It is said that hard cases lay down bad law and therefore sympathy arising from facts cannot be allowed to negate the intention of the legislature in enacting the Benami Act. It is not only the appellant but probably thousands/lakhs of persons like the appellant who have suffered the consequences of enactment of the Benami Act, however, this Court has to act as per the laws as applicable, and considering the facts of this case I have no option but to affirm the finding of the trial Court that the suit was barred by Benami Act.
IN THE HIGH COURT OF DELHI AT NEW DELHI
RFA No. 207/2012
Dated;7th May, 2012
JM KOHLI
Vs
MADAN MOHAN SAHNI & ANR ..... Respondents
CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA
The challenge by means of this Regular First Appeal (RFA) filed under
Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned
judgment of the trial Court dated 2.4.2011 dismissing the suit and/or rejecting
the plaint by holding that the same is barred by Benami Transactions
(Prohibition) Act, 1988 and also by limitation.
2.
The disputes in the present case center around the ownership of a flat
No. C-1/F, DDA Flats, Munirika, Delhi. The appellant/plaintiff-Sh. J.M.
Kohli claims to be the owner of the suit property. The suit property however
from the very beginning stands in the name of defendant No.1/respondent
No.1/Madan Mohan Sahni, inasmuch as, the flat was allotted to him by the
Delhi Development Authority (DDA) and the entire documentation qua the
title of the property also stands in the name of respondent No.1. The title
documents in name of respondent No.1/defendant No.1 exist from 1981 till
date.
3.
The facts of the case are that the appellant/plaintiff filed the subject suit
for declaration, possession and mandatory injunction against respondent
No.1/defendant No.1-Sh. Madan Mohan Sahni (brother-in-law), defendant
No.2-Smt. Vimla Kanta (ex-wife) and defendant No.3-Smt. Renu (daughter of
the plaintiff). The basic cause of action pleaded in the plaint is that it is the
appellant/plaintiff who is the owner of the property because the sale
consideration of the suit property was paid entirely by him.
4.
Respondent No.1 filed two applications for dismissal of the suit and/or
for rejection of the plaint claiming that the suit was barred by Section 4 of the
Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the
„Benami Act‟), and also that the suit was barred by time, inasmuch as, the
appellant/plaintiff way back in the year 1984 had filed a suit No. 157/1984
seeking to declare himself as the actual owner of the suit flat, respondent no.1
being only the benamidar, and which suit was withdrawn on 17.9.1987. The
present suit had been filed after 23 years on 22.5.2010.
5.
Trial Court has dealt with both the aspects of the suit being barred by
the Benami Act and also by limitation by making the following observations:-
“4.1 (Findings) – The first application is taken. The
rival contentions are assessed in the light of statutory
provisions of law and precedent. It is an admitted fact in
the first suit no. 157/84, plaintiff (J.M.Kohli) filed the
suit against Smt. Vimla Kanta (defendant no. 2 herein)
and against Sh. M.M. Sahani (defendant no. 1 herein), he
was permitted on 17.09.1987 to withdraw the first suit
and to file fresh suit, therefore, there was no finality to
the suit or issues involved, therefore, principle of res-
judicata embodied under section 11 of CPC will not be
applicable. To that extent defendant no. 1 application
carries no merit. Let us take the other features of the
application.
4.2 The defendant no. 1/Madan Mohan Sahani is
brother of defendant no. 2 Smt. Vimla Kanta (plaintiff‟s
ex-wife). Section 3 of the Act, 1988 bars benami
transaction. Section 3 of the Act does not apply, when
the property is purchased in the name of wife or
unmarried daughter. Section 4 of the Act, 1988 makes
prohibition of right to recover property held in Benami,
although section 4 is not applicable to the persons
described in clause 3 of section 4 of the Act, 1988, like
the properties held in the name of a coparceners in a
Hindu Undivided Family or a trustee or other person
standing in a fiduciary capacity.
In G. Mahallingappa vs. G.M. Savitha 2005 6 SCC
441 it was held that there is a presumption under section
3(2) of the Act 1988 that when property is purchased in
the name of wife or unmarried daughter, it was for the
benefit of the wife or the daughter, however, it is a
rebuttable presumption by production of evidence or
other material to prove that the property was purchased
by the appellant in the benami of the respondent for his
own benefit. However, the defendant no. 1 is neither
wife not daughter of plaintiff but brother of defendant no.
2. Therefore, in terms of section 4 of the Act 1988,
plaintiff‟s suit or claim is barred to enforce any right in
respect of suit flat, which originally registered and
allotted in the name of defendant no. 1.
