In order to appreciate the second submission, we have to start here with Rajagopala Reddy's case [1995 (2) SCC 630] and find out what it actually decided in regard to the Benami Transactions (prohibition) Act, 1988 (hereinafter called the 'Act'). Sections 3,5 and 8 of the Act came into force at once i.e. w.e.f. 5.9.1988 while the remaining provisions were deemed to have come into force from 19.5.1988. The principles decided in that case, while overruling Mithilesh Kumari Vs. Prem, Behari Khare [1989 (2) SCC 95], can be summarised as follows:
"(1) Firstly while section 4(1) prohibited a plea of benami to be raised in a suit, claim or action and again section 4(2) precluded a defence of benami in suits, claims or actions, - these two provisions did not come in the way of a decision on such pleas in matters pending as on 19.5.1988 if such pleas were already raised before 19.5.1988 by one party or other. This was because such pleas which were already raised
squarely apply to the facts of the present and, therefore, the
first question viz. "Whether in view of the provisions of
section 4 of the Benami Transactions (Prohibition) Act, 1988
which came into force on 19.5.1988, it was open for
Defendants to take defence that the suit transaction was a
Benami transaction?" is answered in the affirmative since
the plea was taken in 1982 prior to the Act coming into
force.
The second question viz. "Whether the said provision
of section 4 of the Act will have retrospective operation?" is
answered in the negative since it is specifically held that if
the plea is raised prior to 19.5.1988, the Act would not have
retrospective effect.
Bombay High Court
Ramkrishna Mahadeo Wagh vs Ramchandra Keshav Kulkarni on 18 March, 2011
Bench: V.M. Kanade
1. Heard the learned Counsel appearing on behalf of the
appellant and the learned Counsel appearing on behalf of
Respondent No.1.
2. Appellant is the original Plaintiff and Respondents are
original Defendants. For the sake of convenience parties
shall be referred to as "Plaintiff" and "Defendants".
3. Plaintiff filed suit for partition and separate actual
possession of the Plaintiff's one half share in the suit
property and future mesne profit alongwith costs of the suit.
Trial Court decreed the suit and held that the Plaintiff was
entitled to get separate possession of his one half share in
the suit property, subject to payment of additional court fee.
Against this order, Defendants filed appeal No.253 of 1984 in
the District Court and the decree of the Trial Court was set
aside. Being aggrieved by the aforesaid judgment and order 3
(SA 263/1989)
passed by the lower appellate court, Plaintiff has filed this
second appeal.
4. The additional grounds were tendered by the Plaintiff's
advocate at the time of admission and the second appeal
was admitted on the additional grounds which were
tendered by the Plaintiff. The second appeal, therefore, was
admitted on the following substantial questions of law:-
"20A) Whether in view of section 4 of Benami Transactions (prohibition) Act, 1988, which came into force on
19.5.88, it is now open to take the defence of the suit transaction being Benami?"
"20B) It should have been seen that the Honourable Supreme Court has
held that Sec. 4 of the said Act will be retrospective in operation and will have the effect of nullifying the
defence based on right in respect of property held Benami."
"20C) The Appellant submits that the facts and Circumstances of the present dispute needs to be reappreciated
especially in view of provisions of Benami Transactions (prohibition) Act being Act No.45 of 1988."
4
(SA 263/1989)
5. During the course of hearing of this second appeal, the
appellant/original Plaintiff has raised the following additional
grounds:-
(1) Whether the judgment and order of the lower appellate court is perverse since it has not taken into consideration the following documents viz (i) Exhibit 38 - property card Extract, (ii) Exhibit 39 - Statement of Defendant No.1 before the City Survey Officer dated 20.9.1975, (iii) Exhibit 40 - Statement recorded before the City Survey Officer of the defendant No.1 before the City Survey Officer dated 19.7.1978 (iv) Exhibit 41 - Statement recorded before the City Survey Officer of the Plaintiff dated 23.8.1975, (v) Exhibit 49 - Statement recorded before the City Survey Officer of the
defendant No.1 dated 20.9.1975, (vi) Exhibit 50 - Statement recorded before the City Survey Officer of defendant No.1 dated 20.9.1975, (vii) Exhibit 47 - copy of 7 x 12 extract sanctioned on 21.4.1970, (viii) Exhibit 48 - Property Card Extract dated 23.2.1982, (ix) Exhibit 83 - Statement of the plaintiff before the City Survey Officer dated 23.8.1975, (x) Exhibit 114 - Joint Building permission dated 19.1.1972, (xi) Exhibit 115 - Notices to both plaintiff and defendant no.1 by
Municipal Council dated 12.1.1972, (xii) Exhibit 155 - N.A. Permission Order in the Joint Name dated
11.2.1981."
