Even assuming some
money was contributed by her husband in putting up construction of house, it
does not by itself conclusively establish the fact of benami.
It was held by the Privy Council in Seth Manik Lal Mansukhbai
Vs. Raja Bijoy Singh Dudhoria (AIR-1921-PC-69) that the burden of proof lies
on the party assailing transaction as benami, although the circumstances may
be suspicious. In such cases, it is essential to take care that the decisions of
the courts rests not upon suspicion, but upon legal grounds, established by
legal testimony. In cases of this character, the determination of the question
depends not only on direct oral evidence, but also upon circumstances and
surrounding of the case concerned. It has been held repeatedly that the burden
of proof lies heavily on the person who claims against the tenor of the deed,
that is, the alleged beneficiary, to show that the ostensible vendee was a mere
name lender and the property was in fact purchased only for his benefit. Such
burden would be discharged by satisfying the well known criteria viz. (1) source
of purchase money relating to the transaction, (2) possession of the property,
(3) the position of the parties and their relationship to one another, (4) the
circumstances, pecuniary or otherwise, of the alleged transfer, (5) the motive for
transaction, (6) the custody and production of title deeds and (7) the previous
and subsequent conduct of the parties. Each of above said circumstances,
taken by itself is of no particular value and affords no conclusive proof of the
intention to transfer the ownership from one person to the other.
But, a
combination of some or all of them and a proper weighing and appreciation of
their value would go a long way towards indicating whether the ownership has
been really transferred or where the real title lies. In every benami transaction,
the intention of the parties is the essence. Therefore, the true test to determine
whether the transaction is benami or not is to look to the intention of the parties
viz. whether it was intended to operate as such or whether it was only meant to
be colourable.
40. From the principles laid down in the decisions, it is clear that the
person who impugns the apparent character of the transaction, viz. the Plaintiff
herein must show by letting in legal evidence establishing that the transaction in
question is a benami one and the issue cannot be disposed of by a mere
conjecture or suspicion as to the various circumstances surrounding the
transaction.
Section 101 of the Evidence Act provides that anyone, who
desires a court to give judgement as to any legal right or liability dependant on
the existence of facts which he asserts, must prove that those facts exist. The
evidence must be reliable and acceptable, compelling the court to take a view
contrary to the recitals in the impugned documents.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:
25.06.2014
CORAM:
THE HONOURABLE MRS.JUSTICE ARUNA JAGADEESAN
CS.Nos.469/2008 and 847/2009
K.R.Rajeesh Kumar
Plaintiff
Vs
K.Nalini Raghavan
CS.No.469/2008 has been filed to pass a judgement and decree in favour of the plaintiff as follows:
(a) to pass a preliminary decree, declaring that the plaintiff is
entitled to 1/4th undivided share in the plaint schedule property
and to effect a partition and separate possession of the plaintiff's
share by metes and bounds,
(a)(i) to pass a preliminary decree declaring that the plaintiff is
entitled to 1/4th undivided share in the plaint schedule II property
and to effect a partition and separate possession of the plaintiff's
share by metes and bounds
(b) to appoint an Advocate Commissioner to effect division of
the plaint schedule property and allot separate possession in
respective shares of the plaintiff and the defendants.
(c) to grant a permanent injunction restraining the defendants 1
and 2 from alienating the plaint schedule property including the
share of the plaintiff and the defendants in the plaint schedule
property, and
(d) to award costs of the suit.
2. CS.No.847/2009 has been filed to pass a judgement and decree
against the Defendants as follows:-
(a) directing the Defendants to vacate and hand over
possession of the portion occupied in the suit schedule
mentioned property viz. Two rooms measuring 1000 sq.ft. at
“Kalyani”, Old No.28, New No.25, South Beach Avenue, MRC
Nagar, Chennai-28 to the Plaintiff,
(b) directing the Defendants to make payment of a sum of
Rs.5,20,000/- being the rent payable from July, 2007 till the date
of the plaint and subsequently till handing over the same,
(c) granting injunction restraining the Defendants from causing
any damage to the property at “Kalyani”, Old No.28, New No.25,
South Beach Avenue, MRC Nagar, Chennai-28 belonging to the
Plaintiff inclusive and not restricted to the two rooms in their
occupation and
(d) to award costs of the suit
3. Since both the suits are interconnected and the subject matter,
the parties and the facts and circumstances are one and the same, these suits
3
are disposed of by this common judgement.
4. The plaint averments in CS.No.469/2008 are as follows:-
a.
The Plaintiff is one of the founder Directors of M/s.Varnam
Printing Inks (P) Limited, which carried on the business of manufacturing and
marketing of printing inks at Ambattur, Chennai and he is living with his wife
and daughter in the bungalow at “Kalyani”Old No.28 and New No.25, South
Beach Avenue, MRC Nagar, Chennai-28, which is described in the schedule. In
the said premises, the Plaintiff's
mother, younger brother and sister, the
Defendants 1 to 3 are also living together with the Plaintiff right from the date of
occupation in 1984 after its construction. The Plaintiff and his brother, the 3rd
Defendant got married in the years 2004 and 2005 respectively and are living
with their wives in the above bungalow and they have a daughter each. The
sister of the Plaintiff, the 2nd Defendant got married in the year 2007 and is
likely to join her husband at Sharjah where he is working.
b.
The father of the Plaintiff Late K.P.Raghavan was working in
M/s.Coates of India Limited, Calcutta, a leading printing ink manufacturer in
India, as a Technical Staff since 1949 and was subsequently posted at Chennai
as Technical Manager in the year 1960. While in service, he was nurturing an
idea of starting a concern by himself to manufacture and market printing inks,
by making use of his deep technical knowledge in the manufacture of printing
inks. In the last leg of his service, the he promoted a proprietary concern in
1965 by name M/s.Kandyan Enterprises at Chennai to buy and sell printing
inks, naming his wife, the 1st Defendant herein as its Proprietor, as he could
not use his name during the period of service. The father of the Plaintiff left his
4
job in October 1965 and
by investing his provident funds and other financial
benefits received from his Company, carried on the business in a small scale by
buying and selling the printing inks in the market with the help of his known
customer. Thereafter, the father of the Plaintiff, for the purpose of starting
manufacturing unit of his own, applied for allotment of a shed at Ambattur
Industrial Estate. In the year 1968, a shed was allotted to him at G3, Industrial
Estate, Ambattur, Chennai and he started a proprietary Company in the name
and style of M/s.National Printing Ink Co. with himself as Proprietor and he was
selling the printing inks through M/s.Kandyan Enterprises, Chennai, both run by
him.
c.
As both the businesses were doing good around, his father
wanted to invest his business income and savings in the immovable properties.
At that time, there was an offer of sale for some plots in MRC.Nagar and he
had purchased two plots, viz. Plot No.27, ad measuring about one ground and
187 sq. ft in his name and Plot No.28, admeasuring about two grounds and 28
sq.ft. in the name of his wife, the 1st Defendant herein under two registered
sale deeds both dated 29.11.1979 out of the funds raised from his above said
business, the savings lying in the name of his children and from external
borrowings. The Plaintiff's father started construction of a house in Plot No.28
for the family members to enjoy with equal rights. At one point of time, when
construction of the house could not be continued further for want of funds, the
Plaintiff's father had sold his other plot No.27 and invested the sale proceeds in
the construction of the house besides borrowing a loan of Rs.75,000/- from LIC
to complete the construction. The bungalow was completed in 1984 and the
5
entire family consisting of the Plaintiff's father and mother, sister and brother,
the Defendants 1 to 3 herein and the Plaintiff moved into the new house. The
Plaintiff has been living all along in the said house since its construction and in
occupation with the Defendants 1 to 3 till date.
d. After finishing graduation in Chemistry, the Plaintiff joined his
father in 1981 to assist him in the formulation and manufacture of printing inks,
as his father was a glaucoma patient and had poor vision. The Plaintiff took
over the entire administration of the manufacturing unit at Ambathur, by name,
M/s.National Printing Ink Company and the marketing Company at Chennai,
M/s.Kandyan Enterprises, as his father was becoming too old and frail. In 1985,
his brother, the 3rd Defendant who finished his UG Course, joined the Plaintiff
in the administration of the said business. The 2nd Defendant, who completed
Post Graduation, also joined the Company in 1988 to look after the accounts
and finance of the Company. As the Plaintiff's father could not go to the factory
at Ambattur from his residence at Chennai regularly and involve himself in the
day to day administration of the business, he wanted to convert his proprietary
concern M/s.National Printing Company into a partnership concern in the name
of M/s.Triyaar & Co. with his two sons and himself as partners so as to enable
the Plaintiff and the 3rd Defendant to do an effective business without his
personal involvement. But, the Plaintiff had suggested for promotion of a new
private Limited Company with all the family members as Directors to carry on
the business of manufacturing and selling of the printing inks and accordingly, a
new Company, by name, M/s.Varnam Printing Inks (P) Limited was registered
in 1989 with the Plaintiff's father as Managing Director and the Plaintiff and the
6
Defendants 1 to 3 as Directors and the machineries and the business for the
manufacture and selling of the printing inks were transferred from the
proprietary concern of the Plaintiff's father, M/s.National Printing Ink Company,
while the ownership of the land and the factory buildings remained with the
M/s.National Printing Ink Company.
Thereafter, the Plaintiff procured more
orders and the business was developed to a greater extent.
e. The Plaintiff's father died on 23.1.1994, leaving behind him the
Plaintiff's mother, sister and brother, the Defendants 1 to 3 and himself as his
only legal heirs to succeed to all his movable and immovable properties,
besides all the savings, shares, investments, interests, etc. earned by him.
Before his death, the Plaintiff's father executed a Will dated 13.02.1986,
whereby he had bequeathed all his movable and immovable properties besides
all the saving, shares, investments, interests, etc. earned by him to his legal
heirs. Thereafter, the Plaintiff made the Plaintiff's mother, as the Managing
Director of the Company in the place of his deceased father, though she was
not much educated and exposed to business management and she was only a
name lender. The Plaintiff in good faith arranged for transfer of all the shares
that remained in the name of the deceased Plaintiff's father. The Plaintiff also
arranged for taking more shares in the name of the Defendants 1 and 2 with a
good intention and trust that the same could be enjoyed by the family members
jointly. Thereafter, Central Excise Department prohibited the sale of inks by
M/s.Varnam Printing Inks (P) Limited to Kandyan Enterprises, as the Managing
Director and Proprietor of both the concerns were one and the same person i.e.
the 1st Defendant. Thereafter, in 2002 the Plaintiff launched a new venture to
7
import and sell papers through M/s.Kandyan Enterprises. While so, after a
marriage proposal was finalized for the 2nd Defendant with one S.Sujithkumar,
problems and misunderstanding crept into the family as well as in the business.
The situation had become worsened further after the betrothal function of the
2nd Defendant that took place on 20.6.2007. The behaviour and attitude of the
Defendants 1 and 2 were changed towards the Plaintiff and the 3rd Defendant.