Now the issue of limitation is taken. Paragraph 42
of the plaint is compilation of points of time, referred in
other parts of plaint that cause of action had arisen from
January 1972 onward till notice was sent on 08.08.1988
and lastly on the point when conveyance deed was
executed/registered in favour of defendant no. 1.
Paragraph 24 of previous suit no. 157/84, also reflects the
cause of action, from the point of time of 28.09.1983, vis
a vis that defendant no. 2 in her written statement in
Divorce Petition in the court of the then Additional
District Judge claimed herself owner of the half portion
of the property in Punjabi Bagh, New Delhi, whereas the
ownership rights in respect of property at Punjabi Bagh
and benami ownership of the flat was subsisting in the
favour of plaintiff.
Article 58 of the schedule appended with the
Limitation Act, 1963 prescribed period of 3 years to be
computed when the right to sue first accrues, for
obtaining declaration. When the suit No. 154/84 was
filed for declaration in the year 1984 or when it was
amended in the year 1986, the plaintiff was knowing that
his right has been accrued for filing the suit for
declaration as at that point of time not only half portion
of the property at Punjabi Bagh claimed by his ex-wife
but also the rights in suit flat were under challenge. Thus
the point of time, when right to sue first accrued were
either in the year 1984 when the suit was originally filed
or when it was amended in the year 1986 (as copy of
amended plaint has been placed on record) and the three
year period is to be computed from that point of time.
However, by order dated 17.09.1987 the suit was
permitted to be withdrawn, however, the period of
limitation will be from the point of time, when the right
to suit first accrued or from the time permission was
given to file the fresh suit, in either of the eventuality, the
present suit filed on 24.5.2010 is beyond the prescribed
period of 3 year from the point of time. In M/s Alliance
Paints and Varnish vs Hari Kishan Gupta (Deceased),
RFA No. 54/1997, DOD 10.02.2010, the Hon‟ble High
Court of Delhi held that section 3 of the Limitation Act
places a statutory obligation on the courts to examine
whether the suit is filed within limitation or not, even if
no such plea has been taken by the opposite party. If the
suit is filed beyond limitation and is clearly time barred,
it cannot be decreed in the teeth of section 3 of the
Limitation Act and the court has to dismiss it, whether or
not limitation has been set up as a defence. As per
documents in support of plaint, it was 21.02.1975 when
defendant no. 1 completed the formalities and requested
DDA for possession letter for possession of flat and
possession was taken around year 1978 and the plaintiff
left the suit flat on 24.12.1979. Article 65 and 64 of the
schedule appended to Limitation Act, 1963 prescribed
period of 12 years from the date when possession of the
defendant becomes adverse to the plaintiff or the date of
dispossession, therefore, the suit filed in May 2010 is
beyond the period of 12 year, if it is to be computed from
24.12.1979. In fact the suit for possession is alike
consequential relief to the declaration, but in view of
above it is also barred by time. In Hardesh Ores (P) Ltd.
Vs. Hede And Company 2007 5 SCC 614 it was held that
the term barred by law, in order VII rule 11 (d) of CPC,
contemplates that it includes the law of limitation also.
4.4 It is settled law that while considering application
under order VII rule 11 CPC, the statement of facts given
in the plaint coupled with document are to be considered
as true and it does not require to look into the defence
taken or to be taken by the defendants, whereas
defendants are yet to file their written statement but
defendant no. 1 has filed the first application.”
(underlining added)
6.
The consequences of the Benami Transactions (Prohibition) Act, 1988
were harsh as they brought to an end the ownership rights of an actual owner
against the benami owner. Before passing of the Benami Act, a de jure owner
could also file a suit against de facto owner and thereby claim ownership of
RFA No.207/2012
Page 6 of 15
the property on the ground that ostensible owner was only a benamidar. The
legal provisions which helped the plaintiff in such a suit prior to passing of
the Benami Act were inter-alia the provisions of Sections 81, 82 and 94 of the
Indian Trusts Act, 1882 and as per which provisions a benami owner was
actually a trustee for the real owner. Section 7 of the Benami Act specifically
repeals the aforesaid sections of the Indian Trusts Act, 1882 and also Section
66 of the CPC which had similar substance.
7.
Section 4(3)(b) of the Benami Act, however, protected rights of a real
owner where the person in whose name the property is held is a trustee or
other person standing in the fiduciary capacity and the property is held for the
benefit of other person, for whom the person in whose name the property is
held is a trustee. Section 4(3)(b) of the Benami Act reads as under:-
“4. Prohibition of the right to recover property held
benami.-
(3) Nothing in this section shall apply –
(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.”