5
(SA 263/1989)
6. Brief facts are as under:-
7. Plaintiff was a Doctor by profession and Defendant No.1
was working under him as his compounder for couple of
years. He, however, obtained license for medical practice. A
plot was purchased by the Plaintiff and Defendant No.1 in
their joint name on 8th August, 1968 for consideration of Rs
5000/- from one Roshanbi and a bungalow was constructed
on the said plot some time in the year 1972. The contention
of the Plaintiff in the suit was that he was the joint owner of
the said plot and bungalow which was constructed thereon
and he, therefore, was claiming partition of the common
property and for possession of the structure in respect of his
one half share.
8. Defendant No.1 filed his Written Statement and denied
the joint ownership of the Plaintiff. It was contended that he
was the exclusive owner of the said property and that he
had constructed bungalow out of his own funds. It was
contended that the Plaintiff was a Benamidar in respect of 6
(SA 263/1989)
one half share in the suit plot. It was contended that in
order to show respect to the Plaintiff, he had purchased the
plot in the joint name.
9. The issues were framed by the Trial Court and the
Plaintiff examined himself. Defendant No.1 also examined
himself and also the vendor Roshanbi Raheman Shaikh, one
Shankar Krishna Patil and the architect Narayan Tukaram
Jadhav as witnesses. Apart from oral evidence of witnesses,
both, Plaintiff and Defendant No.1 also produced number of
documents in support of their claim. Trial Court decreed the
suit. Appellate Court, however, has set aside the judgment
and decree of the Trial Court and dismissed the suit.
10. The questions which fall for consideration before this
Court are (i) Whether in view of the provisions of section 4 of
the Benami Transactions (Prohibition) Act, 1988 [For short
"the Act"] which came into force on 19.5.1988, it was open
for Defendants to take defence that the suit transaction was
a Benami transaction? (ii) Whether the said provision of
section 4 of the Act will have retrospective operation? (iii) In 7
(SA 263/1989)
view of the provisions of the Act coming into force, whether
facts and circumstances of the case are required to be re-
appreciated and (iv) Whether the findings recorded by the
lower appellate court can be said to be perverse since it has
not taken into consideration the various documents on which
reliance is placed by the Plaintiff?
11. So far as the first three questions of law which fall for
consideration before this Court are concerned, the said
questions are no longer res integra in view of the judgment
of the Apex Court in Rebti Devi (Smt) vs. Ram Dutt and
another 1
12. In the present case, the suit was filed in 1981. The
Written Statement was filed immediately thereafter on
23.9.1982. The suit was decided on 13.3.1984. Appeal
against that order was filed in 1984 and the appeal was
decided on 28.4.1988. The Act came into force with effect
from 19.5.1988 i.e. after the judgment and order was passed
by the lower appellate court. The Apex Court in Rebti Devi's
1 (1997) 11 SCC 714
8
(SA 263/1989)
case (supra) cited, with approval, the judgment in R.
Rajagopal Reddy vs. Padmini Chandrasekharan 1 which
overruled its earlier decision in Mithilesh Kumari vs. Prem
Behari Khare2. The Apex Court in para 7 of its judgment in
Rebti Devi (supra) has observed as under:-
"7. In order to appreciate the second submission, we have to start here with Rajagopala Reddy's case [1995 (2) SCC 630] and find out what it actually decided in regard to the Benami Transactions (prohibition) Act, 1988 (hereinafter called the 'Act'). Sections 3,5 and 8 of the Act came into force at once i.e. w.e.f. 5.9.1988 while the remaining provisions were deemed to have come into force from 19.5.1988. The principles decided in that case, while overruling Mithilesh Kumari Vs. Prem, Behari Khare [1989 (2) SCC 95], can be summarised as follows:
"(1) Firstly while section 4(1) prohibited a plea of benami to be raised in a suit, claim or action and again section 4(2) precluded a defence of benami in suits, claims or actions, - these two provisions did not come in the way of a decision on such pleas in matters pending as on 19.5.1988 if such pleas were already raised before 19.5.1988 by one party or other. This was because such pleas which were already raised 1 (1995) 2 SCC 630
2 (1989) 2 SCC 95
9
(SA 263/1989)
before 19.5.1988 were not intended to be affected by the Act, if they were raised in suits, claims or actions pending as on 19.5.1988. The repeal provision in Section 7 repealed S. 82 of the Trust Act only in that manner and to that extent.