However, the Plaintiff has made all arrangements for conduct of the marriage of
the 2nd Defendant on 24.10.2007. Few days after the marriage, the Plaintiff
and his brother were shocked to receive pressure from his mother and sister,
the Defendants 1 and 2 to vacate the house, stating that she had planned to go
to Dubai along with the 2nd Defendant to join his son in law after letting out the
suit property for rent. The Defendants 1 and 2 have also started harassing the
Plaintiff's wife when she was lonely at home with the child.
f.
On 9.2.2007, when the Plaintiff left for Indore to see the newly
born baby and the wife of the 3rd Defendant, the Defendants 1 and 2 brought a
self cheque of Rs.2 lakhs and tried to draw the money from the Bank and
instructed the Senior Manager of the Bank to close the overdraft account
without the knowledge of the Plaintiff and the 3rd Defendant. They also sent a
letter to the Bank Manager to freeze the account and to stall all the business.
Even after the Plaintiff and the 3rd Defendant explained the legal position and
made it clear that they are legally entitled for 1/4th share each in the suit
property, the Defendants 1 and 2 continued to forcefully oust the Plaintiff and
the 3rd Defendant with their families out of the suit property. The Plaintiff was,
therefore, left with no other alternative than to demand for partition of the suit
8
property and asked the Defendants 1 to 3 to agree for partition.
But, the
Defendants 1 and 2 refused to partition, by saying that the title deeds of the suit
property stood in the name of the 1st Defendant and she was entitled to deal
with the property according to her wish. The Plaintiff came to know from the
Encumbrance Certificate dated 2.4.2008 that a settlement deed dated
28.6.2007 was executed by the 1st Defendant in favour of the 2nd Defendant,
illegally settling the suit property. Though the 1st Defendant does not enjoy
absolute right over the suit property so as to deal with it in any manner, she in
collusion with the 2nd Defendant has registered the settlement deed executed
by her in favour of the 2nd Defendant. The 1st Defendant is not the real owner
of the suit property and only as an ostensible owner, she has been holding its
title deeds in her name in a fiduciary capacity for the benefit of the legal heirs of
her late husband, K.P.Raghavan. She is only a name lender and not a true and
lawful owner except that the sale deed of the suit property stands in her name
ostensibly. Therefore, the settlement deed dated 28.6.2007 executed by the 1st
Defendant is a sham and nominal and void ab initio in the eye of law. As he
has come to know about the illegal transaction with regard to the suit property
only on 2.4.2008, when the 1st Defendant registered the settlement deed dated
28.6.2007 in favour of the 2nd Defendant, the Plaintiff has filed this suit. The
settlement deed is not acted upon.
g. The suit property, by all means, both factually and legally and in
equity as well, is the joint family property, after the death of the Plaintiff's father,
as the same was purchased by the father of the Plaintiff in the name of his wife,
the 1st Defendant out of the income derived from his business. The nucleus,
9
out of which the funds were raised for the purchase of the suit property, is
nothing but the investments made by the Plaintiff's father as stated supra. In the
Will, it is also made clear that the business should not be closed at any time
unless and until all the members of the family, i.e. the Plaintiff and the
Defendants 1 to 3 agree and that in case one of the members who wishes to
quit, he or she can do so and he or she would be paid Rs.1 lakh from the
account of the business. The intention of the Testator is very much clear and
unambiguous that all his movable and immovable properties are to be
succeeded by the Plaintiff and the Defendants equally. The 1st Defendant is
only a Benamidar to the above transaction, wherein the sale consideration was
provided by the Plaintiff's father. The Benami Transactions (Prohibition) Act,
1988 does not prohibit such a transaction and the Act further provides that the
purchase of the property by any person in the name of his wife can be
contested and proved for the benefit of the husband and accordingly for the
benefit of his legal heirs after his death, intestate. The 1st Defendant is holding
the suit property in her fiduciary capacity for the benefit of the members of the
family of Late K.P.Raghavan after his death and therefore, the Plaintiff has
become entitled for 1/4th share in the suit property as a legal heir of the said
K.P.Raghavan under Class I of the Schedule in the Indian Succession Act,
1956. In such circumstances, CS.No.469/2008 has been filed for the reliefs as
stated above.
5.
In CS.No.469/2008, in the Written Statement filed by the 1st
Defendant, it is averred as follows:-
a.
The suit property was the self acquired property of the 1st
10
Defendant. Out of her free will and volition, to avoid any future disputes after
her life time, she had settled the suit property in favour of her daughter, the 2nd
Defendant herein. The averments regarding Benamidar are false. The Plaintiff
and the 3rd Defendant are my sons and due to difference in family, they have
come forward with this false suit. The 1st Defendant had married K.P.Raghavan
on 17.5.1953, who was employed in M/s.Coates of India Limited, Calcutta, a
leading printing ink manufacturing Company in India. In 1958, he was
transferred and posted at Chennai. The 1st Defendant was aspiring to be
entrepreneur and with the knowledge she acquired from her husband, had
invested amounts, by selling her jewellery that was given to her at the time of
her marriage by her parents and started a Proprietress concern in 1962 by
name M/s.Kandyan Enterprises at Chennai. The husband of the 1st Defendant
had left his job and had not taken up any employment for three years.
Originally ink concentrates were purchased, then mixed, blended and finished
produced sold. The blending was done by the 1st Defendant at home and
marketed by her husband. Thereafter, K.P.Raghavan managed to get a shed
allotted in Ambathur Industrial Estate on rental basis from the Government of
Tamil Nadu and started a proprietorship concern in his name. The 1st
Defendant had contributed from her earning made from M/s.Kandyan
Enterprises and borrowing made from his friends. Late K.P.Raghavan also
used his provident fund amounts and invested the same in the proprietorship
concern M/s.National Printing Inks Company. M/s.Kandyan Enterprises was
managed by the 1st Defendant and M/s.National Printing Inks Company was
managed by her husband. K.P.Raghavan had not invested any amount for
11
setting up or starting up of the M/s.Kandyan Enterprises. M/s.National Printing
Ink Company was later converted into a private limited Company and
incorporated and registered under the provisions of the Companies Act under
the name and style of M/s.Varnam Printing Inks Private Limited. Though
K.P.Raghavan wanted to retain the name of the Company as M/s.National
Printing Ink Company, there was an objection raised by the Registrar of
Companies as the name “National” was not allowed to be used and therefore,
at the suggestion of the 1st Defendant, the name was changed to M/s.Varnam
Printing Inks Private Limited.
Thus, the proprietorship concern of the 1st
Defendant's husband with all its assets and liabilities was taken over by the
said concern M/s.Varnam Printing Inks Private Limited.
b.
M/s.Kandyan Enterprises continued to carry on business in
printing inks and allied products like anti set off liquid spray and had its own
customer base. No person, excepting the 1st Defendant was involved in the
manufacturing process. The products manufactured and marketed by the 1st
Defendant were supplied to various customers. Subsequent to the incorporation
of M/s.Varnam Printing Inks Private Limited, M/s.Kandyan Enterprises
continued to market the printing inks manufactured by the above Company.
This arrangement continued until the death of the 1st Defendant's husband.
Thereafter,
since the 1st Defendant took over as Managing Director of
M/s.Varnam Printing Inks Private Limited, it was decided that the said Company
would market the printing inks, as the same would be in the interest of the
business. The income earned from M/s.Kandyan Enterprises was exclusively
used by the 1st Defendant for her needs and no person had any share in
12
respect of the same. The 1st Defendant purchased the plaint schedule I
mentioned property on 29.11.1979 from Adyar Coop. House Site Society
Limited, registered as Doc.No.2010 of 1979 in SRO of Mylapore and from and
out of her earnings from M/s.Kandyan Enterprises and with a loan availed by
the 1st Defendant from LIC, construction was put up over the plaint schedule
mentioned property.
The plot adjacent to the plaint schedule mentioned
property, purchased by the Defendant's husband, was later sold by him to one
Chandramouli. The sale was made, as the funds were required by the 1st
Defendant's husband to purchase the factory land and shed for M/s.Varnam
Printing Inks Private Limited at Ambattur, which was under lease till then.
When the business activities of M/s.Kandyan Enterprises were put in operation,
the Plaintiff was one year old. The 1st Defendant's husband had expired on
23.1.1994 and at that time, her children were very young and the 1st Defendant
took control of all the businesses.
c. Serious differences and disputes have cropped up between the
family members of the Defendants and the third Defendant had gone to the
extent of physically assaulting the 1st Defendant only for the properties and the
1st Defendant has also instituted several complaints and also a suit in respect
of the other businesses. The 2nd Defendant filed a company petition before the
Company Law Board in respect of M/s.Varnam Printing Inks P Limited. The
Plaintiff does not have any knowledge whatsoever regarding the acquisition of
the suit schedule mentioned property and has deliberately come forward with
this suit making false and untenable allegations. In order to keep peace, the 1st
Defendant's daughter the 2nd Defendant herein had quit the office in May 2007.
13
In the mean time, as the family situation was worsening, the 1st Defendant had
requested her sons to take her to a lawyer to make her Will. They took her to
their family lawyer V.M.G.Ramakannan, with whom the 1st Defendant confided
that she wanted to settle the property which she had purchased from and out of
her self earning in the year 1979 in the name of her daughter, the 2nd Defendant
herein, who was then a spinster.
The 1st Defendant had explained to the
lawyer the situation at home and office and conveyed her intention to settle the
property in the name of her daughter, the 2nd Defendant herein. Subsequently,
the 1st Defendant understands that V.M.G.Ramakannan, Advocate had
communicated the same to the Plaintiff. Thereafter, the 1st Defendant was
called by the said Advocate to his office, who tried to prevail on the 1st
Defendant to reconsider her decision in the interest of the family giving equal
shares to all three children. The said Advocate had explained that the 1st
Defendant's daughter, 2nd Defendant herein and herself would continue as
Directors, drawing salary and have equal rights with her other children in
business. The 1st Defendant was compelled and forced to write a Will. But,
the 1st Defendant had insisted that her share in all business and the Proprietary
concern, M/s.Kandyan Enterprises would go exclusively to her daughter viz. the
2nd Defendant herein. Thereafter, the said Advocate had communicated this to
the 1st Defendant's daughter that the Plaintiff and the 3rd Defendant are taking
efforts to get the Will written and to safeguard her interest. There was frequent
misunderstanding in the family and in light of the attitude of the two brothers,
the 1st Defendant had consulted another lawyer, made a settlement deed
settling her self acquired property namely house more fully described in the
14
schedule to the plaint in favour of the 2nd Defendant herein to avoid any further
disputes, out of her free will and volition.
d. As regards the allegations contained in paragraph 3, the Plaintiff
has not contributed anything towards M/s.Varnam Printing Inks P Limited. The
business carried on by the 1st Defendant in the name of M/s.National Printing
Ink Company, was converted into a Private Limited Company, named as
M/s.Varnam Printing Inks Private Limited. The Plaintiff and the 3rd Defendant
are living in one room respectively each in the suit schedule mentioned
property. They have left the premises and subsequently prior to the filing of the
suit forcibly entered into the premises and are in forceful occupation of one
room each.