8.
In a way, therefore, there may be some ostensible conflict between the
provision of Section 4(3)(b) of the Benami Act and Section 7 of the same Act
which repeals the provisions of the Indian Trusts Act, 1882, however, one has
to read and interpret Section 4(3)(b) in a manner which is in accord with the
legislative intention to bar claims against properties held as benami. The
concept of trust was always inbuilt once a transaction was a benami
transaction as the benamidar was the trustee for the real owner. But in spite
of the concept of trust being inbuilt in benami transactions, the Benami Act
provided that no rights could be asserted in a benami property by the actual/de
jure owner.
Putting it differently, once Sections 81, 82 and 94 of the India Trusts
Act, 1882 have been repealed, they cannot be brought in from the back door,
so to say, by giving the same content contained in the repealed provisions of
Sections 81, 82 and 94 of the Indian Trusts Act, 1882 to Section 4(3)(b) of the
Benami Act. If we give such an interpretation, the entire Benami Act will fall
and it will be as if the same has not been enacted. Therefore, Section 4(3)(b)
which provides that the property which is held as a trustee or in a fiduciary
capacity must be interpreted in the sense that the trustee or a person who is
holding the property in a fiduciary capacity has either committed a fraud and
got the property title in his name or is in furtherance of law holding property
in his name however in the capacity of a trustee or in fiduciary capacity,
although the real owner is somebody else. Repealed Sections 81, 82 and 94
of the Indian Trusts Act, 1882 read as under:-
“81. Where the owner of property transfers or
bequeaths it and it cannot be inferred consistently with
the attendant circumstances that the intend to dispose of
the beneficial interest therein, the transferee or legatee
must hold such property for the benefit of the owner or
his legal representative.
82. Where property is transferred to one person for a
consideration paid or provided by another person, and it
appears that such other person did not intend to pay or
provide such consideration for the benefit of the
transferee, the transferee must hold the property for the
benefit of the person paying or providing the
consideration.
Nothing in this session shall be deemed to affect
the Code of Civil Procedure, section 317, or Act No. XI
of 1859 (to improve the law relating to sales of land for
arrears of revenue in the Lower Provinces under the
Bengal Presidency), section 36.
94. In any case not coming within the scope of any of
the proceeding sections, where there is no trust, but the
person having possession of property has not the whole
beneficial interest therein, he must hold the property for
the benefit of the persons having such interest, or the
residue thereof (as the case may be), to the extent
necessary to satisfy their just demands.”
9.
Two of the examples where the Supreme Court has held the property to
be held as a trustee in terms of Section 4(3)(b) of the Benami Act are the
judgments in the cases of C. Gangacharan V. C. Narayanan, 2000 (1) SCC
459 and P.V. Sankara Kurup V. Leelavathy Nambiar, 1994(6) SCC 68.
In the case of C. Gangacharan (supra), the Supreme Court has held
that the property was held as a trustee as per Section 4(3)(b) of the Benami
Act, and the person in whose name the property stood cannot take up a plea
of the bar of Benami Act, inasmuch as, actually the owner had given moneys
for the property to be purchased under his name, however, the moneys were
in fraud utilized to get the property purchased in the name of defendants in
that suit. In the case of P.V. Sankara Kurup (supra) also the obvious fraud
which was perpetrated was that the property was to be purchased in the name
of the plaintiff by his attorney holder and which the defendants did not do
and instead got the property purchased directly in their name. In the case of
P.V. Sankara Kurup (supra), the Supreme Court was dealing with Section 66
of CPC as it existed before its repeal by Section 7 of the Benami Act and in
the facts of the case as stated above it was held that the purchaser had acted in
fiduciary capacity as an agent and consequently the bar of the Benami Act
would not apply. In the said judgment, the Supreme Court held that when the
agent was employed to purchase the property on behalf of his principal,
however does so in his own name, i.e. the agent‟s name then upon
conveyance or transfer of the property to the agent, he stands as a trustee for
the principal.
10.
Therefore, in certain cases where there is obvious breach of trust in
purchasing the property in the name of a person, whereas it ought to have
been purchased in the name of the principal or the real owner, Supreme Court
has, to that limited extent, held that such actions are covered under Section
4(3)(b) of the Benami Act and such transactions are not hit by the Benami
Act.
11.
If we see the facts of the present case, the only relationship of trust
which is alleged has two salient features. The first is of the moneys having
been paid by the appellant/plaintiff and therefore the property being actually
of the appellant/plaintiff and the defendant No.1 being the trustee, and, the
second feature is that the parties understood as per the case in the plaint that
defendant No.1 will hold the property in faith/trust for the appellant/plaintiff.