(2) Secondly on the express language of Section 4(1), any right inhering in the real owner in respect of any property held benami would be not enforceable once Section 4(1) operated, even if such transaction had been entered into prior to 19.5.1988 and no suit could be filed on the basis of such a plea after 19.5.1988.The same prohibition applied in case of Section 4(2) to a defence taken after 19.5.1988 pleading benami in respect of a transaction prior to 19.5.1988. The Act could be said to be retrospective only to that extent. But from this it did not follow that where such a plea was already taken before 19.5.1988 to the effect that the property was held benami, such a plea got shut out merely because the proceeding in which such plea was raised before 19.5.1988 was pending on 19.5.1988.
(3) Thirdly, where a suit had been filed before 19.5.1988, and in any written statement filed on or after 19.5.1988, a plea of benami was raised, then such a plea of benami could not also be gone into. If however such a plea in defence had been raised before 19.5.1988, the Act did not preclude that question from being decided in proceedings which were pending on 19.5.1988. Mithlesh Kumari's case was wrong in holding that such a defence could not be decided after 19.5.1988 even though the plea was raised before 10
(SA 263/1989)
19.5.1988.
(4) Fourthly, if such an interpretation as stated in (1) to (3) was given, it could not be validly contended that a question of invalid discrimination arose between cases where suits were filed on or before 19.5.1988 and those filed after 19.5.1988.
(5) Fifthly, even though the word 'suit' might include appeal or further appeals, Section 4(1) and 4 (2) could not be made applicable to these subsequent stages.
(6) Sixthly, pleas by plaintiffs or applicants and defences after 19.5.1988 of real owners against benamidars were barred under section 4(1) and section 4(2), only to the extent indicated above."
This in substance is what was decided in R. Rajagopal Reddy's case [(1995) 2 SCC 630]"
13. The ratio of the judgment of the Apex Court in R.
Rajagopal Reddy vs. Padmini Chandrasekharan 1 would
squarely apply to the facts of the present case since it has
been observed by the Apex Court that provisions of section
4(1) and section 4(2) of the Act would not come in the way
of a decision on such pleas in matters pending as on
19.5.1988 if such pleas were already raised before 19.5.1988
1 (1995) 2 SCC 630
11
(SA 263/1989)
and they were not affected by the Act.
14. In the present case also, the plea was raised in 1982.
Trial Court decided the suit in 1984. The first appeal was
filed in 1984 and it was decided on 28.4.1988 even prior to
the Act coming into force. In R. Rajagopal Reddy vs. Padmini
Chandrasekharan 1 the Apex Court has observed that only in
those cases where transaction had taken place before
19.5.1988 but the plea is raised after the Act coming into
force then such pleas cannot be taken in view of the bar
under section 4(1) and 4(2) of the Act. Similarly, in para 12
of its judgment in Rebti Devi2 (supra), the Apex Court has
observed as under:-
"12. In order to complete discussion, we shall also refer to two subsequent cases. The case in Heirs of Vrajlal Ganatra Vs. Heirs of Parshottam S. Shah [(1996) 4 SCC 490] was one where the suit was filed in 1981 claiming that the defendant in whose name the deed dated 16.12.1963 stood was benami. The plaintiff's heirs filed appeal in Gujarat High Court in 1990 against the judgment of the trial Court. No contention based on the Act of 1988 was raised in the High Court. For the first time it was argued in this Court 1 (1995) 2 SCC 630
2 (1997) 11 SCC 714
12
(SA 263/1989)
that the plea was prohibited by the Act. This Court, followed R. Rajagopal Reddy case [(1995) 2 SCC 630] and held that the plea was raised in a suit filed before 19.5.1988, and it was not barred under the Act. This Court then proceeded to decide the case on merits, dismissing the plaintiff's appeal."
