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2002 Supreme(AP) 355

Andhra Pradesh High Court
Akinipalli Shankaraiah - Appellant
Versus
Akinipalli Lingaiah - Respondent
CRP.No.5207/99
Decided On : 03-07-02
Advocates Appeared :
Mr.B.Nalin Kumar,Mr.Bankalal Mandhani

Headnote:BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988, Secs2(a)& 4(1)& (2) - ‘Benami transaction’ - Meaning of - Sec4(1) of the Act has no application to suit filed prior to coming into force of Sec4 of the Act - So far as Sec4(2) is concerned a defence of benami which was otherwise available to a defendant in a suit, till coming into force of Sec4, is no more available if such a defence is taken by cut-off date ie 19-5-1988, written statement is not filed by that date - It is not sufficient that transaction must have been anterior to date of commencement of Sec4(2), but defence of benami must also have been taken prior to 19-5-1988 - When suit itself is filed after commencement of the Act, such plea of benami cannot be entertained

J. CHALAMESWAR, J.

( 1 ) AGGRIEVED by the order dated 29th september 1999 passed in I. A. No. 228 of 1999 in O. S. No. 13 of 1998, on the file of the learned Senior Civil Judge, Huzurabad, the petitioner therein preferred this revision.

( 2 ) THE petitioner herein is the plaintiff in the abovementioned suit. The said suit was laid for recovery of possession of suit schedule property from the respondent, who is none other than the brother of the petitioner, and also for mesne profits. In the said suit, the respondent set up a defence that he, in fact, purchased the suit schedule property though the title deed was obtained in favour of the petitioner and therefore disputed the right of the petitioner to claim the relief such as the one sought by the petitioner in the suit. In substance, the respondent set up a plea of benami .

( 3 ) IN the background of the above mentioned defence, the petitioner herein filed the above said I. A. , under Order XVI rule 16 of the Code of Civil Procedure read with Section 4 (2) of the benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the Act ) praying that portion of the written statement insofar as it pertains to the plea of benami by the defendant- (respondent herein) be struck off. The trial court by the impugned order dismissed the above said I. A. , purporting to be relied upon a judgment of this court reported in d. Mittyalu v. G. Kanakam.

( 4 ) SECTION 2 (a) of the Act defines benami transaction , which reads as follows: "benami transaction" means any transaction in which property is transferred to one person for a consideration paid or-provided by another person".

( 5 ) SECTION 3 of the Act prohibits the benami transactions with certain exceptions enumerated in sub-section (2) thereof. The entering into any benami transaction itself is made a punishable offence under subsection (3 ).

( 6 ) HOWEVER, Section 4 of the Act prohibits the right to recover property held benami. Section 4 reads as follows: "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 whom he stands in such capacity. "

( 7 ) THE case of the respondent precisely is one of the benami transactions. Learned counsel for the petitioner - Sri B. Nalin kumar argued that the lower court clearly misunderstood the ratio decidendi of the judgment of this court reported in d. Mutyaht s case (1 supra ). In fact, the position of law, insofar as Section 4 of the act is concerned, was authoritatively pronounced by the Apex Court in s. . Rajagopal Reddy v. P. Chandmsekharan.

( 8 ) THE Supreme Court in the above-mentioned judgment held that Section 4 (1) of the Act has no application to the suit which was filed prior to coming into force of Section 4 of the Act i. e. , 19-5-1988. Insofar as Section 4 (2) of the Act is concerned, a defence of benami, which was otherwise available to a defendant in a suit, till coming into the force of Section 4 of the Act, is no more available to the defendant, if such a defence is not taken by the above mentioned cut








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