As regards allegations contained in paragraph 4, the name
“Kandyan” is the 1st Defendant's family name and the 1st Defendant out of her
own resources started the proprietary concern. The 1st Defendant's husband
throughout his life time had actively encouraged the 1st Defendant to be self
sustaining and has developed the entrepreneurial skill in the 1st Defendant.
During his life time, the 1st Defendant had all freedom to carry on business and
there was no dispute or quarrel about the properties or their ownership. Solely
for the purpose of maintaining the above suit, the allegations have been made
as if the 1st Defendant's husband was doing the business in the name of the
1st Defendant. In fact, due to the moral support given by her husband during
his life time, the 1st Defendant was able to manage even the other businesses.
The Plaintiff does not have any knowledge about any of the transactions as he
was not born then. The Plaintiff was then too young; however, he has stated as
if he has personal knowledge about the business started by the 1st Defendant
15
and about acquisition of property.
As regards allegations contained in
paragraph 5, the suit schedule mentioned property was purchased by the 1st
Defendant out of her own funds on 29.11.1979. The house was constructed
over the suit schedule mentioned property by availing loan from LIC. In fact,
the adjacent plot was purchased by the 1st Defendant's husband.
Late
K.P.Raghavan sold the said plot for purchase of factory premises for
M/s.National Printing Ink Company now known as M/s.Varnam Printing Inks
Private Limited. The 1st Defendant specifically denies the allegation that the
1st Defendant's husband had purchased the suit schedule mentioned property
in the 1st Defendant's name. The Plaintiff does not have any knowledge of the
struggle we have undertaken to bring them up. Neither the Plaintiff nor the 3rd
Defendant have any right whatsoever over the suit schedule mentioned
property. At the most, their possession was permissive prior to leaving the suit
schedule mentioned property. Their possession today, at the most, is only as
trespassers and they do not have any right whatsoever over the suit schedule
mentioned property. As regards the allegations contained in paragraph 6 of the
plaint, the role of the Plaintiff is denied and in any event not germane for the
purpose of this suit.
e.
As regards allegations contained in paragraph 7, the same
pertains to M/s.National Printing Ink Co. and M/s.Varnam Printing Inks P
Limited and not germane for the purpose of this suit. The disputes pertaining to
M/s.Varnam Printing Inks Private Limited is pending before the Company Law
Board. The Plaintiff and the 3rd Defendant are mismanaging the said business
and in any event, the allegations pertaining to the said Company are not
16
germane for the purpose of this suit.
As regards allegations contained in
paragraph 8 of the plaint, the 1st Defendant's husband executed a Will
bequeathing all his properties in equal share to the Plaintiff and the Defendants.
The suit schedule mentioned property, being exclusive property of the 1st
Defendant, does not find a place in the Will executed by her husband. The 1st
Defendant was running her business ever since its formation i.e. M/s.Kandyan
Enterprises and statements have been made only for the purpose of
maintaining the suit. The issues pertaining to M/s.Varnam Printing Inks (P)
Limited are not gemane for the purpose of this suit. In fact, the 1st Defendant
with an intention to take back seat reposing faith in the Plaintiff and the 3rd
Defendant had signed cheque books pertaining to M/s.Kandyan Enterprises
and entrusted the business activities to the Plaintiff and the 3rd Defendant. The
faith and confidence reposed by the 1st Defendant had been misused by the
Plaintiff and the 3rd Defendant and amounts have been fraudulently transferred
to other entities and third parties have been taken in as partners in these
entities. The 1st Defendant is an income tax assessee. The present suit has
been filed for collateral purpose and false allegation as if the property was
purchased by the 1st Defendant's husband in her name. Events subsequent to
the acquisition of the property are irrelevant for the purpose of the suit. The suit
schedule mentioned property has been purchased by the 1st Defendant out of
her own funds and building constructed by availing loan from LIC and duly
repaid by the 1st Defendant out of her business income from M/s.Kandyan
Enterprises.
f. The allegations made in paragraphs 8 to12 are false and incorrect.
17
The 1st Defendant has executed a settlement in favour of the 2nd Defendant
and the Plaintiff is not entitled to question the same. He does not have any
right or authority to question the same. The suit property is not a joint family
property.
The 1st Defendant is presently being taken care off by the 2nd
Defendant only. The 1st Defendant has no means for her to to day sustenance
and the present suit has been filed out of ill will. As regards the allegations
contained in paragraph 13, no cause of action has arisen for filing of this suit.
All the other allegations in the plaint, which are not specifically traversed into,
are denied as false and incorrect. The Plaintiff is not entitled to any partition
and the suit is not maintainable either in law or on facts and is liable to be
dismissed.
6. In CS.No.469/2008, the 2nd Defendant has filed a separate written
statement adopting the written statement filed by the 1st Defendant.
7.
In CS.No.469/2008, in the Written Statement filed by the 3rd
Defendant, it is averred as follows:-
a. The Plaintiff and the Defendants 2 and 3 are the children of Late
K.P.Raghavan and the 1st Defendant. As a matter of fact, the suit property was
purchased by his father, Late K.P.Raghavan under a benami transaction in the
name of the 1st Defendant and hence, the claim of the Plaintiff for partition of
the suit property into four shares to be allotted to the Plaintiff and the three
Defendants equally with 1/4th share each is more appropriate and justified in
accordance with law as well as on equitable grounds. It is true that as stated by
the Plaintiff, Late K.P.Raghavan was working in M/s.Coates India Limited,
Calcutta and was transferred to Chennai in 1960. In 1965, he started a
18
proprietary concern by name M/s.Kandyan Enterprises at Chennai to buy and
sell printing inks, putting the name of his wife, the 1st Defendant as its
proprietrix as he was in the service. He had then left the job and started doing
the above business, investing his provident funds and other retirement benefits.
He was running the business well and in order to expand the business, he had
got an allotment of a shed at G3, Industrial Estate, Ambattur, Chennai allotted
by SIDCO and registered a proprietary Company in the name and style of
M/s.National Printing Ink Co for manufacturing printing inks and selling them
through the M/s.Kandyan Enterprises, his other concern. Thereafter, he had
purchased two plots i.e. Plot No.27, admeasuring about one ground and 187
sq.ft. in his name and plot No.28, admeasuring about two grounds and 28 sq.ft.
in the name of the 1st Defendant under two registered sale deeds both dated
29.11.1979. He also constructed a house in the Plot No.28 for the benefit of
the family members to enjoy equally. In fact, the Plaintiff' father had to sell his
other plot No.27 to complete the construction. After the construction of the
house in 1984, the Plaintiff, the Defendants 1 and 2 and the 3rd Defendant and
his father moved into the new house. The Plaintiff and the Defendants 1 to 3
have been living all along in the said house since its occupation till date. The
3rd Defendant and the Plaintiff have been living with their family after their
marriage in the suit property. While so, after the marriage finalization of the 2nd
Defendant, the problems started in the family and after the conduct of the
betrothal ceremony of the 2nd Defendant on 20.06.2007, the Defendants 1 and 2
became more arrogant and discourteous to the Plaintiff and the 3rd Defendant.
A few days after the marriage on 24.10.2007, the Plaintiff and the 3rd
19
Defendant were treated badly and their wives were threatened by the
Defendants 1 and 2 to vacate the house, the suit property informing that they
wanted to let out the home for rent as they had decided to leave the suit
property and live in Dubai with the husband of the 2nd Defendant.
b. On 9.2.2007, the Bank Manager called the 3rd Defendant, who
used to represent the M/s.Kandyan Enterprises always for all banking purposes
and informed that the Defendants 1 and 2 were demanding payment of Rs.2
lakhs by presenting a cheque from the account of M/s.Kandyan Enterprises.
The 3rd Defendant explained the difficulty in allowing the payment of the said
cheque for such a huge amount without consulting the others and hence, the
payment was denied by the Bank.
The Defendants 1 and 2 became very
ferocious against the Plaintiff and the 3rd Defendant and also sent a letter to
the Manager to freeze the account of M/s.Kandyan Enterprises.
After the
above incident, the Defendants 1 and 2 had started harassing and threatening
the Plaintiff and the 3rd Defendant to go out of the suit property. Though the
Plaintiff and the 3rd Defendant have resisted the same as they are entitled for
shares each in the suit property, but the Defendants 1 and 2 continued to take
all coercive steps to oust them out of the suit property by giving false police
complaints against them. The above action of the Defendants 1 and 2 grew
suspicious in the minds of the Plaintiff and the 3rd Defendant and the Plaintiff
had obtained the encumbrance certificate dated 2.4.2008 from the Office of the
Sub Registrar, Santhome in respect of the suit property. On scrutinizing the
encumbrance certificate, the 3rd Defendant and the Plaintiff were shocked to
learn that a settlement deed dated 28.6.2007 was already registered by the 1st
20
Defendant in favour of the 2nd Defendant in respect of the suit property though
the 1st Defendant had no absolute right over the suit property.
The 1st
Defendant in collusion with the 2nd Defendant has arranged for settlement of
the suit property in favour of the 2nd Defendant. The 1st Defendant had been
holding the title only in a fiduciary capacity for the benefit of the family members
of her late husband, K.P.Raghavan.
Therefore, the settlement deed dated
28.6.2007 executed by her is illegal and not binding on the 3rd Defendant and
the Plaintiff. The suit property, which was acquired out of the income from the
M/s.National Printing Ink Company and M/s.Kandyan Enterprises both run by
Late K.P.Raghavan and from the funds raised through the sale of his other plot
no.27 as well as his personal savings and other loans, is nothing but a joint
family property of the Plaintiff and the Defendants and the 1st Defendant is only
a benami holding a ostensible title on behalf of the family members of Late
K.P.Raghavan. The Benami Transactions (Prohibition) Act, 1988 provides for
purchase of property by any person in the name of his wife and the same can
be claimed and proved for the benefit of the husband. The Plaintiff and the
Defendants 1 to 3 are entilted for 1/4th shares in the suit property as legal heirs
of the said K.P.Raghavan under Class I of the Schedule in the Indian
Succession Act, 1956. His father, before his death in 1994, had executed a Will
dated 13.02.1986 bequeathing all his movable and immovable properties as
well as his savings, shares, investments, interests, etc. to his legal heirs, i.e. the
Plaintiff and the Defendants 1 and 3 to be enjoyed equally. Hence, all the
parties are entiled for 1/4th share in the suit property. In such circumstances, the
above suit for partition deserves to be allowed as prayed for in accordance with
21
law.
8. The plaint averments in CS.No.847/2009 are as follows:-
a. The Defendants 1 and 2 are the brothers of the the Plaintiff and
born through the legal wedlock between K.P.Raghavan and K.Nalini Raghavan.
The Plaintiff's mother K.Nalini Raghavan had purchased the vacant land
presently bearing Municipal New Door No.25 (Old No.28) “Kalyani” South
Beach Avenue, MRC Nagar, Chennai 600028 within the territorial jurisdiction of
this court under a deed of sale executed at Madras on 29th November 1979 by
the Adyar Cooperative Housing Society Limited for a valuable consideration
and registered as Document No.2010 of 1979 on the file of the Sub Registrar of
Assurances, Mylapore. The mother of the Plaintiff in the light of the grooming
differences in the family to avoid any dispute over the property after her life
time, settled the suit schedule mentioned property out of her own will and
accord on 28.6.2007 in favour of the Plaintiff under a Registered Deed of
Settlement registered as Doc.No.1622 of 2007 on the file of the Sub Registrar
of Assurances, Mylapore. In furtherance to the settlement deed, the revenue
records have been mutated and presently stand in the name of the Plaintiff.
