Madras High Court
Valliammal ... 5Th Defendant / 5Th ... vs Arunachalam ... Plaintiff / ... on 9 March, 2022
1 S.A.(MD)No.647 of 2010
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 09.03.2022
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
S.A.(MD)No.647 of 2010
Valliammal ... 5th Defendant / 5th Respondent /
Appellant
vs.
1.Arunachalam ... Plaintiff / Appellant /
1st Respondent
2.Kannappan ... 1st Defendant / 1st Respondent /
2nd Respondent
3.Subbaiah ... 2nd Defendant / 2nd Defendant /
3rd Respondent
4.Umayal Ammal (died) ... 3rd Defendant / 3rd Respondent /
4th Respondent
5.Suthandiram Chettiar ... 4th Defendant / 4th Respondent /
5th Respondent
6. Sankara Ammal ... 6th Defendant / 6th Respondent /
6th Respondent
7.Sornalakshmi ... 7th Defendant / 7th Respondent /
7th Respondent
(R1 to R3, R6 & R7 are recorded as
Lrs of the deceased R4 vide order dated
30.04.2014 by this Court)
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1/18
2 S.A.(MD)No.647 of 2010
Prayer: Second appeal filed under Section 100 of C.P.C.,
against the decree and judgment made in A.S.No.57 of 2003,
dated 25.02.2005 on the file of the Subordinate Judge,
Sivagangai in reversing the judgment and decree in O.S.No.92
of 1997 on the file of the Principal District Munsif Court,
Sivagangai, dated 27.03.2002.
For Appellant : Mr.S.Ramesh,
for Mr.V.Ragavachari.
For Respondents : Mr.Srinivasaraghavan,
***
JUDGMENT
The contesting defendant in O.S.No.92 of 1997 on the
file of the Principal District Munsif Court, Sivagangai is the
appellant in this second appeal.
2.The suit was filed by the first respondent herein
namely Arunachalam seeking the relief of partition of the suit
property and allotment of 5/16th share therein. The appellant
herein filed written statement controverting the plaint
averments. Based on the divergent pleadings, the trial court
framed the necessary issues. The plaintiff examined himself
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as P.W.1. One other witness was examined on his side. Ex.A1
to Ex.A6 were marked. The appellant examined herself as
D.W.1. The first defendant Kannappan was examined as
D.W.2. The third defendant Umayal Ammal was examined as
D.W.3. The sale deed executed in favour of the appellant
under Ex.B1 dated 10.12.1997 was marked. After
consideration of the evidence on record, the trial court by
judgment and decree dated 27.03.2002 dismissed the suit.
Challenging the same, the plaintiff filed A.S.No.57 of 2003
before the Sub Court, Sivagangai. By the impugned judgment
and decree dated 25.02.2005, the decision of the Trial Court
was reversed and the appeal was allowed and preliminary
decree was passed allotting 1/6th share in the suit property in
favour of the plaintiff. Challenging the same, this second
appeal came to be filed.
3.The second appeal was admitted on 26.07.2010 on
the following substantial questions of law:-
“1.Whether the Benami Prohibition Act is not
retro-active and retrospective?
2.Is the Court below correct in presuming the
joint family income, when there is no proof of
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availability of joint family property or income?
3.Was not the lower Appellate Court wrong in
presuming the joint family acquisition?
4.What is the scope and effect of the various
provisions of the Benami Prohibition Act 7 of 1998
on the suit transaction ?
5.Is the plaintiff not estopped from making
claim against the bonafide purchaser for value, by
5th defendant from the apparent title-holder?”
4.Even before the commencement of the argument,
the learned counsel for the appellant submitted that the
appellant shall deposit a sum of Rs.1.00 lakh to the credit of
the suit so that the plaintiff Arunachalam can withdraw the
same on certain conditions. This undertaking given by the
appellant is recorded.
5.The learned counsel appearing for the appellant
reiterated the contentions set out in the memorandum of
grounds and called upon this Court to answer the substantial
questions of law in favour of the appellant and set aside the
decision of the first Appellate Court and restore the judgment
and decree passed by the Trial Court.
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6.Per contra, the learned counsel appearing for the
plaintiff / contesting respondent submitted that no substantial
question of law arises for consideration.
7.I carefully considered the rival contentions and
went through the evidence on record.
