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SUPREME COURT OF INDIA
L. NAGESWARA RAO, M.R. SHAH, JJ.
Mangathai Ammal (Died) through LRs and Others – Appellants
Versus
Rajeswari & Others – Respondents
CIVIL APPEAL NO. 4805 OF 2019 (ARISING OUT OF SLP (C) NO.29642 OF 2016)
Decided On : 09-05-2019
(A) Benami Transactions (Prohibition) Act, 1988 – Section 4 – Benami transaction – Burden of proving that a particular sale is Benami and apparent purchaser is not the real owner, always rests on person asserting it to be sold – This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami transaction or establish circumstances unerringly and reasonably raising an interference of that fact. (Para 8.1)
(B) Benami Transactions (Prohibition) Act, 1988 – Section 4 – Benami transaction – Payment of part sale consideration cannot be sole criteria to hold sale/transaction as Benami – While considering a particular transaction as Benami, intention of person who contributed purchase money is determinative of nature of transaction – Intention of person who contributed purchase money, has to be decided on the basis of surrounding circumstances; relationship of the parties; motives governing their action in bringing about transaction and their subsequent conduct. (Para 9.1)
(C) Property Law – Partition – Self-acquired property – Original plaintiffs instituted suit before Trial Court for partition of suit properties and claiming 3/4th share with pleadings that suit properties were ancestral properties – It was not specifically pleaded by plaintiffs that Sale-Deeds/transactions in favour of defendant no.1 were Benami transactions – It was also not pleaded that suit properties were purchased in name of defendant no.1 by husband of defendant no.1 from income derived out of ancestral properties – Trial Court did not specifically frame issue that whether transactions/Sale Deeds in favour of defendant no.1 are Benami transactions or not – Despite that, Trial Court and High Court have held that transactions/Sale Deeds in favour of defendant no.1 were Benami transactions – Trial Court and High Court have erred in shifting burden on defendants to prove that sale transactions were Benami transactions – Trial Court and High Court have erred in shifting burden on defendants to prove that sale transactions were not Benami transactions – Trial Court as well as High Court have committed grave error in holding suit properties as Benami transactions/ancestral properties on the basis of sale-deed – Merely because of stamp duty at the time of execution of Sale Deed was purchased by husband of defendant no.1, by that itself it cannot be said that Sale Deed in favour of defendant no.1 was Benami transaction – Once it is held that Sale Deeds in favour of defendant no.1 were not Benami transactions, suit properties, except property nos. 1 and 3, which were purchased in her name and same can be said to be her self-acquired properties and cannot be said to be Joint Family Properties, plaintiffs cannot be said to have any share in suit properties (except property nos. 1 and 3) – Preliminary Decree directed to be drawn by Trial Court, confirmed by High Court, accordingly modified. (Paras 7.1, 8.4, 9, 9.1, 9.2, 10, 11, 12, 12.1 and 13)
Facts of Case:
Partition decree. Aggrieved and dissatisfied with impugned Judgment and Order passed by High Court of Judicature at Madras passed in AS dismissing the same and affirming Judgment and Decree passed by Subordinate Judge, decreeing suit for partition by original plaintiff, original defendant nos. 1 to 3 have preferred present appeal.
Findings of Court:
Once it is held that Sale Deeds in favour of defendant no.1 were not Benami transactions, in that case, suit properties, except property nos. 1 and 3, which were purchased in her name and the same can be said to be her self-acquired properties and therefore cannot be said to be Joint Family Properties, plaintiffs cannot be said to have any share in suit properties (except property nos. 1 and 3). Counsel appearing on behalf of defendant no.1 has specifically stated and admitted that suit property Item nos. 1 and 3 can be said to be ancestral properties and according to him even before High Court also it was case on behalf of defendant no.1 that item nos. 1 and 3 of suit properties are ancestral properties.
Result : Appeal Partly allowed.
Key Points:
The payment of part of the sale consideration alone is not sufficient to classify a transaction as benami. The primary factor is the intention of the person who contributed the purchase money, which must be determined based on surrounding circumstances, relationship of the parties, motives, and subsequent conduct [p_9.1].
The burden of proving that a sale is benami and that the apparent purchaser is not the real owner rests on the person asserting it. This burden must be strictly discharged by adducing legal evidence that directly proves the benami nature or reasonably raises an inference of such [p_8.1].
The source of purchase funds, possession after purchase, motives, relationships, custody of title deeds, and conduct of the parties are relevant circumstances for determining whether a transaction is benami (!) (!) .
Mere payment of stamp duty or consideration at the time of purchase cannot alone establish a transaction as benami. These factors are relevant but not conclusive (!) .