The electricity connection has also been transferred in the name of the Plaintiff.
The Defendants 1 and 2 started acting in a manner detrimental to the interest of
the Plaintiff and her mother in the businesses wherein the Plaintiff and the
mother were major shareholders. Serious difference crept up in the family and
the Defendants who were aware about the settlement by the mother in favour of
the Plaintiff, filed a suit in CS.No.469/2008 seeking for partition of the suit
schedule mentioned property falsely contending that the suit property is not the
22
exclusive property of the mother of the Plaintiff. The Defendants 1 and 2 have
not challenged the settlement deed and the suit filed by them in
CS.No.469/2008 is being suitably defended. The Plaintiff' mother has denied
the allegations put forth by the Defendants 1 and 2 regarding the manner of
acquisition of the suit schedule mentioned property as well as explained the
circumstances giving rise to the execution of the settlement deed in favour of
the Plaintiff. The Defendants 1 and 2 have filed the suit on ill advice solely with
an intention to harass the Plaintiff.
b. The Plaintiff has instituted a Company Petition in CP.No.10/2009
in respect of the various acts of oppression and mismanagement committed by
the Defendants 1 and 2 in respect of the M/s.Varnam Printing Inks Private
Limited. The mother of the Plaintiff has also instituted a suit before this court
for certain relief. The Plaintiff has become the sole and absolute owner of the
suit property. The Defendants, who were residing in the suit property, left the
property after execution of the settlement deed and just before the filing of the
suit in CS.No.469/2008, forcibly entered into the suit property and are in forcible
occupation of two rooms in the first floor of the house. The entrance to the suit
property is common and the entire property has a single kitchen and the
Defendants are in forcible occupation of the two rooms with an intention to
cause disharmony. The mother of the Plaintiff is residing with the Plaintiff and
the Plaintiff has been taking care of her. Several complainants have been
lodged by the Plaintiff as well as the Plaintiff' mother as against the Defendants
with the Police authorities and the Defendants have been getting away with
their money, muscles power and influence. The 1st Defendant has preferred a
23
complaint with the Electricity Department alleging that name ought not to have
been changed in respect of the electricity connection in the said property. The
Plaintiff sent a reply on 9.11.2008 to the Department. The Defendants 3 and 4
in order to put pressure and chase out the Plaintiff and her mother from the
premises have undertaken acts aimed at creating disharmony in the family and
in the premises. The Defendants are in the habit of opening the water taps
leaving it open overnight, leaving the house open and making it unsafe for the
Plaintiff and her mother to live, using the common kitchen and garden creating
a mess by throwing waste and other products after they finished cooking and
dumping waste wantonly by leaving the same in front of the room of the Plaintiff
and overhearing conversations of the Plaintiff. Though the property tax, water
taxes are being paid prior to the deed of settlement from the account of the
Company and treated as drawings of the Plaintiff's mother subsequent to the
deed of settlement, the Defendants 1 and 2 have maintained that the Plaintiff
has to pay the taxes and charges for electricity consumption. The Plaintiff has
been making payment of these charges.
c.
The Defendants indulged in activities of physical assault, in
respect of of which the Plaintiff and her mother had preferred complaint with the
Police concerned. Since the Defendants are influential, every time they had
managed to apologize and be let out with an apology without any action being
taken by the authorities. The Plaintiff demanded the Defendants to vacate and
hand over possession of the property and pay rents at Rs.20,000/- per month.
They have failed and neglected to comply with the same. The Defendants by
their acts have caused lot of loss and damage and every time before the police
24
authorities promised to make payment of amounts and till date have not
complied with. They are not contributing any amount even for maintenance of
mother. They are causing untold hardship and damage to the property. The
Plaintiff reliably understands that the Defendants have acquired interest in
respect of another property and have shifted most of the things there and only
with an intent to harass and make an illegal gain and damage the property, the
Defendants are continuing in occupation of 2 rooms in the first floor of the
property, knowing fully well the same would result in hardship and loss to the
Plaintiff. The Defendants do not have any right or authority to reside in the
property. The Defendants 3 and 4, who are wives of the Defendants 1 and 2
respectively, are not residing in the property and keep visits the property on and
off and making merry in causing hardship to the Plaintiff and her mother during
their stay.
Though originally the Defendants were permitted to occupy the
portion of the house, on coming to know of the Deed of Settlement had left the
premises.
Thereafter, the Plaintiff understood that for the purpose of
maintaining the suit in CS.No.469/2008 before this court entered into the
property and are in forcible occupation of the two rooms and are using the
common kitchen in the ground floor. Thus, the Plaintiff values the relief (a)
prayed for in the plaint at Rs.10,50,000/- though 12 times of monthly rent in
respect of the portion in occupation of the Defendants is Rs.2,40,000/- The
market value of the portion occupied is Rs.10,50,000/-
d. The Defendants are liable to pay amount in respect of the portion
forcibly occupied by them till handing over of possession to the Plaintiff. The
property viz. “Kalyani”Old No.28, New No.25, South Beach Avenue, MRC
25
Nagar, Chennai-28 is situated in a prime locality and the portion in forcible
occupation of the Defendants would easily fetch a sum of Rs.20,000/- per
month. Due to the forcible occupation by the Defendants, the Plaintiff is not in a
position to rent out the property and earn rental income. No person is willing to
occupy the property due to the forcible occupation by the Defendants and the
Plaintiff is suffering a loss of about Rs.2 lakhs per month which the property at
MRC Nagar would otherwise fetch if rented out. The Defendants do not have
any right, claim or title over the property and the other suit has been filed only to
thwart the Plaintiff's right to peacefully possess and enjoy the suit schedule
mentioned property. In such circumstances, the suit has been filed.
9.
In CS.No.847/2009, in the Written Statement filed by the
Defendants 1 and 2, it is averred as follows:-
a. The suit is liable to be dismissed in limini on the ground of res-
judicata under Section 11 of CPC, since the subject matter, the parties and the
property of this suit are squarely the same as in the suit filed by the 1st
Defendant in CS.No.469/2008. The suit property was acquired by the father of
these Defendants and the Plaintiff, Late K.P.Raghavan by way of purchase in
the name of his wife, K.Nalini Raghavan, under the registered sale deed dated
29.11.1979. K.P.Raghavan had only arranged for allotment of the Plot No.28 in
the name of his wife K.Nalini Raghavan by the vendor, the Adyar Cooperative
House Site Society Limited, Chennai-28 who allotted the same by a resultion
dated 11.10.1978 as confirmed on 11.11.1979.
In pursuance to the above
allotment, a sale deed was registered for a consideration of Rs.49,364.89/- by
the Society in the name of K.Nalini Raghavan. The above consideration was
26
paid by the Raghavan out of the funds from the account of M/s.Kandyan
Enterprises promoted and run by him in the name of his wife as its proprietor as
well as from his other resources.
Together with the above plot the late
Raghavan had also purchased another plot No.27 adjoining the suit plot No.28
in his name. The late Raghavan, while serving in M/s.Coates of India Limited,
promoted a proprietary concern in May 1965 and registered the same under the
name and style of M/s.Kandyan Enterprises at Chennai naming his wife Nalini
Raghavan as its proprietor as he could not use his name during service, to
carry on with the manufacturing and marketing of printing ink after his
retirement with the help of his technical knowledge and experience gained in
the service.
b.
Late K.P.Rahgavan had after retirement from service started
doing the business in a small scale under the name and style of M/s.Kandyan
Enterprises by buying and selling the printing Inks in the market with the help of
his known customers.
After the business was doing well, he started a
manufacturing unit in the name and style of National Printing Ink Co. with
himself as proprietor in a shed at G3, Industrial Estate, Ambattur, Chennai in
1968 allotted by SIDCO for manufacturing printing inks.
He was then
manufacturing printing inks in M/s.National Printing Ink Company at Ambattur
and selling them through the M/s.Kandyan Enterprises, Chennai both run by
him. Whereas the mother of the Defendants and the Plaintiff was extending
support in all his business as a wife.
As the business was doing good,
K.P.Raghavan had purchased two plots viz. Plot No.27, admeasuring about
one ground and 187 sq.ft. in his name and Plot No.28 admeasuring about two
27
grounds and 28 sq.ft. in the name of his wife, the mother of the Defendants and
the Plaintiff under two registered sale deeds both dated 29.11.1979 out of the
funds raised from the above said business, the saving lying in the name of his
children and from external borrowings and started construction of a house in
Plot No.28 for the family members to enjoy with equal rights. At one point of
time, when construction of the house could not be continued further for want of
funds, he had sold his other plot No.27 and invested the sale proceeds in the
construction of the house. The bungalow was completed in 1984 and the entire
family consisting of the Plaintiff and the Defendants and their father late
K.P.Raghavan and Nalini Raghavan moved into the new house.
The
Defendants have been living all along in the said house since the day of its
occupation till date.
c.
The
concern
M/s.National
Printing
Inks
Company
was
subsequently converted into a Private Limited Company in 1989 under the
name and style of M/s.Varnam Printing Inks P Limited with the Defendants 1
and 2 and the Plaintiff and their parents as Directors. Their father died on
23.1.1994 leaving behind him, the Defendants 1 and 2, the Plaintiff and their
mother as his only legal heirs to succeed to all his movable and immovable
properties. After the demise of their father, their mother who is the eldest
member of the family was made as the Managing Director of the Company
M/s.Varnam Printing Inks (P) Limited. In fact, after the demise of their father,
the business was put into lots of difficulties as the family had to meet the huge
medical bills and also for the reason that the good profits they had been
enjoying in the selling of their inks through their sister concern M/s.Kandyan
28
Enterprises was lost due to the objection raised by the Central Excise
Department under the Excise Rules that prohibited the sale of inks by
M/s.Varnam Printing Inks (P) Limited to M/s.Kandyan Enterprises as the
Managing Director and Proprietor of both the concerns were one and the same
person i.e. the mother.
However, the marketing arm of the business,
M/s.Kandyan Enterprises was kept alive by transferring funds from the
manufacturing concern M/s.Varnam Printing Inks (P) Limited for payment of
statutory taxes, electricity bills and other expenses. The 1st Defendant, being
the eldest male member of the family, was forced to look for new avenues to
overcome the financial constraint and sustain the business and has eventually
come out with an innovative idea to make changes in the existing course and
pattern of the business and develop techniques for manufacture of inks
required for the newspaper industry and has successfully converted the loss
making business units into a more profitable one, with the good understanding
and support of the other Directors. The Defendants 1 and 2 got married to
Defendants 3 and 4 in 2004 and 2005 respectively and have a child each.
