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CASE NO.:

Appeal (civil) 2867 of 2000

PETITIONER:

G.Mahalingappa

RESPONDENT:

G.M. Savitha

DATE OF JUDGMENT: 09/08/2005

BENCH:

D.M. DHARMADHIKARI & TARUN CHATTERJEE

JUDGMENT:

J U D G M E N T

TARUN CHATTERJEE, J.

This is an unfortunate litigation between a father and his married

daughter on the right of ownership of a house measuring about 40 feet

by 30 feet in Khata No.54 of Garehatty Village in Chitradurga Taluk

in the State of Karnataka (hereinafter referred to as the "suit

property").

The appellant, who suffered defeat in second appeal before the

High Court at Bangalore (Karnataka), filed a Special Leave Petition

which on admission got registered as a regular appeal being Civil

Appeal No. 2867/2000 in this Court.

The appellant is the father of the respondent. The suit property

was purchased by the appellant in the name of the respondent by a

registered sale deed dated 24th of August, 1970 when the respondent

was a minor of seven years of age. Subsequently, her marriage was

settled and at that point of time she was assured that the respondent

shall not be disturbed as she was given to understand that the suit

property was her own property. She was married to one Shri

C.Thippeswamy on 4th of December, 1980. Relationship between the

appellant and the respondent was cordial till 8th of October, 1983, and

only thereafter relationship became strained. At that stage she asked

for vacation of the suit property not only from the appellant and his

family but also from the tenants who were defendants 2 to 5 in the

suit and for payment of rent to her. The appellant and the tenants had,

however, refused to vacate their respective portions of the suit

property in their possession or to pay rent to her. Accordingly, the

respondent was constrained to file the suit for declaration of title and

recovery of possession in respect of the suit property on the averment

that since the suit property stood in her name, and the same was

purchased for the benefit of the respondent and as a security for her

marriage she was entitled to a decree for declaration and possession.

The suit was however filed on 5th of July, 1984.

The appellant resisted the claim of the respondent on various

grounds by filing a written statement. According to the appellant, the

suit property was purchased by his own funds in the benami of her

daughter. He also denied the allegation that the suit property was

purchased for and on behalf of the respondent under the sale deed

dated 24th August, 1970 nor it was purchased as a security for her

marriage. According to him, the respondent was born on 5th

November, 1963 and immediately after the birth an astrologer was

contacted from whom the appellant ascertained that she was born on

an auspicious nakshatra and immediately thereafter he made up his

mind to purchase a site with a view to construct a house for his

residence. Accordingly, he purchased the suit property for a sum of

Rs.500/-. It was not the intention of the appellant to create any

benefit, any right in the suit property to the respondent. However, in

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the year 1984, the suit property was bequeathed by a Will in favour of

the respondent and two sons. After the suit property was purchased in

the benami of the respondent, he made improvement of the suit

property and in doing so he mortgaged the suit property in favour of

one Srinivasa Setty and obtained a loan of Rs.3,000/- on 15th

September, 1972. Thereafter, he purchased another site adjacent to

the suit property under a sale deed dated 23rd May, 1972. That sale

deed was also obtained in the name of the respondent out of love and

affection. At that time the respondent was about nine years old. The

rest of the mortgaged amount was utilized for construction of the

back portions of the house after spending his own money. After

improving the same he constructed four portions which were in

occupation of the tenants, and he himself discharged the mortgaged

loan and other loans incurred for construction of the suit property. He

also obtained permission of the Deputy Commissioner for alienation

of the suit property for non-agricultural purposes. He paid taxes

levied by the Revenue Authorities in respect of construction of the

house. He also paid alienation charges and Kandayam of the suit

property from time to time. Accordingly, the appellant sought for

dismissal of the suit inter alia on the ground that he was the real

owner and in possession of the suit property and the respondent was

merely a benamidar in respect of the same. Parties went into trial

with the following issues:

1) Does the plaintiff prove that she is the owner of the suit

property?

2) Is she entitled to possession of the suit property as contended

by her?

3) Is she entitled for damages as claimed by her?

4) To what relief the plaintiff was entitled, if any?

