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SUPREME COURT OF INDIA
UDAY UMESH LALIT, CJI., S. RAVINDRA BHAT, SUDHANSHU DHULIA, JJ.
Pushpalata – Appellant
Versus
Vijay Kumar (Dead) through LRs. and Others – Respondents
Civil Appeal No. 4078 of 2022
Decided On : 05-09-2022
Benami Transactions (Prohibition) Act, 1988 – Section 4 – Benami Transaction – Suit seeking setting aside of sale deed and relief of declaration of title – Courts, by concurrent finding, have concluded that suit is barred by Section 4(1) of Benami Act, whereas petitioner-plaintiffs urge that exception in Section 4(3), applies to present case – First defendant did not mention how he purchased suit property – There is nothing on record to support plea of first defendant (now deceased) that he was real and true owner of property – Trial and first appellate court have not relied on any material to show that first defendant had any source of income, or was living away from his father, or was not dependant on him – One who alleges that a property is benami and is held, nominally, on behalf of real owner - in cases which form exception, under Section 4 (3) – has to displace initial burden of proving that fact – Such proof can be through evidence, or cumulatively through circumstances – First plaintiff had averred that properties were purchased for maintenance and education of his children; that he had constructed a two storied building from his earnings as a contractor, and that he was in possession of property – Conclusions drawn by trial court and first appellate court, are plainly erroneous, given evidence on record – High Court fell into error in not noticing correct position in law – Appeal allowed and suit decreed fully. (Paras 13, 14, 18, 22, 23, 26 and 30)
Facts of the case:
Present appeal challenges a judgment of the Madhya Pradesh High Court at Jabalpur, dismissing petitioners’ second appeal1 and affirming the order and decree passed by the trial court.
Findings of Court:
As far as the discretionary nature of this court’s jurisdiction, under Article 136 goes, respondents are correct in highlighting that the court would rarely interfere with concurrent findings. However, jurisdiction, it has been reiterated is wide, and in exceptional cases, interference is called for.
Result : Appeal allowed.
JUDGMENT :
S. RAVINDRA BHAT, J.
1. With the consent of the parties, this matter is heard finally. The present appeal challenges a judgment of the Madhya Pradesh High Court at Jabalpur, dismissing the petitioners’ second appeal1 [Second Appeal No. 1738/2005, judgment dated 04.04.2013 passed by the Madhya Pradesh High Court at Jabalpur] and affirming the order and decree passed by the trial court2 [Civil Suit No. 47A/94, judgment dated 29.09.2004 passed by the Second Civil Judge, Class-I, Mandla (MP)].
Facts and Contentions
2. The original first plaintiff - Laxmi Prasad, was the karta of a Hindu Undivided Family (HUF) consisting of his wife, Janki Bai (second plaintiff), two daughters - Sarita and Pushpalata (second and third plaintiffs), and two sons - Vijay Kumar and Rajendra Kumar (the first two defendants). The parties are hereafter referred by name, or as “plaintiffs” and “defendants.”
3. Laxmi Prasad purchased a property measuring 1.6 acres at Khasra No. 44/2 (in Bandobast No. 102, Patwari Halka No. 65 in Lalipur Ward) by agreement dated 15.02.1960 (hereafter “first property”). This first property was purchased in the name of Vijay Kumar (i.e. his son and first defendant). Another piece of property measuring 2332 sq. ft (Plot No. 1/1 in Nazul Street No. 22B; hereafter “second property”) was purchased by Laxmi Prasad on 21/2.05.1966 in the names of his two sons - Vijay Kumar and Rajendra Kumar. It was alleged that Laxmi Prasad later constructed a two-storied building, with his earnings. Similarly, Laxmi Prasad purchased two more properties admeasuring 150 sq. ft. on 18.12.1972 and 453 sq. ft. on 25.05.1973, again in the names of Vijay Kumar and Rajendra Kumar. According to Laxmi Prasad, these properties were bought by him for the proper maintenance and education of his children; he was involved in the construction business.
4. On 03.05.1994, Vijay Kumar sold 0.047 hectares out of the land admeasuring 1.6 acres at Khasra No. 44/2 (first property) - which forms the subject of this suit (hereafter “suit property”) - to the third defendant (hereafter “purchaser”). He allegedly further sold 0.019 hectares on 21.06.1995 and 0.049 hectares on 27.08.1996 in favour of the third defendant (despite an interim injunction).
5. Laxmi Prasad filed a suit on behalf of himself, his wife (who passed away in 1996) and two daughters, on 30.09.1994, against his two sons (first and second defendants) and the purchasers of the property (third and fourth defendants) seeking setting aside of the sale deed dated 03.05.1994 and the relief of declaration of title. The plaintiffs urged that they and the first and second defendants, were members of a HUF, and that original first defendant (Vijay Kumar) was a benami owner who could not have alienated the suit property. It was alleged that the properties were paid for or purchased by the first plaintiff- Laxmi Prasad and that the first two defendants, minors, had no source of income. Rajendra Kumar filed written statement dated 16.02.1995, and Vijay Kumar and the third defendant (subsequent purchaser) filed their respective written statements on 07.12.1999. In the meanwhile, in 1996, the trial court had restrained the defendants from alienating the suit properties, and later in 2002 from constructing over the suit property.
6. The trial court framed 14 issues; but was predominantly faced with the issue of whether the first plaintiff was the sole owner, in possession of the properties purchased, and consequently, whether the first defendant was not entitled to sell the disputed land. The trial court by judgment dated 29.09.2004 dismissed the suit on the ground that the original plaintiff had failed to prove by cogent evidence that the suit property was purchased for the welfare of the coparceners of the HUF and declared that the first defendant had the right to sell the disputed properties in his name.
7. The appellate court declined the plaintiffs’ appeal3 [by order dated 26.04.2005 passed by the District Judge, M
Benami Transaction – One who alleges that a property is benami and is held, nominally, on behalf of real owner, has to displace initial burden of proving that fact.
The court held that the rejection of the plaint was improper as the plaintiff sufficiently alleged that the property did not qualify as benami under the exceptions provided in the Benami Transactions....
The burden of proving a benami transaction rests on the party asserting the plea, and the defendants failed to discharge this burden.
The court held that a claim for property belonging to a joint Hindu family is not barred as benami under the Prohibition of Benami Property Transactions Act when purchased with family funds, requirin....
The burden of proof in claiming a property as a benami lies on the person alleging it, and presumption favors the name holder unless proven otherwise.
The absence of mutual trust or dependency negates a claim of fiduciary relationship, despite familial ties, in determining benami ownership of property under the Benami Transactions Act.
Claims of property ownership must be substantiated with credible evidence, as allegations of trust do not override the Benami Transactions Act without proof of fraud.
A suit based on a Benami transaction instituted after the commencement of the Benami Transactions (Prohibition) Act, 1988, is barred by law, regardless of when the transaction occurred. Courts must l....
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