While so, after a marriage proposal was finalized for the 2nd Defendant with
one S.Sujithkumar, problems and misunderstanding crept into the family as well
as in the business. The situation had become worsened further after the
betrothal function of the Plaintiff
that took place on 20.6.2007 and the
behaviour and attitude of the Plaintiff and their mother were changed towards
the Defendants 1 to 4. However, the Defendants has made all arrangements
for conduct of her marriage on 24.10.2007. Few days after the marriage, the
Defendants were shocked to receive pressure from the Plaintiff and their
29
mother to vacate the house, the suit property. Even after the Defendants 1 and
2 resisted the Plaintiff's threat to vacate the suit property and explained the
legal position that they were legally entitled for 1/4 th shares each in the suit
property, the Plaintiff and the mother continued to make attempts to forcefully
oust the Plaintiff and the Defendants 1 and 2 with their families out of the suit
property. The 1st Defendant was therefore left with no other alternative than to
demand for partition of the suit property.
But, the Plaintiff and the mother
refused to partition the suit property stating that the title deeds of the suit
property stood in the name of the Plaintiff and that she was entitled to deal with
the property according to her wish. Only then, the Defendants grew suspicious
of a possible foul play by the Plaintiff and the mother with regard to the suit
property and obtained encumbrance certificate dated 2.4.2008 from the Office
of the Sub Registrar, Santhome. The Defendants were terribly shocked to note
from the encumbrance certificate that a settlement deed dated 28.6.2007 was
registered by their mother settling the suit property illegally in favour of the
Plaintiff. Though their mother did not enjoy absolute right over the suit property,
she, under the undue influence and insistence of the Plaintiff, had registered
the settlement deed in favour of the Plaintiff. Their mother is not the exclusive
owner of the suit property and she is only as an ostensible owner holding its
title in her name in a fiduciary capacity for the benefit of the legal heirs of her
late husband K.P.Raghavan. She is only a name lender and not a true and
lawful owner and the sale deed of the suit property stands in her name
ostensibly. Hence, a suit in CS.No.469/2008 was filed by the 1st Defendant
herein for partition of the suit property. Their mother, after the marriage of the
30
Plaintiff, was brain washed by the Plaintiff and was induced to go against the
Defendants. As the Plaintiff and the mother had knowledge about the legal
claim of the Defendants 1 and 2, they had made the attempt to defeat the legal
claim of shares by the Defendants 1 and 2 in the suit property by registering an
illegal settlement deed. This would be evident from the averment of the Plaintiff
in paragraph 4 of the plaint, in the light of the grooming difference in the family,
to avoid any dispute over the property after her life time, the mother settled the
suit property on her own will and accord in favour of the Plaintiff. It is obvious
that the Plaintiff was aware of the genuine claims and legal rights of the
Defendants 1 and 2 in the property and only in anticipation of a claim of share
in the property by the Defendants 1 and 2 the settlement deed was registered
illegally behind the back of the Defendants 1 and 2. It is agonizing that the
Plaintiff, after extracting all the cooperation, support and help from the
Defendants 1 and 2 for the celebration of her betrothal function on 20.6.2007
had stealthily arranged for the registration of the settlement of the suit property
immediately after the betrothal function. Further, while enjoying all the support
and help affectionately extended by the Defendants for the celebration of her
wedding function held on 2.10.2007, the Plaintiff remained right lipped with
regard to the registration of the settlement of the suit property in her favour.
d. The mutation of records in favour of the Plaintiff, payment of tax
by her etc. as stated by her would have no impact on the legal claim of these
Defendants in respect of the suit property made in the suit in CS.No.469/2008
nor would bind them in any manner. The allegation contained in paragraph 5
that the Defendants 1 and 2 started acting in a manner detrimental to the
31
interest of the Plaintiff and her mother in the business wherein the Plaintiff and
the mother were major share holders are denied as false. As a matter of fact,
on 9.2.2008, when the 1st Defendant left for Indore to see the newly born baby
and the wife of the 2nd Defendant, the Plaintiff and the mother brought a self
cheque for Rs.2 lakhs and tried to draw the money from the Bank and
instructed the Manager of the Bank to close the overdraft account without the
knowledge of the Defendants. The Bank Manager, who had never seen both of
them earlier, called the 2nd Defendant who used to represent M/s.Kandyan
Enterprises pertaining to banking and the 2nd Defendant was surprised to see
both his mother and sister arguing with the Senior Manager as to how payment
could be denied to them, their mother being its Proprietor. The Plaintiff and the
mother took the issue seriously and shouted at the Senior Manager of the Bank
threatening to take legal action against him. They also sent a letter to the Bank
Manager to freeze the account and to stall all the business of M/s.Kandyan
Enterprises. After the above incident, the Plaintiff and the mother became
ferocious and resorted to all intimidating tactics for the ouster of the Defendants
out of the suit property. It is a settled position of law that the person who was
not a party to a registered document can ignore the same and is not bound to
challenge it. Hence, the 1st Defendant filed the suit for partition claiming his
right in respect of the suit property ignoring the settlement deed. Further, it is
significant to note that the Plaintiff has given an undertaking to this court in
CS.No.469/2008 when the applications seeking to restrain her and the mother
from ousting the Defendants and from alienating the suit property came up for
hearing that she would not resort to any attempt for the ouster of the
32
Defendants and their family and to alilenate the suit property pending disposal
of the above suit. Hence, the filing of the present suit by the Plaintiff cannot be
sustained and her plea for vacating the Defendants does not merit any
consideration while the adjudication of the issue with regard to the claim for
partition of the suit property by the 1st Defendant in CS.No.469/2008 is pending
on the file of this court. The Plaintiff is not the owner of the suit property as
claimed by her in paragraph 7 since the mother is only a benami of their father
who purchased the suit property in her name. Therefore, their mother did not
enjoy absolute right to own the suit property so as to entitle her to execute a
settlement deed. It is false to state that the Defendants 1 and 2 at any point of
time left the suit property after the execution of the settlement deed and that
just before filing of the suit in CS.No.469/2008 forcibly entered the suit property
and are in forcible occupation in two rooms. The Defendants 1 and 2 have not
left the hosue at any time and have been dwelling in the house since the date of
their occupation of the same in 1984. It is false that the Defendants 1 and 2 are
not taking care of their mother. Only the Plaintiff has been poisoning her mind
and blocking the way of cordial relationship between the mother and the
Defendants. As a matter of fact, the Defendants sent a letter dated 11.7.2009
expressing their love and affection and readiness to support and maintain her
despite receipt of letter dated 23.5.2009 from their mother sent at the instigation
of the Plaintiff, requesting these Defendants not to remit any amount in her
account. In fact, several false complaints were given by the Plaintiff against
the Defendants with the police, but as their complaints turned out to be untrue
after enquiry, the police condemned the Plaintiff and sent them away. On the
33
contrary, only the Plaintiff often indulged in harassment and ill treatment of the
3rd Defendant who is the wife of the 1st Defendant while she was alone after
the Defendants left for office.
With regard to the allegation that the 1st
Defendant has preferred a complaint with the electricity board, it is submitted
that as the Plaintiff has committed the mischief by changing the EB Card from
the name of the 1st Defendant without his knowledge or consent, the 1st
Defendant sent a letter dated 18.9.2009 to EB making a genuine request that
the illegal effecting of change of name in the service connection No.135:38:45
in favour of Plaintiff without his knowledge be transferred to his name. The
allegation that the Defendants 3 and 4 in order to chase out the Plaintiff and her
mother from the premises had indulged in the acts, creating disharmony in the
family and in the premises, the Defendants 3 and 4 is utterly false.The wives of
the Defendants 1 and 2 were threatened and assaulted by the Plaintiff in order
to chase them out of the house since the Plaintiff was upset and afraid of the
suit filed by the 1st Defendant in CS.No.469/2008 claiming his share in the suit
property. It is not true that the water taps were left open during night and
leaving the house open to make it unsafe for Plaintiff and her mother to live. It
is false to state they were creating mess in the kitchen and garden by throwing
waste and dumping in front of the room.
e. The property tax, water tax were being paid by the family concern
M/s.Varnam Printing Inks (P) Limited and the same could not be continued as
the Plaintiff and her mother left their office abruptly, shirking their
responsibilities as finance directors and the MD of the Company and ruined the
Company. It is strange that while alleging that the Defendants enjoy influence
34
with the police, the Plaintiff has also stated that they were let out with an
apology. It is utterly false that the Plaintiff had demanded the Defendants to
vacate and hand over possession of the property and pay a rent of Rs.20,000/-
per month. If any such illegal demand the Plaintiff has been entertaining in her
imagination she has to then blame herself as she could not make such a claim
as against the Defendants 1 and 2 who are the co-owners of the suit property.
The Defendants could never be expected to cause loss or damage to their own
property. It is a lie that the Defendants had acquired interest in respect of
another property and had shifted most of the things and that only with intent to
harass and to make an illegal gain and to cause damage to the property and
cause hardship and loss to the Plaintiff, they remain in the house. As a matter
of fact, the Defendants have been continuously living in the suit property which
was acquired by their father and left to the Defendants 1 and 2 and the Plaintiff
and the mother to live peacefully enjoying equal shares. The Defendants have
not acquired any property at any place as alleged by the Plaintiff and they have
the only house of their father, the suit property to live. The Defendants 1 and 2
are entitled for 1/4th share each in the suit property. The mother who is only an
ostensible owner and holding the title of the suit property in her fiduciary
capacity cannot claim absolute and exclusive ownership of the property so as to
deal with it in any manner as she likes and hence, the settlement deed dated
28.06.2007 executed by her in favour of the Plaintiff without the knowledge of
the Defendants 1 and 2 is not legally valid and would not bind them in any
manner. Therefore, the Plaintiff or her mother has no right to seek their ousting
from the suit property.
35
10.
In CS.No.847/2009, in the Written Statement filed by the 3 rd
Defendant, it is averred as follows:-
All the allegations contained in the plaint are false, except those that
are specifically stated hereunder. The The 3rd Defendant was married to the
1st Defendant on 26.1.2004 and has been living with her husband since
marriage in his marital home, the suit property. There was cordial relationship
between the members of the family of her husband which included the mother,
sister and brother of the 1st Defendant and Defendants 3 and 4. But, after the
finalization of marriage proposal of the Plaintiff, the Plaintiff left her work in the
family concern, M/s.Varnam Printing Company P Limited and remained in the
house.
From then onwards the problems started with the Plaintiff making
accusations against the 3rd Defendant, her husband, his brother and sister in
law, the 4th Defendant and the mother in law has also started showing
hatredness against them. The Plaintiff used to pick up frequent quarrels with
the 3rd Defendant and resorted to abusing and insulting her that she did not
bring dowry, etc. from her parents. Because of the advice of her husband the
3rd Defendant has not chosen to file any criminal complaint and proceed aginst
the Plaintiff. It is the duty of the 3rd Defendant to remain and lead a peaceful
marital life with the 1st Defendant wherever he lives and therefore, seeking
eviction against the 3rd Defendant is not just and proper in respect of the joint
family property of her husband. The Plaintiff has no right to seek eviction of the
3rd Defendant from the marital home of the 1st Defendant. In such
circumstances, the suit is liable to be dismissed.
11. In CS.No.469/2008, the following issues were framed for
36
determination:-
1. Whether the suit schedule mentioned property is a
joint family property purchased by the Plaintiffs'
father, benami in the name of the first Defendant?