In order to appreciate the contents of the plaint in this regard, qua the
averments with regard to trust, paras 27 to 29 of the plaint are relevant and the
same read as under:-
“27. That all the payments of the installments of the
value of the suit property was given by the plaintiff out of
his self earned income and nothing was paid by the
defendant no. 1 and only the name of the defendant no. 1
was in the records of the D.D.A. with respect to the said
property and due to the abovesaid fiduciary relationship
between the plaintiff and the defendants, the said
arrangement was made, as stated above and it was
understood that the plaintiff will be the owner of the suit
property and the defendant no. 1 shall be a just for the
name and he shall have no ownership or possessiory right
in the suit property.
28.
That at present the defendant no. 3 is in possession
of the suit property being a daughter, in fiduciary
relationship with the plaintiff and she has no right,
interest in the title and in possession of the said property
and in fact she is illegal occupation of the same and
therefore the plaintiff is entitled for the possession of the
suit property.
29. That plaintiff has deposited the above said
amounts towards the suit flat in the D.D.A. on faith and
trust in the name of the defendant no. 1, being in
fiduciary relationship with him and it was very well
understood in the family that the plaintiff is the owner of
the same and defendant no. 1 is only having his name in
the record of the D.D.A.”
12.
In my opinion, the aforesaid averments are not the averments which
can take the case out of the repealed Sections 81, 82 and 94 of the Indian
Trusts Act, 1882 and bring the same within Section 4(3)(b) of the Benami
Act. As already stated above, in benami transaction obviously there is an
implied trust, however, such trusts are not the trusts which are within the
purview of Section 4(3)(b) of the Benami Act.
13.
Learned Senior counsel for the appellant sought to place reliance upon
the decision of learned Single Judge of this Court in the case of S.M. Wahi v.
Reeta Wahi, 2006 (90) DRJ 616 in which the learned Single Judge, in the
facts of the said case, found that the nominee under the agreement to sell was
the trustee for the purpose of Section 4(3)(b), inasmuch as, nominee herself
admitted that the property was being held pursuant to the agreement to sell in
trust for and on behalf of the plaintiff who was said to be the actual owner. I
may also state that the attention of the learned Single Judge who decided the
case of S.M. Wahi (supra) was not drawn to the two judgments of the
Supreme Court in the cases of C. Gangacharan (supra) and P.V. Sankara
Kurup (supra), which have been referred to by me above. The judgment,
therefore, cited in the case of S.M. Wahi (supra) will have no application in
the facts of the present case.
14.
It is said that hard cases lay down bad law and therefore sympathy
arising from facts cannot be allowed to negate the intention of the legislature
in enacting the Benami Act .
It is not only the appellant but probably
thousands/lakhs of persons like the appellant who have suffered the
consequences of enactment of the Benami Act, however, this Court has to act
as per the laws as applicable, and considering the facts of this case I have no
option but to affirm the finding of the trial Court that the suit was barred by
Benami Act.
15.
The trial Court, in my opinion, has further rightly held the suit to be
barred by limitation. Admittedly, the appellant/plaintiff had claimed title in
the suit property by way of a suit filed way back in the year 1984 on the
ground that actually the defendant was the benamidar and that the
appellant/plaintiff was the real owner.
That
suit No. 157/1984 was
withdrawn on 17.9.1987 and the present suit had been filed after 23 years. In
law, the right to sue for possession of an immovable property arises within 12
years of the possession being adverse to the actual owner in terms of Article
65 of the Limitation Act, 1963. Obviously respondent No.1/defendant No. 1
was claiming ownership of the property from day one and at least since 1984
which forced the appellant/plaintiff to file the suit being No. 157/1984
seeking ownership rights in the suit property. Though learned counsel for the
appellant one way or the other could not categorically state as to whether any
written statement was field by respondent No. 1 in the suit of 1984, but even
assuming that if the written statement was not filed, the very fact that the
appellant/plaintiff was forced to file the suit claiming ownership rights
pleading that defendant No.1/respondent No.1 was only a benamidar shows
that defendant No.1/respondent No.1 was claiming title adverse to the
appellant/plaintiff at least from 1984. The present suit therefore filed in 2010
i.e. after 23 years is ex facie barred by limitation. As per Section 27 of the
Limitation Act, 1963 when the period of limitation for filing of the suit qua an
immovable property comes to an end, the ownership rights qua the same also
get extinguished as against the person who ought to have filed the suit within
12 years.
16.