8.There is no dispute that Shanmugavel Asari got
married to Umayal Ammal and through the wedlock, the
plaintiff, 1st defendant, 2nd defendant , 6th defendant and 7th
defendant were born. The suit property was purchased on
09.09.1981 in the name of Umayal Ammal. After the demise of
Shanmugavel Asari, upon coming to know that Umayalammal /
mother was proposing to sell the suit property, the plaintiff
filed O.S.No.92 of 1997 on 13.03.1997. After institution of the
suit, Umayal Ammal sold the suit property in favour of the 4th
defendant Sudanthiram Chettiar under Ex.A2 dated
24.03.1997. The 4th defendant in turn sold the suit property
through his power agent in favour of the appellant (D5) under
Ex.A4 dated 10.12.1997.
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9.The Trial Court framed an issue as to whether the
suit property was purchased out of the joint family funds in
the name of the 3rd defendant. A categorical finding was
rendered by the Trial Court that the suit property was
purchased out of the joint family funds in the name of the 3rd
defendant. It was specifically held that the funds were created
by the joint efforts of the plaintiff, defendants 1 &2 and their
father.
10.The learned counsel appearing for the first
respondent pointed out that this finding was not challenged by
the appellant either by filing cross objection or under Order
41 Rule 33 of C.P.C. In any event, the evidence on record
clearly points to the said fact. Admittedly, Umayal Ammal was
not engaged in any gainful employment. She was only a house
wife. She had no other source of income. The suit property
was purchased for a sum of Rs.18,700/- in the year 1981.
Umayal Ammal was only a name lender and nothing else. The
Trial Court after giving such a finding in favour of the plaintiff
dismissed the suit by invoking the statutory bar contained in
Section 4(3) of the Prohibition of Benami Property
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Transactions Act, 1988.
11.The first substantial question of law formulated at
the time of admission had already been answered by the
Hon'ble Supreme Court in the decision reported in 1995 2
SCC 630 (R. Rajagopal Reddy (Dead) by L.Rs. and Ors.
vs. Padmini Chandrasekharan (Dead) by L.Rs.) in the
following terms:-
“Before we deal with these six considerations which
weighed with the Division Bench for taking the view that Section
4 will apply retrospectively in the sense that it will get telescoped
into all pending proceedings, howsoever earlier they might have
been filed, if they were pending at different stages in the
hierarchy of the proceedings even upto this Court, when Section
4 came into operation, it would be apposite to recapitulate the
salient feature of the Act. As seen earlier, the preamble of the Act
itself states that it is an act to prohibit benami transactions and
the right to recover property held benami, for matters connected
therewith or incidental thereto. Thus it was enacted to efface the
then existing rights of the real owners of properties held by
others benami. Such an act was not given any retrospective
effect by the legislature. Even when we come to Section 4, it is
easy to visualise that Sub-section (1). of Section 4 states that 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 shall lie by or on behalf of a
person claiming to be the real owner of such property. As per
Section 4(1) no such suit shall thenceforth lie to recover the
possession of the property held benami by the defendant.
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Plaintiffs right to that effect is sought to be taken away and any
suit to enforce such a right after coming into operation of Section
4(1) that is 19th May, 1988, shall not lie. The legislature in its
wisdom has nowhere provided in Section 4(1) that no such suit,
claim or action pending on the date when Section 4 came into
force shall not be proceeded with and shall stand abated. On the
contrary, clear legislative intention is seen from the words "no
such claim, suit or action shall lie", meaning thereby no such suit,
claim or action shall be permitted to be filed or entertained or
admitted to the portals of any Court for seeking such a relief
after coming into force of Section 4(1). In Collins English
Dictionary, 1979 Edition as reprinted subsequently, the word 'lie'
has been defined in connection with suits and proceedings. At
page 848 of the Dictionary while dealing with topic No. 9 under
the definition of term 'lie' it is stated as under :-
For an action, claim appeal ect. to subsist; be maintainable or
admissible. The word 'lie' in connection with the suit, claim or
action is not defined by the Act. If we go by the aforesaid
dictionary meaning it would mean that such suit, claim or action
to get any property declared benami will not be admitted on
behalf of such plaintiff or applicant against the concerned
defendant in whose name the property is held on and from the
date on which this prohibition against entertaining of such suits
comes into force. With respect, the view taken by that Section
4(1) would apply even to such pending suits which were already
filed and entertained prior to the date when the Section came
into force and which has the effect of destroying the then existing
right of plaintiff in connection with the suit property cannot be
sustained in the face of the clear language of Section 4(1). It has
to be visualised that the legislature in its wisdom has not
expressly made Section 4 retrospective. Then to imply by
necessary implication that Section 4 would have retrospective
effect and would cover pending litigations filed prior to coming
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into force of the Section would amount to taking a view which
would run counter to the legislative scheme and intent projected
by various provisions of the Act to which we have referred
earlier. It is, however, true as held by the Division Bench that on
the express language of Section 4(1) any right inhering in the
real owner in respect of any property held benami would get
effaced once Section 4(1) operated, even if such transaction had
been entered into prior to the coming into operation of Section
4(1), and hence-after Section 4(1) applied no suit can lie in
respect to such a past benami transaction. To that extent the
Section may be retroactive. To highlight this aspect we may take
an illustration. If a benami transaction has taken place in 1980
and suit is filed in June 1988 by the plaintiff claiming that he is
the real owner of the property and defendant is merely a
benamidar and the consideration has flown from him then such a
suit would not lie on account of the provisions of Section 4(1).