An additional issue was framed which is of the following effect:

Does defendant No.1 prove that the suit was purchased

nominally in the name of the plaintiff under the circumstances

pleaded in the written statement, the plaintiff is a benamidar and he is

the real owner of the suit property, as contended?

Parties went to trial after adducing evidence to support their

respective claims as made out in the pleadings.

Both the courts found on consideration of the oral and

documentary evidence on record as well as the pleadings that \026

1) the appellant had paid the purchase money.

2) the original title deeds were with the appellant.

3) the appellant had mortgaged the suit property for raising loan

to improve the same.

4) he paid taxes for the suit property.

5) he had let out the suit property to defendant Nos. 2 to 5 and

collecting rents from them.

6) the motive for purchasing the suit property in the name of

plaintiff was that the plaintiff was born on an auspicious

nakshatra and the appellant believed that if the property was

purchased in the name of plaintiff/respondent, the appellant

would prosper.

7) the circumstances surrounding the transaction, relationship of

the parties and subsequent conduct of the appellant tend to

show that the transaction was benami in nature.

On the aforesaid concurrent findings of fact it was held that

the respondent had failed to prove that she was the real owner of the

suit property and that the appellant was however the real owner of the

same and the respondent was only a benamidar of the appellant.

Accordingly, the appellate court as well as the trial court

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dismissed the suit of the respondent.

Feeling aggrieved by the concurrent decisions of the

appellate court as well as the trial court, a second appeal was filed

before the High Court at Bangalore, which, however, had set aside the

concurrent decisions and decreed the suit of the respondent only on

the ground that the purchase by the appellant in the name of the

respondent was intended for the benefit of the respondent. While

coming to this conclusion, the High Court had taken into

consideration the fact that since the appellant had already executed a

Will bequeathing his property to the respondent and two other sons,

which would, according to the High Court, amply show that the

intention of the appellant to purchase the suit property in the name of

the respondent was to benefit the respondent. In our view, this

finding on the face of the record is erroneous and perverse. This

finding, according to us, was arrived at by the High Court in the

second appeal without any material on record to support such finding

nor it was based after considering the oral and documentary evidence

as well as the findings of fact arrived at by the trial court and appellate

court. On the other hand, in our view, the findings of the appellate

court as well as the trial court were based on due consideration of oral

and documentary evidence on record and pleadings of the parties.

To consider the intention to purchase the suit property for the benefit

of the respondent, in our view, the fact of bequeathing the suit

property by executing a Will by the appellant in favour of respondent

and two sons could not at all be a factor for consideration. The

execution of the Will by the appellant in favour of his sons and the

respondent would only indicate that the suit property was treated as

the property of his own and the respondent was never accepted by him

to be a real owner of the same. The other ground on which the

concurrent findings of fact were set aside and suit was decreed is to

the following effect:

"Even otherwise, as could be gathered from the

evidence and representation made at the Bar, her father

used to purchase the property in the name of all his sons

and daughters on auspicious days. It can be clearly

gathered that the intention of the father was to benefit his

children to avoid any possible conflict or dispute that may

arise between them with reference to sharing of the

properties after his life time. Therefore, taking the view on

equity as well, and the cumulative circumstances, I am

inclined to hold that the plaintiff is entitled to be held as

the owner of the property."

We are unable to agree with this conclusion of the High Court.

It is difficult to rely on the representation from the Bar that the

appellant used to purchase properties in the names of his children on

auspicious days and for that the intention of the appellant to purchase

the suit property for the benefit of the daughter only must be

presumed without having any material to support this conclusion from

the record. We must not forget that the High Court was dealing with

a second appeal which was filed against the concurrent findings of

fact based on consideration of oral and documentary evidence

adduced by the parties and such findings were on sound reasoning.

Even otherwise, we are of the view that the presumption that the suit

property was purchased for the benefit of the respondent only was

amply rebutted by the appellant by adducing evidence that the suit

property, though purchased in the name of the respondent, was so

purchased for the benefit of the appellant and his family.