In view of the above, I do not find any reason to interfere with the
impugned judgment of the trial Court dated 2.4.2011. The present appeal,
being without any merit, is accordingly dismissed, leaving the parties to bear
their own costs.
VALMIKI J. MEHTA, J.
MAY 07, 2012
Print Page
IN THE HIGH COURT OF DELHI AT NEW DELHI
RFA No. 207/2012
Dated;7th May, 2012
JM KOHLI
Vs
MADAN MOHAN SAHNI & ANR ..... Respondents
CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA
The challenge by means of this Regular First Appeal (RFA) filed under
Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned
judgment of the trial Court dated 2.4.2011 dismissing the suit and/or rejecting
the plaint by holding that the same is barred by Benami Transactions
(Prohibition) Act, 1988 and also by limitation.
2.
The disputes in the present case center around the ownership of a flat
No. C-1/F, DDA Flats, Munirika, Delhi. The appellant/plaintiff-Sh. J.M.
Kohli claims to be the owner of the suit property. The suit property however
from the very beginning stands in the name of defendant No.1/respondent
No.1/Madan Mohan Sahni, inasmuch as, the flat was allotted to him by the
Delhi Development Authority (DDA) and the entire documentation qua the
title of the property also stands in the name of respondent No.1. The title
documents in name of respondent No.1/defendant No.1 exist from 1981 till
date.
3.
The facts of the case are that the appellant/plaintiff filed the subject suit
for declaration, possession and mandatory injunction against respondent
No.1/defendant No.1-Sh. Madan Mohan Sahni (brother-in-law), defendant
No.2-Smt. Vimla Kanta (ex-wife) and defendant No.3-Smt. Renu (daughter of
the plaintiff). The basic cause of action pleaded in the plaint is that it is the
appellant/plaintiff who is the owner of the property because the sale
consideration of the suit property was paid entirely by him.
4.
Respondent No.1 filed two applications for dismissal of the suit and/or
for rejection of the plaint claiming that the suit was barred by Section 4 of the
Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the
„Benami Act‟), and also that the suit was barred by time, inasmuch as, the
appellant/plaintiff way back in the year 1984 had filed a suit No. 157/1984
seeking to declare himself as the actual owner of the suit flat, respondent no.1
being only the benamidar, and which suit was withdrawn on 17.9.1987. The
present suit had been filed after 23 years on 22.5.2010.
5.
Trial Court has dealt with both the aspects of the suit being barred by
the Benami Act and also by limitation by making the following observations:-
“4.1 (Findings) – The first application is taken. The
rival contentions are assessed in the light of statutory
provisions of law and precedent. It is an admitted fact in
the first suit no. 157/84, plaintiff (J.M.Kohli) filed the
suit against Smt. Vimla Kanta (defendant no. 2 herein)
and against Sh. M.M. Sahani (defendant no. 1 herein), he
was permitted on 17.09.1987 to withdraw the first suit
and to file fresh suit, therefore, there was no finality to
the suit or issues involved, therefore, principle of res-
judicata embodied under section 11 of CPC will not be
applicable. To that extent defendant no. 1 application
carries no merit. Let us take the other features of the
application.
4.2 The defendant no. 1/Madan Mohan Sahani is
brother of defendant no. 2 Smt. Vimla Kanta (plaintiff‟s
ex-wife). Section 3 of the Act, 1988 bars benami
transaction. Section 3 of the Act does not apply, when
the property is purchased in the name of wife or
unmarried daughter. Section 4 of the Act, 1988 makes
prohibition of right to recover property held in Benami,
although section 4 is not applicable to the persons
described in clause 3 of section 4 of the Act, 1988, like
the properties held in the name of a coparceners in a
Hindu Undivided Family or a trustee or other person
standing in a fiduciary capacity.
In G. Mahallingappa vs. G.M. Savitha 2005 6 SCC
441 it was held that there is a presumption under section
3(2) of the Act 1988 that when property is purchased in
the name of wife or unmarried daughter, it was for the
benefit of the wife or the daughter, however, it is a
rebuttable presumption by production of evidence or
other material to prove that the property was purchased
by the appellant in the benami of the respondent for his
own benefit. However, the defendant no. 1 is neither
wife not daughter of plaintiff but brother of defendant no.
2. Therefore, in terms of section 4 of the Act 1988,
plaintiff‟s suit or claim is barred to enforce any right in
respect of suit flat, which originally registered and
allotted in the name of defendant no. 1.
Now the issue of limitation is taken. Paragraph 42
of the plaint is compilation of points of time, referred in
other parts of plaint that cause of action had arisen from
January 1972 onward till notice was sent on 08.08.1988
and lastly on the point when conveyance deed was
executed/registered in favour of defendant no. 1.
