Nand Kishore Mehra vs Sushila Mehra

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1995 Supreme(SC) 702

SUPREME COURT OF INDIA
KULDIP SINGH, N. VENKATACHALA AND S. SAGHIR AHMAD, JJ.
Nand Kishore Mehra, Appellant
Versus
Sushila Mehra, Respondent.
Civil Appeal No. 6920 of 1994
Decided on 2-7-1995.
Advocates appeared
Mr. Joseph Pookkat and Mr. P. A. Perumal Advocates for Appellant; Mr. Kamal Kr. Bhatia, Advocate for Respondent.
* F.A.O. (OS) No. 280 of 1993, D/- 21-4-1994.

Advocates:
JOSEPH PUKKATT, KAMAL BHATIA, R.A.PERUMAL

Headnote:
Civil Procedure Code, 1908 - Order 7 - Rule 11 - Criminal Procedure Code , 1973 - Section – 5 - Punishment - Transactions (Prohibition) Act, 1988 - Section 4 - Claim to be real owner of such property - Court presided over by one of us which dealt with prohibition to file suit on to take up defense in respect of transaction imposed by Section Act in case - Reported in expressed its view that that prohibition imposed by sub sections applies only to suits to be filed or defenses to be taken in respect of property held beanie transactions after coming into force Act and not to those suits filed and defaces taken in respect of such transactions and pending final decision at time of coming into force Act as had been held earlier by Division Bench of this Court - Section of act which imposes prohibition in matter filing of suits or taking of defaces in respect of property covered by transactions reads thus Prohibition of right to recover property suit claim or action to enforce any right in respect of any property against person in whose name property is held or against any other person shall lie by or on behalf of person claiming to be real owner such property – Held, Therefore our answer to question consideration is that neither filing of suit nor taking defense in respect of either present or past transaction involving purchase of property by person in name of his wife unmarried daughter is prohibited sub sections Act - Coming to facts of case on hand plaintiff had filed suit in High Court seeking relief in respect of properties alleged to have been purchased in name defendant - his wife - Single Judge rejected application filed by defendant in that suit seeking rejection of plaint on ground that suit was barred Section Act - Order of rejection of that application was appealed against by defendant in First Appeal filed in same Court - Division Bench of High Court reversed order of learned single Judge and granted application of defendant made in suit seeking rejection of plaint - It is that order which is now questioned by plaintiff husband in this appeal - Since plaintiff is husband who had right to enter into transaction in matter of purchase of property in name of his wife or unmarried daughters court have held earlier he is entitled to enforce his rights in properties concerned if he can succeed in showing that he had purchased them in name of his wife - But in view of statutory presumption incorporate in sub section can get relief sought in suit only if he can prove that properties concerned had not been purchased for benefit of wife even if he succeeds in showing that consideration for purchases of properties had been paid by him - In result court allow this appeal set aside order of Division Bench of High Court up hold order of single Judge rejecting application defendant wife for rejection of plaint and remit suit to Delhi High Court for disposal according to law and in light of this judgment - Appeal allowed

Judgement Key Points

Based on the provided legal document, here are the key points regarding the case Nand Kishore Mehra v. Sushila Mehra:

Core Legal Question: The primary issue was whether the prohibition imposed by Section 4 of the Benami Transactions (Prohibition) Act, 1988, against filing suits or taking defenses applies to benami transactions where property is purchased by a person in the name of his wife or unmarried daughter. (!) (!) (!)
Statutory Framework: Section 4 prohibits suits or claims to enforce rights in benami property, but Section 3(2) creates an exception for purchases in the name of a wife or unmarried daughter, presuming the property was for their benefit unless proved otherwise. (!) (!) (!) (!)
Judicial Reasoning: The Supreme Court reasoned that if the Act permits a person to purchase property in the name of their wife or daughter (via Section 3(2)), it cannot simultaneously prohibit them from enforcing those rights via suit or defense under Section 4. To hold otherwise would create a contradiction where rights are created but cannot be enforced. (!) (!)
Burden of Proof: While the husband is allowed to file a suit or take a defense regarding such property, the statutory presumption in Section 3(2) means he must prove that the property was not purchased for the benefit of the wife or daughter to succeed in his claim. (!) (!)
Procedural History: The plaintiff (husband) filed a suit in the Delhi High Court seeking relief regarding properties allegedly purchased in his wife's name. The Single Judge rejected the defendant's application to reject the plaint. The Division Bench reversed this, allowing the rejection of the plaint. The Supreme Court allowed the husband's appeal against this Division Bench order. (!) (!) (!)
Final Ruling: The Supreme Court held that neither filing a suit nor taking a defense is prohibited for present or past transactions involving purchase of property by a person in the name of his wife or unmarried daughter. The appeal was allowed, the Division Bench order was set aside, and the suit was remitted to the Delhi High Court for disposal according to law. (!) (!) (!)

JUDGMENT

VENKATACHALA, J. :—Whether the prohibition to file a suit or to take up a defence in respect of a benami transaction imposed by the Section 4 of the Benami Transactions (Prohibition) Act, 1988 - the Act applies to a benami transanction of purchase of property by a person in the name of his wife or unmarried daughter, is the question requiring our answer in deciding this appeal by special leave filed by the plaintiff in a suit against an order of the Division Bench of the High Court of Delhi allowing an appeal filed by the defendant against an order in the suit made by a learned single Judge of the same Court, refusing to reject the plaint under Order 7 - Rule 11 of the Code of Civil Procedure, 1908 - the Code, as that barred by Section 4 of the Act.

2. A three Judge Bench of this Court presided over by one of us (Kuldip Singh, J.) which dealt with the prohibition to file a suit on to take up a defence in respect of a benami transaction imposed by Section 4 of the Act in the case of R. Rajagopal Reddy v. P. Chandrasekharan reported in 1995 (1) SCALE 692, has expressed its view that that prohibition imposed by sub-sections (1) and (2) of Section 4 applies only to suits to be filed or defences to be taken, in respect of property held benami, i.e., benami transactions, after the coming into force of the Act and not to those suits filed and defences taken in respect of such benami tansactions and pending final decision at the time of coming into force of the Act as had been held earlier by a Division Bench of this Court in Mithilesh Kumari v. Prem Behari Khare, (1989) 1 SCR 621.

3. Section 4 of the act which imposes prohibition in the matter of filing of suits or taking of defences in respect of property held benami i.e. covered by benami transactions reads, thus :

"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 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 who he stands in such capacity."

4. It was undisputed that a suit could be filed or a defence could be taken up in respect of properties held benami, i.e., covered by benami tansactions if the properties are held by persons covered by clauses (a) and (b) of sub-section (3) of Section 4 since that sub-section makes the provisions by sub-sections (1) and (2) thereof inapplicable. But, the question is, a property if held benami by a wife for her husband or by an unmarried daughter for her father envisaged by sub-section (2) of Section 3 of the Act even though is not the property covered by clauses (a) or (b) of sub-section (3) of Section 4 could it be that respecting which no suit can be filed or no defence can be taken under sub-sections (1) and (2) of Section 4 of the Act. It is true that the benami transaction as defined in clause (a) of Section 2 of the Act since means - any transaction in which property is transferred to one person for a consideration paid or provided by another person, any purchase of propery made by a person in the name of his wife or unmarried daughter envisaged in sub-section (2) of Section 3 of the Act, would be a "benami

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1995 Supreme(SC) 702

Cases Referred (2)