2. Whether the Plaintiff is entitled for partition or
separate possession of the suit property?
3. If so, whether the Plaintiff is entitled for 1/4th share
as claimed in the plaint?
4. To what relief the Plaintiff is entitled to?
12. In CS.No.847/2009, the following issues were framed for
determination:-
1. Whether the suit is bad for misjoinder of necessary
party 3rd Defendant?
2. Whether the Plaintiff is entitled to recovery of
possession and mesne profits as prayed for in the
plaint?
3. Whether the Plaintiff is entitled to the injunction as
prayed for in the Plaintiff?
4. To what other relief the Plaintiff is entitled to?
13. Common oral and documentary evidence was recorded, viz. the
plaintiff in CS.No.469/2008 was examined as PW.1 and Exs.P1 to P20 were
marked. On the side of the Defendants in CS.No.469/2008, the DW.1 to DW.4
were examined and Ex.D1 to D15 have been marked.
14. This court heard the learned counsel on either side and also
perused materials on record.
15.
CS.No.469/2008 is filed for partition of Schedule I and II
properties. For understanding the facts of this case in a better perspective, a
small pedigree table is necessary to be given.
The 1st Defendant
Nalini
37
Raghavan in CS.No.469/2008 is the wife of Late K.P.Ragavan, the father of the
Defendants 2 and 3 and the Plaintiff in CS.No.449/2008. The Plaintiff is the
eldest son, the 2nd Defendant is the daughter and the 3rd Defendant is their
younger son.
16. The suit in CS.No.847/2009 is filed by the 2nd Defendant,
daughter of Nalini Raghavan and Late K.P.Ragavan for possession and mesne
profits in respect of a portion of the Schedule I property described as Chennai
Property by virtue of deed of settlement dated 28.6.2007. In the said suit, apart
from her brothers, namely, the Plaintiff and the 3rd Defendant in
CS.No.469/2008, the wife of the 3rd Defendant and Shika were arrayed as
parties. However, claim against the 4th Defendant Shika was given up. The suit
Schedule II property is described as Ambattur property. Common evidence was
recorded in both the suits.
17. Issue Nos.(1) to (4) in CS.No.469/2008:-
In so far as the suit schedule II property (Ambattur property) is
concerned, all the parties admit that the property was purchased by Late
K.P.Raghavan in Ex.D10, who died intestate on 23.1.1994. The legal heirship
certificate Ex.P11 shows that they are the only heirs to K.P.Raghavan. The
Division Bench of this Court in OSA.No.402/2012 observed that in view of the
parties agreeing for partitioning, the Ambattur Estate property which is available
for partition, a decree on admission could be passed by including the said
property in the suit. The Plaintiff, PW.1 has admitted that all the parties in
CS.No.469/2008 have equal share in the suit schedule II property (Ambattur
Estate property) during his cross examination. Therefore, a preliminary decree
38
for partition can be passed in respect of suit schedule II property (Ambattur
Estate property) allotting 1/4th share each to the Plaintiff and each of the
Defendants in CS.No.469/2008.
18. In so far as the Chennai property is concerned, the main point for
consideration is whether it is a case of benami as asserted by the Plaintiff and
supported by the third Defendant.
19. The Plaintiff seeks partition of the suit schedule I property
(Chennai property) on the ground of benami that his father K.P.Raghavan was
the real owner, who had acquired the said property benami in the name of his
wife, the 1st Defendant herein, out of the income derived from both the
business concerns promoted and run by him.
Admittedly, M/s.Kandyan
Enterprises is in the name of his wife, the 1st Defendant herein who is the
Proprietrix of the said Company. The other Company, namely, M/s.National
Printing Inks Co. was in his name and was run by him. The printing inks were
manufactured in the National Printing Ink Co. and sold through the Kandyan
Enterprises.
20. Before we advert to the evidence placed on record, it may be
useful to take note of the legal aspects relating to Benami theory. In the course
of arguments, an interesting question was raised by the learned counsel
appearing for the 1st Defendant that even as per the case of the Plaintiff, it is the
husband of the 1st Defendant who supplied the funds for purchase of the
property in the name of the 1st Defendant and therefore, only the husband of the
1st Defendant is entitled to challenge the right of the exclusive title of the 1st
Defendant and not the sons or daughters under the provisions of Benami
39
Transaction Prohibition Act, 1988 (herein after referred to as Benami Act). I am
unable to countenance the said arguments advanced by the learned counsel for
the 1st Defendant. It is relevant to refer to the provisions of Section 3 and 4 of
the Benami Act as under:-
“Section 3:- Prohibition of benami transactions:- (1) No person
shall enter into any benami transaction.
(2) Nothing in sub section (1) shall apply to-
(a) the purchase of property by any person in the name of his
wife or unmarried daughter and it shall be presumed, unless
the contrary is proved, that the said property had been
purchased for the benefit of the wife or the unmarried daughter;
(b) the securities held by a -
(i) depository as registered owner under sub section (1) of
section 10 of the Depositories Act, 1996.
(ii) participant as an agent or of a depository.
Explanation:- The expressions “depository” and “Participants
shall have the meanings respectively assigned to them in
clauses (e) and (g) of sub section(1) of Section 2 of the
Depositories Act, 1996.
(3) Whoever enters into any benami transaction shall be
punishable with imprisonment for a term which may extend to
three years or with fine or with both.
(4) Notwithstanding anything contained in the Code of Criminal
Procedure 1973 (2 of 1974) an offence under this section shall
be non cognizable and bailable.
Section 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.
(2) No defence based on any right in respect of any property
held benami, whether against the person in whose name the
40
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.”
21. Under Section 3 of the Benami Act, it is permissible for a person
to purchase property in the name of his wife or unmarried daughter and such
purchase is not hit by the provisions of the Act. However, there is presumption
that the purchase made in the name of the wife or unmarried daughter is to
their benefit.
The person setting up adverse claim is entitled to rebut the
presumption. If he succeeds in his attempt and is able to show by cogent and
clear evidence that the property ostensibly standing in the name of the wife or
unmarried daughter is not made for their personal exclusive benefit quite
naturally the property has to fall back to the common stock available for
inheritance by succession. It is needless to point that to rebut the presumption
ever, to answer the legal prepositions, it is necessary that the facts are not only
to be pleaded, but also proved.
22. I am unable to agree with the contention that Section 4(1) and
(2) of the Act could be invoked only in respect of benami transactions exempted
under Section 4(3) and that they have no relevance or application to Section
3(2) of the Act, in view of the legal provisions of the Act that both the exemption
provisions of the Act under Section 3(2) and 4(3) recognize the benami
41
transactions of the persons exempted thereunder and the benami transactions
exempted by others are prohibited to be contested either by filing of a suit or
taking a defence under Section 4(1) and (2) of the Act, which would mean that
the persons exempted under the provisions of the Act can contest and prove
benami in respect of the purchase of property made by them thereunder.
23.
The above legal position is well settled in the following
decisions:-
1. Nanda Kishore Mehra Vs. Susila Mehra (1995-11-CTC-356).
2. Ouseph Chauko and another Vs. Raman Nair Raghavan Nair
(AIR-1989-Ker-317).
24. In the aforesaid decision, the Kerala High Court has held as
follows:-
“35. Sections 3 and 4 of the Act have to be read and
understood together. They are not disjunctive provisions in a
comprehensive legislation intended to prohibit benami
transactions. Both Sections 3 and 4 are complementary to each
other to achieve the same object. While S.3 prohibits the
creation of any “benami transaction”. S.4 prevents any suit,
claim or action to enforce any right in respect of any property
“held benami”. It is only when any right in respect of a property
“held benami” is sought to be enforced, in any suit or claim that
S.4 is attracted. “Hold”, according to Black's Dictionary means”
to possess in virtue of a lawful title as in the expression,
common in grants, “to have and to hold”; to possess; to occupy;
to be in possession and administration of”. In the context and
setting of S.4, the word “held” has to be understood as
“possessed or occupied”. If the possession or occupation is not
benami, S.4 can have no application. An intended benami
does not confer even pretended rights. A benami transaction
where the property is so held as benami is the subject of the
statutory prohibition under Sections 3 and 4. The definition of
“benami transaction” is in extricably connected with all the
provisions of the Act, as the Act is intended “to prohibit benami
transactions and the right to recover property held benami and
for matters connected therewith or incidental thereto.”
25. It is also relevant to note that in Rebli Devi Vs. Ram Dutt and
42
another (1997-11-SCC-714), the defence taken by the son that the property
was purchased by his father Ujagar Lal in the name of Ram Dutt's mother Rebli
Devi benami and the entire consideration was paid by his father and that his
father was the real owner and after his death the property devolved on his wife
and other children was considered by the Honourable Supreme Court and it
could be inferred from the said judgement that the defence under Section 4 of
the Act is permissible in such case.
26. Similarly in Binarani Paul Vs. Pratima Ghosh and others (2007-
6-SCC-100) the Honourable Supreme Court considered the plea of defence
made by son claiming the purchase of property by his father in the name of his
mother in a benami transaction under Section 3(2) of the Act and the suit was
disposed of on merits.
27. Therefore, all the cases referred to above would undoubtedly
show that it is permissible for a person setting up an adverse claim to rebut the
presumption and the contention that it is the husband or father alone would
have the right to challenge or impeach the exclusive title of the wife or daughter
is not tenable.
28.
The plaintiff's case is that the husband of the 1st Defendant is
the real owner of the Chennai property and that he was running both the
business concerns, namely, M/s.Kandyan Enterprises and M/s.National Printing
Ink Co. and consideration was paid by him for purchase of the said property
from the income derived from the said business concerns and construction of
building in the said property was made by him by utilizing the sale proceeds
derived from the sale of his other plot no.27 as well as his personal savings and
43
other loans and that the self acquired suit schedule I property of the Plaintiff's
father after his death has come into the hands of the Plaintiff and the
Defendants as joint family property.
29. It is by now well settled that the burden is on the person who
sets up the case of benami, in the instant case, the Plaintiff and the 3rd
Defendant and that if the burden is not discharged, the ostensible title will
prevail. To substantiate a case of benami, the judicial pronouncements have
laid down several factors to be taken into consideration and on an over all
assessment of such factors the court to render a finding. In Bhim singh Vs
Khan Singh (AIR-1980-SC-727) it has been held on this aspect as follows:-
“The Principle governing the determination of the question
whether a transfer is a benami transaction or not may be
summed up thus: (1) The burden of showing that a transfer is a
benami transaction lies on the person who asserts that it is
such a transaction; (2) if it is proved that the purchase money
came from a person other than the person in whose favour the
property is transferred, the purchase is prima facie assumed to
be for the benefit of the person who supplied the purchase
money unless there is evidence to the contrary; (3) the true
character of the transaction is governed by the intention of the
person who has contributed the purchase money and (4) the
question as to what his intention was has to be decided on the
basis of the surrounding circumstances, the relationship of the
parties, the motives governing their action in bringing about the
transaction and their subsequent conduct etc.