Paragraph 24 of previous suit no. 157/84, also reflects the
cause of action, from the point of time of 28.09.1983, vis
a vis that defendant no. 2 in her written statement in
Divorce Petition in the court of the then Additional
District Judge claimed herself owner of the half portion
of the property in Punjabi Bagh, New Delhi, whereas the
ownership rights in respect of property at Punjabi Bagh
and benami ownership of the flat was subsisting in the
favour of plaintiff.
Article 58 of the schedule appended with the
Limitation Act, 1963 prescribed period of 3 years to be
computed when the right to sue first accrues, for
obtaining declaration. When the suit No. 154/84 was
filed for declaration in the year 1984 or when it was
amended in the year 1986, the plaintiff was knowing that
his right has been accrued for filing the suit for
declaration as at that point of time not only half portion
of the property at Punjabi Bagh claimed by his ex-wife
but also the rights in suit flat were under challenge. Thus
the point of time, when right to sue first accrued were
either in the year 1984 when the suit was originally filed
or when it was amended in the year 1986 (as copy of
amended plaint has been placed on record) and the three
year period is to be computed from that point of time.
However, by order dated 17.09.1987 the suit was
permitted to be withdrawn, however, the period of
limitation will be from the point of time, when the right
to suit first accrued or from the time permission was
given to file the fresh suit, in either of the eventuality, the
present suit filed on 24.5.2010 is beyond the prescribed
period of 3 year from the point of time. In M/s Alliance
Paints and Varnish vs Hari Kishan Gupta (Deceased),
RFA No. 54/1997, DOD 10.02.2010, the Hon‟ble High
Court of Delhi held that section 3 of the Limitation Act
places a statutory obligation on the courts to examine
whether the suit is filed within limitation or not, even if
no such plea has been taken by the opposite party. If the
suit is filed beyond limitation and is clearly time barred,
it cannot be decreed in the teeth of section 3 of the
Limitation Act and the court has to dismiss it, whether or
not limitation has been set up as a defence. As per
documents in support of plaint, it was 21.02.1975 when
defendant no. 1 completed the formalities and requested
DDA for possession letter for possession of flat and
possession was taken around year 1978 and the plaintiff
left the suit flat on 24.12.1979. Article 65 and 64 of the
schedule appended to Limitation Act, 1963 prescribed
period of 12 years from the date when possession of the
defendant becomes adverse to the plaintiff or the date of
dispossession, therefore, the suit filed in May 2010 is
beyond the period of 12 year, if it is to be computed from
24.12.1979. In fact the suit for possession is alike
consequential relief to the declaration, but in view of
above it is also barred by time. In Hardesh Ores (P) Ltd.
Vs. Hede And Company 2007 5 SCC 614 it was held that
the term barred by law, in order VII rule 11 (d) of CPC,
contemplates that it includes the law of limitation also.
4.4 It is settled law that while considering application
under order VII rule 11 CPC, the statement of facts given
in the plaint coupled with document are to be considered
as true and it does not require to look into the defence
taken or to be taken by the defendants, whereas
defendants are yet to file their written statement but
defendant no. 1 has filed the first application.”
(underlining added)
6.
The consequences of the Benami Transactions (Prohibition) Act, 1988
were harsh as they brought to an end the ownership rights of an actual owner
against the benami owner. Before passing of the Benami Act, a de jure owner
could also file a suit against de facto owner and thereby claim ownership of
RFA No.207/2012
Page 6 of 15
the property on the ground that ostensible owner was only a benamidar. The
legal provisions which helped the plaintiff in such a suit prior to passing of
the Benami Act were inter-alia the provisions of Sections 81, 82 and 94 of the
Indian Trusts Act, 1882 and as per which provisions a benami owner was
actually a trustee for the real owner. Section 7 of the Benami Act specifically
repeals the aforesaid sections of the Indian Trusts Act, 1882 and also Section
66 of the CPC which had similar substance.
7.
Section 4(3)(b) of the Benami Act, however, protected rights of a real
owner where the person in whose name the property is held is a trustee or
other person standing in the fiduciary capacity and the property is held for the
benefit of other person, for whom the person in whose name the property is
held is a trustee. Section 4(3)(b) of the Benami Act reads as under:-
“4. Prohibition of the right to recover property held
benami.-
(3) Nothing in this section shall apply –
(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.”
8.
