up no additional plea of any source of income, or that someone had lent the money to fund the purchase of the property. The second defendant (Rajendra Kumar), admitted to plaint allegations and even deposed in favor of his father. He alleged that the first defendant was unemployed and had assaulted his father.
The hon’ble apex court stated that the circumstances under which a claim against a Benami owner can be said to be proved, under Section 4(3)(a) of the Act, the conclusions drawn by the trial court and first appellate court, are plainly erroneous, given the evidence on record. The High Court, in the opinion of this court, fell into error in not noticing the correct position in law.
The hon’ble court after considering the judgment titled Collector Singh v. L.M.L. Ltd and Nizam v. State of Rajasthan stated that the discretionary nature of this court’s jurisdiction, under Article 136 goes, the respondents are correct in highlighting that the court would rarely interfere with concurrent findings. However, the jurisdiction, it has been reiterated is wide, and in exceptional cases, interference is called for.
At last, the court held that the elements which are necessary to establish Benami ownership within the meaning of Section 4 (3) (a) of the Act, in terms of the judgments in Binapani Paul and Valliammal (supra) have been satisfied by the first plaintiff.
CASE NAME- Pushpalata vs Vijay Kumar (dead) thr. Lrs and Ors
CITATION- CIVIL APPEAL NO. 4078 OF 2022
DATED- 05.09.22
CORUM- Justice Uday Umesh Lalit, Justice S. Ravindra Bhatt, and Justice Sudhanshu Dhulia
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