Bar against filing, entertaining and admission of such suits would
have become operative by June, 1988 and to that extent Section
4(1) would take in its sweep even past benami transactions which
are sought to be litigated upon after coming into force of the
prohibitory provision of Section 4(1); but that is the only effect of
the retroactivity of Section 4(1) and nothing more than that.
From the conclusion that Section 4(1) shall apply even to past
benami transactions to the aforesaid extent, the next step taken
by the Division Bench that therefore, the then existing rights got
destroyed and even though suits by real owners were filed prior
to coming into operation of Section 4(1) they would not survive,
does not logically follow.”
The Central Act 45 of 1988 was amended by the Act 43 of
2016. Sub Section 3 of Section 4 of the Act was omitted.
2016 amendment is not retrospective and hence, the case on
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hand will have to be determined with reference to the
un-amended provisions.
12.The Trial Court had given a categorical finding
that there was a joint family income and that it was generated
by the joint efforts of the father and two sons. This finding of
fact was not challenged by the appellant before the first
Appellate Court. It is true that since the suit itself came to be
dismissed, there was no question of the appellant having to
file an appeal. But then, nothing prevented the appellant from
filing a cross objection challenging the adverse finding
rendered against her. Even without filing a cross objection,
the appellant could have canvassed the said point under Order
41 Rule 33 of C.P.C. She did not do so. This not only proves
the availability of a joint family income but also proves that
the suit property itself was purchased only out of the joint
family funds. Therefore, the second and third substantial
questions of law are also answered against the appellant.
13.With utmost respect, I have to comment that the
formulation of the fifth substantial question of law is not
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proper. There is no question of the principle of estoppel
operating against the plaintiff. If by his conduct, the plaintiff
had induced the other party to do or refrain from doing an act,
the plaintiff cannot be allowed to go back on the same. But in
this case, even before the first alienation took place, the
plaintiff had filed the suit. The appellant was the purchaser
from an alienee. The appellant did not purchase from the
plaintiff's mother Umayal Ammal. In that event, she can be
considered as a bonafide purchaser. The appellant had
purchased from the 4th defendant in the suit. Therefore, the
question of the plaintiff being estopped will not arise. The fifth
substantial question of law is also answered against the
appellant.
14.The un-amended Section 4 of the Act is as follows:-
“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.
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(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
(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.”
15.Since Umayal Ammal could not have been a
member of the coparcenary, Section 4(3)(a) of the Act will not
apply. The only question that arises for consideration is
whether the case on hand will fall within Section 4(3)(b) of the
Act. If Umayal Ammal was standing in a fiduciary capacity
holding the property for the benefit of the other members of
the joint family, then the statutory bar set out in Section 4(1)
of the Act will not apply. It is true that the plaintiff came out
with a specific case that the suit property was purchased out
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of the joint family funds and his contention was also upheld.
But that by itself will not be sufficient to save the suit from
Section 4(1) of the Act. Before 2016 amendment, the statute
read that the purchase of the property by any person in the
name of his wife or un-married daughter shall be presumed,
unless the contrary is proved, that the suit property had been
purchased for the benefit of his wife or the un-married
daughter. These are pure questions of fact.
16.I carefully went through the plaint averments.
The plaintiff has nowhere alleged that Umayal Ammal held the
property for the benefit of the joint family members. Mere
pleading that she was a name lender would not be sufficient.