In a way, therefore, there may be some ostensible conflict between the
provision of Section 4(3)(b) of the Benami Act and Section 7 of the same Act
which repeals the provisions of the Indian Trusts Act, 1882, however, one has
to read and interpret Section 4(3)(b) in a manner which is in accord with the
legislative intention to bar claims against properties held as benami. The
concept of trust was always inbuilt once a transaction was a benami
transaction as the benamidar was the trustee for the real owner. But in spite
of the concept of trust being inbuilt in benami transactions, the Benami Act
provided that no rights could be asserted in a benami property by the actual/de
jure owner.
Putting it differently, once Sections 81, 82 and 94 of the India Trusts
Act, 1882 have been repealed, they cannot be brought in from the back door,
so to say, by giving the same content contained in the repealed provisions of
Sections 81, 82 and 94 of the Indian Trusts Act, 1882 to Section 4(3)(b) of the
Benami Act. If we give such an interpretation, the entire Benami Act will fall
and it will be as if the same has not been enacted. Therefore, Section 4(3)(b)
which provides that the property which is held as a trustee or in a fiduciary
capacity must be interpreted in the sense that the trustee or a person who is
holding the property in a fiduciary capacity has either committed a fraud and
got the property title in his name or is in furtherance of law holding property
in his name however in the capacity of a trustee or in fiduciary capacity,
although the real owner is somebody else. Repealed Sections 81, 82 and 94
of the Indian Trusts Act, 1882 read as under:-
“81. Where the owner of property transfers or
bequeaths it and it cannot be inferred consistently with
the attendant circumstances that the intend to dispose of
the beneficial interest therein, the transferee or legatee
must hold such property for the benefit of the owner or
his legal representative.
82. Where property is transferred to one person for a
consideration paid or provided by another person, and it
appears that such other person did not intend to pay or
provide such consideration for the benefit of the
transferee, the transferee must hold the property for the
benefit of the person paying or providing the
consideration.
Nothing in this session shall be deemed to affect
the Code of Civil Procedure, section 317, or Act No. XI
of 1859 (to improve the law relating to sales of land for
arrears of revenue in the Lower Provinces under the
Bengal Presidency), section 36.
94. In any case not coming within the scope of any of
the proceeding sections, where there is no trust, but the
person having possession of property has not the whole
beneficial interest therein, he must hold the property for
the benefit of the persons having such interest, or the
residue thereof (as the case may be), to the extent
necessary to satisfy their just demands.”
9.
Two of the examples where the Supreme Court has held the property to
be held as a trustee in terms of Section 4(3)(b) of the Benami Act are the
judgments in the cases of C. Gangacharan V. C. Narayanan, 2000 (1) SCC
459 and P.V. Sankara Kurup V. Leelavathy Nambiar, 1994(6) SCC 68.
In the case of C. Gangacharan (supra), the Supreme Court has held
that the property was held as a trustee as per Section 4(3)(b) of the Benami
Act, and the person in whose name the property stood cannot take up a plea
of the bar of Benami Act, inasmuch as, actually the owner had given moneys
for the property to be purchased under his name, however, the moneys were
in fraud utilized to get the property purchased in the name of defendants in
that suit. In the case of P.V. Sankara Kurup (supra) also the obvious fraud
which was perpetrated was that the property was to be purchased in the name
of the plaintiff by his attorney holder and which the defendants did not do
and instead got the property purchased directly in their name. In the case of
P.V. Sankara Kurup (supra), the Supreme Court was dealing with Section 66
of CPC as it existed before its repeal by Section 7 of the Benami Act and in
the facts of the case as stated above it was held that the purchaser had acted in
fiduciary capacity as an agent and consequently the bar of the Benami Act
would not apply. In the said judgment, the Supreme Court held that when the
agent was employed to purchase the property on behalf of his principal,
however does so in his own name, i.e. the agent‟s name then upon
conveyance or transfer of the property to the agent, he stands as a trustee for
the principal.
10.
Therefore, in certain cases where there is obvious breach of trust in
purchasing the property in the name of a person, whereas it ought to have
been purchased in the name of the principal or the real owner, Supreme Court
has, to that limited extent, held that such actions are covered under Section
4(3)(b) of the Benami Act and such transactions are not hit by the Benami
Act.
11.
If we see the facts of the present case, the only relationship of trust
which is alleged has two salient features. The first is of the moneys having
been paid by the appellant/plaintiff and therefore the property being actually
of the appellant/plaintiff and the defendant No.1 being the trustee, and, the
second feature is that the parties understood as per the case in the plaint that
defendant No.1 will hold the property in faith/trust for the appellant/plaintiff.