15. The ratio of the judgment in Rebti Devi1 (supra) would
squarely apply to the facts of the present and, therefore, the
first question viz. "Whether in view of the provisions of
section 4 of the Benami Transactions (Prohibition) Act, 1988
which came into force on 19.5.1988, it was open for
Defendants to take defence that the suit transaction was a
Benami transaction?" is answered in the affirmative since
the plea was taken in 1982 prior to the Act coming into
force.
The second question viz. "Whether the said provision
of section 4 of the Act will have retrospective operation?" is
answered in the negative since it is specifically held that if
the plea is raised prior to 19.5.1988, the Act would not have
retrospective effect.
1 (1997) 11 SCC 714
13
(SA 263/1989)
So far as the third question viz. "In view of the
provisions of the Act coming into force, whether facts and
circumstances of this case are required to be re-
appreciated?" is concerned, in view of the answers to the
above two questions, this question does not survive and
there is no question of re-appreciating the evidence on
record.
So far as the last question viz. "Whether the findings
recorded by the lower appellate court can be said to be
perverse since it has not taken into consideration the various
documents on which reliance is placed by the Plaintiff?" is
concerned, in my view, the submission of the Counsel for the
appellant/plaintiff cannot be accepted. Perusal of the
judgment and order of the lower appellate court discloses
that the lower appellate court has re-appreciated the
evidence on record and after taking into consideration the
circumstantial evidence and the admission given by the
Plaintiff in his cross-examination, it has observed that the
name of the Plaintiff was shown only out of respect and that 14
(SA 263/1989)
he had neither paid the sale consideration of the plot nor
had spent any amount for construction of the bungalow. The
statements made before the Non-agricultural Assessment
Officer were made by Defendant No.1 only for the purpose of
obtaining N.A. Permission. The lower appellate court further
observed that the penalty imposed for not obtaining N.A.
Permission was paid only by Defendant No.1. So far as the
city survey record is concerned, though statement was made
before the City Survey Officer that the property was in joint
name, the said statement does not bind the Defendant No.1
since he has come out with a specific case that the Plaintiff
was a Benamidar and, therefore, did not have any right in
the property. This version of the Defendant No.1 is
supported by the vendor Roshanbi Raheman Shaikh and
also by the other witness. The submission of the learned
Counsel for the appellant/original plaintiff that the Trial Court
has not taken into consideration these documents is also
incorrect. In the detailed judgment and order passed by the
lower appellate court, it has taken into consideration all the
documentary and oral evidence on record. Reference is
made by the lower appellate court to the statements which 15
(SA 263/1989)
were recorded before the City Survey Officer in para 23 of its
judgment and it has observed that the Plaintiff gave
statement before the City Survey Officer that he was not
ready to pay penalty. The lower appellate court, therefore,
came to the conclusion that though Defendant No.1 made
statement that the plot was in joint name, the claim of the
Plaintiff that he had equally spent the amount for
construction of the bungalow was falsified. Then in para 30
of its judgment, the lower appellate court, again, has taken
into consideration the statement made by Defendant No.1
while obtaining N.A. Permission that the plot was standing in
the joint name and, after taking into consideration the said
statement, the Court has observed that the surrounding
circumstances and other facts which are required to be
taken into account in the matter of Benami transaction
would clearly go to show that the Plaintiff was the Benamidar
so far as the suit plot is concerned and that the Defendant
No.1 had discharged his burden with cogent and satisfactory
evidence and, therefore, the admission that the plot was in
the joint name could not be considered as conclusive proof
that the Plaintiff was owner of the one half share. The 16
(SA 263/1989)
lower appellate court has also taken into consideration the
fact that the Defendant No.1 was in exclusive possession
and enjoyment of the suit property. The submission made
by the learned Counsel appearing on behalf of the original
Plaintiff, the appellant herein that the documents were not
considered is, therefore, without any substance. Though
specific exhibit numbers are not mentioned which are
mentioned in the said grounds which have been now taken
at the time of final arguments of this second appeal, the
lower appellate court has considered these documents and
recorded its findings on these documents and the
submissions made by the Plaintiff. Therefore the aforesaid
last question is also answered in the negative.
16. Thus there is no substance in the submissions made by
the learned Counsel appearing on behalf of the
Plaintiff/appellant. No case is made out for interfering with
the judgment and order passed by the lower appellate court.
The second appeal is, therefore, dismissed.
(V.M. KANADE, J.)
17
(SA 263/1989)
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