30. It is clear that the burden of proving that a particular transaction
is Benami always rests on the person asserting it to be so. It is also clear in
mind that the essence of benami is an intention of a particular party or parties
concerned and not often such intention is shrouded in a thick veil which cannot
be easily pierced through.
But, such difficulties do not relieve the person
asserting transaction to be benami of any part of the serious onus that rests on
44
him; nor justify the acceptance of mere conjectures or surmises as a substitute
for proof.
31. The specific averments in the plaint are to the effect that the sale
deed Ex.P8=Ex.D1 was executed in favour of the 1st Defendant by her
husband benami, for the benefit of the family and that the consideration came
from R.K.Raghavan the father of the Plaintiff. Admittedly, the sale deed stand
in the name of the 1st Defendant. On deciding whether a particular transaction
is benami or not, the source of money always will be a very valuable test.
There is no whisper whatsoever in the sale deed that the consideration was
paid by the husband of the 1st Defendant. The Plaintiff examined as PW.1 and
the 3rd Defendant examined as DW.2 have admitted in their evidence that
there is no proof to show that their father paid or provided the consideration for
purchase of the property. PW.1's evidence indicated that the sale consideration
for Ex.P8 was paid by way of Company cheque namely M/s.Kandyan
Enterprises. It is admitted by him that after the completion of construction over
the suit property, patta for the building as well as land was issued in the name
of the 1st Defendant.
32. According to the Plaintiff and the 3rd Defendant, their father was
working in M/s.Coates of India Limited, Calcutta and he promoted a proprietary
concern M/s.Kandyan Enterprises in May 1965 in the name of the 1st
Defendant as he was in the last leg of his service. It is stated that with the
knowledge and experience he had acquired during his service in the Company
started contacting all his known business customers soliciting their support for
the proposed business and further he commenced the business in a small scale
45
after his relieving of from service by investing his provident fund and other
monetary benefits. The Plaintiff has marked Ex.P1 to Ex.P7 to prove that the
Plaintiff's father had the intention and desire to promote a business concern.
Ex.P1 to Ex.P7 were marked subject to objection on the ground that PW.1 is
neither the author of the document nor the recipient of the same. Admittedly,
PW.1 was hardly 4 years old when those letters were written by his father. He
has admitted in his cross examination that he had no personal knowledge of the
averments contained in his proof affidavit which pertains to the floating of
business by his father. Though DW.1 (1st Defendant) admitted that Ex.P1 and
Ex.P3 to Ex.P6 were written by her husband for business purposes, but she has
denied the fact that she was only a name lender and the business was run by
her husband.
33. Ex.P1 to Ex.P7 shows the intention of the Plaintiff's father to do
independent business and the efforts put in by him in the negotiation of prices
for getting inks with the customers for the proposed business.
The learned
counsel for the Plaintiff, referring to Ex.P3 letter dated 13.10.1965 wherein it is
recited that the 1st Defendant was 6 months pregnant in October 1965 at the
time when business was started and was frail and weak, submitted that she
could have hardly started a business much less entertained any such thought of
promoting a business of her own.
The learned counsel for the Plaintiff
vehemently submitted that those documents pertaining to the business were
made in the course of business which are relevant and admissible in
accordance with Section 32 of the Evidence Act to establish the fact that the
business of M/s.Kandyan Enterprises was started by the Plaintiff's father and its
46
income formed part of the source of acquisition of the Chennai property.
Incidentally, the learned counsel for the Plaintiff and the 3rd Defendant referred
to Ex.D7 marked on the side of the 3rd Defendant to show that the Plaintiff's
father was assessed for the provident fund and would submit that the same was
invested in the above said business.
34. From a perusal of Ex.P1 to Ex.P9, the possible inference is that
the Plaintiff's father intended to start business, but it cannot be inferred that
consideration was paid by the Plaintiff's father for purchase of the property.
The meticulous repeated reading of the letter does not indicate anywhere that
his wife was merely a name lender and the business is only run by him. By the
contents of the letter, it is impermissible to read and infer more than what it
states. It is not in dispute that from the year 1965 to till date the 1st Defendant is
the proprietrix of M/s.Kandyan Enterprises. Even after the Plaintiff's father left
the services, the business of M/s.Kandyan Enterprises was with the 1 st
Defendant and he never intended to carry on the said business in his name that
is even after starting the business M/s.National Printing Ink Co. There is no
evidence to show that the 1st Defendant was only a nominal owner whereas the
Plaintiff's father alone was the real owner of the said business. No motive is
attributed for holding out the 1st Defendant as the owner of the business even
after the Plaintiff's father retired from his services.
35. The 1st Defendant has paid the sale consideration by way of
Company cheque namely M/s.Kandyan Enterprises.
There is no evidence
produced to show that the sale consideration was paid by the Plaintiff's father.
Neither there is evidence to show that out of the deposits which Plaintiff'' father
47
held in his name and in the names of the Defendants 2 and 3, the property was
purchased. PW.1 has admitted the same in his cross-examination. It is also
admitted that the 1st Defendant is an income tax assessee. In fact, DW.3,
auditor of their family admitted that the 1st Defendant had income and he had
audited the said income and she also filed Income Tax Returns from 1965
onwards.
DW.1 (1st Defendant) has stated in her evidence that she is an
income tax assessee ever since mid 1960's and had sufficient means of her
own and the same remains unchallenged.
36. At this juncture, it is relevant to refer to the evidence of DW.3,
V.Pichaikutty who admittedly is the auditor of both the Plaintiff and the 1st
Defendant and her husband. He has admitted that the 1st Defendant was
assessed to income tax as a proprietrix of M/s.Kandyan Enterprises. He has
spoken to regarding Ex.D3 and has stated that the same is self explanatory of
the gross income of the 1st Defendant for the years ended 31.3.1978,
31.3.1979 and 31.3.1980. Like wise, Ex.D4 certificate is also self explanatory
of the gross
wealth of the 1st Defendant as on 31.3.1978, 31.3.1979 and
31.3.1980. The 2nd Defendant had instituted a Company petition in CP.No.10/
2009 before the Company Law Board regarding certain other business and
DW.3 in the said case has admitted that the 1st Defendant had income and
assessed to Income Tax.
37. The recitals in the document, under which the suit property was
purchased, clearly show that the consideration was paid by the 1st Defendant
and the source of income was from M/s.Kandyan Enterprises the business run
by her. In order to rebut the said presumption, the Plaintiff has to adduce legal
48
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
concerned and 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 or 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 in
the deed starts with the initial presumption in her favour that the apparent state
of affairs is the real state of affairs.
38. In the instant case, the 1st Defendant was a proprietrix of a
business and admittedly she was getting income from the said business. The
business also started in her family name 'Kandyan”. It has not been proved that
any income from the business run by her husband was utilized. In fact there is
a specific recital that the Company cheque namely M/s.Kandyan Enterprises
was paid towards the sale consideration. In view of the experience gained by
her husband, he may have helped the 1st Defendant in managing the business,
but from the mere fact that her husband was helping her in managing or running
the business, inference that purchase was benami could not be drawn. The
evidence clearly indicated that the 1st Defendant was in a position to purchase
the property with her own funds.
She has obtained loan from LIC for the
purpose of construction of the house in the said property. Even assuming some
money was contributed by her husband in putting up construction of house, it
49
does not by itself conclusively establish the fact of benami.
39. It was held by the Privy Council in Seth Manik Lal Mansukhbai
Vs. Raja Bijoy Singh Dudhoria (AIR-1921-PC-69) that the burden of proof lies
on the party assailing transaction as benami, although the circumstances may
be suspicious. In such cases, it is essential to take care that the decisions of
the courts rests not upon suspicion, but upon legal grounds, established by
legal testimony. In cases of this character, the determination of the question
depends not only on direct oral evidence, but also upon circumstances and
surrounding of the case concerned. It has been held repeatedly that the burden
of proof lies heavily on the person who claims against the tenor of the deed,
that is, the alleged beneficiary, to show that the ostensible vendee was a mere
name lender and the property was in fact purchased only for his benefit. Such
burden would be discharged by satisfying the well known criteria viz. (1) source
of purchase money relating to the transaction, (2) possession of the property,
(3) the position of the parties and their relationship to one another, (4) the
circumstances, pecuniary or otherwise, of the alleged transfer, (5) the motive for
transaction, (6) the custody and production of title deeds and (7) the previous
and subsequent conduct of the parties. Each of above said circumstances,
taken by itself is of no particular value and affords no conclusive proof of the
intention to transfer the ownership from one person to the other.
But, a
combination of some or all of them and a proper weighing and appreciation of
their value would go a long way towards indicating whether the ownership has
been really transferred or where the real title lies. In every benami transaction,
the intention of the parties is the essence. Therefore, the true test to determine
50
whether the transaction is benami or not is to look to the intention of the parties
viz. whether it was intended to operate as such or whether it was only meant to
be colourable.
40. From the principles laid down in the decisions, it is clear that the
person who impugns the apparent character of the transaction, viz. the Plaintiff
herein must show by letting in legal evidence establishing that the transaction in
question is a benami one and the issue cannot be disposed of by a mere
conjecture or suspicion as to the various circumstances surrounding the
transaction.
Section 101 of the Evidence Act provides that anyone, who
desires a court to give judgement as to any legal right or liability dependant on
the existence of facts which he asserts, must prove that those facts exist. The
evidence must be reliable and acceptable, compelling the court to take a view
contrary to the recitals in the impugned documents.
41. It has to be noted that the 1st Defendant being a woman had
taken the assistance of her husband in putting up construction and therefore, it
would not in any way indicate that the 1st Defendant was only a benamidar.
The 1st Defendant in order to put up construction over the vacant plot had
availed a loan by mortgaging the said property in favour of LIC under Ex.D2
dated 19.3.1981. Ex.D5 series are some of the receipts for repayment of the
loan availed from LIC by the 1st Defendant. Ex.D6 dated 13.4.1982 is the patta
standing in the name of the 1st Defendant. It is significant to refer to Ex.D11
produced by the 3rd Defendant.
This documents clearly exhibits that the
property has been purchased by the 1st Defendant from her own funds and the
funds for construction of the house has been obtained from LIC as loan and
51
also from one V.Kothai, who is none other than the sister of DW.3 Pitchaikutty,
the auditor of R.K.raghavan's family.
42. On analyse of evidence adduced, I am of the clear view that the
Plaintiff and the 3rd Defendant failed to discharge the burden that the
consideration for purchase of the property was paid by the father of the Plaintiff
and the 3rd Defendant. On the basis of the admission made by the Plaintiff and
the 3rd Defendant that they have not produced any evidence before this court
to show that sale consideration under Ex.P8 was paid by their father and that
the LIC loan was obtained by the 1st Defendant for putting up the construction
over the suit property, I have to reiterate that the burden had not been
discharged.
43. The pleadings of the Plaintiff is also in consistent. It is the case
of the Plaintiff that K.P.Raghavan contributed for the purchase of the Chennai
property thus indicating that he paid the consideration from his own funds.
However, at another stage, the Plaintiff states that though the 1st Defendant
was the Proprietor of M/s.Kandyan Enterprises, it was run by her husband and
funds of this business were utilized for purchase of the property.