In order to appreciate the contents of the plaint in this regard, qua the
averments with regard to trust, paras 27 to 29 of the plaint are relevant and the
same read as under:-
“27. That all the payments of the installments of the
value of the suit property was given by the plaintiff out of
his self earned income and nothing was paid by the
defendant no. 1 and only the name of the defendant no. 1
was in the records of the D.D.A. with respect to the said
property and due to the abovesaid fiduciary relationship
between the plaintiff and the defendants, the said
arrangement was made, as stated above and it was
understood that the plaintiff will be the owner of the suit
property and the defendant no. 1 shall be a just for the
name and he shall have no ownership or possessiory right
in the suit property.
28.
That at present the defendant no. 3 is in possession
of the suit property being a daughter, in fiduciary
relationship with the plaintiff and she has no right,
interest in the title and in possession of the said property
and in fact she is illegal occupation of the same and
therefore the plaintiff is entitled for the possession of the
suit property.
29. That plaintiff has deposited the above said
amounts towards the suit flat in the D.D.A. on faith and
trust in the name of the defendant no. 1, being in
fiduciary relationship with him and it was very well
understood in the family that the plaintiff is the owner of
the same and defendant no. 1 is only having his name in
the record of the D.D.A.”
12.
In my opinion, the aforesaid averments are not the averments which
can take the case out of the repealed Sections 81, 82 and 94 of the Indian
Trusts Act, 1882 and bring the same within Section 4(3)(b) of the Benami
Act. As already stated above, in benami transaction obviously there is an
implied trust, however, such trusts are not the trusts which are within the
purview of Section 4(3)(b) of the Benami Act.
13.
Learned Senior counsel for the appellant sought to place reliance upon
the decision of learned Single Judge of this Court in the case of S.M. Wahi v.
Reeta Wahi, 2006 (90) DRJ 616 in which the learned Single Judge, in the
facts of the said case, found that the nominee under the agreement to sell was
the trustee for the purpose of Section 4(3)(b), inasmuch as, nominee herself
admitted that the property was being held pursuant to the agreement to sell in
trust for and on behalf of the plaintiff who was said to be the actual owner. I
may also state that the attention of the learned Single Judge who decided the
case of S.M. Wahi (supra) was not drawn to the two judgments of the
Supreme Court in the cases of C. Gangacharan (supra) and P.V. Sankara
Kurup (supra), which have been referred to by me above. The judgment,
therefore, cited in the case of S.M. Wahi (supra) will have no application in
the facts of the present case.
14.
It is said that hard cases lay down bad law and therefore sympathy
arising from facts cannot be allowed to negate the intention of the legislature
in enacting the Benami Act .
It is not only the appellant but probably
thousands/lakhs of persons like the appellant who have suffered the
consequences of enactment of the Benami Act, however, this Court has to act
as per the laws as applicable, and considering the facts of this case I have no
option but to affirm the finding of the trial Court that the suit was barred by
Benami Act.
15.
The trial Court, in my opinion, has further rightly held the suit to be
barred by limitation. Admittedly, the appellant/plaintiff had claimed title in
the suit property by way of a suit filed way back in the year 1984 on the
ground that actually the defendant was the benamidar and that the
appellant/plaintiff was the real owner.
That
suit No. 157/1984 was
withdrawn on 17.9.1987 and the present suit had been filed after 23 years. In
law, the right to sue for possession of an immovable property arises within 12
years of the possession being adverse to the actual owner in terms of Article
65 of the Limitation Act, 1963. Obviously respondent No.1/defendant No. 1
was claiming ownership of the property from day one and at least since 1984
which forced the appellant/plaintiff to file the suit being No. 157/1984
seeking ownership rights in the suit property. Though learned counsel for the
appellant one way or the other could not categorically state as to whether any
written statement was field by respondent No. 1 in the suit of 1984, but even
assuming that if the written statement was not filed, the very fact that the
appellant/plaintiff was forced to file the suit claiming ownership rights
pleading that defendant No.1/respondent No.1 was only a benamidar shows
that defendant No.1/respondent No.1 was claiming title adverse to the
appellant/plaintiff at least from 1984. The present suit therefore filed in 2010
i.e. after 23 years is ex facie barred by limitation. As per Section 27 of the
Limitation Act, 1963 when the period of limitation for filing of the suit qua an
immovable property comes to an end, the ownership rights qua the same also
get extinguished as against the person who ought to have filed the suit within
12 years.
16.
In view of the above, I do not find any reason to interfere with the
impugned judgment of the trial Court dated 2.4.2011. The present appeal,
being without any merit, is accordingly dismissed, leaving the parties to bear
their own costs.
VALMIKI J. MEHTA, J.
MAY 07, 2012
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