If Umayal Ammal was running the family business and was in
a dominant position, then, the purchase of a property from out
of the joint family funds would be in the nature of a trust. It
can be stated that she was holding the property for the benefit
of all the members of the joint family. But such is not a case
here. Umayal Ammal was a mere housewife. It was
Shanmugavel Asari who purchased the property in the name
of his wife from out of the joint family funds. The statute
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would presume that the purchase was for the benefit of
Umayal Ammal and it was not a benami purchase. Of-course,
the presumption is rebuttable. To rebut the statutory
presumption, there must be firm foundation in pleadings as
well as evidence. In the pleadings, there is no averment that
Umayal Ammal held the property for the benefit of the joint
family members. Umayal Ammal examined herself as D.W.3
and not even a suggestion has been put in this regard. This is
a clear case of complete lack of pleadings and lack of proofs.
The very purpose of enacting the Central Act 45 of 1988 is to
prohibit the benami transactions. Of-course, the statute
carved out certain exceptions. But then, every benami
transaction cannot be allowed to be sustained by bringing it
within the scope of the exceptions.
17.The Hon'ble Delhi High Court in Peeyush
Aggarwal Vs. Sanjeev Bhavnani (2013 SCC ONLINE DEL
2397) observed as follows:-
“25. Even otherwise I am unable to see as to how the case
built by the plaintiff does not fall in the trap of benami. The case
in nutshell of the plaintiff is of the shares (which are property
within the meaning of Section 2(c) of the Benami Act) though in
the name of the defendant, being owned by the plaintiff and the
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present suit has been filed by the plaintiff to enforce rights in the
said shares held benami by the defendant and which is clearly
within the bar of Section 4 of the Benami Act.
26. The plaintiff even otherwise has been unable to plead a
case of ‘trust’. The defendant did not stand in the position of a
trustee with the plaintiff and merely because the word ‘trust’ is
used does not allow a transaction to be taken out of Benami Act.
Section 4(3)(b) of the Benami Act while carving out an exception
in this regard, is applicable only where the person in whose
name the property is held is a trustee or stands in a fiduciary
capacity qua the beneficiary.
30. I find the aforesaid view to have been followed in D.N.
Kalia v. R.N. Kalia 178 (2011) DLT 294 where also, the defence
of the plaintiff being only the Benami owner and holding the
property in trust for the defendant and other family members,
was held to be not tenable in view of the Benami Act and the
exception contained in Section 4(3)(b) held to be not
available...... The term fiduciary is not restricted to technical or
express trusts but includes even such offices or relations as
those of an attorney at law, a guardian, executor, broker, a
director of a Corporation, and a public officer. Finding no such
office or relationship in the facts of that case, mere plea of the
Benami holding the property in a fiduciary capacity was held to
be insufficient to escape the bar of the Benami Act.“
18.A careful reading of the statutory scheme as
applied to the factual matrix leads me to the conclusion that
the purchase of the suit property was very much for the
benefit of Umayal Ammal and therefore, the appellant did
acquire valid title under Ex.A5. The fourth substantial
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question of law is answered in favour of the appellant. The
impugned judgment and decree passed by the first Appellate
Court is set aside. The decision of the Trial Court is restored.
19.As per the undertaking given by the appellant, the
appellant is directed to deposit a sum of Rs.1.00 lakh within a
period of six weeks from the date of receipt of copy of this
judgment to the credit of the suit in OS No.92 of 1997 on the
file of the Principal District Munsif Court, Sivagangai. The
said amount shall remain in court deposit for a period of one
year. If the plaintiff Arunachalam decides to accept this
judgment, it is open for him to withdraw the said amount. Of
course, the original document (Ex.A1) marked by the appellant
will be handed over to the appellant herein on an appropriate
application to be filed by him. The second appeal is allowed.
No costs.
09.03.2022
Index : Yes / No
Internet : Yes/ No
rmi/skm
Note: In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may be
utilized for official purposes, but, ensuring that the
copy of the order that is presented is the correct
copy, shall be the responsibility of the
advocate/litigant concerned.
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To:
1. The Subordinate Judge, Sivagangai.
2. The Principal District Munsif, Sivagangai
3. The Record Keeper, V.R.Section,
Madurai Bench of Madras High Court,
Madurai.
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G.R.SWAMINATHAN, J.
rmi/skm
S.A.(MD)No.647 of 2010
09.03.2022
https://www.mhc.tn.gov.in/judis