44. It is not in dispute that the 1st Defendant was the Proprietrix of
M/s.Kandyan Enterprises. Even according to the Plaintiff, the funds for the
purchase of the property had come from M/s.Kandyan Enterprises.
If
M/s.Kandyan Enterprises is the business of K.P.Raghavan, then there is no
necessity for the business be named after the family name of the 1st
Defendant. It is settled law that a sole proprietary concern has no independent
legal entity and its identity remains inseparable from its proprietor as held by
52
the Honourable Supreme Court in Milind Shripad Chandurkar Vs. Kalim
M.Khan (2011-4-SCC-275). Therefore, the identity of M/s.Kandyan Enterprises
is nothing, but that of the 1st Defendant.
45. It is the case of the Plaintiff that K.P.Raghavan sold the other
plot which was purchased in his name and contributed for construction of the
building in Chennai property in the name of the 1st Defendant. No document
has been produced to show that the sale proceeds of Plot No.27 was utilized in
the construction of the building. It is the evidence of DW.3, Pitchai Kutti that the
1st Defendant had income from her business and she was an income tax
assessee
from
1965
onwards.
K.P.Raghavan did not have any
His
evidence
further
discloses
that
Hindu Undivided Family (HUF) account
assessed to tax. Apart from the property registered in her name, mutation entry
have been made in her name and she has been paying the house tax. The
above conspectus will undoubtedly establish that apart from the Plaintiff and
the 3rd Defendant failing to discharge their burden, the 1st Defendant has
satisfactorily established that she is not the benamidar, but is the real owner.
46. There is no pleading or evidence from the Plaintiff about the
motive for the alleged benami transaction. In the instant case, it is very evident
that K.P.Raghavan had no liability and the Plaintiff has failed to establish that
there was motive for entering into a benami transaction. In this case, the 1st
Defendant did have source of income. If she had no source of income, it could
have been taken that this transaction was financed by the husband intending
that he will be the real owner of this property and the wife would continue to be
the benami owner of the property. There is absolutely no motive why should
53
K.P.Raghavan have constituted his wife as benami owner of the property and
himself stayed in the back screen. It cannot be said that he had done so
because he was in service and had to take permission of the management. He
was not in Government service. This property was purchased long after his
service. It was submitted by the learned counsel for the Plaintiff that each
person was not given more than one plot by the Housing Society and that
necessitated K.P.Raghavan to purchase the plot in question in the name of his
wife. This is not the plea made in the plaint. He has not disclosed his intention
at any point of time that the Plot No.28 though purchased in the name of his
wife, but he intended to be the real owner. He had not asserted his title over
the suit property till his death and only the Plaintiff and the 3rd Defendant had
set up a plea of benami for the first time in this suit. The absence of motive is a
strong indicator against the case of benami.
47. It was submitted by the learned counsel for the Plaintiff that after
the purchase of this house, K.P.Raghavan and other family member were in
possession and even after his demise, the Plaintiff and the 3rd Defendant
continued to be in possession of the house. The Plaintiff and the 3rd Defendant
are not strangers.
If the 1st Defendant had allowed them to stay and the
Plaintiff had paid telephone bills, that does not mean that they are in
possession of this house under some claim or right.
Their occupation of the
house cannot lead to court to infer that they are in possession, as this house
was purchased by their father.
No inference can be drawn from Ex.P16
Electricity Consumption Card and Ex.P18 telephone bills, because it is common
knowledge that the 1st Defendant had permitted the Plaintiff and the 3rd
54
Defendant to stay with her, since they are her sons. The payment of electricity
consumption charges or telephone bill does not advance the case of the
Plaintiff in any manner.
48. The 1st Defendant has been in possession since her purchase
and custody of the title deeds until the execution of settlement deed Ex.P13
dated 28.6.2007 in favour of her daughter, the 2nd Defendant herein. The 2nd
Defendant is now in possession and custody of the title deeds. Therefore, even
the custody of the title deeds would unerringly prove that the 1st Defendant is
the real owner of the property.
49. Even with regard to the previous and subsequent conduct, the
following facts would clearly show that the allegation of the Plaintiff that the 1st
Defendant is a benamidar is not acceptable. It has to be immediately pointed
out that the husband of the 1st Defendant had witnessed the execution of the
sale deed in Ex.P8/Ex.D1 under which the 1st Defendant had purchased the
property. He had stood as a guarantor in the mortgage deed in Ex.D2 wherein
the title of the 1st Defendant has been asserted. He has not during his life time
ever claimed title to this property. It may not be out of place to point out that the
1st Defendant had obtained patta for this property in her name and was
assessed to tax only during the life time of K.P.Raghavan.
50. The learned counsel for the 1st Defendant submitted that there
is no evidence placed on record by the Plaintiff to show that the Plaintiff's
father had ever made a declaration with the Chief Commissioner of Income Tax
as required under Section 281A of the Income Tax Act, as it stood then in
respect of the said transaction. The learned counsel would contend that the
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absence of any such declaration by K.P.Raghavan would only disprove the
case of the Plaintiff. There is every force in the said contention of the Plaintiff.
Section 7 of the Benami Act repealed Section 281A of the Income Tax Act.
Prior to repeal of Section 281A of the Income Tax Act 1961, it was mandatory
for the aquirer of the property in the name of the another person to disclose
within one year from the date of such acquisition of the property to disclose
particulars in respect of the said property/ acquisition to the Chief
Commissioner or Commissioner of Income Tax. If such a disclosure was not
made, a suit to enforce any right in respect of any property held benami was not
maintainable. In the present case, it is the case of the Plaintiff that the 1st
Defendant is a benamidhar of K.P.Raghavan purchased in the year 1979. If it
was a benami transaction, a disclosure would have been made as required
under Section 281A of the Income Tax Act 1961. But, even though Auditor who
audited the accounts of the Plaintiff's father has been examined as DW.3 no
evidence had been let in by the Plaintiff or the 3rd Defendant to show in fact
such a declaration was made by the Plaintiff 's father pursuant to Section 281A
of the Income Tax Act. In view of absence of evidence in that regard, an
adverse inference has to be drawn against the Plaintiff.
51.
It is not the case of the Plaintiff that the property is held by the
1st Defendant as a coparcener in a Hindu Undivided Family and the property is
held for the benefit of the coparceners. It is the case of the Plaintiff that it is joint
family property after the demise of the Plaintiff's father, as according to the
pleadings, joint family came into existence after the demise of K.P.Raghavan.
The Plaintiff has also failed to plead and prove that there existed a Hindu
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Undivided Family of his father comprising all his heirs and that the 1st
Defendant was a coparcener.
Therefore, Section 4(3)(a) of the Act is not
applicable.
52. It was contended by the Plaintiff that the suit falls within the
ambit of Section 4(3)(b) of the Act. There is no pleadings to that effect. The
only available allegation in the plaint regarding fiduciary capacity is as follows:-
“... the 1st Defendant is holding the suit property in a fiduciary
capacity for the benefit of the members of the family of Late
K.P.Raghavan after his death and that for the Plaintiff has
become entitled for 1/4th share in the suit property as a legal
heir of the said K.P.Raghavan underclass one of the schedule
in the Indian Succession Act, 1956.”
53. In order to fall within the exception contained in Section 4(3)(b)
of the Act, the person in whose name the property is held, should be a trustee
of the other person and standing in a fiduciary capacity. Even according to the
Plaintiff, the fiduciary capacity comes into existence after the demise of
K.P.Raghavan. The theory of benami purchase made by the Plaintiff has not
been proved. The evidence tendered in the instant case has been examined in
detail. The evidence tendered does not indicate that the 1st Defendant is the
benamidar of K.P.Raghavan.
54. The 1st Defendant retained full control of the property from the
date of purchase till she executed settlement deed in favour of her daughter,
the 2nd Defendant herein and she was not a mere nominal owner.
The
purchase in the name of the 1st Defendant was not a benami and therefore, the
question of 1st Defendant holding the property in fiduciary capacity does not
arise.
55. Therefore, I am of the clear view that the benami pleaded by the
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Plaintiff is not proved and the Chennai property was purchased only by the 1st
Defendant.
Since the Plaintiff has failed to establish that the purchase of
Chennai property (suit I schedule) is a Benami transaction and since he failed
to dislodge the presumption under Section 3(2)(a) of the Act, the Plaintiff is not
entitled to any partition in the suit schedule I (Chennai property) and resultantly,
the Plaintiff is not entitled to 1/4 th share in the suit I schedule (Chennai
property).
56.
In so far as the suit schedule II (Ambattur property) is
concerned, the Plaintiff and the Defendants are each entitled to 1/4th share in
the said property.
57. Issue No.(1) in CS.No.847/2009:-
In CS.No.847/2008, the 1st Defendant's wife is the 3rd Defendant.
The 2nd Defendant's wife is the 4th Defendant.
The suit as against the 4th
Defendant was given up since the 4th defendant no longer resides in the suit
property. The suit was given up by order dated 2.8.2010 as against the 4 th
Defendant. The 2nd Defendant in CS.No.847/2008 who is the 3rd Defendant in
CS.No.469/2008 was examined as DW.2 and in cross examination has
admitted that his wife no longer resides in the property.
Since the 3rd
Defendant in CS.No.847/2008 is the wife of the 1st Defendant and she resides
with her husband, she has been impleaded as a party.
The suit in
CS.No.847/2008 is filed for recovery of possession of the portion occupied by
the Defendants and therefore, the 3rd Defendant, who resides in a portion of
the suit property with her husband, is a proper and necessary party.
58. Issue No.(2) in CS.No.847/2009:-
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The suit schedule I property has been settled in favour of
R.K.Reshma Sawini (2nd Defendant in CS.No.469/2008), the daughter of Nalini
Raghavan (1st Defendant in CS.No.469/2008) by her mother under Ex.P13. Her
mother continues to reside along with the settlee. In view of the findings in
CS.No.469/2008 that Nalini Raghavan, the 1st Defendant is the owner of the
suit schedule I property (chennai property) and the said property having been
settled in favour of her daughter, the Plaintiff in CS.No.847/2008, she is entitled
to recover possession occupied by the Defendants in CS.No.847/2009. The
settlor has been examined as DW.1 who has categorically stated both in the
pleadings as well as in evidence affirming execution of settlement deed in
favour of her daughter out of her own free will and volition. In fact, DW.1 has
stated that her sons have to vacate the house. Hence, the Plaintiff is entitled to
recover the portion occupied by the Defendants as claimed by her. Accorindgly,
all the issues are answered.
59. In the result, these civil suits are disposed with the following:-
(1) A preliminary decree for partition
allotting 1/4th share to the
parties in CS.No.469/2008 in so far as schedule II (Ambattur property) is
concerned, is passed.
(2) The suit in CS.No.469/2009 in so far as suit schedule I (Chennai
property) is concerned is dismissed.
(3) There will be a decree against the Defendants for possession and
injunction in favour of the Plaintiff in CS.No.847/2009.
(4)
proceedings.
The determination of mesne profits is relegated to separate
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(5) Time for handing over vacant possession is four months from
today. In the circumstances of the case and considering the relationship of the
parties, the parties shall bear their own costs.
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