The execution of a release deed or the manner in which property is treated post-purchase (e.g., payment to a family member or revocation of a will) does not automatically imply that the property is joint family or benami property. Such actions need to be interpreted in context (!) (!) .
The absence of specific pleadings or issues related to benami transactions in the original suit and the failure of the courts to frame such issues can lead to errors in classifying transactions as benami (!) .
The legal framework and amendments, including the omission of certain statutory presumptions, influence the assessment but do not alter the fundamental requirement that the party claiming a transaction as benami must prove it with cogent evidence (!) (!) .
If a transaction is not proven to be benami, and properties are purchased in the name of a family member, such properties may be considered self-acquired unless clear evidence suggests joint ownership or benami intent (!) .
The overall assessment of evidence, including conduct, documentary proof, and surrounding circumstances, is essential for determining the true nature of property transactions and ownership rights (!) .
These key points reflect the principles and findings relevant to property ownership, benami transactions, and the importance of evidence in establishing the true nature of property dealings.
JUDGMENT :
M.R. SHAH, J.
1. Leave granted.
2. Feeling aggrieved and dissatisfied with the impugned Judgment and Order passed by the High Court of Judicature at Madras dated 05.01.2016 passed in AS No.785 of 1992 dismissing the same and affirming the Judgment and Decree dated 05.08.1992 passed by the learned Subordinate Judge, Arni in O.S. No.124 of 1990 decreeing the suit for partition by original plaintiff, the original defendant nos. 1 to 3 have preferred the present appeal.
3. The facts leading to the present appeal in nutshell are as under :
That, one Rajeswari and Others-original plaintiffs instituted a suit bearing O.S. No.124 of 1990 for partition of the suit properties and separate possession. It was the case on behalf of the plaintiffs that the first defendant is the wife of one Narayanasamy Mudaliar. That, the said Narayanasamy Mudaliar and original defendant no.1 had one son and three daughters namely Elumalai (son), Ranganayaki (daughter), Nagabushanam (daughter) and Navaneetham (daughter). That, the son Elumalai and daughter Ranganayaki had died. The first plaintiff is the wife of Elumalai, the second plaintiff and plaintiff nos. 3 to 8 are the husband and children of the deceased Ranganayaki. That, Elumalai and the first plaintiff did not have issue. According to the original plaintiffs, Narayanasamy Mudaliar sold the ancestral properties and purchased the suit property in the name of first defendant - Mangathai Ammal (wife of Narayanasamy Mudaliar). Therefore, it was the case on behalf of the plaintiffs that Narayanasamy Mudaliar and his son Elumalai are entitled to half share of the ancestral properties. That, it was the case on behalf of the plaintiffs that the same Narayanasamy Mudaliar had died twenty years back to the filing of the suit. His share in the properties was inherited by Elumalai, defendant nos. 1 and 2 viz Nagabushanam Ammal and Ranganayaki Ammal. That, the Ranganayaki died about six years before filing of suit, therefore, her legal representatives viz original plaintiff nos.2 to 8 inherited her share in the properties. That, the Nagabushanam executed the Release Deed dated 24.04.1990 in favour of the first defendant. According to the plaintiffs, the first plaintiff is entitled to 5/8th share, plaintiff nos. 2 to 8 are entitled to 1/8th share and the defendants are entitled to 1/4th share in the suit properties. According to the plaintiffs, since the defendant tried to claim the suit properties, the plaintiffs filed the present suit for partition.
3.1 The suit was resisted by the defendants. As per the case of the first defendant, except item nos. 1 and 3 of the suit properties, the other properties are self-acquired properties of the first defendant. According to the first defendant, the first item of the suit property was purchased out of the money provided by her in her name. According to the first defendant, the suit properties are not the ancestral properties of Narayanasamy Mudaliar. It was denied that the suit properties were purchased by selling the ancestral properties. It was the case on behalf of the defendant no.1 that except properties in item nos. 1 and 3 of Schedule II, the properties were purchased by the defendant no.1 out of the stridhana she received from her parents’ house and by selling the gold jewellery. It was also the case on behalf of defendant no.1 that after purchasing the property from Thangavel Gounder and others; she constructed a house and is in possession and enjoyment of the said property. According to the defendant no.1, the deceased Narayanasamy Mudaliar was entitled to 47 cents in Survey No.218/1 and 8 cents in Survey No. 218/3 and the deceased Ranganayaki Ammal is entitled to 1/5th share in the suit properties. It was also the case on behalf of the first defendant that, similarly, the first plaintiff’s husband is also entitled to 1/5th share, in which, first defendant and first plaintiff are entitled to half share in the suit properties. According to the first def
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