As noted hereinearlier, the appellate court as well as the trial

court on consideration of all the materials including oral and

documentary evidence and on a sound reasoning after considering the

pleadings of the parties came to concurrent findings of fact that

purchase of the suit property by the appellant in the name of the

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respondent was benami in nature. As noted herein earlier, the

following findings of fact were arrived at by the appellate court and

the trial court to conclude that the transaction in question was benami

in nature :-

1) the appellant had paid the purchase money.

2) the original title deed was with the appellant. And

3) the appellant had mortgaged the suit property for raising loan to

improve the same.

4) he paid taxes for the suit property.

5) he had let out the suit property to defendant Nos. 2 to 5 and

collecting rents from them.

6) the motive for purchasing the suit property in the name of

plaintiff was that the plaintiff was born on an auspicious

nakshatra and the appellant believed that if the property was

purchased in the name of plaintiff/respondent, the appellant

would prosper.

7) the circumstances surrounding the transaction, relationship of

the parties and subsequent conduct of the appellant tend to show

that the transaction was benami in nature.

Keeping these concurrent findings of fact in our mind

which would conclusively prove that the transaction in question was

benami in nature, let us now consider whether the appellant was

entitled to raise the plea of benami in view of introduction of the

Benami Transaction (Prohibition) Act, 1988 (In short "Act") and

whether the Act was retrospective in operation. If so, in view of

Section 4(2) of the Act, plea of benami in the defence of the appellant

was not available to him.

Before a two Judges Bench decision of this Court, in the

case of Mithilesh Kumari and another Vs. Prem Behari Khare

1989(2) SCC 95 this question had cropped up. In that decision, it

was held that the question of benami cannot be taken as a plea either

in the plaint or in the written statement even when the sale deed was

executed and registered before the introduction of the Act and when

the suit was filed before the Act had come into force. Before we

proceed further, we may remind ourselves of certain provisions of the

Act. Section 2 (a) defines 'benami transactions' which means any

transaction in which property is transferred to one person for a

consideration paid or provided by another person. Section 3 (1) and

(2) reads as under:

3(1) "No person shall enter into any benami

transactions.

(2) Nothing in sub-section(1) shall apply to 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 wife or the unmarried

daughter." (Underlining is ours)

Section 4 of the Act prohibits the right to recover property held

benami. It reads as under:

4(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 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."

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(underlining is ours)

Since in this case, we are concerned with the question whether the

appellant was entitled to raise the plea of benami in his defence in

view of the bar imposed in Section 4(2) of the Act, let us now confine

ourselves to the bar imposed in Section 4(2) of the Act of taking this

plea in his defence and to the question of retrospective operation of

this section or this provision is prospective in operation.

Now, therefore, the question arises is whether under section 4(2)

of the Act, defence can be allowed to be raised on any right in respect

of any property held benami, whether against the person in whose

name the property is held or against any other person, shall be

allowed in any suit, claim or action or on behalf of a person claiming

to be real owner of such property. As noted already, this question

cropped up for decision before this Court in the case of Mithilesh

Kumari and Another Vs. Prem Behari Khare 1989 (2) SCC 95. In

fact, the retrospective operation of this provision, as noted herein

earlier, was answered in the affirmative in the aforesaid decision.

However, the correctness of that decision was doubted and an order

was passed by this Court subsequently referring this question of

retrospectivity for decision to a 3-Judges Bench of this Court. In the

case of R.Rajagopal Reddy (Dead) by LRs. And Ors. Vs. Padmini

Chandrasekharan (Dead) by LRs. 1995 (2) SCC 630, S.B.

Majmudar, J. (As His Lordship then was) writing the judgment for

the Three Judges Bench could not agree with the views expressed in

Mithilesh Kumari's case and held that the Act was prospective in

nature and it has no retrospective operation excepting certain

observations made in respect of some cases which would be

mentioned hereinafter. In paragraph 10 it was observed as follows:-

"though the Law Commission recommended retrospective

applicability of the proposed legislation, Parliament did not make the

Act or any of its sections retrospective in its wisdom.". Thereafter on

a careful consideration of the provisions made under sections 3 and 4

of the Act, it was observed:

"A mere look at the above provisions shows that the

prohibition under Section 3(1) is against persons who are

to enter into benami transactions and it has laid down that

no person shall enter into any benami transaction which

obviously means from the date on which this prohibition

comes into operation i.e. w.e.f. 5/9/1988. That takes care

of future benami transactions. We are not concerned with

sub-section (2) but sub-section (3) of Section 3 also throws

light on this aspect. As seen above, it states that whoever

enters into any benami transaction shall be punishable with

imprisonment for a term which may extend to three years

or with find or with both. Therefore, the provision creates

a new offence of entering into such benami transaction. It

is made non-cognizable and bailable as laid down under

sub-section (4) It is obvious that when a statutory

provision creates new liability and new offence, it would

naturally have prospective operation and would cover only

those offences which take place after Section 3(1) comes

into operation." (Underlining is ours).

In paragraph 11 of the said decision of this Court, the Supreme

Court further observed "On the contrary, clear legislative intention is

seen from the words "no such claim, suit or action shall lie", meaning

thereby no such suit, claim or action shall be permitted to be filed or

entertained or admitted to the portals of any court for seeking such a

relief after coming into force of Section 4(1)." (underline is ours).

In the same paragraph the Supreme Court observed:

" With respect, the view taken that Section 4(1) would

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apply even to such pending suits which were already filed

and entertained prior to the date when the section came

into force and which has the effect of destroying the then

existing right of plaintiff in connection with the suit

property cannot be sustained in the face of the clear

language of Section 4(1). It has to be visualized that the

legislature in its wisdom has not expressly made Section 4

retrospective. Then to imply by necessary implication that

Section 4 would have retrospective effect and would cover

pending litigations filed prior to coming into force of the

section would amount to taking a view which would run

counter to the legislative scheme and intent projected by

various provisions of the Act to which we have referred

earlier. It is, however, true as held by the Division Bench

that on the express language of Section 4(1) any right

inhering in the real owner in respect of any property held

benami would get effaced once Section 4(1) operated,

even if such transaction had been entered into prior to the

coming into operation of Section 4(1), and henceafter

Section 4(1) applied no suit can lie in respect to such a

past benami transaction. To that extent the section may be

retroactive."

In our view, similar is the position in law on the question

of retrospectivity of section 4(2) of the Act.

Finally, this Court in the aforesaid decision held that the

decision in Mithilesh Kumari & Anr. Vs. Prem Behari Khare erred in

taking the view that under Section 4(2), in all suits filed by persons in

whose names properties are held no defence can be allowed at any

future stage of the proceedings that the properties are held benami

cannot be sustained. It was also held that Section 4(2) will have a

limited operation even in cases of pending suits after Section 4(2) had

come into force, if such defences are not already allowed. The

decision in R. Rajagopal Reddy (Dead) by LRs. And Ors. Vs.

Padmini Chandrasekharan (Dead) by LRs. 1995 (2) SCC 630 which

overruled the decision of two Judges Bench in the case of Mithilesh

Kumari and Anr. Vs. Prem Behari Khare 1989 (2) SCC 95 was also

approved by this Court in the cases of Prabodh Chandra Ghosh Vs.

Urmila Dassi AIR 2000 SC 2534 and C. Gangacharan Vs.

C.Narayanan AIR 2000 SC 589. In view of the aforesaid, this

question is, therefore, no longer res integra.

Therefore, we are now to consider in this case whether the

facts disclosed would indicate that even after coming into force of the

Act the defence under Secion 4 can be available. Admittedly, the

transaction in question was registered on 24th August, 1970. The suit

was filed on 5th of July 1984 which was long before coming into force

of the Act. It is an admitted position that the written statement in the

suit taking plea of benami was also filed by the appellant long before

the Act had come into force. Therefore, it was not a case where

Section 4(2) of the Act will have a limited operation in the pending

suit after Section 4(2) of the Act had come into operation. It is true

that the judgment of the trial court was delivered after the Act had

come into force but that could not fetter the right of the appellant to

take the plea of benami in his defence. Since the Act cannot have any

retrospective operation in the facts and circumstances of the present

case, as held by this Court in the aforesaid decision, we are therefore

of the view that the appellant was entitled to raise the plea of benami

in the written statement and to show and prove that he was the real

owner of the suit property and that the respondent was only his

benamidar.

Before parting with this judgment, we may take into

consideration of a short submission of the learned counsel for the

respondent. The submission is that since the suit property was

purchased by the appellant in the name of the respondent, the suit

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property must be held to have been purchased by him for the benefit

of the respondent. Section 3 deals with Prohibition of benami

transaction. Sub-section (1) clearly prohibits that no person shall

enter into benami transaction. However, sub-section (2) of Section 3

clearly says that nothing in sub-section (1) shall apply to purchase of

property of any person in the name of his wife, unmarried daughter

and it shall be presumed, unless the contrary is proved, that suit

property had been purchased for the benefit of the unmarried

daughter.

Section 3(2) makes it abundantly clear that if a property is

purchased in the name of an unmarried daughter for her benefit, that

would only be a presumption but the presumption can be rebutted by

the person who is alleging to be the real owner of the property by

production of evidences or other materials before the court. In this

case, the trial court as well as the appellate court concurrently found

that although the suit property was purchased in the name of the

respondent but the same was purchased for the interest of the

appellant. We are therefore of the opinion that even if the

presumption under section 3(2) of the Act arose because of purchase

of the suit property by the father ( in this case appellant ) in the name

of his daughter ( in this case respondent ), that presumption got

rebutted as the appellant had successfully succeeded by production of

cogent evidence to prove that the suit property was purchased in the

benami of the respondent for his own benefit.

Let us now consider whether the concurrent findings of fact

could be set aside by the High Court in the second appeal. It is well

settled by diverse decisions of this Court that the High Court in

second appeal is entitled to interfere with the concurrent findings of

fact if the said concurrent findings of fact are based on non-

consideration of an important piece of evidence in the nature of

admission of one of the party to the suit, which is overlooked by the

two courts below ( See [2003 (7) SCC 481, Deva (Dead) Through

LRs Vs. Sajjan Kumar (Dead) by LRs] ). It is equally well settled

that under section 100 of the Code of Civil Procedure, High Court

cannot interfere with concurrent findings of facts of the courts below

without insufficient and just reasons. (See [2003(7)SCC 52, Sayeda

Akhtar Vs. Abdul Ahad]). In second appeal, High Court is also not

entitled to set aside concurrent findings of fact by giving its own

findings contrary to the evidence on record. (See [ 2001 (4) SCC

694, Saraswathi & Anr. Vs. S.Ganapathy & Anr.] ).

As held herein earlier the High Court had set aside the

concurrent findings of fact not on consideration of the evidence

adduced by the parties but set aside the concurrent findings of fact on

the basis of findings contrary to the evidence on record and without

considering the findings of fact arrived at by the appellate court and

the trial court. From the judgment of the High Court we further find

that the concurrent findings of fact were set aside not on consideration

of the findings of fact arrived at by the courts below but only on the

basis of the arguments of the learned Advocate of the respondent.

This was also not permissible to the High Court in Second Appeal to

come to a contrary findings of its own only on the basis of the

arguments of the learned counsel for the respondent without

considering the findings of the trial court as well as the appellate

court. (See [2002(9) SCC 735, Gangajal Kunwar (Smt.) and Ors. Vs.

Sarju Pandey (Dead) by LRs & Ors.] ). It is equally settled that High

Court in second appeal is not entitled to interfere with the concurrent

findings of fact arrived at by the courts below until and unless it is

found that the concurrent findings of fact were perverse and not based

on sound reasoning. We ourselves considered the evidence on record

as well as the findings of fact arrived at by the two courts below.

From such consideration we do not find that the concurrent findings

of fact arrived at by the appellate court as well as the trial court were

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either perverse or without any reason or based on non-consideration

of important piece of evidence or admission of some of the parties.

We are therefore of the view that the High Court was not justified in

interfering with the concurrent findings of fact arrived at by the

appellate court as well as the trial court which findings were rendered

on consideration of the pleadings as well as the material ( oral and

documentary ) evidence on record.

For the reasons aforesaid this appeal is allowed. The judgment

of the High Court impugned in this Court is set aside and the

judgments of the trial court as well as the appellate court are affirmed.

The suit filed by the respondent shall stand dismissed.

There will be no order as to costs.